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TRANS WORLD AIRLINES, INC.
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Trustee
INDENTURE
Dated as of March 31, 1997
$50,000,000*
12% Senior Secured Notes Due 2002
===============================================================================
* Subject to an increase up to an aggregate of $7,500,000, for the additional
issuance of 12% Senior Secured Notes Due 2002 pursuant to the Purchase
Agreement as defined herein.
TABLE OF CONTENTS
ARTICLE 1.
Page
----
DEFINITIONS AND RULES OF CONSTRUCTION..................................... 1
Section 1.1 Definitions................................................ 1
Section 1.2 Rules of Construction...................................... 1
ARTICLE 2.
THE SECURITIES............................................................ 1
Section 2.1 Designation, Form and Dating............................... 1
Section 2.2 Execution, Amount, Authentication and Delivery............. 2
Section 2.3 Registrar and Paying Agent................................. 5
Section 2.4 Paying Agent to Hold Payments In Trust..................... 5
Section 2.5 Securityholder Lists....................................... 7
Section 2.6 Transfer and Exchange...................................... 7
Section 2.7 Mutilated, Defaced, Destroyed, Lost and Stolen Securities.. 8
Section 2.8 Treasury Securities........................................ 9
Section 2.9 Temporary Securities....................................... 10
Section 2.10 Cancellation............................................... 10
Section 2.11 Defaulted Interest......................................... 10
ARTICLE 3.
REDEMPTION AND REPURCHASE................................................. 11
Section 3.1 No Optional Redemption..................................... 11
Section 3.2 Use of Temporary Cash Collateral or Cash Collateral
for Purchase............................................. 11
ARTICLE 4.
COVENANTS................................................................. 12
Section 4.1 Payment of Securities...................................... 12
Section 4.2 Maintenance of Office or Agency............................ 13
Section 4.3 Limitation on Dividends and Acquisition of Common Stock.... 13
Section 4.4 Corporate Existence........................................ 14
Section 4.5 Payment of Taxes and other Claims.......................... 15
Section 4.6 Notices.................................................... 15
Section 4.7 Maintenance of Properties.................................. 16
Section 4.8 Default Notices and Compliance Certificates................ 16
Section 4.9 SEC Reports................................................ 17
Section 4.10 Waiver of Stay, Extension or Usury Laws.................... 18
Section 4.11 Amendment to Certain Agreements............................ 18
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Page
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Section 4.12 Liens...................................................... 18
Section 4.13 Books, Records, Access; Confidentiality.................... 18
Section 4.14 Security Interests......................................... 19
Section 4.15 Change in Control.......................................... 20
ARTICLE 5.
SUCCESSOR CORPORATION..................................................... 23
Section 5.1 Covenant Not to Consolidate, Merge, Convey or Transfer
Except Under Certain Conditions.......................... 23
Section 5.2 Successor Person Substituted............................... 24
Section 5.3 Limitation on Lease of Properties.......................... 25
ARTICLE 6.
DEFAULT AND REMEDIES...................................................... 25
Section 6.1 Events of Default.......................................... 25
Section 6.2 Acceleration............................................... 27
Section 6.3 Other Remedies............................................. 28
Section 6.4 Waiver of Past Defaults.................................... 28
Section 6.5 Control by Majority........................................ 28
Section 6.6 Limitation on Suits........................................ 29
Section 6.7 Rights of Holders to Receive Payment....................... 29
Section 6.8 Collection Suit by Trustee................................. 30
Section 6.9 Trustee May File Proofs of Claim........................... 30
Section 6.10 Application of Proceeds.................................... 30
Section 6.11 Undertaking for Costs...................................... 32
Section 6.12 Restoration of Rights on Abandonment of Proceedings........ 32
Section 6.13 Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default.................................... 32
ARTICLE 7.
TRUSTEE................................................................... 33
Section 7.1 Duties of Trustee.......................................... 33
Section 7.2 Rights of Trustee.......................................... 34
Section 7.3 Individual Rights of Trustee............................... 34
Section 7.4 Trustee's Disclaimer....................................... 34
Section 7.5 Notice of Defaults......................................... 34
Section 7.6 Reports by Trustee to Holders.............................. 35
Section 7.7 Compensation and Indemnity................................. 35
Section 7.8 Replacement of Trustee..................................... 36
Section 7.9 Successor Trustee by Merger, etc........................... 37
Section 7.10 Eligibility; Disqualification.............................. 37
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Page
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Section 7.11 Preferential Collection of Claims Against Company.......... 37
Section 7.12 Other Capacities........................................... 37
ARTICLE 8.
DISCHARGE OF INDENTURE.................................................... 38
Section 8.1 Termination of Company's Obligations....................... 38
Section 8.2 Application of Trust Money................................. 39
Section 8.3 Repayment to Company....................................... 40
Section 8.4 Reinstatement.............................................. 40
ARTICLE 9.
AMENDMENTS, SUPPLEMENTS AND WAIVERS....................................... 41
Section 9.1 Without Consent of Holders................................. 41
Section 9.2 With Consent of Holders.................................... 41
Section 9.3 Compliance with Trust Indenture Act........................ 42
Section 9.4 Revocation and Effect of Consents.......................... 42
Section 9.5 Notation on or Exchange of Securities...................... 43
Section 9.6 Trustee to Sign Amendments, etc............................ 43
Section 9.7 Effect of Supplement and/or Amendment...................... 43
ARTICLE 10.
SECURITY.................................................................. 44
Section 10.1 Operative Documents........................................ 44
Section 10.2 Opinions, Certificates and Appraisals...................... 44
Section 10.3 Authorization of Actions to be Taken by the Trustee
Under the Operative Documents............................ 46
Section 10.4 Payment of Expenses........................................ 46
Section 10.5 Authorization of Receipt of Funds by the Trustee
Under the Operative Documents............................ 46
Section 10.6 Agreement as to Appraised Value and Fair Market Value...... 47
Section 10.7 Intercreditor Agreement.................................... 47
ARTICLE 11.
MISCELLANEOUS............................................................. 47
Section 11.1 Trust Indenture Act Controls............................... 47
Section 11.2 Notices.................................................... 47
Section 11.3 Communications By Holders With Other Holders............... 48
Section 11.4 Certificate and Opinion as to Conditions Precedent......... 48
Section 11.5 Statements Required In Certificate or Opinion.............. 49
Section 11.6 Liens. Rules By Trustee, Paying Agent, Registrar........... 50
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Page
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Section 11.7 Payment Dates............................................. 50
Section 11.8 Governing Law............................................. 50
Section 11.9 No Adverse Interpretation of Other Agreements............. 50
Section 11.10 No Recourse Against Others................................ 51
Section 11.11 Provisions of Indenture for the Sole Benefit of
Parties and Securityholders............................. 51
Section 11.12 Successors................................................ 51
Section 11.13 Duplicate Originals....................................... 51
Section 11.14 Severability.............................................. 51
Section 11.15 Rating Agencies........................................... 51
Section 11.16 Effect of Headings........................................ 52
ARTICLE 12.
RELEASE OF COLLATERAL..................................................... 52
Section 12.1 Release of Collateral..................................... 52
APPENDIX I Definitions
APPENDIX II Rule 144A/Regulation S Appendix
EXHIBIT A Form of 12% Senior Secured Note
EXHIBIT B Form of Legend for Global Securities
EXHIBIT C Form of Acquired Slot Trust Agreement with Form of Subsequent
Deed of Conveyance attached thereto as Exhibit A thereto and Form
of Master Sub-License Agreement attached thereto as Exhibit C
thereto
EXHIBIT D Form of Pledge and Security Agreement
EXHIBIT E Form of Intercreditor Agreement
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INDENTURE dated as of March 31, 1997 between TRANS WORLD AIRLINES, INC., a
Delaware corporation (the "Company"), and FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's 12% Senior Secured
Notes Due 2002 (the "Initial Securities") and, if and when issued pursuant to a
registered exchange for Initial Securities, the Company's 12% Senior Secured
Notes Due 2002 (the "Exchange Securities") and, if and when issued pursuant to a
private exchange for Initial Securities, the Company's 12% Senior Secured Notes
Due 2002 (the "Private Exchange Securities", together with the Exchange
Securities and the Initial Securities, the "Securities").
ARTICLE 1.
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1 Definitions.
-----------
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to such terms in Section 1 of the Definitions Appendix
attached hereto as Appendix I, which shall be a part of this Indenture as if
fully set forth in this place.
Section 1.2 Rules of Construction.
---------------------
The rules of construction for this Indenture are set forth in Section 2 of
the Definitions Appendix.
ARTICLE 2.
THE SECURITIES
Section 2.1 Designation, Form and Dating.
----------------------------
Provisions relating to the Initial Securities, the Private Exchange
Securities and the Exchange Securities are set forth in the Rule 144A/Regulation
S Appendix attached hereto as Appendix II (the "Rule 144A Appendix") which is
hereby incorporated in and expressly made part of this Indenture. The Initial
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to the Rule 144A Appendix (with such
appropriate insertions, omissions, substitutions and other variations as are
required by this Indenture) which is hereby incorporated in and expressly made a
part of this Indenture. The Exchange Securities, the Private Exchange
Securities, and the Trustee's certificates of authentication shall be
substantially in the form of Exhibit A hereto which
is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities and the Private Exchange Securities may be issued with the
appropriate insertions, omissions, substitutions and other, variations. The
Securities may have imprinted or otherwise reproduced thereon such notations,
legends or endorsements, not inconsistent with the provisions of this Indenture,
as may be required to comply with any law or with any rules or regulations
pursuant thereto, or with the rules of any securities market in which the
Securities are admitted to trading, or to conform to general usage. The Company
shall approve the form of the Securities and any notation, legend or endorsement
on them. Each Security shall be dated the date of its authentication and shall
bear interest from the applicable date set forth in the form of security and
shall be payable, unless previously Tendered, on the dates as specified on the
face of the form of the Security.
The terms and provisions contained in the Securities, annexed hereto as
Exhibit A shall constitute, and are hereby expressly made, a part of this
Indenture.
The Person in whose name any Security is registered at the close of
business on any Record Date with respect to any Interest Payment Date shall be
entitled to receive the interest and Liquidated Damages, if any, payable on such
Interest Payment Date to the extent provided by such Security, notwithstanding
any transfer, exchange, or tender, in connection with payment of the Exercise
Price of the Warrants, of such Security subsequent to the Record Date and prior
to such Interest Payment Date, except if and to the extent the Company shall
default in the payment of the interest or Liquidated Damages due on such
Interest Payment Date, in which case defaulted interest or Liquidated Damages,
as the case may be, shall be paid to the Person in whose name the Outstanding
Security is registered at the close of business on the subsequent record date
(which shall be not less than five (5) Business Days prior to the date of
payment of such defaulted interest) established by notice given by mail or on
behalf of the Company to the Holders of Securities not less than fifteen (15)
days preceding such subsequent record date (a "Special Record Date").
Section 2.2 Execution, Amount, Authentication and Delivery.
----------------------------------------------
The Securities shall be signed for the Company by the manual or facsimile
signatures of an Officer and a Certifying Officer. The Company's seal shall be
affixed to or reproduced on the Securities. Typographical or other errors or
defects in any such reproduction of the seal or any such signature shall not
affect the validity or enforceability of any Security which has been duly
authenticated and delivered by the Trustee.
If an officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is limited to (a) $50,000,000 plus (b) such
aggregate principal amount (which
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may not exceed $7,500,000 principal amount) of Securities as shall be purchased
by PaineWebber Incorporated pursuant to the exercise of its overallotment option
under the Purchase Agreement, dated March 27, 1997, between the Company and
PaineWebber Incorporated (the "Over-Allotment Option"), except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities pursuant to Sections 2.6, 2.7, 2.9, 4.15,
or 9.5 or in conjunction with a Registered Exchange Offer or any Private
Exchange.
The Securities shall be known and designated as the "12% Senior Secured
Notes Due 2002" of the Company. Their Stated Maturity shall be April 1, 2002,
and they shall bear interest at the rate of 12% per anum, from March 31, 1997 or
from the most recent Interest Payment Date to which interest and Liquidated
Damages, if any, have been paid or duly provided for, as the case may be,
payable semi-annually on April 1 and October 1, commencing October 1, 1997,
until the principal thereof is paid or made available for payment.
Subject to the limits set forth in the second preceding paragraph of this
Indenture, the Trustee shall authenticate Securities for original issue upon
written order of the Company signed by an Officer and by a Certifying Officer of
the Company. The order shall specify the amount of Securities to be
authenticated and the date on which the original issue of Securities is to be
authenticated, shall provide instructions with respect to the delivery thereof
and shall be accompanied by the documents specified in Sections 10.2 (except in
the case of any original issuance of Securities pursuant to the Over-Allotment
Option) and 11.4 and (except in the case of any original issuance of Securities
pursuant to the Over-Allotment Option) by the following (each to the extent and
in form acceptable to the Trustee, who is authorized conclusively to rely upon
the documents specified in Section 11.4):
(a) the grant to the Collateral Agent, by assignment, pledge, or otherwise
pursuant to the Pledge Agreement, of a security interest in the Collateral and
the conveyance to or otherwise vesting in the Slot Trust of the Acquired Slots;
(b) (i) Officers' Certificates or other satisfactory confirmation (i) with
respect to the Pledge Agreement and the Collateral, that the Company is the
legal and beneficial owner of the Collateral, free and clear of all Liens except
Permitted Liens; (ii) that the Acquired Slots are vested in the Slot Trustee;
and (iii) describing the actions taken to make, obtain and accomplish all
necessary filings, confirmations and identifications referred to in Section 4.15
hereof and Section 7.1(b)(i) of the Master Sub-License Agreement;
(c) compliance with all applicable provisions of Sections 4.13 and 4.15
hereof;
(d) an Officers' Certificate (i) listing (A) (by reference to exhibits or
schedules to the Operative Documents or otherwise) as of the last day of the
month preceding the date hereof the locations of and the Adjusted Cost of the
Ground Equipment, and (B) as of the date of such Certificate, the Acquired Slots
then held by the Slot Trust; and (ii) stating that (A) no dispositions of Ground
Equipment outside of the Ordinary Course have occurred since the date of such
list nor has any amount of Ground Equipment, as described on such list, been
moved from the location
3
indicated other than in the ordinary course of business nor is the sum of such
dispositions or movements, considered in the aggregate, material in relation to
the Property set forth on such list, (B) no material changes in the information
provided have occurred from the last day of the preceding month to the date
hereof; and (C) confirming all representations and warranties of the Company
contained in the Indenture and the Operative Documents as of the date of
authentication;
(e) an Officers' Certificate containing representations and warranties of
the type usual and customary to the issuance of the Securities such as, but not
limited to, representations regarding due authorization of the Indenture; due
authorization of the issuance, sale and delivery of the Securities that the
Securities; when so issued, sold and delivered against payment therefor will be
duly and validly issued, fully paid and non-assessable; that no consent,
approval or authorization of, or designation, declaration, or filing with, any
governmental authority or any other person or entity is required of the Company
in connection with the execution and delivery of the Indenture or the issuance,
sale and delivery of the Securities; and that the Securities have been
registered under the Securities Act or that registration is not required in
connection with the offer, sale and delivery of the Securities;
(f) an Opinion of Counsel to the effect that the Company has the requisite
corporate power and authority to execute, deliver and perform its obligations
under the Indenture; that the Securities have been duly authorized and validly
issued; and that the offer and sale of the Securities have been registered or
will be exempt from the registration requirements under the Securities Act; and
(g) execution and delivery by the Company of the Securities and by all
parties thereto of this Indenture and all Operative Documents;
provided, however, that any Securities in fact authenticated by the Trustee upon
-------- -------
written order of the Company as set forth in the first sentence of this
paragraph shall be deemed to have been duly authenticated hereunder and to
constitute an enforceable contractual obligation of the Company and shall be
entitled to all the benefits of this Indenture and the other Operative Documents
equally and proportionately with any and all other Securities duly authenticated
and delivered hereunder, in each case, notwithstanding any failure of the
Company to deliver any of the documents specified in Sections 10.2 and 11.4 or
above in this sentence;
The Securities shall be issuable only in registered form, without coupons,
in denominations of $1,000 and any integral multiple thereof, except that one
Global Security may be issued in a different denomination.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company,
any guarantor or any Affiliate of the Company.
4
Section 2.3 Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency where Securities eligible
for transfer or exchange may be presented for registration of transfer or for
exchange ("Registrar") and an office or agency where Securities may be presented
for payment or repurchase ("Paying Agent") or tender in payment of the Exercise
Price of the Warrants ("Tender Agent"). The Registrar shall keep a register of
the Securities and of their transfer and exchange ("Register"). Such Register
shall be in written form in the English language or any other form capable of
being converted into such form within a reasonable time. At all reasonable
times such Register shall be open for inspection by the Trustee. The Company
may have one or more co-Registrars and one or more additional paying agents or
tender agents. The term "Paying Agent" or "Tender Agent" includes any
additional paying agent or tender agent.
The Company may enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall notify the Trustee
of the name and address of any such Agent. If the Company fails to maintain a
Registrar, Paying Agent or Tender Agent, the Trustee shall act as such.
The Company initially appoints First Security Bank, National Association,
as Registrar, Paying Agent and Tender Agent.
Section 2.4 Paying Agent to Hold Payments In Trust.
--------------------------------------
Each Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all Payments held by the Paying Agent for the payment of principal
of, interest on, Liquidated Damages, if any, with respect to, the Securities
(whether such Payment has been Paid to it by the Company or any other obligor on
the Securities), and shall notify the Trustee of any default by the Company (or
any other obligor on the Securities) in making any such Payment. The Company at
any time may require a Paying Agent to Pay all Payments held by it to the
Trustee and account for any funds disbursed and the Trustee may at any time
during the continuance of any payment default, upon written request to a Paying
Agent, require such Paying Agent to Pay all Payments held by it to the Trustee
and to account for any Payments distributed. Upon doing so the Paying Agent
shall have no further liability for the Payments.
If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of, interest on, or Liquidated Damages,
if any, with respect to, any of the Securities, segregate and hold in trust for
the benefit of the Persons entitled thereto Payments sufficient to pay the
principal, interest or Liquidated Damages, if any, so becoming due until such
Payments shall be Paid to such Persons or otherwise disposed of as herein
provided, and will promptly notify the Trustee of such action or any failure so
to act.
The Company will, on or before each due date for the payment of the
principal of, interest on, or Liquidated Damages, if any, with respect to, or
any Securities, deposit with a Paying Agent Payments (in same day funds)
sufficient to pay the principal, interest or Liquidated Damages, if any,
5
so becoming due, such Payments to be held in trust for the benefit of the
Persons entitled to such principal, interest, or Liquidated Damages, if any, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of such action or any failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(a) hold all Payments received by it as such agent for the payment of the
principal of, or Liquidated Damages, if any, with respect to or interest on
Securities (whether such Payments have been Paid to it by the Company or by any
other obligor on the Securities) in trust for the benefit of the Persons
entitled thereto until such Payments shall be paid to such Persons or otherwise
disposed of as herein provided;
(b) promptly give the Trustee notice of any failure by the Company (or any
other obligor upon the Securities) to make any payment of the principal of,
interest on, or Liquidated Damages, if any, with respect to the Securities when
the same shall be due and payable; and
(c) at any time during the continuance of any such failure, upon the
written request of the Trustee, forthwith pay to the Trustee all Payments so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, Pay, or direct any
Paying Agent to Pay, to the Trustee all Payments held in trust by the Company or
such Paying Agent, such Payments to be held by the Trustee upon the same trusts
as those upon which such Payments were held by the Company or such Paying Agent;
and, upon such Payment by any Paying Agent to the Trustee, such Paying Agent
shall be released from all further liability with respect to such Payments held
by it as Paying Agent.
Any Payments deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, Repurchase Price
of, interest on or Liquidated Damages, if any, with respect to any Security and
unclaimed for two (2) years after such principal, interest or Liquidated
Damages, if any, has become due and payable shall be Paid to the Company on its
request, or (if then held by the Company) shall be discharged from such trust,
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law, and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof and all liability of the Trustee or such Paying Agent with
regard to such Payments, and all liability of the Company as trustee thereof,
shall thereupon cease.
Section 2.5 Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders identified as to series. If the Trustee is not the Registrar,
the Company shall furnish to the Trustee on or before each Interest
6
Payment Date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.
Section 2.6 Transfer and Exchange.
---------------------
When Securities are presented to the Registrar or a co-Registrar with a
request to register the transfer or to exchange them for an equal principal
amount of Securities of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested if its requirements, for
such transactions are met. To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Securities at the
Registrar's request. All Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Company or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Trustee,
duly executed by the Holder or his attorney duly authorized in writing. The
Company may require payment of a sum sufficient to pay all taxes, assessments or
other governmental charges in connection with any registration of transfer or
exchange, but not for any exchange pursuant to Sections 2.9, 3.5, 4.15 or 9.5 or
any Tender not involving any transfer of Securities (other than to the Company).
No service charge shall be made for any such transaction.
In the case of any Security which is Tendered in part only, upon such
Tender the Company shall execute and the Trustee shall authenticate and make
available for delivery to the Holder thereof, without service charge, a new
Security or Securities of any authorized denomination as requested by such
Holder in aggregate principal amount equal to the non-Tendered portion of the
principal of such Security. No Securities will be issued in denominations of
less than $1000 upon tender of the Securities nor shall any cash be paid by the
Company in connection with a tender of the Securities in payment of the Exercise
Price of the Warrants other than in payment of fractional shares.
All Securities issued upon any transfer or exchange of Securities shall be
valid obligations of the Company, evidencing the same debt of the same series
and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Section 2.7 Mutilated, Defaced, Destroyed, Lost and Stolen Securities.
---------------------------------------------------------
In case any temporary or definitive Security shall become mutilated,
defaced or be apparently destroyed, lost or stolen, subject to compliance with
the following sentence and in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute, and the Trustee shall authenticate and deliver, a new
Security, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in lieu of and
substitution for the Security so apparently destroyed, lost or stolen. In every
case the applicant for a substitute Security shall furnish to the Company and to
the Trustee and any agent of the Company or the Trustee such security or
indemnity as may be required by them to indemnify and defend and to save each of
them harmless and, in every case of
7
destruction, loss or theft, evidence to their satisfaction of the apparent
destruction, loss or theft of such Security and of the ownership thereof.
Upon the issuance of any substitute Security pursuant to the preceding
paragraph, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith. In case any Security which has matured or is about to mature, or has
been tendered for repurchase pursuant to Section 4.15 or has been tendered in
payment of the Exercise Price for the Warrants (as evidenced by an irrevocable
written notice from the Holder to the Company and the Trustee), shall become
mutilated or defaced or be apparently destroyed, lost or stolen, the Company
may, instead of issuing a substitute Security, pay or authorize the payment of
such Security or authorize the issuance of the securities issuable upon exercise
of the Warrants (without surrender of such Security except in the case of a
mutilated or defaced Security), as applicable, if the applicant for such payment
shall furnish to the Company and to the Trustee and any agent of the Company or
the Trustee such security or indemnity as any of them may require to save each
of them harmless from all risks, however remote, and, in every case of apparent
destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee and any agent of the Company or the Trustee evidence to their
satisfaction of the apparent destruction, loss or theft of such Security and of
the ownership thereof.
Every substitute Security issued pursuant to the provisions of this Section
by virtue of the fact that any Security is apparently destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the apparently destroyed, lost or stolen Security shall be at any time
enforceable by anyone and shall be entitled to all the benefits of (but shall
also be subject to all the limitations of rights set forth in) this Indenture
equally and proportionately with any and all other Securities duly authenticated
and delivered hereunder. Every substitute Security issued pursuant to the
provisions of this Section by virtue of the fact that any Security is mutilated
or defaced shall constitute an additional contractual obligation of the Company
and shall be entitled to all the benefits of (but shall also be subject to all
the limitations of rights set forth in) this Indenture equally and
proportionately with any and all other Securities of the same series duly
authenticated and delivered hereunder. All Securities shall be held and owned
upon the express condition that, to the extent permitted by law, the foregoing
provisions are exclusive with respect to the replacement or payment of mutilated
or defaced or apparently destroyed, lost or stolen Securities and shall preclude
any and all other rights or remedies notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.
Section 2.8 Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities have given or concurred in any amendment, request, demand,
authorization, direction, notice, consent or waiver under this Indenture or any
other Operative Document, Securities owned by the Company (including Securities
Tendered), an Affiliate of the Company, any other obligor upon the Securities,
any Affiliate of such obligor upon the Securities or any Person who has given or
concurred in any such
8
amendment, request, demand, authorization, direction, notice, consent or waiver
under the direction of, by agreement with, or as a condition or in consideration
of any exchange offer by or transfer of such Person's Securities to the Company,
an Affiliate of the Company, any other obligor, any Affiliate of such obligor or
any such Person, shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that, for the purposes of determining
whether the Trustee shall be protected in relying on any such amendment,
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee that
neither the Company nor any such other obligor, Affiliate or Person is
affiliated with the pledgee or any Affiliate of the pledgee and that the pledgee
has the present right (subject to no contrary obligation or understanding) so to
act with respect to the Securities on the basis of its best interests as a
Holder independently of any direction by or interest of the Company. In case of
a dispute as to such right, the Trustee in good faith shall be entitled to rely
upon the advice of counsel, including counsel for the Company. Upon request of
the Trustee, the Company shall promptly furnish to the Trustee a certificate of
a Certifying Officer listing and identifying all Securities, if any, known by
the Company to be owned or held by or for the account of any of the above-
described Persons; and subject to Sections 7.1 and 7.2 herein, the Trustee shall
be entitled to accept such certificate as conclusive evidence of the facts
therein set forth and of the fact that all Securities not listed therein are
Outstanding for the purpose of any such determination. The Company shall not,
directly or indirectly, pay or cause to be paid any remuneration, whether by way
of supplemental or additional interest, fee or otherwise, or grant any
additional security, to any Holder of Securities as consideration for or as an
inducement to giving or concurring in any amendment, request, demand,
authorization, direction, notice, consent or waiver under this Indenture or any
other Operative Document unless such remuneration is concurrently paid, or such
security is concurrently granted, as the case may be, on the same terms ratably
to the Holders of all Securities then Outstanding (regardless of whether any
such Holder has given or concurred in such amendment, request, demand,
authorization, direction, notice, consent or waiver under this Indenture or any
other Operative Document).
For purposes of this Section and without limiting the generality of the
foregoing, Securities which are subject to a binding contract or irrevocable
tender offer (including an offer which is in any way conditioned upon or
simultaneous with, or requires as a condition precedent (whether by contract or
otherwise) or which cannot be effected without, the agreement or consent of the
transferor to any amendment, request, demand, authorization, direction, notice,
consent or waiver hereunder) pursuant to which ownership (direct or indirect) is
to be transferred (including for example, Securities tendered to the Company or
any other Person in an exchange transaction) shall be deemed owned by such
transferee, and therefore, any such simultaneous agreement or consent by the
transferor shall be invalid.
Section 2.9 Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the Company may
prepare, and, upon written order of the Company, the Trustee shall authenticate,
temporary Securities in any authorized
9
denominations. Temporary Securities shall be substantially in the form of
definitive Securities of the same series but may have variations that the
Company considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate and deliver
definitive Securities in exchange for temporary Securities. Until so exchanged,
the temporary Securities shall be entitled to the same benefits under this
Indenture as definitive Securities of the same series.
Section 2.10 Cancellation.
------------
The Company may at any time deliver Securities to the Trustee for
cancellation. The Registrar, the Paying Agent and the Tender Agent shall
forward to the Trustee any Securities surrendered to them (i) for transfer,
exchange (including without limitation, Initial Securities exchanged for
Exchanged Securities, Private Exchange Securities or both), repurchase or
payment, or (ii) in payment (in whole or in part) of the Exercise Price of the
Warrants. All Securities purchased pursuant to Section 3.2 shall be cancelled.
The Trustee and no one else shall cancel all Securities surrendered for
transfer, exchange, repurchase, payment (in whole or in part) of the Exercise
Price of the Warrants or cancellation. The Company may not issue new Securities
to replace Securities it has paid (upon Tender or otherwise) or which have been
delivered to the Trustee for cancellation. The Trustee shall destroy all
canceled Securities and, if requested, deliver a certificate of such destruction
to the Company. If the Company shall acquire any of the Securities, such
acquisition shall not operate as a satisfaction of the indebtedness represented
by such Securities unless and until the same are delivered to the Trustee for
cancellation.
Section 2.11 Defaulted Interest.
------------------
If the Company defaults in a payment of interest on, or Liquidated Damages,
if any, with respect to, the Securities, it shall pay the defaulted interest,
plus interest on the defaulted interest or Liquidated Damages, as the case may
be, at the rate then borne on the Securities to the extent permitted by law and
the terms thereof, to the persons who are Securityholders on a subsequent
Special Record Date. The Company shall fix the Special Record Date and payment
date. At least fifteen (15) days before the Special Record Date, the Company
shall mail to each Securityholder a notice that states the Special Record Date,
the payment date and the amount of defaulted interest or Liquidated Damages, as
the case may be, to be paid.
ARTICLE 3.
REDEMPTION AND REPURCHASE
Section 3.1 No Optional Redemption.
----------------------
The Securities Outstanding shall not be subject to redemption in whole or
in part at any time, at the option of the Company.
Section 3.2 Use of Temporary Cash Collateral or Cash Collateral
---------------------------------------------------
for Purchase
------------
10
So long as no Event of Default shall have occurred and be continuing, the
Company may at any time direct the Trustee by Request to apply moneys held by
the Collateral Agent as Temporary Cash Collateral to the purchase of Securities
for cancellation at prices not exceeding their face amount plus accrued interest
and Liquidated Damages, if any, provided that (a) the Request shall specify the
principal amount of Securities to be purchased, the date by which and maximum
price at which the purchase of any Securities is directed, and the arrangements
(which shall be satisfactory to the Trustee) the Company will make to assure
payment of accrued interest and Liquidated Damages, if any, to the date of
purchase on the Securities to be purchased from sources other than Temporary
Cash Collateral; (b) the Trustee shall direct the Collateral Agent to hold for
the account of or transfer to the Trustee Temporary Cash Collateral in the
amounts and to be available at the times specified in the Request, and such
Temporary Cash Collateral shall thereupon be held by the Trustee or Collateral
Agent (together with accrued interest and Liquidated Damages, if any provided by
the Company) for the exclusive purpose of paying, and shall be applied by them
to pay, the principal amount of, accrued interest on, and Liquidated Damages, if
any, with respect to, the Securities purchased on the applicable date of
purchase; (c) the Trustee may enter into such purchase contracts for Securities
as are necessary to comply with the Request; and shall notify the Company and
the Collateral Agent as to the face amount of Securities (including accrued
interest and Liquidated Damages, if any) purchased from time to time; and (d)
Temporary Cash Collateral held exclusively for purposes of this Section may be
returned to the Collateral Agent as Temporary Cash Collateral upon Request
except to the extent it is needed by the Trustee to honor its contracts for the
purchase of Securities or to pay the Repurchase Price of Securities tendered for
repurchase pursuant to Section 4.15. So long as no Event of Default shall have
occurred and be continuing, the Company may at any time direct the Trustee by
Request to apply moneys held by the Collateral Agent as Cash Collateral to the
purchase of Securities for cancellation under the terms and subject to the
provisions of clauses (a) through (c) of the preceding sentence applicable to
Temporary Cash Collateral.
ARTICLE 4.
COVENANTS
Section 4.1 Payment of Securities.
---------------------
The Company shall pay the principal of, interest on and Liquidated Damages,
if any, with respect to the Securities on the dates and in the manner provided
in this Indenture and in the Securities, subject to utilization of Securities in
payment of the Exercise Price of the Warrants,.
The Company shall pay interest semi-annually in arrears on each Interest
Payment Date, commencing with the first such Interest Payment Date to occur
after the Original Issuance Date. Interest shall be paid on each Interest
Payment Date in an amount equal to the interest accrued for the period beginning
from March 31, 1997, or from the most recent date to which interest and
Liquidated Damages, if any, have been paid. All interest due and payable on the
Securities shall be paid in cash.
11
In the case of any Security which is Tendered in payment of the Exercise
Price of Warrants after any Record Date for the payment of interest and on or
prior to the next succeeding Interest Payment Date, interest or Liquidated
Damages whose Stated Maturity is on such Interest Payment Date shall be payable
on such Interest Payment Date notwithstanding such Tender, and such interest or
Liquidated Damages (whether or not punctually paid or duly provided for) shall
be paid to the Person in whose name that Security (or one or more predecessor
Securities to such Security) is registered at the close of business on such
Record Date. Any Security which is tendered in payment of the Exercise Price
after any Record Date for the payment of interest or Liquidated Damages, if any,
and on or prior to the next succeeding Interest Payment Date must be accompanied
by funds equal to the interest and Liquidated Damages, if any, payable on such
succeeding Interest Payment Dates on the principal amount to be tendered in
payment of the Exercise Price of the Warrants. Except as otherwise expressly
provided in the second preceding sentence, in the case of any Security which is
Tendered in payment of the Exercise Price of Warrants, interest whose Stated
Maturity is after the date of Tender of such Security shall not be payable.
No Securities will be accepted in payment of the Exercise Price of the
Warrants, if such acceptance would result in cash being due to Holder in payment
of the principal amount of the Securities at any time other than the Stated
Maturity of the Securities.
An installment of principal, interest or Liquidated Damages, if any, shall
be considered paid on the date due if the Trustee or Paying Agent (other than
the Company or any Affiliate thereof) holds on that date Payments designated for
and sufficient to pay the installment and the Trustee or Paying Agent has not
received instructions from the Company not to make such payment or is not
prohibited from Paying such Payments to the Holders of the Securities pursuant
to this Indenture. An installment of principal on a Security also shall be
considered paid on the date due if the Trustee or Paying Agent holds on such
date instructions from the Holder of the Security to apply such principal to
payment of the Exercise Price of the Warrants.
The Company shall pay interest at the rate set forth in the Securities and
the Company shall pay interest on unpaid interest or Liquidated Damages, if any,
at the same rate to the extent legally permitted.
Section 4.2 Maintenance of Office or Agency.
-------------------------------
The Company shall maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be surrendered for registration
of transfer or exchange or for presentation for payment, repurchase or tender in
payment of the Exercise Price of Warrants and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be served.
At the request of the Company, said office or agency may be the office of an
agent appointed by the Trustee for such purpose. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency not designated or appointed by the Trustee. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office.
12
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
Section 4.3 Limitation on Dividends and Acquisition of Common Stock.
-------------------------------------------------------
The Company will not declare or pay any dividend or make any distribution
on its Common Stock, Employee Preferred Stock or other capital stock of the
Company (other than dividends or distributions payable in the Company's Common
Stock or Employee Preferred Stock or options, warrants or other rights to
acquire, subscribe for or purchase the Company's Common Stock or Employee
Preferred Stock) and will not, and will not permit any of its Subsidiaries to,
purchase, redeem or otherwise acquire for value any shares of its Common Stock,
Employee Preferred Stock or other capital stock of the Company, whether in cash
or property or in obligations of the Company, if, at the time of such
declaration, payment, distribution, purchase, redemption or other acquisition
or, after giving effect thereto, a Default or Event of Default shall have
occurred and be continuing; provided, further, that notwithstanding anything to
-------- -------
the contrary written above, this Section 4.3 shall not apply to: (a) any
purchase or redemption of Common Stock or Preferred Stock by the Company or an
employee stock ownership or benefit plan (i) from union employees or former
union employees, or their respective transferees, pursuant to the terms of
agreements with labor unions existing on the date hereof; (ii) from recipients
or their transferees of such stock from employee stock ownership or benefit
plans subject to ERISA; (iii) from employee stock ownership or benefit plans
subject to ERISA in order to provide cash benefits to employees pursuant to the
terms of such plans; and (iv) as required by ERISA; and (b) any purchase or
redemption of Common Stock or Preferred Stock by an employee stock ownership or
benefit plan subject to ERISA for an aggregate consideration, without regard to
purchases or redemptions pursuant to clause (a) above, of up to $200,000,000;
(c) the payment of fixed or mandatory dividends on or scheduled redemptions or
exchanges of any of the Company's 8% Preferred Stock and the payment of any
interest on the securities issuable upon such exchange; (d) the payment of any
dividends on or the purchase, redemption or other acquisition or retirement of
the Common Stock or Preferred Stock of the Company within sixty (60) days after
the date of declaration of such dividend or the commitment to make such
purchase, redemption or other acquisition or retirement, if at said date of
declaration or commitment such payment or commitment complied with this Section
4.3; (e) the purchase, redemption, retirement or other acquisition of any shares
of the Company's Common Stock or Preferred Stock in exchange for, or out of the
proceeds of the substantially concurrent sale of, Common Stock or Preferred
Stock of the Company; (f) any consolidation or merger with or into any Person or
conveyance or transfer of all or substantially all of the Company's Property to
one or more Persons substantially as an entirety, not prohibited by the terms of
Section 5.1; and (g) the conversion of Employee Preferred Stock into Common
Stock.
13
Section 4.4 Corporate Existence.
-------------------
(a) Except as otherwise provided in Article 5, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate existence of each Pledged
Subsidiary and the corporate existence of each other Subsidiary engaged in
substantial business activity each in accordance with the respective
organizational documents of the Company and each such Subsidiary and the rights
(charter and statutory), licenses, permits, approvals and governmental
franchises of the Company and each such Subsidiary necessary to the conduct of
its respective business; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or (other than with
respect to the Pledged Subsidiaries) to preserve the corporate existence of any
such Subsidiary, if the Board of Directors shall determine that the preservation
thereof is no longer in the interest of the Company and that termination of the
corporate existence is not disadvantageous to the Holders in any material
respect.
(b) The Company shall continue to be an air carrier certificated under
Section 604(b) of the Federal Aviation Act.
(c) The Company is and, to the extent required to operate its business as
presently conducted and to perform its obligations under this Indenture and the
Operative Documents, shall remain a "citizen of the United States" as defined in
Section 101(16) of the Federal Aviation Act.
Section 4.5 Payment of Taxes and other Claims.
---------------------------------
The Company shall, and shall cause each Subsidiary to, pay or discharge or
cause to be paid or discharged, before the same shall become delinquent, (a) all
taxes, assessments and governmental charges levied or imposed upon the Company
and each Subsidiary or upon the income, profits or Property of the Company and
each Subsidiary or upon the Collateral, the Slot Trust or the Acquired Slots and
(b) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a Lien upon the Collateral, the Slot Trust, the Acquired Slots or
the other Property of the Company or a Subsidiary; provided, however, that the
Company or a Subsidiary, as the case may be, shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim (i) the amount, applicability or validity of which is being contested in
good faith by appropriate proceedings as permitted by and in accordance with the
provisions of the Operative Documents, to the extent applicable, and for which
adequate reserves have been established in accordance with generally accepted
accounting principles, as in effect from time to time, or (ii) if the Company
delivers to the Trustee a Certificate of an Officer stating that such non-
payment and non-discharge is in the interest of the Company and not prejudicial
in any material respect to the Holders.
Nothing contained herein or in the Securities shall be deemed to impose on
the Trustee or on the Company any obligation to pay on behalf of the Holder of
any Securities any tax, assessment or governmental charge required by any
present or future law of the U.S. or of any state, county, municipality or other
taxing authority thereof to be paid on behalf of, or withheld from the amount
14
payable to, the Holder of any Securities; rather any tax, assessment or
governmental charge shall, to the extent required by law, be withheld from the
amounts provided for herein.
Section 4.6 Notices.
-------
The Company shall notify the Trustee in writing of any of the following
promptly (and in any event within five (5) Business Days after an Officer learns
of the occurrence thereof) describing the same and, if applicable, the steps
being taken by the Person(s) affected with respect thereto:
(a) In the event of any failure to pay any Senior Obligation at its stated
maturity or any default on any Senior Obligations giving any Person the right to
cause such Senior Obligations to become due prior to their stated maturity or
exercise other remedies, regardless of any waiver of such default or non-
exercise of such right;
(b) In the event that any other Indebtedness of the Company in a principal
amount in excess of $15,000,000 (i) is declared due and payable before its
stated maturity because of the occurrence of any default (or any event which,
with notice or the lapse of time, or both, shall constitute such default) under
such Indebtedness or (ii) is not paid at its stated maturity; or
(c) Any litigation, arbitration proceeding or governmental proceeding
involving damages or potential liability in excess of $15,000,000 is instituted
against the Company or any of its Subsidiaries which, if adversely determined,
would have a material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries taken as a whole.
Section 4.7 Maintenance of Properties.
-------------------------
Except as otherwise provided in this Indenture, the Company shall, and
shall cause each Subsidiary to, cause all material Properties owned by or leased
to it and used or useful in the conduct of the business of the Company or any
Subsidiary, as the case may be, to be maintained and kept in normal condition,
repair and working order, except for reasonable wear and use, and supplied with
all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary, so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
except, in every case, as and to the extent that the Company or any Subsidiary
may be prevented by fire, strikes, lockouts, acts of God, inability to obtain
labor or materials, governmental restrictions, enemy action, civil commotion or
unavoidable casualty or similar causes beyond the control of the Company or such
Subsidiary; provided, however, that subject to all requirements of the Operative
Documents, nothing in this Section 4.7 shall prevent the Company or any
Subsidiary from discontinuing the use, operation or maintenance of any such
Properties, or disposing of any of them, if such discontinuance or disposal is,
in the good faith judgment of an Officer of the Company (or other agent employed
by the Company) having managerial responsibility for any such Property (or, in
the case of any materially important item, with respect to operations or value,
in the good faith judgment of the Company as expressed in a resolution of the
Board of Directors), desirable in the conduct of the business of the Company.
15
Section 4.8 Default Notices and Compliance Certificates.
-------------------------------------------
Contemporaneously with furnishing quarterly financial reports to the
Trustee under Section 4.9(a) or mailing quarterly statements to the Trustee and
Holders under Section 4.9(c), the Company shall furnish to the Trustee a
Certifying Officer's Certificate to the effect that no Default or Event of
Default has occurred or is continuing, or, if there is any such Default or Event
of Default, describing it and the steps, if any, being taken to cure it.
The Company shall deliver to the Trustee within one hundred twenty (120)
days after the end of each fiscal year in which any of the Securities remain
Outstanding (i) a certificate of the principal executive officer, principal
financial officer or principal accounting officer of the Company (which need not
comply with the provisions of Section 11.5) stating whether or not, to the
knowledge of the signer, the Company is in compliance with all conditions and
covenants under this Indenture and the Operative Documents (determined without
regard to any period of grace or requirement of notice), and if the Company is
not in compliance with all such conditions and covenants, describing each
Default or Event of Default and its status, and (ii) a certificate of one of the
foregoing officers or an Officers' Certificate stating whether or not, to the
knowledge of the signer, the Company is in compliance with all conditions and
covenants under each Senior Security Agreement, and if not, describing each
default or event of default thereunder and its status. The first certificates
to be delivered by the Company pursuant to this Section 4.8 shall be for the
fiscal year ending December 31, 1997.
Section 4.9 SEC Reports.
-----------
(a) The Company shall deliver to the Trustee as soon as practicable after
it files them with the SEC, copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Sections 13 or 15(d) of the Securities Exchange
Act of 1934, as amended. The Company also shall comply with the other
provisions of TIA (S) 314(a).
(b) So long as any of the Securities remain Outstanding, the Company shall
cause its annual report to stockholders and any quarterly or other financial
reports furnished by it to stockholders generally, to be mailed to the Holders
of such Outstanding Securities at their addresses appearing in the Register.
(c) At any time the Company does not have a class of securities registered,
or is not otherwise required to file quarterly and other reports under the
Securities Exchange Act of 1934, as amended, the Company will prepare or cause
to be prepared, for each of the first three (3) quarters of each fiscal year, an
unaudited balance sheet of the Company and its consolidated Subsidiaries as at
the end of such quarter and related unaudited consolidated statements of income
and retained earnings and cash flow of the Company and its consolidated
Subsidiaries for such quarter and the portion of the fiscal year through such
date, setting forth in each case in comparative form the figures for the
corresponding year-to-date period in the previous year, certified by the
principal
16
financial officer of the Company, and for each fiscal year, an audited
balance sheet of the Company and its consolidated Subsidiaries as at the end of
such year and related audited consolidated statements of income and retained
earnings and cash flow of the Company and its consolidated Subsidiaries for such
year, setting forth in comparative form the figures for the previous year,
reported on without a qualification arising out of the scope of the audit, by
the Company's independent public accountants. All financial statements will be
prepared in accordance with generally accepted accounting principles, as in
effect from time to time, consistently applied, except for changes with which
the Company's independent public accountants concur and except that quarterly
statements may be subject to year-end adjustments. The Company will cause a
copy of the respective financial statements to be mailed to the Trustee and each
of the Holders of the Securities within forty-five (45) days after the close of
each of the first three (3) quarters of each fiscal year and within one hundred
twenty (120) days after the close of each fiscal year, to the addresses set
forth in Section 11.2 or, in the case of each of the Holders, to such Holder's
address as set forth in the Register of the Securities.
Section 4.10 Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim,
and will resist any and all efforts to be compelled to take the benefit or
advantage of, any stay or extension law or any usury law or other law that would
prohibit or forgive the Company from paying all or any portion of the principal
of, interest on, or Liquidated Damages, if any, with respect to the Securities
as contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Indenture and the
Operative Documents; and (to the extent that it may lawfully do so) the Company
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power granted to
the Trustee herein and in the Operative Documents, but will suffer and permit
the execution of every such power as though no such law had been enacted.
Section 4.11 Amendment to Certain Agreements.
-------------------------------
The Company shall not enter into or consent to any amendment, supplement or
other modification of the Operative Documents except as permitted under Article
9 hereof.
Section 4.12 Liens.
-----
The Company represents and warrants that it has, and covenants that it
shall continue to have, full power and lawful authority to grant, release,
convey, assign, transfer, mortgage, pledge, hypothecate and otherwise create the
security interests in the Collateral referred to in Article 10; the Company
shall warrant, preserve and defend the interest and title of the Collateral
Agent to the Collateral, and of the Pledged Subsidiaries to their respective
Properties, against the claims of all persons and will maintain and preserve the
security interests contemplated by Article 10; and the Company shall not, and
not permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or suffer to exist any Lien upon or with respect to the Collateral,
except for Permitted Liens.
17
The Company shall cause the Operative Documents, including all necessary
financing statements, notifications of secured transactions and other assurances
or instruments to be properly recorded, registered and filed and to be kept,
recorded, registered and filed in such manner and in such places as may be
required by law and shall take all such other actions as may be required in
order to make effective the security interests intended to be created in
connection with this Indenture. The Company shall furnish to the Trustee the
Opinions of Counsel required by Section 10.2 to confirm such action.
Section 4.13 Books, Records, Access; Confidentiality.
---------------------------------------
(a) The Company shall, and shall cause each of its Subsidiaries to, (i)
maintain complete and accurate books and records in which full and correct
entries in conformity with generally accepted accounting principles shall be
made of all dealings and transactions in relation to its respective business and
activities, (ii) permit authorized representatives of the Trustee, the
Collateral Agent and/or the Slot Trustee to visit and inspect the Properties of
the Company or its Subsidiaries, and any or all books, records and documents in
the possession of the Company relating to the Collateral and the Acquired Slots,
including the records, logs, and other materials referred to in Section 4.8 of
the Pledge Agreement, and to make copies and take extracts therefrom and to
visit and inspect the Collateral, all upon reasonable notice and at such
reasonable times during normal business hours and as often as may be reasonably
requested, and (iii) permit the authorized representatives of any Trustee
Appraiser or Third-Party Appraiser to visit and inspect the Properties, books,
records and documents described in clause (ii) and any Properties to be provided
as Substitute Collateral (including comparable books, records and documents
relating thereto), at such times and to such extent as may be necessary to allow
timely completion of any Independent Appraiser's Certificate to be prepared by
such Trustee Appraiser or Third Party Appraiser.
(b) The Trustee, the Collateral Agent, the Slot Trustee and their
respective authorized representatives referred to in clause (a) above agree not
to use any information obtained pursuant to this Section 4.13 for any purpose
other than as required in order to discharge their respective duties hereunder
and under the Operative Documents and except as otherwise required for such
purpose to keep confidential and not to disclose any such information to any
person except that (i) the recipient of the information may disclose any
information which becomes publicly available other than as a result of
disclosure by such recipient, (ii) the recipient of the information may disclose
any information which its counsel reasonably concludes is necessary to be
disclosed by law, pursuant to any court or administrative order or ruling or in
any pending legal or administrative proceeding or investigation after notice to
the Company adequate, subject to applicable laws, to allow the Company to obtain
a protective order or other appropriate remedy, provided that the recipient of
the information will (if not otherwise required in order to discharge its duties
as aforesaid) cooperate with the Company's efforts to obtain a protective order
or other reliable assurance that confidential treatment will be accorded any
such information required to be so disclosed, and (iii) the recipient of the
information may disclose any information necessary to be disclosed pursuant to
any provision of the TIA.
18
Section 4.14 Security Interests.
------------------
The Company and its Subsidiaries shall perform any and all acts and execute
any and all documents (including, without limitation, the execution, amendment
or supplementation of any financing statement and continuation statement or
other statement) for filing under the provisions of the Federal Aviation Act and
the applicable Uniform Commercial Code and the rules and regulations thereunder
or any other statute, rule or regulation of any applicable federal, state or
local jurisdiction, which are necessary or advisable, from time to time, in
order to grant and maintain in favor of the Collateral Agent for the benefit of
the Holders a valid, perfected Lien on the Collateral.
The Company and its Subsidiaries shall deliver or cause to be delivered to
the Collateral Agent from time to time such other documentation, consents,
authorizations, approvals and orders in form and substance satisfactory to the
Collateral Agent as it shall deem reasonably necessary or advisable to perfect
or maintain the Liens for the benefit of the Holders.
The Company will not nor permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume or suffer or permit to exist any Lien upon or
with respect to any Property (other than the Pledged Stock of the Gate
Companies) of the Company or any of its Subsidiaries that is, or is required to
be, subject to any of the Operative Documents (pursuant to the terms hereof or
thereof) except for Permitted Liens.
Section 4.15 Change in Control.
-----------------
(a) In the event that there shall occur a Change in Control (as defined
below) of the Company, each Holder of a Security shall have the right (the
"Repurchase Right") upon receipt of a Repurchase Right Notice (as defined
below), at such Holder's option, to require the Company to repurchase any
Security of such Holder or any portion of the principal amount thereof which is
$1,000 or an integral multiple of $1,000, on the date (the "Repurchase Date")
that is 45 days after the date of the Repurchase Right Notice, or, if such 45th
day is a Legal Holiday, the next subsequent day which is not a Legal Holiday,
unless otherwise required by applicable law, at a purchase price equal to 100%
of the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to and including the Repurchase Date (the "Repurchase Price").
The right to require the repurchase of Securities shall not continue after a
discharge of the Company from its obligations with respect to the Securities in
accordance with Article 8.
(b) Within thirty (30) days after the occurrence of a Change in Control,
the Company, or, at the request of the Company and at the Company's expense, the
Trustee, shall give notice of the occurrence of the Change in Control and of the
Repurchase Right set forth herein (the "Repurchase Right Notice") by first-class
mail, postage prepaid, to each Holder of the Securities at such Holder's address
appearing in the registry books of the Company kept by the registrar. The
Company shall deliver a copy of the Repurchase Right Notice to the Trustee. The
Company shall also place such notice in a financial newspaper of general
circulation in New York City. No failure of the Company to give the foregoing
notice shall limit any such Holder's rights to exercise a Repurchase Right. Any
such notice shall state that a Change in Control has occurred and that such
19
Holder has the right to require the Company to repurchase such Holder's
Securities and shall contain all instructions and materials necessary to enable
such Holders to deliver Securities pursuant to the Repurchase Right including,
without limitation, the following:
(1) the Repurchase Date;
(2) the date by which the Repurchase Right must be exercised;
(3) the Repurchase Price;
(4) that Securities are to be surrendered for payment of the
Repurchase Price;
(5) that the exercise of the Repurchase Right is irrevocable on and
after the fifth Business Day prior to the Repurchase Date, unless
(i) the Company shall default in making the repurchase payment
when due, in which case Holders who elect to exercise the
Repurchase Right will retain the right to tender Securities
submitted for repurchase in payment of the Exercise Price of the
Warrants until the close of business on the date such default is
cured and such Security is repurchased; or (ii) the Company shall
otherwise, in its sole discretion, consent thereto; and
(6) the then existing Exercise Price for exercise of the Warrants,
the date on which the right to tender the principal of the
Securities to be repurchased in payment of the Exercise Price of
the Warrants will terminate and the place or places where such
Securities may be tendered in payment of the Exercise Price of
the Warrants.
(c) To exercise a Repurchase Right, a Holder shall deliver to the Company
(if it is acting as its own Paying Agent) or to a Paying Agent designated by the
Company for such purpose in the notice referred to above on or before the 30th
day after the date of the Repurchase Right Notice, or, if such day is a Legal
Holiday, the next subsequent day which is not a Legal Holiday, (i) written
notice (which notice shall be deemed to be delivered when received) of the
Holder's exercise of such right, which notice shall set forth the name of the
Holder, the principal amount of Securities (or portions thereof) to be
repurchased, a statement that an election to exercise the Repurchase Right is
being made thereby, and (ii) the Securities with respect to which the Repurchase
Right is being exercised, duly endorsed for transfer to the Company, and the
Holder of such Securities shall be entitled to receive from the Company (if it
is acting as its own Paying Agent) or such Paying Agent a non-transferable
receipt of deposit evidencing such deposit. Such written notice shall be
irrevocable, except as provided in Section 4.15(b) above. Interest on any
Securities or portion thereof tendered for repurchase pursuant to a Repurchase
Right will cease to accrue on and after the Repurchase Date.
(d) In the event a Repurchase Right shall be exercised in accordance with
the terms hereof, the Company shall pay or cause to be paid the applicable
Repurchase Price with respect to
20
the Securities as to which the Repurchase Right shall have been exercised to the
Holder on the Repurchase Date.
(e) Prior to a Repurchase Date, the Company shall deposit with the Trustee
or with a Paying Agent (or if the Company is acting as its own Paying Agent,
segregate and hold in trust in accordance with Section 2.4) an amount of money
sufficient to pay the Repurchase Price payable in respect of all of the
Securities which are to be repurchased on that date. If any Security submitted
for repurchase is converted prior to the repurchase thereof, any money deposited
with the Trustee or with the Paying Agent or so segregated and held in trust for
the redemption of such Security shall be paid to the Company upon its request,
or, if then held by the Company, shall be discharged from such trust.
(f) Both the notice of the Company and the notice of the Holder having
been given as specified in this Section 4.15, the Securities so to be
repurchased shall, on the Repurchase Date become due and payable at the
Repurchase Price applicable thereto and from and after such date (unless the
Company shall default in the payment of the Repurchase Price) such Securities
shall cease to bear interest. Upon surrender of any such Security for
repurchase in accordance with said notice, such Security shall be paid by the
Company at the Repurchase Price. If any Security shall not be paid upon
surrender thereof for repurchase, the principal shall, until paid, bear interest
from the Repurchase Date at the rate borne by such Security.
(g) Any Security which is to be submitted for repurchase only in part
shall be delivered pursuant to this Section 4.15 (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing) and the Company shall
execute, and the Trustee shall authenticate and make available for delivery to
the Holder of such Security without any service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder, of the
same tenor and in aggregate principal amount equal to and in exchange for the
portion of the principal of such Security not submitted for repurchase.
(h) If any repurchase pursuant to the foregoing provisions constitutes an
"issuer tender offer" as defined in Rule 13e-4 under the Exchange Act, the
Company will comply with the requirements of Rule 13e-4, Rule 14e-1 and any
other tender offer rules under the Exchange Act which then may be applicable,
including the filing of an issuer tender offer statement on Schedule 13E-4 with
the SEC and the furnishing of certain information contained therein to the
Holders.
(i) As used in this Section 4.15:
A "Change in Control" means the occurrence of any of the following
events: (i) any person (including any entity or group deemed to be a "person"
under Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) is or becomes
the direct or indirect beneficial owner (as determined in accordance with Rule
13d-3 under the Exchange Act) of shares of the Company's capital stock
representing greater than 50% of the total voting power of all shares of capital
stock of the Company entitled to vote in the election of Directors under
ordinary circumstances or to elect a majority of
21
the Board of Directors of the Company, (ii) the Person then constituting the
"Company" hereunder sells, transfers or otherwise disposes of all or
substantially all of its assets (regardless of whether such Person thereupon
ceases to constitute the "Company" hereunder pursuant to Section 5.2 hereof),
(iii) when, during any period of 12 consecutive months after the date of
original issuance of the Securities, individuals who at the beginning of any
such 12-month period constituted the Board of Directors of the Company (together
with any new directors whose election by such Board or whose nomination for
election by the stockholders of the Company was approved by a vote of a majority
of the directors still in office entitled to vote with respect to such
nomination who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved, but excluding
any of the individuals who at the beginning of such 12-month period constituted
such Board but who ceased to be a member of the Board pursuant to the Company's
mandatory retirement policy as in effect as of the date of this Indenture),
cease for any reason to constitute a majority of the Board of Directors of the
Company then in office or (iv) the date of the consummation of the merger or
consolidation of the Person then constituting the "Company" hereunder with
another corporation where the stockholders of such Person, immediately prior to
the merger or consolidation, would not beneficially own, immediately after the
merger or consolidation, shares entitling such stockholders to 50% or more of
all votes (without consideration of the rights of any class of stock to elect
directors by a separate class vote) to which all stockholders of the corporation
issuing cash or securities in the merger or consolidation would be entitled in
the election of directors or where members of the Board of Directors of the
Person then constituting the "Company" hereunder, immediately prior to the
merger or consolidation, would not, immediately after the merger or
consolidation, constitute a majority of the board of directors of the
corporation issuing cash or securities in the merger or consolidation.
Section 4.16 Restrictions on Becoming an Investment Company. The Company
----------------------------------------------
shall not become an investment company within the meaning of the Investment
Company Act of 1940 as such statute and the regulations thereunder and any
successor statute or regulations thereto may from time to time be in effect.
ARTICLE 5.
SUCCESSOR CORPORATION
Section 5.1 Covenant Not to Consolidate, Merge, Convey or Transfer Except
-------------------------------------------------------------
Under Certain Conditions.
------------------------
The Company shall not consolidate with, or merge with or into, or convey or
transfer (excluding by way of lease) all or substantially all of its Properties
(as determined at the time of such transfer without regard to any prior
conveyance or transfer or series of conveyances or transfers made on unrelated
transactions) to any other Person, or permit any Person to convey, lease or
transfer all or substantially all of its Properties to the Company, unless:
22
(a) The Company shall be the continuing Person or the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged or to which all or substantially all of the Properties of the Company are
conveyed or transferred (the "surviving Person"): (i) shall be a corporation
organized and existing under the laws of the United States of America or any
state thereof or the District of Columbia; (ii) shall expressly assume, by an
indenture and other agreements supplemental hereto and to the Operative
Documents, executed and delivered to the Trustee in form reasonably satisfactory
to the Trustee, the due and punctual payment of the principal of, interest on
and Liquidated Damages with respect to all the Securities and the observance and
performance of every covenant, condition and obligation of this Indenture, the
Securities and the Operative Documents on the part of the Company to be observed
or performed;
(b) Immediately before and immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing hereunder;
(c) In the case of any such conveyance or transfer, such conveyance or
transfer includes, without limitation, all of the Collateral and in any event
such consolidation, merger, conveyance or transfer shall be on such terms as
shall fully preserve the Lien and security of each of the Operative Documents,
the priority thereof purported to be established thereby and the rights and
powers of the Trustee, the Collateral Agent, the Slot Trustee and the Holders of
the Securities under each of the Operative Documents; and
(d) The Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each stating that such merger, consolidation, transfer,
conveyance, or acquisition of assets and such supplemental indenture comply with
the Indenture.
Section 5.2 Successor Person Substituted.
----------------------------
Upon any consolidation or merger, or any conveyance or transfer (excluding
by way of lease) of all or substantially all of the Properties of the Company in
accordance with Section 5.1, the surviving entity formed by such consolidation
or into which the Company is merged or the surviving entity to which such
conveyance or transfer is made shall succeed to, and be substituted for, and be
bound by and obligated to pay the obligations of, and may exercise every right
and power of, the Company under this Indenture, the Securities and the Operative
Documents with the same effect as if such successor had been named as the
Company herein and therein; and in the event of any such conveyance or transfer,
the Person that immediately prior to such conveyance or transfer constituted the
"Company" shall be discharged from all obligations and covenants under the
Indenture, the Securities and the Operative Documents and may be dissolved and
liquidated.
Such surviving entity may cause to be signed, and may issue either in its
own name or in the name of the Company prior to such succession any or all of
the Securities issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee; and, upon the order of such
surviving entity, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Company
23
to the Trustee for authentication, and any Securities which such surviving
entity thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All of the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, transfer or conveyance
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
Section 5.3 Limitation on Lease of Properties. Without limitation of the
---------------------------------
prohibitions set forth in the other Operative Documents, the Company shall not
lease all or substantially all of its Properties to any Person.
ARTICLE 6.
DEFAULT AND REMEDIES
Section 6.1 Events of Default.
-----------------
An "Event of Default" occurs if:
(a) the Company defaults in the payment of interest on, or Liquidated
Damages, if any, with respect to, any Security when the same becomes due and
payable and the default continues for thirty (30) days;
(b) the Company defaults in the payment of the principal amount of any
Securities when the same becomes due and payable at maturity, upon acceleration
or tender for repurchase, or otherwise;
(c) the Company fails to comply with the covenants contained in Sections
4.3 or 4.12 hereof, takes any action prohibited by Section 5.1 hereof,
discontinues substantially all of its commercial airlines operations, fails to
comply with the covenants contained in Sections 4.4(a), 4.4(c), or 4.9 of the
Pledge Agreement or Section 5.1(e) of the Master Sub-License Agreement within
the time periods provided therein, or fails to pay over amounts required under
Section 4.11(c) of the Pledge Agreement;
(d) (i) the Company fails in any material respect to comply with any of
its other agreements contained in the Securities, this Indenture or the
Operative Documents or (ii) any representation or warranty made by the Company
in this Indenture, the Operative Documents, any Subsequent Deed of Conveyance or
any Supplemental Pledge Agreement or in any certificate of the Company delivered
hereunder or under any such document shall prove to have been untrue in any
24
material respect when made, and in any such case such default continues for the
period and after the notice specified below;
(e) there shall be a default or an event under or with respect to (i) any
Indebtedness of the Company or any Significant Subsidiary in excess of
$15,000,000 in principal amount, (ii) any Senior Obligation or related Senior
Security Agreement, whether such Indebtedness or Senior Obligation now exists or
shall hereafter be created, and the effect of any such default or event is to
cause the principal amount of any such Indebtedness or Senior Obligation to
become due, to have the date of payment thereof fixed prior to its stated
maturity or the date it would otherwise become due and while any Securities are
Outstanding, or to be unpaid at maturity while any Securities are Outstanding,
but only if such redemption or payment thereupon or thereafter occurs;
(f) the Company or any Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law (as hereinafter defined):
(i) commences a voluntary case or proceeding,
(ii) consents to the entry of an order for relief against it in an
involuntary case or proceeding,
(iii) consents to the appointment of a Custodian (as hereinafter
defined) of it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is unable to pay its debts as the same become due;
(g) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any Significant Subsidiary
in an involuntary case or proceeding,
(ii) appoints a Custodian of the Company or any Significant Subsidiary
for all or substantially all of its properties, or
(iii) orders the liquidation of the Company or any Significant
Subsidiary,
and in each case the order and decree remains unstayed and in effect for sixty
(60) consecutive days;
(h) final, non-appealable judgments for the payment of money which
judgments in the aggregate exceed $15,000,000 shall be rendered against the
Company or any Significant Subsidiary or by a court of competent jurisdiction
remain undischarged, unstayed and unsatisfied for the period and after the
notice specified below; or
25
(i) any of the Operative Documents ceases, without the consent of the
Trustee, to be in full force and effect, provided, however, that if an Operative
-------- -------
Document ceases to be in full force and effect by virtue of, or arising out of,
any action by the Federal Aviation Administration terminating proprietary rights
to airport takeoff and landing access or otherwise eliminating Slots that such
occurrence shall not give rise to a Default or Event of Default.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator, sequestrator or similar official under
any Bankruptcy Law.
A Default under clause (d), (e) or (h) of this Section 6.1 is not an Event
of Default until the Trustee notifies the Company, or the Holders of at least
twenty-five percent (25%) in aggregate principal amount of the Securities
Outstanding notify the Company and the Trustee, of the Default and the Company
does not cure the Default within sixty (60) days with respect to clauses (d) and
(h), or within thirty (30) days with respect to clause (e), after receipt of the
notice; provided, however, that the Company shall be permitted such longer
period of time, if any, as may be provided for under the Operative Documents in
respect of any particular Default. The notice must specify the Default, demand
that it be remedied and state that the notice is a "Notice of Default." When a
Default is cured, it ceases.
Section 6.2 Acceleration.
------------
If an Event of Default (other than an Event of Default specified in Section
6.1(f) or (g)) occurs, and is continuing, the Trustee may, by notice to the
Company, or the Holders of at least twenty-five percent (25%) in aggregate
principal amount of the Securities Outstanding may, by notice to the Company and
the Trustee, and the Trustee shall, upon the request of such Holders, declare
all unpaid principal of, accrued interest and Liquidated Damages, if any, to the
date of acceleration on the Securities Outstanding (if not then due and payable)
to be due and payable and upon any such declaration, the same shall become and
be immediately due and payable. If an Event of Default specified in Section
6.1(f) or (g) occurs, all unpaid principal of, accrued interest on and
Liquidated Damages, if any, with respect to, the Securities Outstanding shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Securityholder. Upon payment of
such principal amount, interest, and Liquidated Damages, if any, all of the
Company's obligations under the Securities and this Indenture, other than
obligations under Sections 7.7 and 8.4, shall terminate. The Holders of a
majority in principal amount of the Securities then Outstanding by notice to the
Trustee may rescind an acceleration and its consequences if (a) all existing
Events of Default, other than the non-payment as to the Securities of the
principal, interest or Liquidated Damages, if any, which has become due solely
by such declaration of acceleration, have been cured or waived, (b) to the
extent the payment of such interest is permitted by law, interest on overdue
installments of interest and on overdue principal which has become due otherwise
than by such declaration of acceleration, has been paid, (c) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction, and (d) all payments due to the Trustee and any predecessor
Trustee under Section 7.07 have been made.
26
Section 6.3 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of, interest on or Liquidated Damages, if any, with respect to the
Securities or to enforce the performance of any provision of the Securities or
this Indenture including, without limitation, instituting proceedings and
exercising and enforcing, or directing exercise and enforcement of, all rights
and remedies of the Trustee, the Collateral Agent and the Slot Trustee under the
Operative Documents (provided that the Collateral Agent shall only be permitted
to become the record Holder of the Beneficial Interest and the Beneficial
Interest Certificate as and when described in Section 6.1 of the Pledge
Agreement) and directing the Collateral Agent to deposit with the Trustee all
cash and/or Investment Securities held by the Collateral Agent.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.4 Waiver of Past Defaults.
-----------------------
Subject to Sections 6.7, 9.2 and 9.6, the Holders of a majority in
principal amount of the Securities Outstanding by notice to the Trustee may
authorize the Trustee to waive an existing Default or Event of Default and its
consequences, except a Default (a) in the payment of principal of or interest on
or Liquidated Damages with respect to any Security as specified in clauses (a)
and (b) of Section 6.1 or (b) in respect of a covenant or provision hereof which
cannot be modified or amended without the consent of the Holder of each Security
affected. When a Default or Event of Default is waived, it is cured and ceases,
and the Company, the Holders and the Trustee shall be restored to their former
positions and rights hereunder respectively; but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon.
Section 6.5 Control by Majority.
-------------------
The Holders of a majority in principal amount of the Securities Outstanding
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee (as Trustee, Collateral Agent or Slot Trustee,
subject, in the case of any actions based on the status of the Trustee as
Collateral Agent or Slot Trustee, to any limitations otherwise expressly
provided for in the Operative Documents) or exercising any trust or power
conferred on it; provided that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction. The
Trustee may refuse to follow any direction hereunder or authorization under
Section 6.4 that conflicts with law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of another Securityholder, or
that the Trustee determines may subject the Trustee to personal liability.
However, the Trustee shall have no liability for any actions or omissions to act
which are in accordance with any such direction or authorization.
27
Section 6.6 Limitation on Suits.
-------------------
A Securityholder may not pursue any remedy with respect to this Indenture
or the Securities unless:
(a) the Holder gives to the Trustee written notice of a continuing Event
of Default;
(b) the Holders of at least twenty-five percent (25%) in principal amount
of the Securities Outstanding make a written request to the Trustee to pursue
the remedy;
(c) such Holder or Holders offer to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within sixty (60) days
after receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the Securities Outstanding do not give the Trustee a direction which,
in the opinion of the Trustee, is inconsistent with such request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
Section 6.7 Rights of Holders to Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal of, interest on, and
Liquidated Damages, if any, with respect to, the Security in cash, on or after
the respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
It is hereby expressly understood, intended and agreed that any and all
actions which a Holder of the Securities may take to enforce the provisions of
this Indenture and/or collect Payments due hereunder or under the Securities,
except to the extent that such action is determined to be on behalf of all
Holders of the Securities, shall be in addition to and shall not in any way
change, adversely affect or impair the rights and remedies of the Trustee or any
other Holder of the Securities thereunder or under this Indenture and the
Operative Documents, including the right to foreclose upon and sell the
Collateral or any part thereof and to apply any proceeds realized in accordance
with the provisions of this Indenture.
Section 6.8 Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of interest or principal specified in
clause (a) or (b) of Section 6.1 occurs and is continuing, the Trustee may
recover judgment in its own name and as
28
trustee of an express trust against the Company or any other obligor on the
Securities for the whole amount of principal, accrued interest and Liquidated
Damages, if any, remaining unpaid, together with interest on overdue principal
and on overdue installments of interest to the extent that payment of such
interest is permitted by law, in each case at the rate per annum provided for by
the Securities, and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.9 Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company (or any other
obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.7, and unless
prohibited by law or applicable regulations to vote on behalf of the Holders of
Securities for the election of a trustee in bankruptcy or other person
performing similar functions. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding except, as aforesaid, for the election of a trustee in
bankruptcy or person performing similar functions.
Section 6.10 Application of Proceeds.
-----------------------
Any moneys collected by the Trustee pursuant to this Article shall be
applied in the following order at the date or dates fixed by the Trustee and, in
case of the distribution of such moneys on account of principal, interest, or
Liquidated Damages, if any, upon presentation of the several Securities and
stamping (or otherwise noting) thereon the payment, or issuing Securities in
reduced principal amounts in exchange for the presented Securities if only
partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses, including reasonable
compensation to the Trustee, the Collateral Agent, the Slot Trustee, each
of their predecessors and their respective agents and attorneys (including
amounts due and unpaid under Section 7.7), and of all costs, fees, expenses
and liabilities incurred, and all advances made, by any and all of the
foregoing (including amounts due and unpaid under Section 7.7), except as a
result of negligence or bad faith;
29
SECOND: In case the entire principal of the Securities shall not have
become and be then due and payable, as to any Securities (a) first to the
payment of interest and Liquidated Damages, if any, in default in the
order of the maturity of the installments of such interest and Liquidated
Damages, if any, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest or
Liquidated Damages, if any, at the rate of interest specified in the
Securities and (b) second to the payment of principal of the Securities as
the same shall become due and payable, such payments to be made ratably to
the Persons entitled thereto, without discrimination or preference;
THIRD: In case the entire principal of the Securities shall have
become and shall be then due and payable, as to any Securities, to the
payment of the whole amount then owing and unpaid upon all the Securities
for principal, interest and Liquidated Damages, with interest upon the
overdue principal, and (to the extent that such interest has been collected
by the Trustee) upon overdue installments of interest or Liquidated
Damages, if any, at the same rate as the rate of interest specified in the
Securities; and in case such moneys shall be insufficient to pay in full
the whole amount so due and unpaid upon the Securities, then to the payment
of such principal, interest and Liquidated Damages, if any, without
preference or priority of any of principal, interest or Liquidated Damages,
if any, over the other, or any installment of interest or Liquidated
Damages, if any, over any other installment of interest or Liquidated
Damages, if any, or of any Security over any other Security, ratably to the
aggregate of such principal and accrued and unpaid interest and Liquidated
Damages; and
FOURTH: To the payment of the remainder, if any, after payment in
full of the entire principal balance, if any, of the Securities and all
interest, Liquidated Damages and other amounts due upon or in respect of
such Securities, to the Company or any other Person lawfully entitled
thereto.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Securityholders pursuant to this
Section 6.10.
Section 6.11 Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court in its
discretion may require in any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7, or a suit
by Holders of more than ten percent (10%) in principal amount of the Securities
Outstanding.
30
Section 6.12 Restoration of Rights on Abandonment of Proceedings.
---------------------------------------------------
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned for any
reason, or shall have been determined adversely to the Trustee, then and in
every such case the Company, the Trustee and the Securityholders shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company, the Trustee and the Securityholders
shall continue as though no such proceedings had been taken.
Section 6.13 Powers and Remedies Cumulative; Delay or Omission Not
-----------------------------------------------------
Waiver of Default.
-----------------
No right or remedy herein conferred upon or reserved to the Trustee or to
the Securityholders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of any of the
Securities to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to the other applicable provisions of this
Indenture, every power and remedy given by this Indenture or by law to the
Trustee or to the Securityholders may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or by the Securityholders.
Any right or remedy herein conferred upon or reserved to the Trustee may be
exercised by it in its capacity as Trustee, as Collateral Agent and/or as Slot
Trustee, as it may deem most efficacious, if it is then acting in such capacity.
ARTICLE 7.
TRUSTEE
Section 7.1 Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
31
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties as are specifically
set forth in this Indenture and the Operative Documents and no others.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) This paragraph (c) does not limit the effect of paragraph (b) of
this Section 7.1 or of Section 7.2.
(ii) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.5.
(d) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.1.
(f) Funds held in trust for the benefit of the Holders of the Securities
by the Trustee or any Paying Agent on deposit with itself or elsewhere, and
Investment Securities held in trust for the benefit of the Holders of the
Securities by the Trustee, shall be held in distinct, identifiable accounts, and
other funds or investments of any nature or from any source whatsoever may be
held in such accounts, except, in each case, to the extent required by law. The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree with the Company.
Section 7.2 Rights of Trustee.
-----------------
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
32
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, which shall conform to Section
11.5. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such certificate or opinion.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through its attorneys and
agents and the Trustee shall not be responsible for the misconduct or negligence
of any agent or attorney appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it reasonably believes to be authorized or within its
rights or powers.
Section 7.3 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or Affiliates of the Company with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 7.10 and 7.11.
Section 7.4 Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities, it shall not be accountable for the Company's use
of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities or in this Indenture other than its certificate of
authentication.
Section 7.5 Notice of Defaults.
------------------
If a Default occurs and is continuing and if it is known to the Trustee,
the Trustee shall mail to each Securityholder notice of the Default within
ninety (90) days after the occurrence thereof except as otherwise permitted by
the TIA. Except in the case of a Default in payment of principal of, or
interest on, or Liquidated Damages, if any, with respect to, any Security, the
Trustee may withhold the notice if and so long as it, in good faith, determines
that withholding the notice is in the interests of the Securityholders.
Section 7.6 Reports by Trustee to Holders.
-----------------------------
If circumstances require any report to Holders under TIA (S) 313(a), it
shall be mailed to Securityholders within sixty (60) days after each May 15
(beginning with the May 15 following the date of this Indenture) as of which
such circumstances exist. The Trustee also shall comply with the remainder of
TIA (S) 313.
The Company shall notify the Trustee if the Securities become listed on any
stock exchange or other recognized trading market.
33
The Trustee shall, upon the written request of any Holder of Securities but
subject to applicable laws and contractual limitations, provide to such Holder
copies of any reports, certificates, opinions or other materials of any kind or
nature required to be delivered to the Trustee (including in its capacity as
Collateral Agent and Slot Trustee) under this Indenture or any of the Operative
Documents or otherwise delivered by or on behalf of the Company to the Trustee
(including in its capacity as Collateral Agent and Slot Trustee).
Section 7.7 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation, as agreed upon from time to time, for its services, including as
Collateral Agent and as Slot Trustee. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it in any such
capacities. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel and all agents
and other persons not regularly in its employ.
The Company shall indemnify the Trustee (in its capacities as Trustee,
Collateral Agent and Slot Trustee) and each predecessor Trustee for, and hold
each of them harmless against, any loss or liability incurred by each of them in
connection with the administration of this trust and its duties hereunder. In
connection with any defense of such a claim, the Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee or any predecessor Trustee through the
negligence or bad faith of such Trustee or each such predecessor Trustee.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a Lien (legal and equitable) prior to the Securities on all
money or property held or collected by the Trustee, in its capacity as Trustee,
or otherwise distributable to Securityholders, except money, securities or
property held in trust to pay principal of or interest on particular Securities
(including, without limitation, pursuant to Section 8.1(b) hereof).
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(f) or (g) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.8 Replacement of Trustee.
----------------------
The Trustee (in its capacities as Trustee, Collateral Agent and Slot
Trustee) may resign by so notifying the Company in writing. The Holders of a
majority in principal amount of the Securities Outstanding may remove the
Trustee (in its capacities as Trustee, Collateral Agent and Slot Trustee) by so
notifying the Trustee in writing and may appoint a successor Trustee with the
Company's consent, which consent shall not be unreasonably refused or delayed.
The Company may remove the Trustee (in its capacities as Trustee, Collateral
Agent and Slot Trustee) if:
34
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the Trustee or its
property;
(d) the Trustee becomes incapable of acting; or
(e) no Default or Event of Default has occurred and is continuing and the
Company determines in good faith to remove the Trustee.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities Outstanding may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in Section 7.7, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
No resignation or removal of the Trustee and no appointment of a successor
Trustee, pursuant to this Article, shall become effective until the acceptance
of appointment by the successor Trustee under this Section 7.8. If a successor
Trustee does not take office within sixty (60) days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of at
least ten percent (10%) in principal amount of the Securities Outstanding may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder of Securities
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Company's obligations under Section 7.7 shall continue for the benefit of
the retiring Trustee which shall retain its claim pursuant to Section 7.7.
35
Section 7.9 Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the resulting, surviving or transferee corporation without any further act shall
be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S) 310(a)(1). The Trustee shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent, published annual report of
condition. The Trustee shall comply with TIA (S) 310(b); provided, however,
that there shall be excluded from the operation of TIA (S) 310(b)(1) any
indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are outstanding,
if the requirements for such exclusion set forth in TIA (S) 310(b)(1) are met.
Section 7.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
Section 7.12 Other Capacities.
----------------
At all times during which any Securities are Outstanding, unless otherwise
permitted under the Operative Documents, the Trustee shall serve as the
Collateral Agent and (unless otherwise required under or for the purposes of the
Slot Trust) as the Slot Trustee, and any resignation, removal or
disqualification from any one such office (except as aforesaid as Slot Trustee)
shall, without action on the part of any Person, result in the resignation,
removal, or disqualification from all such offices. Any Person serving in such
capacities shall have and may effectively exercise all the rights, remedies and
powers, and be entitled to all protections and indemnifications, provided to
such Person in whatever capacities such Person then serves under any and all of
the Indenture and the Operative Documents, regardless of the capacity or
capacities in which such Person may purport to take or omit any action. The
Trustee agrees to and shall have the benefit of all provisions of the Operative
Documents stated therein to be applicable to the Trustee.
36
ARTICLE 8.
DISCHARGE OF INDENTURE
Section 8.1 Termination of Company's Obligations.
------------------------------------
(a) The Company may terminate its obligations under this Indenture, except
those obligations referred to in the second succeeding paragraph, if all
Securities previously authenticated and delivered (other than destroyed, lost or
stolen Securities which have been replaced or paid or Securities for whose
payment Payments have theretofore been held in trust and thereafter repaid to
the Company, as provided in Section 8.3) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it hereunder.
(b) The Company may terminate all its obligations under the Indenture
except those obligations referred to in the immediately succeeding paragraph if
(1) the Company has irrevocably deposited or caused to be irrevocably
deposited with the Trustee or a Paying Agent, under the terms of an irrevocable
trust agreement in form and substance satisfactory to the Trustee and any such
Paying Agent, as trust funds in trust solely for the benefit of the Holders for
that purpose, cash or U.S. Government Obligations maturing as to principal and
interest, in such amounts and at such times as are sufficient without
consideration of any reinvestment of any such interest to pay principal of,
interest on, and the then maximum possible Liquidated Damages, if any, with
respect to the Securities Outstanding to maturity provided that the Trustee or
such Paying Agent shall have been irrevocably instructed to apply such money or
the proceeds of such U.S. Government Obligations to the payment of said
principal, interest and Liquidated Damages, if any, with respect to the
Securities.
(2) No Default or Event of Default with respect to the Securities
shall have occurred and be continuing (A) on the date of such deposit described
in clause (1), or (B) insofar as paragraph (f) of Section 6.1 is concerned, at
any time during the period ending on the 91st day after the date of such deposit
or, if longer, ending on the day following the expiration of the longest
preference period applicable to the Company in respect of such deposit (it being
understood that the condition in this clause (B) is a condition subsequent and
shall not be deemed satisfied until the expiration of such period);
(3) Such termination and deposit described in clause (1) shall not (A)
cause the Trustee to have a conflicting interest as defined in TIA Section
310(b) or otherwise for purposes of the Trust Indenture Act with respect to any
securities of the Company, or (B) result in the trust arising from such deposit
to constitute, unless it is qualified as, a regulated investment company under
the Investment Company Act of 1940, as amended;
37
(4) Such termination and deposit described in clause (1) shall not
result in a breach or violation of or constitute a default under, this Indenture
or any other material agreement or instrument to which the Company is a party or
by which it is bound;
(5) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of the Securities will not recognize
income, gain or loss for federal income tax purposes as a result of such
termination and deposit described in clause (1) and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such termination and deposit had not occurred; and
(6) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent and subsequent provided for above in this Section 8.1(b) have been
complied with.
The Company may make an irrevocable deposit pursuant to this Section 8.1
only if at such time the Company shall have delivered to the Trustee and any
such Paying Agent an Officers' Certificate to that effect.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.3, 2.4, 2.5, 2.6, 2.7, 4.1, 4.2, 4.8, 7.7, 7.8, 8.2, 8.3, 8.4 and
10.4 shall survive until the Securities are no longer Outstanding. Thereafter,
the Company's obligations in Sections 7.7 and 8.3 shall survive.
(c) After the effectiveness of any termination of its obligations (except,
in the case of Section 8.1(b), as set forth in the second paragraph thereof),
under this Indenture in accordance with Section 8.1(a) or (b) above (such
effective date, the "Indenture Discharge Date") and payment of all obligations
of the Company accrued under Section 7.7, the Trustee upon Request shall
acknowledge in writing the discharge of the Company's obligations under this
Indenture except for those surviving obligations specified above.
Section 8.2 Application of Trust Money.
--------------------------
The Trustee or Paying Agent shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.1, and shall apply the
deposited money and the money from U.S. Government Obligations in accordance
with this Indenture to the payment of principal, interest and Liquidated
Damages, if any, on the Securities. The obligations of the Trustee and Paying
Agent under this Section 8.2 shall survive, notwithstanding any termination or
discharge of the Company's obligations pursuant to Section 8.1, until all
Securities are paid in full.
The Company shall pay and indemnify the Trustee or Paying Agent, as the
case may be, against any tax, fee or other charge imposed on or assessed against
the money or U.S. Government Obligations deposited pursuant to Section 8.1(c) or
the principal and interest received in respect thereof.
Section 8.3 Repayment to Company.
--------------------
38
Anything in Section 8.1(b) to the contrary notwithstanding, the Trustee or
Paying Agent, as the case may be, shall deliver or pay to the Company from time
to time upon Company Request any money or U.S. Government Obligations (or other
property and any proceeds therefrom) held by it as provided in Section 8.1(b)
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee and to the Paying Agent, if applicable, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
termination under said Section 8.1(b). The Trustee and the Paying Agent shall
Pay to the Company any Payments held by them for the payment of principal,
interest and Liquidated Damages, if any, that remains unclaimed for two (2)
years after the Stated Maturity of such payment of principal, interest or
Liquidated Damages, as the case may be; provided, however, that the Trustee or
such Paying Agent before making any Payment shall at the expense of the Company
cause to be published once in a newspaper of general circulation in the City of
New York or mail to each Holder entitled to such money, notice that such
Payments remain unclaimed and that, after a date specified therein which shall
be at least thirty (30) days from the date of such publication or mailing, any
unclaimed balance of such Payments then remaining will be repaid to the Company.
After payment to the Company, Securityholders entitled to Payments must look to
the Company for payment as general creditors unless an applicable abandoned
property law designates another person.
Section 8.4 Reinstatement.
-------------
Anything herein to the contrary notwithstanding, (i) if the Trustee or
Paying Agent, as the case may be, is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.1 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, or
(ii) the deposited money or U.S. Government Obligations (or the proceeds
thereof) are, for any reason, insufficient in amount, then the Company's
obligations under this Indenture shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.1 until such time as the Trustee, or
Paying Agent, as the case may be, is permitted to apply all such money or U.S.
Government Obligations and the proceeds of the investment thereof in accordance
with Section 8.1, or the deficiency is cured in the manner set forth in Section
8.1(b), as the case may be. In such event, the Trustee will invest all such
money or the proceeds from U.S. Government Obligations at the Company's request
in other U.S. Government Obligations and, upon written notice from the Company,
so long as there exists no Event of Default, to the extent and only to the
extent provided in the first sentence of Section 8.3 return to the Company any
money or U.S. Government Obligations deposited with the Trustee pursuant to
Section 8.1. If the Company has made any payment of interest on, principal of,
or Liquidated Damages, if any, with respect to any Securities because of an
event described in clause (i) of the first sentence of this Section 8.4, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent, as the case may be.
39
ARTICLE 9.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Without Consent of Holders.
--------------------------
The Company and the Trustee, the Collateral Agent or the Slot Trustee, as
the case may be, may amend or supplement this Indenture, the Securities or the
Operative Documents without notice to or consent of any Securityholder:
(a) to provide for uncertified Securities in addition to or in place of
certificated Securities;
(b) to provide for the assumption of the Company's obligations to the
Holders of the Securities in the case of a merger or consolidation or transfer
of all or substantially all of the assets of the Company or otherwise to comply
with Article 5;
(c) to comply with any requirements of the SEC in connection with the
qualification of this Indenture under the TIA; or
(d) to cure any ambiguity, defect or inconsistency or to make any other
change, in each case, provided that such action does not materially adversely
affect the interests of any Securityholder.
Section 9.2 With Consent of Holders.
-----------------------
Subject to Section 6.7, the Company (by resolution of its Board of
Directors if required) and the Trustee, the Collateral Agent or the Slot
Trustee, as the case may be, may amend or supplement this Indenture, the
Securities or the Operative Documents without notice to any Securityholder but
with the written consent of the Required Holders. Subject to Sections 6.4, 6.5
and 6.7, the Required Holders may authorize the Trustee to, and the Trustee,
subject to Section 9.6, upon such authorization shall, waive compliance by the
Company with any provision of this Indenture, the Securities or the Operative
Documents. However, an amendment, supplement or waiver, including a waiver
pursuant to any provision of Section 6.4, may not without the consent of each
Securityholder affected:
(a) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver (or, without limiting the generality of the
foregoing, consent to any Senior Security Interest);
(b) reduce the rate or change the time for payment of interest on, or
Liquidated Damages, if any, with respect to any Security;
40
(c) reduce the principal of, or the amount of Liquidated Damages, if any,
with respect to, or change the fixed maturity of any Security;
(d) change the place of payment where, or the coin or currency in which,
any Security (or the Repurchase Price thereof) interest thereon, or Liquidated
Damages, if any, with respect thereto is payable;
(e) waive a default in the payment of the principal of, or interest on, or
Liquidated Damages with respect to any Security;
(f) make any changes in Sections 2.8, 6.4, 6.7 or 6.10 or the third
sentence of this Section 9.2; or
(g) reduce any amount payable upon exercise of the Repurchase Right
thereof or otherwise change the Repurchase Right provision or impair the right
to institute suit for the enforcement of any such payment on any Security when
due or adversely effect any Repurchase Rights.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to the Holders affected thereby the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however in any way impair or affect the validity of
any such amendment, supplement or waiver.
Section 9.3 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents.
---------------------------------
Until an amendment or waiver becomes effective, a consent to it by a Holder
is a continuing consent by the Holder and every subsequent Holder of a Security
or portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security. However,
any such Holder or subsequent Holder may revoke the consent as to his Security
or portion of a Security. Such revocation shall be effective only if the
Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective.
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder, unless it makes a change described in any of clauses (a)
through (g) of Section 9.2.
41
In that case the amendment, supplement or waiver shall bind each Holder of a
Security who has consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security; provided, however, that no amendment, supplement or waiver relating to
any impairment of the right to receive principal and interest when due and
payable consented to by a Holder shall be binding upon any subsequent Holder of
a Security or a portion of a Security that evidences the same debt as the
consenting Holder's Security unless notation with regard thereto is made upon
such Security or the Security representing such portion.
Section 9.5 Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Section 9.6 Trustee to Sign Amendments, etc.
-------------------------------
The Trustee shall be entitled to receive and rely upon an Officers'
Certificate and an Opinion of Counsel stating that the execution of any
amendment, supplement or waiver authorized pursuant to this Article 9 has been
duly authorized by the Company and is authorized or permitted by this Indenture
and the applicable Operative Documents. The Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 9.7 Effect of Supplement and/or Amendment.
-------------------------------------
Upon the execution of any supplemental indenture and/or any such amendment
or supplement to the Operative Documents pursuant to the provisions of this
Article 9, this Indenture and the Operative Documents shall be and be deemed to
be modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Indenture
and the Operative Documents of the Trustee, the Collateral Agent, the Slot
Trustee, the Company and the Holders of Securities shall thereafter be
determined, exercised and enforced hereunder and thereunder subject in all
respects to such modifications and amendments, and all terms and conditions of
any such supplemental indenture and/or any such amendment or supplement to the
Operative Documents shall be and be deemed to be part of the terms and
conditions of this Indenture and the Operative Documents for any and all
purposes.
42
ARTICLE 10.
SECURITY
Section 10.1 Operative Documents.
-------------------
To secure the due and punctual payment, performance and observance of the
Obligations, the Company has simultaneously with the execution of this Indenture
entered into or caused to be assigned to the Trustee, Collateral Agent and/or
Slot Trustee the Operative Documents and has made an assignment and pledge of or
otherwise transferred or caused to be transferred its right, title and interest
in and to the Collateral and the Acquired Slots to the Trustee, Collateral Agent
and/or Slot Trustee pursuant to the Operative Documents and in the manner and to
the extent therein provided. Each Securityholder, by accepting a Security,
agrees to all of the terms and provisions of each Operative Document (including,
without limitation, the provisions providing for the release of Collateral
and/or Slot Trust Assets), as the same may be in effect or may be amended from
time to time pursuant to its terms and the terms hereof. The Company will
execute, acknowledge and deliver to the Trustee, the Collateral Agent or the
Slot Trustee such further assignments, transfers, assurances or other
instruments as the Trustee may require or request, and will do or cause to be
done all such acts and things as may be necessary or proper, or as may be
reasonably required by the Trustee, the Collateral Agent or the Slot Trustee to
assure and confirm to the Trustee, the Collateral Agent or the Slot Trustee the
security interest in the Collateral and the ownership of the Acquired Slots
contemplated hereby and by the Operative Documents or any part thereof, as from
time to time constituted, so as to render the same available for the security
and benefit of this Indenture and of the Securities secured hereby, according to
the intent and purposes herein expressed.
Section 10.2 Opinions, Certificates and Appraisals.
-------------------------------------
(a) The Company shall furnish to the Trustee promptly after the execution
and delivery of this Indenture but prior to authentication of any Securities an
Opinion of Counsel (A) either (i) stating that in the opinion of such Counsel
the actions necessary to be taken under the Federal Aviation Act, the Uniform
Commercial Code of all applicable jurisdictions, or otherwise with respect to
the recording, registering and filing of this Indenture, the Operative
Documents, financing statements or other instruments to make effective and
(subject to the Certificate of Title Exception) to perfect the Lien intended to
be created by the Pledge Agreement have been taken and reciting with respect to
the security interests in the Collateral, the details of such actions, or (ii)
stating that, in the opinion of such Counsel, no such action is necessary to
make such Lien effective and (subject to the Certificate of Title Exception)
perfected, and (B) either (i) stating that, in the opinion of such Counsel,
action has been taken with respect to the recordation of all instruments
required to be executed or filed to establish and maintain the Slot Trust as the
holder of record at the FAA of the Acquired Slots and reciting with respect to
such recordation the details of such action, or (ii) stating that, in the
opinion of such Counsel, no such action, execution or filing is necessary to
establish and maintain the Slot Trust.
43
(b) The Company shall furnish to the Collateral Agent and the Trustee
hundred and twenty (120) days after January 1 in each year beginning with
January 1, 1998, an Opinion of Counsel, dated as of such date, either (a)(i)
stating that, in the opinion of such Counsel, action has been taken with respect
to the recording, registering, filing, rerecording, re-registering and refiling
(in this section, "recordation") of all supplemental indentures, financing
statements, continuation statements or other instruments of further assurance as
is necessary to maintain the Lien intended to be created by the Pledge Agreement
and (subject to the Certificate of Title Exception) the perfection thereof and
reciting with respect to the security interests in the Collateral the details of
such action or referring to prior Opinions of Counsel in which such details are
given, and (ii) stating that all financing statements and continuation
statements have been executed and filed that are necessary as of such date and
during the succeeding seventeen (17) months fully to maintain the Lien of the
Securityholders and the Collateral Agent and the Trustee intended to be created
hereunder and under the Pledge Agreement with respect to the security interest
in the Collateral and (subject to the Certificate of Title Exception) the
perfection thereof, or (b) stating that, in the opinion of such Counsel, no such
action is necessary to maintain such Lien and (subject to the Certificate of
Title Exception) the perfection thereof.
The Company shall also furnish to the Slot Trustee and the Trustee within
one hundred and twenty (120) days after January 1 in each year beginning with
January 1, 1998, an Opinion of Counsel, dated as of such date, either (a)(i)
stating that, in the opinion of such Counsel, action has been taken with respect
to the recordation of all instruments as are necessary to maintain the Slot
Trust as the Holder of record at the FAA of the Acquired Slots and reciting with
respect to the recordation of such Acquired Slots the details of such action or
referring to prior Opinions of Counsel in which such details are given, and (ii)
stating that all instruments have been executed and filed that are necessary as
of such date and during the succeeding seventeen (17) months fully to continue
in effect such recordation as will maintain the Slot Trust as such Holder of
record for the benefit of the Securityholders, the Slot Trustee, the Holder of
the Beneficial Interest and the Beneficial Interest Certificate and the Trustee
as intended hereunder and under the Acquired Slot Trust Agreement and the Master
Sub-License Agreement with respect to the Acquired Slots, or (b) stating that,
in the opinion of such Counsel, no such action, execution or filing is necessary
to maintain the necessary recordation.
(c) The release of any Collateral from the terms of the Pledge Agreement
or of Slot Trust Assets from the Slot Trust will not be deemed to impair the
security under this Indenture in contravention of the provisions hereof if and
to the extent the Collateral and the Slot Trust Assets are released pursuant to
the Pledge Agreement, the Acquired Slot Trust Agreement or the Master Sub-
License Agreement, as applicable. To the extent applicable, the Company shall
cause TIA (S) 314(d) relating to the release of property or securities from the
Lien of the Pledge Agreement or the possession of the Slot Trust pursuant to the
Master Sub-License Agreement and relating to the substitution therefor of any
property or securities to be subjected to the Lien of the Pledge Agreement to be
complied with. With respect to any such substitution, the Company shall furnish
to the Trustee an Independent Appraiser's Certificate if required by TIA (S)
314(d). Any certificate or opinion required by TIA (S) 314(d) may be made by an
Officer of the Company, except in cases where TIA (S) 314(d) requires that such
certificate or opinion be made by an independent person,
44
which person shall meet the requirements set forth in clauses (a) through (d) of
the definition of the term "Independent Appraiser."
Section 10.3 Authorization of Actions to be Taken by the Trustee Under the
-------------------------------------------------------------
Operative Documents.
-------------------
The Trustee (in its capacities as such and/or as Collateral Agent and/or
Slot Trustee) may, in its sole discretion and without the consent of the
Securityholders, take all actions it deems necessary or appropriate to (a)
enforce any of the terms of the Operative Documents and (b) collect and receive
any and all amounts payable in respect of the obligations of the Company
hereunder. Subject to the provisions of this Indenture and the Operative
Documents, the Trustee (in such capacities) shall have power to institute and to
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral and the Acquired Slots by any acts which may be
unlawful or in violation of the Operative Documents or this Indenture, and such
suits and proceedings as it may deem expedient to preserve or protect its
interest and the interests of the Securityholders in the Collateral and the
Acquired Slots (including power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the security interest hereunder or be prejudicial to the interests
of the Securityholders or of the Trustee in any such capacity).
Section 10.4 Payment of Expenses.
-------------------
On demand of the Trustee, the Company forthwith shall pay or satisfactorily
provide for all reasonable expenditures incurred by the Trustee under this
Article 10, and all such sums shall be a Lien upon the Collateral and shall be
secured thereby.
Section 10.5 Authorization of Receipt of Funds by the Trustee Under the
----------------------------------------------------------
Operative Documents.
-------------------
The Trustee is authorized to receive any funds for the benefit of
Securityholders distributed under the Operative Documents, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture.
Section 10.6 Agreement as to Appraised Value and Fair Market Value.
-----------------------------------------------------
The Company and the Trustee acknowledge that the use of Appraised Value and
Fair Market Value herein or in the Operative Documents is strictly and solely
for convenience in establishing relative value equivalencies of Permitted
Substitutes permitted to be substituted under limited circumstances for
Collateral and/or Acquired Slots under the Operative Documents. Accordingly,
the Appraised Value or Fair Market Value of any Collateral, Permitted
Substitutes, Acquired Slots or Slots subjected to the Lien of the Pledge
Agreement or conveyed to the Slot Trust is not an indication of and shall not be
deemed an agreement by the parties as the basis for valuation of such
45
Collateral, Permitted Substitutes, Acquired Slots, or Slots for purposes of
determining the value of the Trustee's secured claim against the Company,
adequate protection of the Trustee's interest in the Collateral, Permitted
Substitutes, Acquired Slots or Slots or for any other purpose in any bankruptcy,
receivership or insolvency proceeding involving the Company or any remedial
action brought by the Trustee, Collateral Agent or Slot Trustee, except to the
extent such valuations are mandated by applicable law, or any court with
jurisdiction over such proceedings, in either case without regard to the use of
the concept of Appraised Value or Fair Market Value by the parties hereto.
Section 10.7 Intercreditor Agreement.
-----------------------
The Trustee or the Collateral Agent may enter into intercreditor agreements
substantially in the form attached hereto as Exhibit E with the holders from
time to time of Senior Security Interests in order to define the relative rights
and priorities among the Holders of the Securities and the holders of the
applicable Senior Obligations in respect of the Collateral.
ARTICLE 11.
MISCELLANEOUS
Section 11.1 Trust Indenture Act Controls.
----------------------------
If and to the extent that any provision of this Indenture limits,
qualifies, or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the TIA, such imposed duties shall control.
Section 11.2 Notices.
-------
Any notice or communication shall be sufficiently given (subject to the
provisions of the third succeeding paragraph) if in writing and delivered in
person or when mailed by first-class mail addressed as follows:
46
if to the Company:
Trans World Airlines, Inc.
One City Centre
000 X. 0xx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Senior Vice
President and General Counsel
if to the Trustee:
First Security Bank, National Association,
as Trustee
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Corporate Trust Department
------------
The Company or the Trustee by notice to the others may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed to
him by first-class mail, postage prepaid, at his address as it appears on the
Register and shall be sufficiently given to him if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders.
Except for a notice to the Trustee or to the Company, which is deemed given only
when received, if a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
Section 11.3 Communications By Holders With Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other person shall
have the protection of TIA (S) 312(c).
Section 11.4 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any Request or application by the Company to the Trustee to take any
action under this Indenture or the Operative Documents, the Company shall
furnish to the Trustee:(a) an Officers' Certificate, and (b) an Opinion of
Counsel, each stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, provided, that in the case of any such
application or Request as to which the furnishing of an Officers' Certificate or
Opinion of Counsel is specifically required by any provision
47
of this Indenture or the Operative Documents relating to such particular
application or Request, no additional certificate or opinion, as the case may
be, need be furnished.
Section 11.5 Statements Required In Certificate or Opinion.
---------------------------------------------
Each certificate or opinion provided for and delivered to the Trustee, the
Collateral Agent or the Slot Trustee with respect to compliance with a condition
or covenant provided for in this Indenture or the Operative Documents shall
include: (a) a statement that the Person signing such certificate or opinion
has read such condition or covenant and the definitions herein or therein
relating thereto; (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (c) a statement that, in the opinion of
such Person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such condition or
covenant has been complied with; and (d) a statement as to whether or not in the
opinion of such Person, such condition or covenant has been complied with.
Any certificate or opinion of an Officer or an engineer, insurance broker,
accountant or other expert may be based, insofar as it relates to legal matters,
upon a certificate or opinion of or upon representations by counsel, unless such
officer, engineer, insurance broker, accountant or other expert knows that the
certificate or opinion or representations with respect to the matters upon which
his opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should have known that the same were erroneous.
Any certificate or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon the certificate or opinion of or representations by an
officer or officers of the Company stating that the information with respect to
such factual matters is in possession of the Company, unless such counsel knows
that the certificate or opinion or representations with respect to the matters
upon which his opinion may be based as aforesaid are erroneous and insofar as it
relates to legal matters in a jurisdiction or area of law beyond the expertise
of such counsel, such counsel may rely upon the opinion of counsel qualified in
such other jurisdiction or area of law.
Wherever in this Indenture or the Operative Documents in connection with
any application, certificate or report to the Trustee, the Collateral Agent or
the Slot Trustee it is provided that the Company shall deliver any document as a
condition of the granting of such application or as evidence of the Company's
compliance with any term hereof, it is intended that the truth and accuracy at
the time of the granting of such application or at the effective date of such
certificate or report, as the case may be, of the facts and opinions stated in
such document shall in each such case be a condition precedent to the right of
the Company to have such application granted or to the sufficiency of such
certificate or report. Nevertheless, in the case of any such application,
certificate or report, any document required by any provision of this Indenture
or the Operative Documents to be delivered to the Trustee, the Collateral Agent
or the Slot Trustee as a condition of the granting of such application or as
evidence of such compliance may be received by the Trustee, the Collateral Agent
or the Slot Trustee as conclusive evidence of any statement therein contained
and shall be full
48
warrant, authority and protection to the Trustee, the Collateral Agent or the
Slot Trustee acting on the faith thereof.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Whenever any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements or opinions or other
instruments under this Indenture or any Operative Document he may, but need not,
consolidate such instruments into one.
Section 11.6 Liens. Rules By Trustee, Paying Agent, Registrar.
------------------------------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Registrar, Paying Agent or Tender Agent may make
reasonable rules for their respective functions.
Section 11.7 Payment Dates.
-------------
If a payment date is not a Business Day, payment may be made at the
designated place on the next succeeding day that is a Business Day with the same
effect as if such payment was made on the original payment date, and no interest
or Liquidated Damages, if any, shall accrue on that payment for the intervening
period.
Section 11.8 Governing Law.
-------------
The laws of the State of New York shall govern this Indenture and the
Securities without regard to principles of conflict of laws.
Section 11.9 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret any indenture, loan or debt
agreement of the Company or any of its Subsidiaries which is unrelated to the
Indenture, the Securities or the Operative Documents. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture or the Operative
Documents.
Section 11.10 No Recourse Against Others.
--------------------------
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability.
49
Section 11.11 Provisions of Indenture for the Sole Benefit of Parties and
-----------------------------------------------------------
Securityholders.
---------------
Nothing in this Indenture or the Securities, expressed or implied, shall
give or be construed to give to any Person, firm or corporation, other than the
parties hereto and their successors and the Holders of the Securities, any legal
or equitable right, remedy or claim under this Indenture or under any covenant
or provision herein contained, all such covenants and provisions being for the
sole benefit of the parties hereto and their successors and of the Holders of
the Securities.
Section 11.12 Successors.
----------
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
Section 11.13 Duplicate Originals.
-------------------
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 11.14 Severability.
------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby,
and a Holder shall have no claim therefor against any party hereto.
Section 11.15 Rating Agencies.
---------------
Any reference in this Indenture or in the Operative Documents to Xxxxx'x
Investors Service, Standard & Poor's Corporation or Duff & Xxxxxx (each a
"rating agency" or an "agency") shall include its successors or successor
publishers of its financial ratings, and references to the ratings of any such
rating agency shall include comparable ratings in the event of one or more
reclassifications of such ratings by such rating agency after the date hereof.
In the event that any of such rating agencies shall cease to publish applicable
ratings, any provision herein requiring ratings of all of such agencies shall be
deemed to require ratings of only the agency or agencies continuing to publish
applicable ratings. If all of such agencies cease to publish applicable
ratings, any provision herein requiring ratings of any of such agencies shall be
deemed to require ratings that are both (a) certified by the Company in an
Officers' Certificate to be equivalent to the ratings of such agency or agencies
and (b) reasonably satisfactory to the Trustee or the Collateral Agent.
Section 11.16 Effect of Headings.
------------------
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
50
ARTICLE 12.
RELEASE OF COLLATERAL
Section 12.1 Release of Collateral.
---------------------
The Collateral securing the obligations evidenced by the Securities shall
be subject to release from the Lien of this Indenture and the Operative
Documents from and to the extent provided by the Operative Documents.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
TRANS WORLD AIRLINES, INC,
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Trustee
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
51
EXHIBIT A TO INDENTURE
===============================================================================
12% SENIOR SECURED NOTES
ISSUED UNDER
INDENTURE
FROM
TRANS WORLD AIRLINES, INC.
TO
FIRST SECURITY BANK, NATIONAL ASSOCIATION
AS TRUSTEE
Dated as of March 31, 1997
==============================================================================
Form of 12% Senior Secured Note due 2002
----------------------------------------
No. PS______ $_______
THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT. SOLELY FOR FEDERAL
INCOME TAX PURPOSES, (I) ISSUE PRICE IS $_____ PER $1,000 PRINCIPAL
AMOUNT, (II) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $_____ PER
$1,000 PRINCIPAL AMOUNT, (III) THE ISSUE DATE WAS MARCH 31, 1997, AND
(IV) YIELD TO MATURITY IS ______.
THE NOTES REPRESENTED BY THIS CERTIFICATE WERE INITIALLY ISSUED AS
PART OF AN ISSUANCE OF UNITS, EACH OF WHICH CONSISTS OF $1,000
PRINCIPAL AMOUNT AT MATURITY OF 12% SENIOR SECURED NOTES DUE 2002 OF
TRANS WORLD AIRLINES, INC (THE "NOTES") AND ONE WARRANT. PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EARLIEST OF (i) JUNE 29, 1997, (ii)
THE DATE ON WHICH AN EXCHANGE OFFER REGISTRATION STATEMENT OR A SHELF
REGISTRATION STATEMENT FOR THE NOTES IS DECLARED EFFECTIVE BY THE
SECURITIES AND EXCHANGE COMMISSION OR (iii) SUCH EARLIER DATE AS
PAINEWEBBER INCORPORATED MAY, IN ITS DISCRETION, DEEM APPROPRIATE, THE
NOTES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR
EXCHANGED SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY
TOGETHER WITH, THE WARRANTS.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR
ANY STATE SECURITIES LAWS. NEITHER THESE SECURITIES NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THESE SECURITIES BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE WHICH IS THE DATE WHICH IS TWO YEARS
AFTER THE LATER OF THE DATE OF ORIGINAL ISSUANCE AND THE LAST DATE ON
WHICH THE CORPORATION OR ANY AFFILIATE OF THE CORPORATION WAS THE
OWNER OF THESE SECURITIES (OR ANY PREDECESSOR OF THESE SECURITIES)
ONLY (A) TO THE CORPORATION, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
TO A PERSON IT REASONABLY BELIEVES IS AS "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
A-1
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A UNDER THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES
TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1),(2) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE CORPORATION'S AND THE TRANSFER AGENT'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE, OR TRANSFER (i) PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (ii) IN EACH OF THE FOREGOING CASES ,TO REQUIRE A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF
THESE SECURITIES IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW
YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OR
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION
AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
TRANS WORLD AIRLINES, INC.
12% SENIOR SECURED NOTE DUE 2002
CUSIP ________
Trans World Airlines, Inc., a Delaware corporation (hereinafter sometimes
called the "Company", which term includes any successor Person under the
Indenture hereinafter referred to), promises to pay to _________________________
A-2
______, or registered assigns, the principal sum of ___________________ Dollars
on April 1, 2002 and to pay interest thereon as provided on the reverse hereof,
until the principal hereof is duly paid or provided for.
Interest Payment Dates: April 1 and October 1 and the date of maturity.
Record Dates: March 15 and September 15.
Other provisions of this Note set forth on the reverse hereof or elsewhere
herein shall have the same effect as if set forth at this place.
Executed as a sealed instrument under the corporate seal or a facsimile thereof.
ATTEST: TRANS WORLD AIRLINES, INC.
Corporate Secretary
________________________________ By:____________________________________
Vice President, Corporate Finance
Dated: __________________________
Certificate of Authentication
-----------------------------
This is one of the Securities referred to in the within-mentioned Indenture.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Trustee
By:____________________________________
Authorized Signature
A-3
(Back of Security)
TRANS WORLD AIRLINES, INC.
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD, OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED
THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT,
PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO
YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), (A) THIS SECURITY MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QIB (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(ii) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (iv) TO THE
COMPANY OR (v) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (i) THROUGH (v) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO
IN (A) ABOVE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE."
BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR") AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) OR (C)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S.
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS."
12% Senior Secured Notes Due 2002
The Security is one of a duly authorized issue of securities of the Company
designated as its 12% Senior Secured Notes due 2002 (hereinafter called the
Securities"), limited in aggregate principal amount Outstanding to $50,000,000,
(subject to increase up to $57,500,000 aggregate principal amount Outstanding,
as provided in the Indenture) issued or to be issued pursuant to an Indenture,
dated as of March 31, 1997 (hereinafter called the "Indenture") between the
Company and First Security Bank, National Association, as Trustee (herein called
the "Trustee", which term includes any successor trustee under the Indenture).
A-4
1. Interest; Liquidated Damages. The Company promises to pay interest on
----------------------------
the principal amount of this Security at the rate of twelve percent (12%) per
---
annum. To the extent permitted by law, interest on any overdue interest or
------
Liquidated Damages, if any, will accrue and be paid at the rate then borne by
the principal amount hereof. Overdue principal shall bear interest at the rate
shown above. The Company will pay interest and Liquidated Damages, if any,
semi-annually on April 1 and October 1 of each year, commencing October 1, 1997.
Interest on the Securities will accrue from March 31, 1997 or the most recent
Interest Payment Date to which interest and Liquidated Damages, if any, have
been paid. Interest and Liquidated Damages, if any, will be payable to the
Holders of record as they appear on the register of the Company kept by the
Registrar on such record dates, provided that Holders of Securities tendered for
repurchase on a Repurchase Date falling between an interest payment record date
and the Interest Payment Date shall, in lieu of receiving such interest and
Liquidated Damages, if any, on the Interest Payment Date fixed therefor, receive
such interest payment together with all other accrued and unpaid interest and
Liquidated Damages, if any, on the date fixed for repurchase (unless such
Holders tender such Securities in payment of the Exercise Price of the Warrants
in accordance with the Indenture, in which case such holders will receive such
payment on the corresponding Interest Payment Date, but will be required to
accompany such tender with funds equal to the interest and Liquidated Damages,
if any, payable on such succeeding Interest Payment Date on the principal amount
of Securities tendered in payment of the Exercise Price of the Warrants).
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment. Unless the Securities are tendered in payment of
-----------------
the Exercise Price of the Warrants, the Company will pay interest on and
Liquidated Damages, if any, with respect to, the Securities (except defaulted
interest) to the persons who are registered Holders of Securities at the close
of business on the record date set forth on the face of this Security next
preceding the applicable Interest Payment Date. Holders must surrender
Securities to a Paying Agent to collect principal payments and must surrender
Securities to a Tender Agent to utilize the principal amount of such Securities
to pay the Exercise Price of the Warrants. The Company will pay principal,
interest and Liquidated Damages, if any, at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York
and at any other office or agency maintained by the Company for such purpose in
money of the United States that at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
the Company, payment of interest on and Liquidated Damages, if any, with respect
to, the Securities may be by check payable in such money and mailed to a
Holder's registered address. If a payment date is a legal holiday at a place of
payment, payment may be made at that place on the next succeeding Business Day,
and no interest shall accrue for the intervening period.
3. Registrar, Paying Agent and Tender Agent. Initially, First Security
----------------------------------------
Bank, National Association (the "Trustee") will act as Registrar, Paying Agent
and Tender Agent. The Company may change any Paying Agent, Tender Agent,
Registrar or co-registrar without prior notice to any Securityholder. The
Company may act in any such capacity, except in certain circumstances.
A-5
4. Indenture. The Company issued the Securities under an Indenture dated
---------
as of March 31, 1997 (as amended, amended and restated or supplemented, the
"Indenture") between the Company and the Trustee. The terms of the Securities
include those stated in the Indenture and those made applicable to the Indenture
by the Trust Indenture Act of 1939 (15 U.S.C. (S) (S) 77aaa-77bbbb) as in effect
on the date of the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and such Act for a statement of
such terms. The Securities are secured obligations of the Company limited to
$50,000,000 aggregate principal amount (subject to increase up to $57,500,000
aggregate principal amount), except as otherwise provided in the Indenture.
Capitalized terms used in this Security and not defined in this Security shall
have the meaning set forth in the Indenture, including the Definitions Appendix
to the Indenture.
5. Security. The Securities are secured by Liens on certain Properties
--------
of the Company pursuant to the Operative Documents described in the Indenture.
6. Change in Control. In the event of a Change in Control (as
-----------------
hereinafter defined) with respect to the Company, then each Holder of the
Securities shall have the right, at the Holder's option, to require the Company
to repurchase such Holder's Securities including any portion thereof which is
$1,000 or any integral multiple thereof on the date (the "Repurchase Date") that
is 45 days after the date of the Repurchase Right Notice at a purchase price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, to and including the Repurchase Date (the
"Repurchase Price").
Within 30 days after the occurrence of a Change in Control, the Company is
obligated to give notice of the occurrence of such Change in Control, and the
procedure which such Holder must follow to exercise such right. To exercise the
repurchase option, the Holder of a Security must deliver on or before the 30th
day after the date of the Repurchase Right Notice, written notice to the Company
of the Holder's exercise of such option together with the Security or Securities
with respect to which the option is being exercised, duly endorsed for transfer.
Exercise of the Repurchase Right by the Holder of a Security will be irrevocable
on and after five (5) Business Days prior to the Repurchase Date, unless (i) the
Company shall default in making the repurchase payment when due, in which case a
Holder who elects to exercise the Repurchase Right will retain the right to
tender such Security in payment of the then current Exercise Price of the
Warrants (as defined in the Warrant Agreement dated as of March 31, 1997 between
the Company and American Stock Transfer & Trust Company) until the close of
business on the date such default is cured and such Security is repurchased, or
(ii) the Company shall otherwise, in its sole discretion, consent thereto.
If any repurchase pursuant to the foregoing provisions constitutes an
"issuer tender offer" as defined in Rule 13e-4 under the Exchange Act, the
Company will comply with the requirements of Rule 13e-4, Rule 14e-1 and any
other tender offer rules under the Exchange Act which then may be applicable,
including the filing of an issuer tender offer statement on Schedule 13E-4 with
the SEC and the furnishing of certain information contained therein to the
Holders.
A-6
A "Change in Control" means the occurrence of any of the following events:
(i) any person (including any entity or group deemed to be a "person" under
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) is or becomes the
direct or indirect beneficial owner (as determined in accordance with Rule 13d-3
under the Exchange Act) of shares of the Company's capital stock representing
greater than 50% of the total voting power of all shares of capital stock of the
Company entitled to vote in the election of Directors under ordinary
circumstances or to elect a majority of the Board of Directors of the Company,
(ii) the Person then constituting the "Company" under the Indenture sells,
transfers or otherwise disposes of all or substantially all of its assets
(regardless of whether such Person thereupon ceases to constitute the "Company"
under the Indenture pursuant to Section 5.2 of the Indenture), (iii) when,
during any period of 12 consecutive months after the date of original issuance
of the Securities, individuals who at the beginning of any such 12-month period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
directors still in office entitled to vote with respect to such nomination who
were either directors at the beginning such period or whose election or
nomination for election was previously so approved, but excluding any of the
individuals who at the beginning of such 12-month period constituted such Board
but who ceased to be a member of the Board pursuant to the Company's mandatory
retirement policy as in effect as of the date of the Indenture), cease for any
reason to constitute a majority of the Board of Directors of the Company then in
office or (iv) the date of the consummation of the merger or consolidation of
the Person then constituting the "Company" under the Indenture with another
corporation where the stockholders of such Person, immediately prior to the
merger or consolidation, would not beneficially own, immediately after the
merger or consolidation, shares entitling such stockholders to 50% or more of
all votes (without consideration of the rights of any class of stock to elect
directors by a separate class vote) to which all stockholders of the corporation
issuing cash or securities in the merger or consolidation would be entitled in
the election of directors or where members of the Board of Directors of the
Person then constituting the "Company" under the Indenture, immediately prior to
the merger or consolidation, would not, immediately after the merger or
consolidation, constitute a majority of the board of directors of the
corporation issuing cash or securities in the merger or consolidation.
7. Tender in Payment of Exercise Price of Warrants. A Holder of a
-----------------------------------------------
Security may tender such Security in payment of the Exercise Price of the
Warrants at any time prior to maturity. The initial Exercise Price is $7.92 per
share, subject to adjustment under certain circumstances as set forth in the
Warrant Agreement. No payment or adjustment will be made for accrued interest
or Liquidated Damages, if any, on a Security tendered in payment of the Exercise
Price or for dividends or distributions on shares of Common Stock issued upon
exercise of the Warrant except as provided in Section 1 of the Security. No
Securities will be issued in denominations of less than $1000 upon tender of the
Securities nor shall any cash be paid by the Company in connection with a tender
of the Securities in payment of the Exercise Price of the Warrants.
To tender a Security in payment of the Exercise Price of the Warrants, a
Holder must (a) complete and manually sign the tender notice set forth below and
deliver such notice to the Tender Agent, (b) surrender the Security to the
Tender Agent, (c) furnish appropriate endorsements and transfer documents, if
required by the Registrar or the Tender Agent, and (d) pay a transfer or similar
A-7
tax, if required. If a Holder surrenders a Security for tender after the close
of business on a record date, then, notwithstanding such tender, the interest
and Liquidated Damages, if any, payable on the related Interest Payment Date
shall be paid to the Holder of such Security on such record date. In such
event, the Security must be accompanied by payment of any amount equal to the
interest and Liquidated Damages, if any, payable on such Interest Payment Date
on the principal amount of the Security or portion thereof then tendered. A
Holder may tender in payment of the Exercise Price of the Warrants a portion of
a Security equal to $1,000 or any integral multiple thereof other than for
payment of fractional shares issuable upon the exercise of such Warrants.
8. Denominations, Transfer, Exchange. The Securities shall be issuable
---------------------------------
only in registered form without coupons and in denominations of $1,000 and
integral multiples thereof. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes required by law or permitted by the
Indenture.
9. Persons Deemed Owners. The Company, the Trustee and any agent of the
---------------------
Company or the Trustee may treat the person in whose name the Security is
registered with the Registrar as the owner for all purposes.
10. Amendments and Waivers. Subject to certain exceptions, the Indenture,
----------------------
the Securities, or the Operative Documents may be amended with the consent of
the Holders of at least a majority in principal amount of the then Outstanding
Securities, and any existing Default, Event of Default or acceleration may be
waived with the consent of the Holders of a majority in principal amount of the
then Securities Outstanding. Without the consent of any Holder, the Indenture,
the Securities or any of the Operative Documents may be amended to, among other
things, cure any ambiguity, defect or inconsistency.
11. Defaults and Remedies. Events of Default under the Indenture include
---------------------
the following: default for the period specified in the Indenture in payment of
interest on, or Liquidated Damages, if any, with respect to the Securities;
default in payment of principal when due on the Securities (upon maturity,
tender for repurchase or otherwise); failure by the Company to comply with
specific covenants or discontinuance by the Company of substantially all of its
airline operations; failure by the Company for sixty (60) days after notice to
it to comply in any material respect with any of its other covenants, conditions
or agreements in the Indenture or the Securities, unless otherwise specified;
the occurrence of certain defaults under any Indebtedness of the Company or any
Significant Subsidiary in excess of $15,000,000 in principal amount or under
Senior Obligations which continues for thirty (30) days after notice to the
Company; the rendering or domestication of final judgments by a court of
competent jurisdiction against the Company or any Significant Subsidiary in an
aggregate amount of $15,000,000 or more which remain undischarged for a period
(during which execution is not stayed) of sixty (60) days after the date on
which the right to appeal has expired; cessation of effectiveness of Operative
Documents without the consent of the Trustee; and certain events of bankruptcy,
insolvency or reorganization. Subject to certain limitations in the Indenture,
if an Event of Default occurs and is continuing, the Trustee or the Holders of
twenty-five
A-8
percent (25%) in principal amount of the then Securities Outstanding may declare
all the Securities to be due and payable immediately, except that in the case of
an Event of Default arising from certain events of bankruptcy or insolvency, all
Securities Outstanding become due and payable immediately without further action
or notice. Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities. Subject
to certain limitations, Holders of a majority in principal amount of the then
Outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
default (except a default in payment of principal or interest) if it determines
that withholding notice is in their interests. The Company must furnish
compliance certificates to the Trustee. The above description of Events of
Default and remedies is qualified by reference, and subject in its entirety to
the more complete description thereof contained in the Indenture.
12. Trustee Dealings with Company. The Trustee under the Indenture, in
-----------------------------
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not the Trustee.
13. No Recourse Against Others. A director, officer, employee or
--------------------------
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
14. Authentication. This Security shall not be valid until authenticated
--------------
by the manual signature of the Trustee or an authenticating agent.
15. Unclaimed Money. If money for the payment of principal of, interest
---------------
on, or Liquidated Damages, with respect to, or the Repurchase Price for the
Securities remains unclaimed for two (2) years, the Trustee or Paying Agent will
pay the money back to the Company at its request. After such payment, Holders
entitled to any portion of such money must look to the Company for payment
unless an applicable law designates another person.
16. Abbreviations. Customary abbreviations may be used in the name of a
-------------
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
The Company will furnish to any Holder of this Security, upon written
request and without charge, a copy of the Indenture. Request may be made to:
Trans World Airlines, Inc., One City Centre, 000 X. 0xx Xxxxxx, Xx. Xxxxx,
Xxxxxxxx 00000, Attention: Corporate Secretary.
Dated:
---------------------- ----------------------------------------------
NOTICE: To be executed by an executive officer
A-9
ASSIGNMENT FORM
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
-----------------------------------------------------------------------
(Insert Assignee's Soc. Sec. or Tax I.D. No.)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
----------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
TENDER NOTICE
To tender this Security in payment of the Exercise Price of the Warrants, check
the box:
[_]
To tender only part of this Security in payment of the Exercise Price of the
Warrants, state the amount to be tendered (must be in multiples of $1,000)
$
-----------------------------------------------------------------------------
If you want the stock certificate issuable upon exercise of the Warrants made
out in another person's name, fill in the form below:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Print or type other person's name, address and zip code and Social Security
number or Tax Identification Number)
==============================================================================
Date:
--------------------------------------------------------------------------
Signature(s) guaranteed by:
Signature(s):
-----------------------------------------------------------------
------------------------------------------------------------------------------
(Sign exactly as your name(s) appear(s) on the other side of this Security)
(All signatures must be guaranteed by a member of a national securities exchange
or of the National Association of Securities Dealers, Inc. or by a commercial
bank or trust company located in the United States)
A-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security repurchased by the Company
pursuant to Section 4.15 of the Indenture, check the box:
[_]
If you want to elect to have only part of this Security repurchased by the
Company pursuant to Section 4.15 of the Indenture, state the amount to be
repurchased:
$
--------------------------------------------
(in an integral multiple of $1,000)
Date: Signature:
------------------------------- ------------------------------
------------------------------------------
(Sign exactly as your name(s) appear(s) on
the other side of this Security)
Signature(s) guaranteed by:
-------------------------------------------
(All signatures must be guaranteed by a
member of a national securities exchange or
of the National Association of Securities
Dealers, Inc. or by a commercial bank or
trust company located in the United States)
A-11
EXHIBIT B
Form of Legend for Global Securities
Every Global Security authenticated and delivered hereunder shall bear a legend
in substantially the following form:
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to
Issuer or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of Cede
& Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to
such other entity, as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co. has an interest herein.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFER MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO HEREIN.
B-1
ACQUIRED SLOT TRUST AGREEMENT
DECLARATION OF TRUST
DATED AS OF MARCH 31, 1997
DECLARATION OF TRUST (together with all amendments and supplements hereto,
this "Agreement"), made as of March 31, 1997, executed by TRANS WORLD AIRLINES,
INC., a Delaware corporation, having an office at 000 X. 0xx Xxxxxx, Xx. Xxxxx,
Xxxxxxxx 00000 (herein, together with its successors and assigns, "TWA"), and
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association
organized under the laws of the United States, having an office at 00 Xxxxx Xxxx
Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, as trustee (or its successor in interest or
any successor trustee appointed as hereinafter provided and its assigns, the
"Slot Trustee");
R E C I T A L S:
WHEREAS, TWA has duly authorized the issuance of $50,000,000 (plus up to an
additional $7,500,000 if an over-allotment option is exercised) aggregate
principal amount outstanding of its 12% Senior Secured Notes pursuant to an
Indenture (together with all amendments, modifications and supplements thereto,
the "Indenture") dated as of March 31, 1997 between TWA and First Security Bank,
National Association (the "Trustee"); and
WHEREAS, the Indenture requires TWA to establish the Slot Trust for the
purpose of holding the Acquired Slots described in Schedule I for the benefit of
the Holders of the Securities; and
WHEREAS, this Agreement establishes the Slot Trust for the purpose of holding
the Acquired Slots for the benefit of Holders of the Securities (as defined in
the Definitions Appendix described below); and
WHEREAS, as a result of the foregoing, pursuant to the terms of the Indenture
and in order to secure the due and punctual payment, performance and observance
in full of the Obligations (as defined in the Definitions Appendix described
below), the Beneficial Interest and the Beneficial Interest Certificate, among
other things, will be pledged to the Collateral Agent pursuant to the Pledge
Agreement for the equal and ratable benefit of the Holders of the Securities;
and
WHEREAS, TWA has duly authorized the execution and delivery of this
Agreement.
NOW, THEREFORE, both parties agree as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Securities.
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions. Capitalized terms used and not otherwise defined
-----------
herein shall have the meanings ascribed to such terms in Section 1 of the
Definitions Appendix attached to the Indenture as Appendix I, which shall be a
part of this Acquired Slot Trust Agreement as if fully set forth in this place.
Section 1.2. Rules of Construction. The rules of construction for this
---------------------
Acquired Slot Trust Agreement are set forth in Section 2 of the Definitions
Appendix.
ARTICLE 2. NAME
Section 2.1. Name. The Slot Trust established by this Agreement shall be
----
known as the ACQUIRED SLOT TRUST (together with all amendments and supplements
hereto, the "Slot Trust").
ARTICLE 3. PURPOSE OF SLOT TRUST
Section 3.1. Purpose. The purpose for which the Slot Trust has been formed
-------
is (i) to acquire and hold, for the benefit of the holder of the Beneficial
Interest and the Beneficial Interest Certificate, the Acquired Slots assigned,
transferred and conveyed to the Slot Trust pursuant to the Deed of Conveyance
and subsequent deeds of conveyance similar in form and substance to the Deed of
Conveyance pursuant to which TWA has transferred and may transfer Slots to the
Slot Trust, the pledge of the Beneficial Interest therein to serve as security
for the payment and performance of the Obligations, and (ii) to transfer such
Acquired Slots, all in accordance with the terms and conditions set forth in
this Agreement, the Master Sub-License Agreement and the Indenture.
ARTICLE 4. CONVEYANCE OF SLOTS, ORIGINAL ISSUANCE OF
CERTIFICATE
Section 4.1. Holding and Conveyance of Slots. TWA by the execution and
-------------------------------
delivery hereof, confirms that pursuant to the Deed of Conveyance, it is
assigning, transferring and conveying to the Slot Trust the Acquired Slots
described in Schedule I, in each case free and clear of liens, encumbrances and
rights of others (except for certain of the Acquired Slots which are subject to
the Prior Third Party Licenses listed in Schedule II hereto and Acquired Slots
subject to Slot Trades) and without recourse (such Acquired Slots, together with
all other Slots which may, from time to time, be assigned, transferred and
conveyed to the Slot Trust from TWA pursuant to the Master Sub-License Agreement
or otherwise, but excluding any Acquired Slots which have been released and
assigned, transferred and reconveyed to TWA from the Slot Trust (unless later
reassigned, retransferred and reconveyed to the Slot Trust) pursuant to the
2
Master Sub-License Agreement, herein being collectively referred to as the
"Acquired Slots" or the "Slot Trust Assets"), subject to the terms hereof.
Section 4.2. Acceptance by Slot Trustee. The Slot Trustee acknowledges the
--------------------------
prior or concurrent assignment, transfer and conveyance to it of the Acquired
Slots referred to in Section 4.1 hereof and declares that it holds and will hold
all Slot Trust Assets received by it hereunder in trust, in accordance with, and
subject to, the terms herein set forth.
Section 4.3. Execution of Beneficial Interest Certificate. The Slot Trustee
--------------------------------------------
shall execute and record the ownership of the Beneficial Interest Certificate in
accordance with Section 6.1 and deliver it to the Collateral Agent, whereafter
the Beneficial Interest shall be represented by the Beneficial Interest
Certificate, subject to all the terms hereof.
ARTICLE 5. OWNERSHIP AND TRANSFER OF SLOT TRUST ASSETS
Section 5.1. Ownership of Slot Trust Assets. The Slot Trust Assets shall be
------------------------------
held separate and apart from any assets now or hereafter held in any capacity
other than as trustee hereunder by the Slot Trustee. All the assets of the Slot
Trust shall at all times be considered as vested in the Slot Trustee. For so
long as the Slot Trust Assets are held by the Slot Trust, TWA shall not, and
shall not be deemed to, have ownership in, or any rights of the holder of record
at the FAA with respect to, any Slot Trust Asset or any right of partition or
possession thereof, but TWA or its permitted assignee shall have an undivided
beneficial ownership interest in the entire Slot Trust. It is the intent hereof
that by the Deed of Conveyance, any Subsequent Deed of Conveyance, this
Agreement and the Master Sub-License Agreement, TWA (for all purposes other than
tax purposes) has assigned, transferred and conveyed (or in the case of any
Subsequent Deed of Conveyance, will have assigned, transferred and conveyed) its
entire interest in the Acquired Slots to the Slot Trust subject to no Liens
except Permitted Liens, and that TWA can only acquire an interest therein upon
satisfaction of all the Obligations or under the limited circumstances set forth
in Article 6 of the Master Sub-License Agreement. If, notwithstanding TWA's
failure to satisfy all the Obligations or comply with said Article 6, it is held
or determined that any present or future right or interest in any Acquired Slot
does so exist in TWA by contingent right of reverter, expectancy or otherwise,
TWA agrees that such holding or determination is contrary to the intent hereof
and that it has no right to, and shall not, transfer or otherwise place any Lien
upon such interest or make any agreement or understanding to do so unless and
until all the Obligations have been satisfied or such Acquired Slot shall have
ceased to be an Acquired Slot for all purposes hereof and of the Master Sub-
License Agreement.
Section 5.2. Transfer of Slot Trust Assets. Except as provided in the
-----------------------------
Master Sub-License Agreement including Section 6.2(a) thereof, until such time
as the Slot Trust receives notice from the Indenture Trustee that (i) TWA has
satisfied all of its Obligations or (ii) acceleration of TWA's obligations under
the Securities has occurred, the Slot Trust shall not transfer any of the Slot
Trust Assets. Upon receipt of notice from the Indenture Trustee that no Event of
Default exists and TWA has satisfied all of the Obligations, the Slot Trustee
shall,
3
subject to the provisions of Section 9.2 of the Master Sub-License Agreement,
and except as otherwise provided in Section 9.2 thereof, reassign, retransfer
and reconvey to TWA or its designee by deed of conveyance, without recourse,
representation or warranty, all of the Acquired Slots then held as Slot Trust
Assets. Upon receipt of notice from the Indenture Trustee that acceleration of
TWA's obligations under the Securities has occurred, the Slot Trust, upon
direction from the Indenture Trustee, shall take all such actions as are
appropriate and necessary, in the exercise of its sole and exclusive discretion,
to protect the interests of the Holders of the Securities, including without
limitation, to deny TWA use of the Acquired Slots (the Master Sub-License
Agreement having terminated), to cause or allow the termination of, enforce
attornment obligations under or otherwise deal with Third-Party Licenses and to
transfer by deed of conveyance without recourse, representation or warranty any
or all of the Acquired Slots.
Notwithstanding the foregoing, if the Slot Trust or the Slot Trustee (in its
capacity as Slot Trustee) receives any property other than Slot Trust Assets
(including, without limitation, cash and/or Investment Securities) such property
shall be immediately delivered to the Collateral Agent.
ARTICLE 6. BENEFICIAL INTEREST IN THE SLOT TRUST
Section 6.1. Ownership of Beneficial Interest. TWA shall be the holder of
--------------------------------
record of the Beneficial Interest Certificate; provided however that upon
acceleration of the Securities in accordance with the Indenture, the Collateral
Agent may at any time in its discretion and without notice to TWA request that
the Slot Trustee transfer to or register in its name the Beneficial Interest
Certificate, and thereupon shall become holder of record of such certificate.
The ownership of the Beneficial Interest and the Beneficial Interest Certificate
shall be recorded by the Slot Trustee on the books of the Slot Trust. The
record books of the Slot Trust shall be conclusive as to who is the holder of
record of the Beneficial Interest and the Beneficial Interest Certificate.
Section 6.2. Transfer of Beneficial Interest. So long as TWA is recorded on
-------------------------------
the books of the Slot Trust as the holder of record of the Beneficial Interest
and the Beneficial Interest Certificate, TWA shall not transfer or assign the
Beneficial Interest and/or the Beneficial Interest Certificate to any Person,
except that TWA may pledge, transfer or assign the Beneficial Interest and the
Beneficial Interest Certificate to the Collateral Agent under the Pledge
Agreement and to no other Person. At such time as the Collateral Agent becomes
the holder of record of the Beneficial Interest and the Beneficial Interest
Certificate, the Beneficial Interest and the Beneficial Interest Certificate
shall be fully transferable and assignable.
4
ARTICLE 7. THE SLOT TRUSTEE
Section 7.1. Management of the Slot Trust. The business and affairs of the
----------------------------
Slot Trust shall be managed by the Slot Trustee, and the Trustee shall have all
powers granted to it pursuant to applicable law and under this Agreement.
Section 7.2. Powers. The Slot Trustee in all instances shall carry out its
------
duties under this Agreement without interference by TWA. The Slot Trustee shall
have full power and authority to do any and all acts and to make and execute any
and all contracts and instruments necessary in connection with its duties under
this Agreement. In addition to the powers granted to the Slot Trustee pursuant
to applicable law and subject to any applicable limitation in this Agreement,
the Slot Trustee shall have power and authority:
(a) To enter into and perform on behalf of the Slot Trust the
Master Sub-License Agreement, under substantially the terms and
conditions set forth in the form of such agreement attached as Exhibit
C hereto;
(b) To hold on behalf of the Slot Trust the Acquired Slots
assigned, transferred and conveyed to the Slot Trust from TWA pursuant
to the Deed of Conveyance or any subsequent deed of conveyance from
TWA;
(c) To cancel, terminate and declare null and void the Master
Sub-License Agreement pursuant to the terms of such agreement;
(d) After acceleration of TWA's obligations under the Securities
in accordance with the Indenture (i) to take such actions as are
appropriate and necessary in the exercise of its sole and exclusive
discretion, to enter into, cause or allow the termination of, enforce
attornment obligations under or otherwise deal with sublicenses and
Third-Party Licenses and (ii) to assign, transfer and convey by deed
of conveyance, without recourse, representation or warranty, any or
all of the Acquired Slots, upon direction of the Indenture Trustee;
(e) To transfer to the Collateral Agent any property other than
Slot Trust Assets (including, without limitation, cash and/or
Investment Securities) delivered to it; and
(f) To reassign, retransfer and reconvey by deed of conveyance
without recourse, representation or warranty (except as otherwise
provided in Section 9.2 of the Master Sub-License Agreement) to TWA
the Acquired Slots held as Slot Trust Assets, upon receipt of notice
from the Indenture Trustee of satisfaction by TWA of all its
Obligations or under certain circumstances with respect to certain
Acquired Slots as set forth in the Master Sub-License Agreement.
5
Section 7.3. Principal Transactions. The Slot Trustee shall not on behalf of
----------------------
the Slot Trust, or otherwise, transfer any Slot Trust Assets or any other
property delivered to the Slot Trustee or the Slot Trust from the Slot Trust or
sell or lend any Slot Trust Assets or any other property delivered to the Slot
Trustee or the Slot Trust to any person, except as set forth in Sections 5.2 and
7.2 hereof.
Section 7.4. Service in Other Capacities. The Slot Trustee may serve in any
---------------------------
other capacity on its own behalf or on behalf of others (and must serve as
Indenture Trustee and as Collateral Agent), and may engage in such other
business activities in addition to its services on behalf of the Slot Trust as
may be desirable and permissible under any applicable law. The Slot Trustee
agrees to, and shall have the benefit of, all provisions of the Indenture and
the Operative Documents stated therein to be agreements of or applicable to the
Slot Trustee.
Section 7.5. Resignation and Removal of Slot Trustee. The Slot Trustee may
---------------------------------------
resign or be removed and a successor Slot Trustee appointed in accordance with
the terms of Section 7.8 of the Indenture; provided, however, that upon the
occurrence of an Event of Default, the Slot Trustee shall, if required under
applicable law to preserve the existence of the Slot Trust, resign and/or
appoint a successor individual trustee who shall be an individual person and
shall for all purposes be the Slot Trustee hereunder.
Section 7.6. Successor Slot Trustee. Any successor Slot Trustee appointed
----------------------
as provided in Section 7.5 hereof or which became a successor Slot Trustee in
accordance with Section 7.9 of the Indenture shall execute, acknowledge and
deliver to TWA and to its predecessor Slot Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Slot Trustee shall become effective, and such successor Slot
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Slot Trustee herein. The
predecessor Slot Trustee shall deliver to the successor Slot Trustee all
documents and statements held by it hereunder, and TWA and the predecessor Slot
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainty vesting and confirming
in the successor Slot Trustee all such rights, powers, duties and obligations.
ARTICLE 8. LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 8.1. Limitation of Slot Trustee Liability. Every act or thing done
------------------------------------
or omitted, and every power exercised or obligation incurred by the Slot Trustee
in the administration of the Slot Trust or in connection with any business,
property or concerns of the Slot Trust, whether ostensibly in its own name or in
its capacity as Slot Trustee, shall be done, omitted, exercised or incurred by
it as Slot Trustee; and every person contracting or dealing with the Slot
Trustee or having any debt, claim or judgment against it shall look only to TWA
for payment or satisfaction; and the Slot Trustee shall not be personally liable
for or on account of any contract,
6
debt, tort, claim, damage, judgment or decree arising out of or connected with
the administration or preservation of the Slot Trust Assets or the conduct of
any business of the Slot Trust.
Except as provided in Section 9.1 of the Master Sub-License Agreement, the
Slot Trustee does not make and shall not be deemed to have made any
representation or warranty, expressed or implied, as to the title,
merchantability, compliance with specifications, condition, design, operation,
fitness for use or for a particular purpose, or any other representation or
warranty whatsoever, expressed or implied, with respect to the Slot Trust
Assets.
The Slot Trustee shall not be subject to any personal liability whatsoever to
any person for any action or failure to act (including, without limitation, the
failure to compel in any way any former or acting Slot Trustee to redress any
breach of trust) and all Persons shall look solely to TWA for satisfaction of
claims of any nature arising in connection with the affairs of the Slot Trust,
except for the Slot Trustee's own bad faith or negligence.
Section 8.2. Indemnification of Slot Trustee. TWA shall indemnify and hold
-------------------------------
harmless the Slot Trustee to the same extent provided for the Indenture Trustee
under Section 7.7 of the Indenture, and the Slot Trustee shall have those rights
set forth in such Section 7.7 for the Indenture Trustee.
Section 8.3. Duties of Slot Trustee. (a) If an Event of Default has
----------------------
occurred and is continuing, the Slot Trustee shall exercise such of the rights
and powers vested in it by this Agreement and use the same degree of care and
skill in such exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Slot Trustee need perform only those duties as
specifically set forth in this Agreement and no others.
(ii) In the absence of bad faith on its part, the Slot Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Slot Trustee and
conforming to the requirements of this Agreement. However,
the Slot Trustee shall examine the certificates and opinions
to determine whether or not they conform to the requirements
of this Agreement.
(c) The Slot Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) This paragraph (c) does not limit the effect of paragraph
(b) of this Section 8.3 or of Section 8.4 hereof.
7
(ii) The Slot Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is
proved that the Slot Trustee was negligent in ascertaining
the pertinent facts.
(iii) The Slot Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.2
hereof.
(d) The Slot Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any
loss, liability or expense.
(e) Every provision of this Agreement that in any way relates to the
Slot Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
8. 3.
(f) Except as specifically set forth herein, in the Master Sub-License
Agreement or in the Pledge Agreement, the Slot Trustee shall have no duty (i)
to perform any recording or filing in connection with the Slot Trust Assets,
(ii) to see to the payment or discharge of any tax, assessment or other
governmental charge or any lien owing with respect to, or assessed or levied
against, any part of the Slot Trust Assets, or (iii) to take any other
actions in connection with the use, operation, management or maintenance of
the Slot Trust Assets.
Section 8.4. Rights of Slot Trustee. (a) The Slot Trustee may rely on any
----------------------
document believed by it to be genuine and to have been signed or presented by
the proper person. The Slot Trustee need not investigate any fact or matter
stated in any such document.
(b) Before the Slot Trustee acts or refrains from acting, it may
require an Opinion of Counsel, satisfactory to the Slot Trustee in its
reasonable discretion, which shall conform to Section 11.5 of the Indenture.
The Slot Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such certificate or opinion.
(c) The Slot Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Slot Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers. Slot Trustee shall have the right at any time to seek
instruction concerning the administration of this Agreement or the trust
created thereby from any court of competent jurisdiction.
(e) The Slot Trustee may consult with counsel and the advice or opinion
of such counsel as to matters of law shall be full and complete authorization
and
8
protection in respect of any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
ARTICLE 9. VOTING POWERS OF HOLDER OF RECORD OF BENEFICIAL
INTEREST
Section 9.1. No Voting Power. So long as TWA is the holder of record of the
---------------
Beneficial Interest and the Beneficial Interest Certificate, TWA shall have no
voting power with respect to any matter relating to the Slot Trust, unless, and
only to the extent, required by law, which vote shall be exercised by the
Collateral Agent. At such time as the Collateral Agent becomes the holder of
record of the Beneficial Interest and the Beneficial Interest Certificate, the
Collateral Agent shall have all voting power with respect to any and all matters
relating to the Slot Trust, including, without limitation, the dissolution of
the Slot Trust, any direction to the Slot Trustee to make distributions, in kind
or otherwise, or any direction to the Slot Trustee to sell, lease or otherwise
dispose of the Slot Trust Assets; provided these powers are not in derogation of
any powers or rights exercisable by the Slot Trustee under Section 7.2.
ARTICLE 10. MISCELLANEOUS
Section 10.1. Slot Trust Expenses, Etc. TWA shall pay all reasonable
------------------------
expenses and disbursements of the Slot Trust and the Slot Trustee, including,
without limitation, taxes (to the extent provided in Section 4.2 of the Pledge
Agreement), fees and commissions of every kind incurred in connection with the
activities of the Slot Trust; expenses of registering and qualifying the Slot
Trust and the Beneficial Interest under Federal and State laws and regulations,
legal expenses, and such non-recurring items as may arise, including litigation
to which the Slot Trust or the Slot Trustee is a party, and for all losses and
liabilities incurred in administering the Slot Trust.
Section 10.2. Term of Slot Trust; Filing of Copies. The term of the Slot
------------------------------------
Trust shall be from the date of this Agreement to and including such time as all
of the Slot Trust Assets have been assigned, transferred and conveyed pursuant
to the terms set forth herein. The original or a copy of this instrument and of
each Declaration of Trust supplemental hereto shall be kept at the office of the
Slot Trustee.
Section 10.3. Discharge of Slot Trustee; Termination of Slot Trust. Upon
----------------------------------------------------
completion of the assignment, transfer and conveyance of the Slot Trust Assets
pursuant to the terms set forth herein, the Slot Trustee shall be discharged of
any and all further liabilities and duties hereunder and this Slot Trust and the
right, title and interest of all parties hereto shall be canceled and
discharged.
Section 10.4. Amendment Procedure. (a) Except as provided in Section
-------------------
10.4(b) hereof and subject to Section 4.11 of the Indenture and Article 9 of the
Indenture, this Agreement may
9
be amended by TWA and the Slot Trustee only with the affirmative vote of the
Required Holders.
(b) TWA and the Slot Trustee may also amend this Agreement without the
vote of the Holders of the Securities if such parties each deem it necessary
to cure any ambiguity, defect or inconsistency or conform the Slot Trust
and/or this Agreement to the requirements of applicable laws, so long as such
amendment or amendments do not have a material adverse effect on the
interests of the Holders, but the Slot Trustee shall not be liable for
failing so to do.
(c) Notwithstanding the foregoing, nothing contained in this Agreement
shall permit any amendment of this Agreement which would impair the exemption
from personal liability of the Slot Trustee.
Section 10.5. References to Slot Trust and Slot Trustee. All references in
-----------------------------------------
this Agreement and all other Operative Documents to the Slot Trust or the Slot
Trustee shall be to both the Slot Trust and the Slot Trustee unless such a
reference would render the provision in which it is contained meaningless or
ambiguous.
Section 10.6. Notices; Waivers. Any request, demand, authorization,
----------------
direction, notice, consent, waiver or other document provided or permitted by
this Agreement to be made upon, given or furnished to, or filed with
(a) the Slot Trustee, by any Holder or by TWA shall be sufficient for
every purpose hereunder if in writing and made, given, furnished or filed by
personal delivery or registered or certified mail to or with the Slot Trustee
at First Security Bank, National Association, 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx
Xxxx, Xxxx 00000, Attention: Corporate Trust Services.
(b) TWA, by any Holder or by the Slot Trustee shall be sufficient for
every purpose hereunder if in writing and made, given, furnished or filed by
personal delivery or mailed, first class postage prepaid, to TWA at 000 X.
0xx Xxxxxx, Xx. Xxxxx. Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx, Senior
Vice President and General Counsel,
or to any of the above parties at any other address subsequently furnished in
writing by it to each of the other parties listed above. An affidavit by any
person representing or acting on behalf of TWA or the Slot Trustee as to such
mailing, having any registry receipt required by this Section attached, shall be
conclusive evidence of the giving of such demand, notice or Communication.
Where this Agreement provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with
10
the Slot Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
Section 10.7. Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement nor consent to any departure by TWA therefrom shall in any event
be effective unless the same shall be in writing, approved by the Required
Holders (to the extent required herein or by the Indenture) and signed by the
Slot Trustee, and then any such waiver or consent shall only be effective in the
specific instance and for the specific purpose for which given.
Section 10.8. No Waiver; Remedies. (a) No failure on the part of the Slot
-------------------
Trustee to exercise, and no delay in exercising any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right, or constitute an election precluding any other or further
exercise of any alternative right, of the Slot Trustee, the Collateral Agent or
the Indenture Trustee under the Indenture or any Operative Document. The
remedies herein provided are cumulative, may be exercised singly or
concurrently, and are not exclusive of any remedies provided by law or the
Indenture, the Securities or any of the other Operative Documents.
(b) Failure by the Slot Trustee at any time or times hereafter to
require strict performance by TWA or any other Person of any of the provisions,
warranties, terms or conditions contained herein or in any of the Indenture, the
Securities or any other Operative Documents now or at any time or times
hereafter executed by TWA or any such other Person and delivered to the Slot
Trustee shall not waive, affect or diminish any right the Slot Trustee at any
time or times hereafter to demand strict performance thereof, and such right
shall not be deemed to have been modified or waived by any course of conduct or
knowledge of the Slot Trustee or any agent, officer or employee of the Slot
Trustee.
Section 10.9. Conflict with Trust Indenture Act of 1939. If and to the
-----------------------------------------
extent any provision of this Agreement limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive, of the TIA, such imposed
duties shall control.
Section 10.10. Holidays. In the event that any date for the payment of any
--------
amount due hereunder shall not be a Business Day, such payments (notwithstanding
any other provision of this Agreement) need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the due date, and no interest shall accrue for the period from such due
date to and including the next succeeding Business Day.
Section 10.11. Successors and Assigns. This Agreement and all obligations
----------------------
of TWA hereunder shall be binding upon the successors and assigns of TWA and
shall, together with the rights and remedies of the Slot Trustee hereunder,
inure to the benefit of the Slot Trustee, the Holders, and their respective
successors and assigns.
11
Section 10.12. Governing Law. The laws of the State of New York shall
-------------
govern this Agreement without regard to principles of conflict of laws.
Section 10.13. Indemnification. TWA agrees to pay, and to save the Slot
---------------
Trustee harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all excise, sales or other similar taxes which
may be payable or determined to be payable in connection with any of the
transactions contemplated by this Agreement.
Section 10.14. Effect of Headings. The Article and Section headings and the
------------------
Table of Contents contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of this
Agreement.
Section 10.15. No Adverse Interpretation of Other Agreement. This Agreement
--------------------------------------------
may not be used to interpret any security agreement of TWA or any of its
Subsidiaries which is unrelated to the Indenture, the Securities or the
Operative Documents. Any such security agreement may not be used to interpret
this Agreement.
Section 10.16. No Recourse Against Others. A director, officer, employee or
--------------------------
stockholder, as such, of TWA shall not have any liability for any obligations of
TWA under this Agreement or for any claim based on, in respect of or by reason
of such obligations or its creation.
Section 10.17. Duplicate Originals. The parties may sign any number of
-------------------
copies of this Agreement. Each signed copy shall be an original, but all of
them together represent the same agreement.
Section 10.18. Severability. In case any provision in this Agreement shall
------------
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby, and a Holder shall have no claim therefor against the Slot Trustee.
12
IN WITNESS WHEREOF, the parties have caused this Acquired Slot Trust Agreement
to be duly executed, all as of the date first above written.
TRANS WORLD AIRLINES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President, Corporate Finance
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, as Slot Trustee
By: /s/ C. Xxxxx Xxxxxxx
------------------------------------------
Name: C. Xxxxx Xxxxxxx
Title: Vice President
13
SCHEDULE I
TO ACQUIRED SLOT TRUST AGREEMENT
ACQUIRED SLOTS
--------------
The Acquired Slots consist of fifty-two (52) slots at LaGuardia Airport; one
hundred sixty-six (166) slots (81 summer; 85 winter) at Xxxx X. Xxxxxxx
International Airport, and; two (2) slots at X'Xxxx Airport more particularly
identified by number, time and frequency as follows:
Slot Number Slot Time A/D Frequency
JFK S 5130 1500 A DLY
JFK S 5142 1500 A DLY
JFK S 5155 1500 A DLY
JFK S 5191 1500 A DLY
JFK S 5224 1500 D DLY
JFK S 5073 1530 D DLY
JFK S 5121 1530 A DLY
JFK S 5261 1530 A DLY
JFK S 5275 1530 A DLY
JFK S 5276 1530 A DLY
JFK S 5006 1600 A DLY
JFK S 5064 1600 A DLY
JFK S 5065 1600 A DLY
JFK S 5092 1600 D DLY
JFK S 5104 1600 D DLY
JFK S 5109 1600 D DLY
JFK S 5128 1600 D DLY
JFK S 5138 1600 D DLY
JFK S 5150 1600 D DLY
JFK S 5151 1600 D DLY
JFK S 5418 1600 A DLY
JFK S 5419 1600 A DLY
SLOT NUMBER SLOT TIME A/D FREQUENCY
JFK S 5420 1600 A DLY
JFK S 5421 1600 A DLY
JFK S 5178 1630 A DLY
JFK S 5182 1630 A DLY
JFK S 5196 1630 D DLY
JFK S 5208 1630 A DLY
JFK S 5212 1630 A DLY
JFK S 5231 1630 A DLY
JFK S 5233 1630 A DLY
JFK S 5253 1630 A DLY
JFK S 5279 1630 A DLY
JFK S 5286 1630 A DLY
JFK S 5306 1630 D DLY
JFK S 5311 1630 D DLY
JFK S 5314 1630 A DLY
JFK S 5318 1630 A DLY
JFK S 5359 1630 D DLY
JFK S 5404 1630 D DLY
JFK S 5039 1700 A DLY
JFK S 5084 1700 A DLY
JFK S 5185 1700 A DLY
JFK S 5405 1700 A DLY
JFK S 5247 1730 D DLY
JFK S 5256 1730 D DLY
JFK S 5315 1730 D DLY
JFK S 5320 1730 D DLY
JFK S 5331 1730 D DLY
JFK S 5349 1730 D DLY
JFK S 5005 1800 D DLY
JFK S 5012 1800 D DLY
JFK S 5022 1800 D DLY
JFK S 5085 1800 D DLY
JFK S 5099 1800 D DLY
JFK S 5152 1800 A DLY
JFK S 5240 1800 D DLY
JFK S 5340 1800 A DLY
JFK S 5348 1800 A DLY
JFK S 5442 1800 D DLY
JFK S 5161 1830 A DLY
JFK S 5250 1830 D DLY
JFK S 5267 1830 D DLY
JFK S 5380 1830 D DLY
JFK S 5383 1830 D DLY
JFK S 5126 1900 D DLY
JFK S 5141 1900 D DLY
JFK S 5143 1900 D DLY
JFK S 5160 1900 D DLY
JFK S 5168 1900 D DLY
JFK S 5186 1900 D DLY
JFK S 5393 1900 D DLY
JFK S 5038 1930 D DLY
JFK S 5433 1930 D DLY
JFK S 5434 1930 D DLY
JFK W 5030 1500 N DLY
JFK W 5031 1500 N DLY
JFK W 5053 1500 N DLY
JFK W 5073 1500 N DLY
JFK W 5101 1500 N DLY
Slot Number Slot Time A/D Frequency
JFK W 5121 1500 N DLY
JFK W 5130 1500 N DLY
JFK W 5142 1500 N DLY
JFK W 5155 1500 N DLY
JFK W 5191 1500 N DLY
JFK W 5224 1500 N DLY
JFK W 5261 1500 N DLY
JFK W 5275 1500 N DLY
JFK W 5276 1500 N DLY
JFK W 5287 1500 N DLY
JFK W 5064 1600 N DLY
JFK W 5065 1600 N DLY
JFK W 5092 1600 N DLY
JFK W 5104 1600 N DLY
JFK W 5109 1600 N DLY
JFK W 5128 1600 N DLY
JFK W 5138 1600 N DLY
JFK W 5150 1600 N DLY
JFK W 5151 1600 N DLY
JFK W 5156 1600 N DLY
JFK W 5157 1600 N DLY
JFK W 5158 1600 N DLY
JFK W 5171 1600 N DLY
JFK W 5178 1600 N DLY
JFK W 5182 1600 N DLY
JFK W 5208 1600 N DLY
JFK W 5212 1600 N DLY
JFK W 5231 1600 N DLY
JFK W 5233 1600 N DLY
Slot Number Slot Time A/D Frequency
JFK W 5253 1600 N DLY
JFK W 5279 1600 N DLY
JFK W 5286 1600 N DLY
JFK W 5306 1600 N DLY
JFK W 5311 1600 N DLY
JFK W 5312 1600 N DLY
JFK W 5314 1600 N DLY
JFK W 5007 1700 N DLY
JFK W 5051 1700 N DLY
JFK W 5074 1700 N DLY
JFK W 5083 1700 N DLY
JFK W 5084 1700 N DLY
JFK W 5137 1700 N DLY
JFK W 5235 1700 N DLY
JFK W 5238 1700 N DLY
JFK W 5247 1700 N DLY
JFK W 5256 1700 N DLY
JFK W 5315 1700 N DLY
JFK W 5320 1700 N DLY
JFK W 5331 1700 N DLY
JFK W 5349 1700 N DLY
JFK W 5350 1700 N DLY
JFK W 5005 1800 N DLY
JFK W 5012 1800 N DLY
JFK W 5022 1800 N DLY
JFK W 5085 1800 N DLY
JFK W 5099 1800 N DLY
JFK W 5110 1800 N DLY
JFK W 5122 1800 N DLY
Slot Number Slot Time A/D Frequency
JFK W 5152 1800 N DLY
JFK W 5161 1800 N DLY
JFK W 5237 1800 N DLY
JFK W 5239 1800 N DLY
JFK W 5250 1800 N DLY
JFK W 5267 1800 N DLY
JFK W 5117 1900 N DLY
JFK W 5120 1900 N DLY
JFK W 5124 1900 N DLY
JFK W 5126 1900 N DLY
JFK W 5141 1900 N DLY
JFK W 5143 1900 N DLY
JFK W 5160 1900 N DLY
JFK W 5168 1900 N DLY
JFK W 5186 1900 N DLY
JFK W 5260 1900 N DLY
JFK S 5021 1600 A DLY
JFK S 5043 1730 A DLY
JFK S 5248 1800 A DLY
JFK S 5027 1600 D DLY
JFK S 5070 1830 D DLY
JFK S 5055 1930 D DLY
JFK W 5021 1600 N DLY
JFK W 5043 1700 N DLY
JFK W 5248 1800 N DLY
JFK W 5027 1600 N DLY
JFK W 5070 1800 N DLY
JFK W 5055 1900 N DLY
LGA A 3544 0630 D DLY
Slot Number Slot Time A/D Frequency
LGA A 3399 0730 D DLY
LGA A 3049 0800 D DLY
LGA A 3499 0800 A DLY
LGA A 3615 0800 D DLY
LGA A 3809 0830 D DLY
LGA A 3138 0900 A DLY
LGA A 3465 0900 D DLY
LGA A 3222 0930 D DLY
LGA A 3625 0930 D DLY
LGA A 3267 1000 D DLY
LGA A 3540 1000 A DLY
LGA A 3166 1100 D DLY
LGA A 3674 1200 A DLY
LGA A 3310 1230 D DLY
LGA A 3338 1230 D DLY
LGA A 3824 1330 A DLY
LGA A 3215 1400 A DLY
LGA A 3543 1400 D DLY
LGA A 3761 1500 A DLY
LGA A 3523 1530 A DLY
LGA A 3261 1600 D DLY
LGA A 3665 1630 A DLY
LGA A 3170 1700 A DLY
LGA A 3552 1700 D DLY
LGA A 3580 1700 A DLY
LGA A 3159 1730 D DLY
LGA A 3457 1800 D DLY
LGA A 3013 1830 A DLY
LGA A 3481 1830 A DLY
Slot Number Slot Time A/D Frequency
LGA A 3470 1930 A DLY
LGA A 3525 1930 D DLY
LGA A 3099 2000 D 6 ONLY
LGA A 3125 2000 A DLY
LGA A 3393 2000 D X 6
LGA A 3561 2000 A DLY
LGA A 3196 2030 D DLY
LGA A 3312 2030 A DLY
LGA A 3483 2030 A DLY
LGA A 3842 2200 A DLY
LGA A 3443 2230 A DLY
LGA A 3373 2300 A DLY
LGA C 2185 0730 A X6
LGA C 2184 0800 D X7
LGA C 2036 1030 A X6,7
LGA C 2164 1100 D X6,7
LGA C 2234 1200 A DLY
LGA C 2101 1200 D DLY
LGA C 2242 1600 A X6
LGA C 2100 1630 D X6
LGA C 2134 1800 A X6
LGA C 2209 1830 D X6
ORD 7644 1715 A/D DLY
ORD 7334 1515 A/D DLY
SCHEDULE II
TO ACQUIRED SLOT TRUST AGREEMENT
PRIOR THIRD PARTY LICENSES
--------------------------
END OF
SLOT REMAINING
SLOT NUMBER TIME A/D FREQUENCY CARRIER TERM
----------- ---- --- --------- ------- ----
LGA A 3481 1830 A DLY Midwest Express October 1999
LGA A 3465 0900 D DLY Delta June 1998
LGA A 3013 1830 A DLY Delta June 1998
LGA A 3483 2030 A DLY Delta June 1998
EXHIBIT A
TO ACQUIRED SLOT TRUST AGREEMENT
FORM OF
SUBSEQUENT
DEED OF CONVEYANCE
AND
ASSIGNMENT OF SLOTS
FROM
TRANS WORLD AIRLINES, INC.
TO
FIRST SECURITY BANK, NATIONAL ASSOCIATION
AS SLOT TRUSTEE OF THE ACQUIRED SLOT TRUST
12% SENIOR SECURED NOTES
EXHIBIT A
FORM OF SUBSEQUENT
DEED OF CONVEYANCE AND
ASSIGNMENT OF SLOTS
FOR VALUE RECEIVED the undersigned TRANS WORLD AIRLINES, INC. ("TWA") on
behalf of itself and for its successors and assigns does hereby assign, transfer
and convey to a trust created by that certain Declaration of Trust dated as of
March 31, 1997, (as the same may be further amended and supplemented, the
"Acquired Slot Trust" and terms not otherwise defined herein being used as
defined therein), with First Security Bank, National Association, a national
banking association, as trustee (together with its successors in trust and
assigns the "Slot Trustee") all of the rights, titles, interests and privileges
of TWA in and to the primary operating authority granted by the Federal Aviation
Administration (the "FAA") pursuant to Title 14 of the Code of Federal
Regulations, Part 93, Subparts K & S, as amended from time to time, or any
recodification thereof in any regulation ("Title 14"), to conduct certain
Instrument Flight Rule (as defined under the Federal Aviation Act of 1958, as
amended) take-offs or landings in specified one-hour or half-hour periods (the
"Slots," each of which is set forth on Schedule I.).
This Conveyance is an absolute and complete conveyance of all of the Slots.
TWA shall have the exclusive temporary leasehold or sub-license for the use
of the Slots during the period set forth in that certain Master Sub-License
Agreement between the Slot Trustee and TWA, dated as of March 31, 1997 (together
with all amendments and supplements thereto, the "Master Sub-License
Agreement"), subject to the terms thereof. The Slot Trustee, as trustee of the
Acquired Slot Trust, shall continue to be the holder of record at the FAA with
respect to the Slots, subject to the regulations adopted by the FAA pursuant to
authorization of the Secretary of Transportation of the United States.
TWA does hereby warrant and represent to the Acquired Slot Trust that it
has been granted the Slots by the FAA pursuant to Title 14, subject only to
regulation by the FAA, that TWA holds the Slots free and clear of any liens or
other encumbrances or rights of others.
TWA further warrants and represents that it has, at all times since
obtaining each Slot, complied in all material respects with all of the terms,
conditions and regulations set forth in Title 14. With specificity, TWA warrants
and represents that there are existing at this time no violations of the terms,
conditions and regulations of the aforesaid regulatory enactments adopted by the
FAA, the result of which would give the FAA in the exercise of its powers the
right to terminate, cancel, withdraw or revoke any of the Slots.
TWA further warrants and represents that it has used all of the Slots in
accordance with Section 93.227 of Title 14 since the date that it obtained each
of the Slots.
TWA further warrants and represents that the Slots are not Slots which have
been categorized as "essential air service Slots," "international Slots" or
"temporary Slots" by the FAA.
TWA further warrants and represents that the execution and delivery of this
DEED OF CONVEYANCE and the execution of the related documents shall not and does
not create a default or an event of default under any existing loan agreement,
mortgage, deed of trust, indenture, contract or other material agreement to
which TWA is a party, and does not violate any term, covenant and condition of
any other material agreement with any regulatory authority or any of the
provisions of the Articles of Incorporation or By-Laws of TWA as in effect on
the date hereof.
IN WITNESS WHEREOF, the undersigned, TWA, by and through its duly
undersigned authorized officer does hereby execute this DEED OF CONVEYANCE as of
this ____ day of _____, ____.
TRANS WORLD AIRLINES, INC.
By:____________________________________
Name:
Its:
By:____________________________________
Name:
Its:
Before me personally appeared this 31st day March, 1997
___________, as ___________________________
of TRANS WORLD AIRLINES, INC., a Delaware corporation
and ____________, as _____________ of TRANS WORLD
AIRLINES, INC., a Delaware corporation, who in my presence
did execute this Agreement and acknowledged that they executed
this Agreement for the purpose stated herein as an act and deed
of said corporation.
__________________________
Name:
__________________________
Name:
Notarial Seal __________________
Acknowledged and Agreed to as of this___
day of _____, ____.
ACQUIRED SLOT TRUST
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Slot Trustee on behalf of the Acquired Slot Trust
By:___________________________________________
Name:
Title:
After recording and confirmation please return to First Security Bank, National
Association, 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, Attention:
Corporate Trust Department
EXHIBIT B
TO ACQUIRED SLOT TRUST AGREEMENT
BENEFICIAL INTEREST CERTIFICATE
UNDER
ACQUIRED SLOT TRUST AGREEMENT
BETWEEN
TRANS WORLD AIRLINES, INC.
AND
FIRST SECURITY BANK, NATIONAL ASSOCIATION
AS SLOT TRUSTEE
12% SENIOR SECURED NOTES
TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN
RESTRICTIONS AND LIMITATIONS SET FORTH IN SECTIONS 5.2 AND
6.2 OF THE ACQUIRED SLOT TRUST AGREEMENT REFERRED TO BELOW
FIRST SECURITY BANK, NATIONAL ASSOCIATION
AS
SLOT TRUSTEE UNDER THE ACQUIRED SLOT
TRUST AGREEMENT DATED MARCH 31, 1997
BENEFICIAL INTEREST CERTIFICATE
No. 1
March 31, 1997
First Security Bank, National Association, as Slot Trustee (the "Slot
Trustee") under the Acquired Slot Trust Agreement (as the same may be amended,
modified or supplemented, from time to time, in accordance with the terms
thereof, the "Acquired Slot Trust Agreement") dated as of March 31, 1997 between
TRANS WORLD AIRLINES, INC. ("TWA") and the Slot Trustee (capitalized terms used
herein without definition shall have the meanings specified in the Acquired Slot
Trust Agreement or incorporated in such Acquired Slot Trust Agreement by
reference), hereby certifies as follows: (i) this Beneficial Interest
Certificate is the Beneficial Interest Certificate referred to in the Acquired
Slot Trust Agreement, which Beneficial Interest Certificate has been executed by
the Slot Trustee; and (ii) TWA, as the holder of record of this Beneficial
Interest Certificate (the "Holder"), has an undivided beneficial ownership
interest in the entire Slot Trust; however, all the assets of the Slot Trust
shall at all times be considered as vested in the Slot Trustee.
The ownership of this Beneficial Interest Certificate shall be recorded by
the Slot Trustee on the books of the Slot Trust, at the corporate trust office
of the Slot Trustee at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000,
Attention: Corporate Trust Department or at the office of any successor Slot
Trustee, in accordance with Section 6.1 of the Acquired Slot Trust Agreement.
Reference is hereby made to the Acquired Slot Trust Agreement, the Pledge
and Security Agreement dated as of March 31, 1997 between TWA and the collateral
agent thereunder, the Indenture dated as of March 31, 1997 between TWA and the
Trustee (as defined therein) and
the Master Sub-License Agreement dated as of March 31, 1997 between TWA and the
Slot Trustee for a statement of the rights of the Holder of this Beneficial
Interest Certificate, as well as for a statement of the terms and conditions of
the trust created by the Acquired Slot Trust Agreement, to all of which terms
and conditions the Holder hereof agrees by its acceptance of this Beneficial
Interest Certificate.
THIS BENEFICIAL INTEREST CERTIFICATE MAY BE TRANSFERRED, SOLD, ASSIGNED OR
OTHERWISE DISPOSED OF BY THE HOLDER HEREOF ONLY IN ACCORDANCE WITH THE
PROVISIONS OF SECTIONS 5.2 AND 6.2 OF THE ACQUIRED SLOT TRUST AGREEMENT. The
Holder hereof, by its acceptance of this Beneficial Interest Certificate, agrees
not to transfer, sell, assign or otherwise dispose of this Beneficial Interest
Certificate except in accordance with the terms of Sections 5.2 and 6.2 of the
Acquired Slot Trust Agreement. Upon surrender of this Beneficial Interest
Certificate for registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed by the registered Holder hereof or
his attorney duly authorized in writing, and after compliance with the
provisions of Sections 5.2 and 6.2 of the Acquired Slot Trust Agreement, a new
Beneficial Interest Certificate representing the undivided beneficial interest
in the entire Slot Trust will be executed and delivered to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Slot Trustee may treat the Person in whose name this Beneficial
Interest Certificate is registered as the owner hereof for all purposes set
forth in the Acquired Slot Trust Agreement.
IN WITNESS WHEREOF, the Slot Trustee has caused this Beneficial Interest
Certificate to be duly executed by an authorized officer of the Slot Trustee as
of the date first above written.
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Slot Trustee
By: /s/ C. Xxxxx Xxxxxxx
-------------------------------------
Name: C. Xxxxx Xxxxxxx
Title: Vice President
EXHIBIT C
TO ACQUIRED SLOT TRUST AGREEMENT
MASTER SUB-LICENSE AGREEMENT
BETWEEN
TRANS WORLD AIRLINES, INC.
("TWA")
AND
FIRST SECURITY BANK, NATIONAL ASSOCIATION
PURSUANT TO THE ACQUIRED SLOT TRUST AGREEMENT
DATED AS OF MARCH 31, 1997
12% SENIOR SECURED NOTES
TABLE OF CONTENTS
R E C I T A L S......................................................... C-1
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.................. C-2
Section 1.1. Definitions............................................ C-2
Section 1.2. Rules of Construction.................................. C-2
ARTICLE 2. SUB-LICENSE................................................. C-2
Section 2.1. Grant of Sub-License................................... C-2
ARTICLE 3. NATURE OF SUB-LICENSE....................................... C-2
Section 3.1. Non-Proprietary Nature................................. C-2
ARTICLE 4. REPRESENTATION AND WARRANTY................................. C-2
Section 4.1. Representation and Warranty............................ C-2
ARTICLE 5. COVENANTS................................................... C-2
Section 5.1. Covenants.............................................. C-2
ARTICLE 6. EVENT OF LOSS; RELEASE OF ACQUIRED SLOTS.................... C-4
Section 6.1. Event of Loss.......................................... C-4
Section 6.2. Release of Acquired Slots.............................. C-4
ARTICLE 7. SUBSEQUENT DEEDS OF CONVEYANCE.............................. C-5
Section 7.1. Subsequent Deeds of Conveyance......................... C-5
ARTICLE 8. REMEDIES UPON DEFAULT AND FAA ACTION........................ C-6
Section 8.1. Remedies Upon Default and FAA Action................... C-6
ARTICLE 9. TERMINATION AND RECONVEYANCE OF ALL ACQUIRED
SLOTS................................................... C-9
Section 9.1. Reconveyance of Acquired Slots to TWA.................. C-9
Section 9.2. Continued Effectiveness of Agreement................... C-9
ARTICLE 10. INDEMNIFICATION............................................ C-9
Section 10.1. Indemnification by TWA................................ C-9
ARTICLE 11. AMENDMENTS................................................. C-9
Section 11.1. Amendments............................................ C-10
ARTICLE 12. ASSIGNMENTS................................................ C-10
Section 12.1. Rights of Assignment by TWA........................... C-10
ARTICLE 13. INDEPENDENT APPRAISALS..................................... C-10
Section 13.1. Independent Appraisal Required Under Certain
Circumstances......................................... C-10
ARTICLE 14. RECEIPT OF CASH AND/OR INVESTMENT SECURITIES
BY THE SLOT TRUST OR THE SLOT TRUSTEE...................... C-10
Section 14.1. Receipt of Cash and/or Investment Securities.......... C-10
ARTICLE 15. SLOT TRUSTEE............................................... C-11
Section 15.1. Rights and Duties of Slot Trustee..................... C-11
Section 15.2. References to Slot Trust and Slot Trustee............. C-11
ARTICLE 16. MISCELLANEOUS.............................................. C-11
Section 16.1. Notices; Waivers...................................... C-11
Section 16.2. Amendments, Etc....................................... C-12
Section 16.3. No Waiver; Remedies................................... C-12
Section 16.4. Conflict with Trust Indenture Act of 1939............. C-12
Section 16.5. Holidays.............................................. C-12
Section 16.6. Successors and Assigns................................ C-12
Section 16.7. Governing Law......................................... C-13
Section 16.8. Indemnification....................................... C-13
Section 16.9. Effect of Headings.................................... C-13
Section 16.10. No Adverse Interpretation of Other Agreement......... C-13
Section 16.11. No Recourse Against Others........................... C-13
Section 16.12. Duplicate Originals.................................. C-13
Section 16.13. Severability......................................... C-13
SIGNATURE PAGE.......................................................... C-14
Exhibit 1 - Form of Monthly Report to Slot Trustee.............. C-15
Schedule 1 - Slot Release Schedule............................. C-16
MASTER SUB-LICENSE AGREEMENT
THIS MASTER SUB-LICENSE AGREEMENT dated as of March 31, 1997 (herein,
together with all supplements and amendments hereto, this "Agreement"), made by
TRANS WORLD AIRLINES, INC. (herein, together with its successors and assigns,
"TWA") and the trust existing under the Acquired Slot Trust Agreement dated as
of March 31, 1997 (the "Slot Trust"), with FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a banking association organized under the laws of the United
States, having an office at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000
(herein, together with its successors in trust and assigns, the "Slot Trustee").
R E C I T A L S:
WHEREAS, TWA and First Security Bank, National Association, as Trustee,
have contemporaneously herewith entered into that certain Indenture dated March
31, 1997 (the "Indenture") providing for the issuance of $50,000,000 (plus up to
an additional $7,500,000 if an over-allotment option is exercised) aggregate
principal amount outstanding of 12% Senior Secured Notes; and
WHEREAS, TWA granted, assigned, transferred and conveyed to the Slot Trust
by the Deed of Conveyance (as defined in the Definitions Appendix described
below) all of the Acquired Slots set forth in Schedule I to the Acquired Slot
Trust Agreement; and from time to time hereafter TWA may assign, transfer and
convey to the Slot Trust other Slots pursuant to any subsequent deed of
conveyance, which shall be in form and substance similar to the Form of
Subsequent Deed of Conveyance in Exhibit A to the Acquired Slot Trust Agreement
(the "Subsequent Deed of Conveyance"). All Slots so conveyed to the Slot Trust
by the Deed of Conveyance and Subsequent Deeds of Conveyance together constitute
the "Acquired Slots"; and
WHEREAS, the Slot Trustee has agreed to grant to TWA an exclusive sub-
license (the "Sub-License") to use the Acquired Slots in accordance with this
Agreement; and
WHEREAS, as security for the due and punctual payment, performance and
observance in full of the Obligations (as defined in the Definitions Appendix
described below), TWA pledged, among other things, the Beneficial Interest and
the Beneficial Interest Certificate, to the Collateral Agent on behalf of the
holders of the Securities; and
WHEREAS, TWA has duly authorized the execution and delivery of this
Agreement.
NOW, THEREFORE, both parties agree as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Securities
(the "Holders").
33
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions. Capitalized terms used and not otherwise
-----------
defined herein shall have the meanings ascribed to such terms in Section 1 of
the Definitions Appendix attached to the Indenture as Appendix I, which shall be
a part of this Master Sub-License Agreement as if fully set forth in this place.
Section 1.2. Rules of Construction. The rules of construction for this
---------------------
Master Sub-License Agreement are set forth in Section 2 of the Definitions
Appendix.
ARTICLE 2. SUB-LICENSE
Section 2.1. Grant of Sub-License. The Slot Trust does hereby grant unto
--------------------
TWA an exclusive Sub-License to use the Acquired Slots, subject to the terms
hereof and, except as otherwise provided herein, TWA shall not be required to
pay any fee for such Sub-License.
ARTICLE 3. NATURE OF SUB-LICENSE
Section 3.1. Non-Proprietary Nature. The Sub-License shall be deemed to
----------------------
be in the nature of a usufruct and not a proprietary right, and the interest of
TWA under this Agreement shall be terminable in accordance with the terms and
conditions hereof.
ARTICLE 4. REPRESENTATION AND WARRANTY
Section 4.1. Representation and Warranty. TWA represents and warrants
---------------------------
that it is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware with corporate power and authority under
such laws to own, lease and operate its properties and conduct its business as
conducted on the date hereof, and has all such power and authority as is
necessary to enter into this Agreement.
ARTICLE 5. COVENANTS
Section 5.1. Covenants. TWA covenants and agrees that:
---------
(a) It shall use the Acquired Slots, or cause the Acquired Slots to be
used, in a manner consistent with Title 14 (including the percentage use
requirement contained therein) or other regulations established by any
lawful authority (unless noncompliance with such provision or regulations
is otherwise waived or consented to by the FAA or such authority, as the
case may be). TWA shall not use the Acquired Slots for international or
essential air service operations as defined by the FAA. TWA shall file
34
all such reports as are required by the FAA or by any other lawful
authority to protect each Acquired Slot in form and content in compliance
with the provisions of Title 14 or other regulations established by any
other lawful authority, which reports shall be delivered to the FAA or such
other lawful authority on a timely basis. On or before the tenth Business
Day of each month TWA shall furnish to the Slot Trustee a certificate as to
its compliance with this Agreement for the immediately preceding three
months in substantially the form of Exhibit 1 to this Agreement.
(b) Except as expressly permitted in this Section 5.1(b), TWA shall
not transfer, sub-license or otherwise grant to others rights with respect
to the Acquired Slots, and any such non-permitted transfer, sub-license or
other grant by TWA shall be void. TWA may, in the Ordinary Course Of
Business, (i) enter into Slot Trades, and (ii) sub-license and agree to
sub-license, directly or indirectly, to air carriers the right to use
Acquired Slots (such licenses in this clause (ii) hereinafter referred to
as the"Third Party Licenses"), provided that, (x) TWA shall not have
--------
outstanding at any one time Third Party Licenses with a Remaining Term of
longer than twenty-four (24) months with respect to more than forty percent
(40%) of the number of Acquired Slots, and (y) in the case of an indirect
Third Party License with respect to an Acquired Slot, the direct third
party sublicensee shall contractually bind itself with TWA to promptly sub-
license the right to use any such Acquired Slot to an air carrier; and
provided further that (A) TWA shall not enter into or agree to enter into
-------- --------
any Third Party License with a Remaining Term of longer than fifteen (15)
months after its receipt of notice of a Default under Section 6.1(d) of the
Indenture or after the occurrence of any other Default under the Indenture
and so long as any such Default shall continue and (B) shall not accept
prepayments of rentals in connection with such Third Party Licenses.
(c) The rights of all sub-licensees claiming from or under TWA under
any and all Third Party Licenses, except as otherwise provided with respect
to Prior Third-Party Licenses, are subject and subordinate in all respects
to the terms of this Master Sub-License Agreement and the Slot Trust. TWA
shall use commercially reasonable efforts to obtain, as promptly as
practicable, from each licensee under a Prior Third Party License an
agreement (for the express benefit of the Slot Trustee) that, and as a
condition to entering into any Third Party License, TWA will require each
prospective sub-licensee to agree (for the express benefit of the Slot
Trustee) that, upon receipt of notice from the Slot Trustee that this
Master Sub-License Agreement has been terminated, it will promptly either
(A)(i) attorn to the Slot Trustee for the then scheduled Remaining Term of
the Third-Party License and acknowledge that, thereafter, its rights with
respect to the relevant Acquired Slot have terminated, and (ii) agree that
for the Remaining Term of such Third Party License it will make license
payments directly to the Slot Trustee in an amount equal to the higher of
(1) the payments that, from time to time, would have been due and payable
under the terms of the Third-Party License, or (2) monthly fair market
value license payments with respect to the relevant Acquired Slot, or (B)
acknowledge that such Third Party License, and the Third-Party Licensee's
rights with respect to the relevant Acquired Slot, shall terminate sixty
(60) days after notice from the Slot Trustee
35
to such licensee of the Slot Trustee's election to terminate such license.
TWA shall not extend and shall not, in any material respect, amend the
Prior Third Party Licenses described in Schedule II to the Acquired Slot
Trust Agreement, except on terms complying with this paragraph and Section
5.1(b).
(d) TWA shall pay any reasonable fees or expenses incurred by the Slot
Trust or Slot Trustee in connection with being the holder of record at the
FAA of any Acquired Slot or the right to use any Acquired Slot.
(e) TWA shall take any action necessary to maintain the Slot Trust as
the holder of record at the FAA of the Acquired Slots.
ARTICLE 6. EVENT OF LOSS; RELEASE OF ACQUIRED SLOTS
Section 6.1. Event of Loss. (a) Upon the occurrence of an Event of Loss
-------------
with respect to an Acquired Slot, TWA shall give the Slot Trust prompt notice
thereof and shall satisfy the Substitution Requirements.
(b) Upon compliance by TWA with its obligations above, with Article 7
hereof and with any applicable requirements of the TIA, and upon Request
and payment by TWA of the Slot Trustee's costs (including reasonable legal
fees and disbursements) incurred in connection with the foregoing, and
provided that any Slot which may be assigned, transferred and conveyed to
the Slot Trust as provided above shall immediately upon such assignment,
transfer and conveyance for all purposes under the Indenture, the Pledge
Agreement, the Declaration, any Subsequent Deed of Conveyance and this
Agreement become and be an Acquired Slot, the Slot Trust shall execute and
deliver the required documents, assigning, transferring and conveying the
Acquired Slot which was the subject of the Event of Loss to TWA or its
designee, without recourse, whereupon such Acquired Slot shall cease to be
an Acquired Slot for all purposes of the Indenture and the Operative
Documents, including this Agreement.
Section 6.2. Release of Acquired Slots. Upon Request and payment by TWA
-------------------------
of the Slot Trustee's costs (including reasonable legal fees and disbursements)
incurred in complying with such Request:
(a) Sale to Third Parties. So long as no Event of Default has
---------------------
occurred and is continuing or would result therefrom, the Slot Trust shall
assign, transfer and convey to TWA or its designee, without recourse, any
Acquired Slot that is the subject of a contract of sale pursuant to which
TWA has agreed to sell such Acquired Slot in the Ordinary Course, on an
arm's-length basis to an unaffiliated third party within ninety (90) days
after the date of such release, which contract contains only closing
conditions that are customary to a sale of that kind at that time and which
sale is not a
36
"sale/leaseback" or other similar transaction used by TWA as a financing
vehicle, but only if TWA shall comply with the Substitution Requirements.
(b) Release of Acquired Slots Upon Partial Prepayment.
-------------------------------------------------
Simultaneously with or promptly following the cancellation of any
Securities, whether pursuant to a partial repurchase of any Securities
pursuant to Section 4.15 of the Indenture or otherwise, following a tender
of Securities in connection with a tender offer therefor or otherwise,
subject to the Preconditions, and provided that after giving effect to such
--------
release of Acquired Slots, the Company will be in compliance with the
Security Ratio requirements set forth in clause (b) of the definition
thereof, the Slot Trustee shall assign, transfer and convey to TWA or its
designee without recourse the Acquired Slots set forth in Schedule 1 hereto
(the "Released Slots") based upon the reduction in the amount of Securities
Outstanding to an amount equal to or less than the level specified for the
release of particular Acquired Slots as set forth in said Schedule 1 (the
"Release Trigger").
(c) Release of Acquired Slot. Subject to the conditions and upon
------------------------
compliance with all of the requirements of this Section 6.2 and Article 7
hereof and any applicable requirements of the TIA, and provided that any
Slot which may be assigned, transferred and conveyed to the Slot Trust
shall immediately upon such assignment, transfer and conveyance, for all
purposes under the Indenture, the Pledge Agreement, the Declaration, any
Subsequent Deed of Conveyance and this Agreement become and be an Acquired
Slot, the Acquired Slot or Acquired Slots, as the case may be, released
pursuant to Section 6.2(a) or (b), as the case may be, shall cease to be
Acquired Slots for all purposes hereof and of the Indenture and the
Operative Documents (unless later reassigned, retransferred and reconveyed
to the Slot Trust).
ARTICLE 7. SUBSEQUENT DEEDS OF CONVEYANCE
Section 7.1. Subsequent Deeds of Conveyance. If and whenever TWA shall
------------------------------
be required to assign, transfer and convey Slots to the Slot Trust or if TWA
shall at any time desire to assign, transfer and convey Slots to the Slot Trust,
TWA will furnish to the Slot Trustee the following:
(a) a Subsequent Deed of Conveyance duly executed by TWA,
appropriately describing and identifying such Slots; and
(b) an Opinion of Counsel, dated the date of execution of said
Subsequent Deed of Conveyance, stating that:
(i) all necessary filings have been made with the FAA to effect the
transfer of such Slots from TWA to the Slot Trust pursuant to
Title 14, Code of Federal Regulations, Part 93.221 (the "FAA Slot
Regulations"), and TWA has received confirmation from the FAA of
the transfer of such Slots to the Slot Trust and of the license-
back to TWA pursuant to the Subsequent
37
Deed of Conveyance and this Agreement; the Slot Trust owns such
Slots subject to the transfers permitted under the Subsequent
Deed of Conveyance and this Agreement and owns such Slots free
and clear of all liens and interests of others except as may be
provided herein and the Slot Trust has been identified as the
owner and holder of record of each such Slot pursuant to the FAA
Slot Regulations; TWA has been identified as the operator of
record of such Slots (subject to transfers permitted under the
Subsequent Deed of Conveyance and this Agreement) and such right
to use such Slots has been duly recorded in the name of TWA
pursuant and subject to the FAA Slot Regulations; and
(ii) except as described in subsection 7.1 (b)(i) above, no
authorization, approval, consent or license of the FAA or the
Department of Transportation of the United States is required for
the execution, delivery, or performance of the Subsequent Deed of
Conveyance by TWA; and
(c) Such Officers' Certificates, Opinions of Counsel or other
documents, if any, as the TIA may require or the Slot Trustee may
reasonably require.
ARTICLE 8. REMEDIES UPON DEFAULT AND FAA ACTION
Section 8.1. Remedies Upon Default and FAA Action. (a) The parties
------------------------------------
acknowledge and agree that the primary operating authority represented by a Slot
exists at the discretion of the FAA, acting pursuant to Title 14 and statutory
authority, and that the FAA may terminate, cancel, withdraw or revoke a Slot or
amend or revoke the regulation which permits Slots to be bought and sold and
thereby gives them value (any of the foregoing, an "FAA Action"). The parties
further acknowledge and agree that any of these actions by the FAA would
substantially impair the rights of the Slot Trustee and the value of the
Collateral. It is therefore understood and agreed between the parties that:
(i) UPON THE OCCURRENCE OF AN EVENT OF DEFAULT UNDER THE INDENTURE
OR AN FAA ACTION AND DURING THE CONTINUANCE THEREOF, TWA SHALL DELIVER TO
THE COLLATERAL AGENT, ALL CONSIDERATION TO BE RECEIVED BY TWA AFTER SUCH
EVENT OF DEFAULT OR FAA ACTION (OTHER THAN THE RIGHT TO USE A SLOT, AS TO
WHICH A PERSON OTHER THAN TWA IS THE HOLDER OF RECORD AT THE FAA) IN
CONNECTION WITH A THIRD PARTY LICENSE OR SLOT TRADE; PROVIDED THAT IF SUCH
CONSIDERATION IS A SLOT, AS TO WHICH TWA BECAME THE HOLDER OF RECORD AT THE
FAA, SUCH SLOT SHALL BE ASSIGNED, TRANSFERRED AND CONVEYED TO THE SLOT
TRUST AND SHALL BE HELD BY THE SLOT TRUST AS A SLOT TRUST ASSET;
38
(ii) UPON THE ACCELERATION OF TWA'S OBLIGATIONS UNDER THE SECURITIES
IN ACCORDANCE WITH THE INDENTURE, THIS AGREEMENT WILL, WITHOUT ANY ACTION
BY ANY PARTY THERETO, TERMINATE AND TWA SHALL HAVE NO FURTHER RIGHT OR
INTEREST IN THE ACQUIRED SLOTS AND THE SLOT TRUSTEE MAY TAKE SUCH ACTIONS
AS NECESSARY TO CAUSE OR ALLOW THE TERMINATION OF OR ENFORCE ATTORNMENT
OBLIGATIONS UNDER OR OTHERWISE DEAL WITH THIRD PARTY LICENSES AND SLOT
TRADES, AND TO ASSIGN, TRANSFER AND CONVEY BY DEED OF CONVEYANCE, WITHOUT
RECOURSE, WARRANTY OR REPRESENTATION THE ACQUIRED SLOTS; PROVIDED, THAT, IF
SUCH ACCELERATION IS RESCINDED IN ACCORDANCE WITH SECTION 6.2 OF THE
INDENTURE PRIOR TO THE SLOT TRUSTEE'S HAVING DISPOSED OF ANY OF THE
ACQUIRED SLOTS, THIS AGREEMENT WILL, WITHOUT ANY ACTION BY ANY PARTY
THERETO, BE REINSTATED WITH RESPECT TO THOSE SLOTS STILL HELD BY THE SLOT
TRUSTEE AFTER TAKING ANY SUCH ACTION; AND
(iii) IN FURTHERANCE OF THE FOREGOING, THE SLOT TRUSTEE IS HEREBY
IRREVOCABLY APPOINTED THE TRUE AND LAWFUL ATTORNEY OF TWA, IN ITS NAME AND
STEAD, TO THE EXTENT PERMITTED BY LAW, TO EXECUTE, FILE, REGISTER AND/OR
RECORD ALL DOCUMENTS AND INSTRUMENTS OF ASSIGNMENT, TRANSFER AND SURRENDER
OF THE ACQUIRED SLOTS, AND ALL OTHER DOCUMENTS AND INSTRUMENTS, NECESSARY,
OR IN THE GOOD FAITH OPINION OF THE SLOT TRUSTEE DESIRABLE, IN ORDER TO (X)
RECORD OF RECORD WITH THE FAA ANY TERMINATION OF TWA'S RIGHTS OR INTERESTS
IN THE ACQUIRED SLOTS UPON THE ACCELERATION OF TWA'S OBLIGATIONS UNDER THE
SECURITIES IN ACCORDANCE WITH THE INDENTURE, (Y) UPON OR AT ANY TIME AFTER
SUCH ACCELERATION, TO EFFECT THE TRANSFER OF TWA'S OPERATOR STATUS WITH
RESPECT TO ANY OR ALL OF THE ACQUIRED SLOTS TO THE SLOT TRUSTEE OR A THIRD
PARTY DESIGNATED BY THE SLOT TRUSTEE AND/OR (Z) OTHERWISE TO EFFECT THE
ACTIONS THAT THE SLOT TRUSTEE IS AUTHORIZED, OR INTENDED TO BE AUTHORIZED,
TO TAKE PURSUANT TO THE FOREGOING CLAUSES (i) AND (ii) OF THIS SECTION 8.1,
AND MAY SUBSTITUTE ONE OR MORE PERSONS, FIRMS OR CORPORATIONS WITH LIKE
POWER, TWA HEREBY RATIFYING AND CONFIRMING ALL THAT ITS SAID ATTORNEY OR
SUCH SUBSTITUTE OR SUBSTITUTES SHALL LAWFULLY DO BY VIRTUE HEREOF; BUT IF
SO REQUESTED BY THE SLOT TRUSTEE, TWA SHALL RATIFY AND CONFIRM ANY SUCH
ACTION TAKEN IN ACCORDANCE WITH THIS POWER OF ATTORNEY AS MAY BE DESIGNATED
IN ANY SUCH REQUEST. THE FOREGOING POWER OF ATTORNEY IS COUPLED WITH AN
INTEREST, IS IRREVOCABLE AND SHALL SURVIVE ANY TERMINATION OF THIS
AGREEMENT, PROVIDED ONLY THAT THE FOREGOING POWER OF
39
ATTORNEY WILL TERMINATE UPON RECONVEYANCE OF THE ACQUIRED SLOTS TO TWA IN
ACCORDANCE WITH SECTION 9.1 HEREOF.
(b) In view of the nature of a Slot and the discretion given to the
FAA with respect to Slots, the parties understand and agree that the
termination, cancellation, withdrawal or revocation of the Acquired Slots
or the amendment or revocation of the regulation which permits Slots to be
bought and sold would cause a immediate and permanent detrimental effect
upon the Slot Trust and the ability of the Holders to look to the pledge by
TWA of the Beneficial Interest and the Beneficial Interest Certificate to
secure TWA's obligations under the Securities and the Indenture. In
accordance with the foregoing, upon the acceleration of TWA's obligations
under the Securities in accordance with the Indenture, the Slot Trustee and
TWA shall (unless such action on the part of the Slot Trustee is not
consistent with action a prudent man would exercise or use under the
circumstances in the conduct of his own affairs or is not required to
authorize and permit the Slot Trustee to take the actions described in this
sentence) apply for and use their best efforts to obtain a temporary
restraining order and preliminary and final injunctive or other equitable
relief authorizing and permitting the Slot Trustee to cancel this Agreement
in accordance with Section 8.1(a)(ii) hereof, to sell, assign, transfer and
convey the Acquired Slots for a price and under such terms and conditions
as may be commercially reasonable and/or to preserve, to the maximum extent
possible, the value of the Acquired Slots.
(c) In accordance with the foregoing, TWA further recognizes,
understands and agrees that in the event of either a filing by TWA or a
entry of an order or decree against TWA of a petition under the Bankruptcy
Law then, and in either such event, the Slot Trust will only be protected
adequately with respect to the Acquired Slots upon the immediate entry of
an order providing either (i) for immediate abandonment of the Acquired
Slots to the Slot Trust and a grant of authority to the Slot Trust to
assign, transfer and convey the Acquired Slots and have the Collateral
Agent hold any proceeds thereof for the benefit of the Holders or (ii)
permitting TWA, at the sole discretion of the Slot Trustee, which may be
revoked at any time as to any one or more or all of the Acquired Slots, to
continue to use all of the Acquired Slots on a daily basis so as to
prohibit the FAA from immediately terminating, canceling, withdrawing or
revoking the rights thereunder.
It is the position of the Slot Trust and TWA that under the terms of the
Deed of Conveyance, any Subsequent Deed of Conveyance and this Agreement, TWA
(for all purposes other than tax purposes) has assigned, transferred and
conveyed (or, in the case of any Subsequent Deed of Conveyance, will have
assigned, transferred and conveyed) its entire property interest, if any, in the
Acquired Slots and can only acquire an interest therein upon satisfaction of all
of the Obligations or under limited circumstances set forth in Article 6 hereof.
40
In the event, however, that it is determined by a court of competent
jurisdiction that a property interest in the Acquired Slots does so exist in TWA
notwithstanding the failure of TWA to satisfy all of the Obligations or the
existence of certain circumstances set forth in Article 6 hereof, then and in
that event, the Slot Trustee and TWA agree that an order for adequate protection
pertaining to the foregoing rights of the Slot Trust with respect to the
Acquired Slots shall be immediately entered and TWA does hereby for itself and
its successors and assigns, including without limitation a trustee in any
proceeding instituted by or against TWA under the Bankruptcy Law, consent to the
entry of a order providing for such adequate protection of the Slot Trust's
interest in the Acquired Slots.
ARTICLE 9. TERMINATION AND RECONVEYANCE OF ALL ACQUIRED SLOTS
Section 9.1. Reconveyance of Acquired Slots to TWA. (a) In the event
-------------------------------------
that no Default or Event of Default exists under the Indenture, and TWA
satisfies all of the Obligations, then, and in that event, upon receipt by the
Indenture Trustee of such satisfaction in immediately available funds, the Slot
Trustee shall, without cost or charge to TWA (except as otherwise provided
herein), reassign, retransfer and reconvey by deed of conveyance without
recourse, representation or warranty to TWA, all of the Acquired Slots, except
that the Slot Trustee shall represent and warrant that (except in accordance
with Article 8 hereof), it has made no transfers of, or knowingly permitted any
liens to be imposed upon, Acquired Slots other than the limited interest granted
to TWA under this Agreement, and thereupon this Agreement (other than Article 10
hereof) shall terminate.
Section 9.2. Continued Effectiveness of Agreement. If the reassignment,
------------------------------------
retransfer or reconveyance referred to in Section 9.1 hereof is prohibited by
any then applicable law or regulation, this Agreement (including Section 5.1(e)
but otherwise excluding Articles 5, 6, 7, 11, 12, 13 and 14 hereof) will
continue in effect until such time as the reassignment, retransfer or
reconveyance of the primary operating authority with respect to the Acquired
Slots is permitted.
ARTICLE 10. INDEMNIFICATION
Section 10.1. Indemnification by TWA. TWA shall indemnify and hold
----------------------
harmless the Slot Trustee to the extent provided to the Indenture Trustee under
Section 7.7 of the Indenture, and the Slot Trustee shall have those rights set
forth in such Section 7.7 for the Indenture Trustee.
41
ARTICLE 11. AMENDMENTS
Section 11.1. Amendments. (a) Except as provided in Section 11.1(b)
----------
hereof, and subject to Section 4.11 of the Indenture and Article 9 of the
Indenture, this Agreement may be amended by TWA and the Slot Trustee only with
the affirmative vote of the Required Holders.
(b) TWA and the Slot Trustee may also amend this Agreement without the vote
of the Holders if such parties each deem it necessary to cure any ambiguity,
defect or inconsistency or conform this Agreement to the requirements of
applicable laws so long as such amendment does not have a material adverse
effect on the interests of the Holders.
ARTICLE 12. ASSIGNMENTS
Section 12.1. Rights of Assignment by TWA. TWA and the Slot Trustee
---------------------------
understand and agree that the interest of TWA under this Agreement is not
assignable and that any attempt to assign all or any portion of this Agreement
by TWA shall be null and void except for an assignment in connection with a
merger, consolidation or sale of substantially all TWA's assets permitted under
the Indenture.
ARTICLE 13. INDEPENDENT APPRAISALS
Section 13.1. Independent Appraisal Required Under Certain Circumstances.
----------------------------------------------------------
Whenever a Permitted Substitute has been used or operated by a Person or Persons
other than TWA, in a business similar to that in which it has been or is to be
used or operated by TWA, within six (6) months prior to the date of its
acquisition by TWA, or the fair value of any Acquired Slots or Collateral to be
released, assigned or transferred by the Collateral Agent or the Slot Trust,
together with all other property so released, assigned or transferred since the
commencement of the then-current calendar year or in any twelve (12) month
period, as set forth in the certificate or certificates required by this
Agreement, is ten percent (10%) or more of the aggregate principal amount of
Securities at the time Outstanding, TWA will provide to the Slot Trustee such
certificates and opinions, if any, as the TIA may require.
ARTICLE 14. RECEIPT OF CASH AND/OR INVESTMENT SECURITIES
BY THE SLOT TRUST OR THE SLOT TRUSTEE
Section 14.1. Receipt of Cash and/or Investment Securities. In the event
--------------------------------------------
the Slot Trust or the Slot Trustee (in its capacity as Slot Trustee) receives
any property (including, without limitation, cash and/or Investment Securities)
other than Slots, such property shall immediately be delivered to the Collateral
Agent (which shall be evidenced by a certificate of the Collateral Agent
delivered to the Slot Trustee, acknowledging receipt of such property).
42
ARTICLE 15. SLOT TRUSTEE
Section 15.1. Rights and Duties of Slot Trustee. Except as specifically
---------------------------------
set forth herein, in the Pledge Agreement or in the Slot Trust Agreement, the
Slot Trustee shall have no duty (i) to perform any recording or filing in
connection with the Slot Trust Assets, (ii) to see to the payment or discharge
of any tax, assessment or other governmental charge or any lien owing with
respect to, or assessed or levied against, any part of the Slot Trust Assets, or
(iii) to take any other actions in connection with the use, operation,
management or maintenance of the Slot Trust Assets.
Except as provided in Section 9.1 hereof, the Slot Trustee does not make
and shall not be deemed to have made any representation or warranty, expressed
or implied, as to the title, merchantability, compliance with specifications,
condition, design, operation, fitness for use or for a particular purpose, or
any other representation or warranty whatsoever, expressed or implied, with
respect to the Slot Trust Assets.
Section 15.2. References to Slot Trust and Slot Trustee. All references
-----------------------------------------
in this Agreement and the other Operative Documents to the Slot Trust or the
Slot Trustee shall be to both the Slot Trust and the Slot Trustee unless such a
reference would render the provision in which it is contained meaningless or
ambiguous.
ARTICLE 16. MISCELLANEOUS
Section 16.1. Notices; Waivers. Any request, demand, authorization,
----------------
direction, notice, consent, waiver or other document provided or permitted by
this Agreement to be made upon, given or furnished to, or filed with
(a) the Slot Trustee shall be sufficient for every purpose hereunder
if in writing and made, given, furnished or filed by personal delivery or
registered or certified mail to or with the Slot Trustee at First Security
Bank, National Association, 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx
00000, Attention: Corporate Trust Department.
(b) TWA shall be sufficient for every purpose hereunder if in writing
and made, given, furnished or filed by personal delivery or mailed, first
class postage prepaid, to TWA at 000 X. 0xx Xxxxxx, Xx. Xxxxx, Xxxxxxxx
00000, Attention: Xxxxxxx X. Xxxxxxx, Senior Vice President and General
Counsel,
or to any of the above parties at any other address subsequently furnished in
writing by it to each of the other parties listed above. An affidavit by any
person representing or acting on behalf of TWA or the Slot Trustee as to such
mailing, having any registry receipt required by this Section attached, shall be
conclusive evidence of the giving of such demand, notice or communication.
43
Where this Agreement provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by the Holders shall be filed with the Slot Trustee, but such
filing shall not be condition precedent to the validity of any action taken in
reliance upon such waiver.
Section 16.2. Amendments, Etc. Subject to Section 11.1, no amendment or
---------------
waiver of any provision of this Agreement nor consent to any departure by TWA
therefrom shall in any event be effective unless the same shall be in writing,
and signed by the Slot Trustee and approved by the Required Holders if required
hereby or by the Indenture, and then any such waiver or consent shall only be
effective in the specific instance and for the specific purpose for which given.
Section 16.3. No Waiver; Remedies. (a) No failure on the part of the
-------------------
Slot Trustee to exercise, and no delay in exercising any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative, may be
exercised singly or concurrently, and are not exclusive of any remedies provided
by law or the Indenture, the Securities or any of the other Operative Documents.
(b) Failure by the Slot Trustee at any time or times hereafter to
require strict performance by TWA or any other Person of any of the provisions,
warranties, terms or conditions contained herein or in any of the Indenture, the
Securities or any other Operative Documents now or at any time or times
hereafter executed by TWA or any such other Person and delivered to the Slot
Trustee shall not waive, affect or diminish any right of the Slot Trustee at any
time or times hereafter to demand strict performance thereof, and such right
shall not be deemed to have been modified or waived by any course of conduct or
knowledge of the Slot Trustee or any agent, officer or employee of the Slot
Trustee.
Section 16.4. Conflict with Trust Indenture Act of 1939. If and to the
-----------------------------------------
extent any provision of this Agreement limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive of the TIA, such imposed duties
shall control.
Section 16.5. Holidays. In the event that any date for the payment of
--------
any amount due hereunder shall not be a Business Day, then (notwithstanding any
other provision of this Agreement) such payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the due date, and no interest shall accrue on such payment
for the period from such due date to and including the next succeeding Business
Day.
Section 16.6. Successors and Assigns. This Agreement and all obligations
----------------------
of TWA hereunder shall be binding upon the successors and if permitted assigns
of TWA, and shall, together with the rights and remedies of the Slot Trustee
hereunder, inure to the benefit of the Slot Trustee, the Holders, and their
respective successors and assigns.
44
Section 16.7. Governing Law. The laws of the State of New York shall
-------------
govern this Agreement without regard to principles of conflict of laws.
Section 16.8. Indemnification. TWA agrees to pay, and to save the Slot
---------------
Trustee harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all excise, sales or other similar taxes which
may be payable or determined to be payable with respect to any of the Collateral
or Slot Trust Assets or in connection with any of the transactions contemplated
by this Agreement.
Section 16.9. Effect of Headings. The Article and Section headings and
------------------
the Table of Contents contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not a part of this
Agreement.
Section 16.10. No Adverse Interpretation of Other Agreement. This
--------------------------------------------
Agreement may not be used to interpret any agreement of TWA or any of its
Subsidiaries which is unrelated to the Indenture, the Securities or the
Operative Documents. Any such other agreement may not be used to interpret this
Agreement.
Section 16.11. No Recourse Against Others. A director, officer, employee
--------------------------
or stockholder, as such, of TWA shall not have any liability for any obligations
of TWA under the Agreement or for any claim based on, in respect of or by reason
of such obligations or its creation.
Section 16.12. Duplicate Originals. The parties may sign any number of
-------------------
copies of this Agreement. Each signed copy shall be an original, but all of them
together represent the same agreement.
Section 16.13. Severability. In case any provision in this Agreement
------------
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and no Holder shall have any claim therefor against the Slot
Trustee.
45
IN WITNESS WHEREOF, the parties have caused this Master Sub-License
Agreement to be duly executed as of the date first written above.
TRANS WORLD AIRLINES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President, Corporate Finance
FIRST SECURITY BANK, NATIONAL ASSOCIATION
As Slot Trustee on behalf of the
Slot Trust
By: /s/ C. Xxxxx Xxxxxxx
-----------------------------------------
Name: C. Xxxxx Xxxxxxx
Title: Vice President
46
EXHIBIT 1 TO
EXHIBIT C
CERTIFICATE
-----------
The undersigned, Manager of Current Schedules and Industry Affairs of Trans
World Airlines, Inc. ("TWA"), DOES HEREBY CERTIFY THAT:
1. This Certificate is delivered to the Slot Trustee pursuant to Article
5, Section 5.1(a) of the Master Sub-License Agreement dated as of March 31,
1997 (the "Master Sub-License") between TWA and First Security Bank,
National Association, as Slot Trustee Pursuant to the Acquired Slot Trust
Agreement dated as of March 31, 1997. All capitalized terms used herein and
not otherwise defined have the respective meanings ascribed to them in the
Master Sub-License.
2. I am responsible for maintaining and managing the operation of slots
(as such term is defined in 14 C.F.R. 93) for TWA.
3. Except as noted on Schedule A attached hereto, during each of the one-
month, two-month and three-month periods ending the last day of the month
preceding the date of this Certificate.
(a) all the Acquired Slots were operated by TWA or other carriers
or both;
(b) (i) the Acquired Slots operated by TWA, and
(ii) to the best of my knowledge based upon due inquiry
the Acquired Slots operated by all other carriers,
and
(iii) accordingly, to the best of my knowledge, all the
Acquired Slots
were used in a manner consistent with the usage and other
requirements of 14 C.F.R. 93 and Section 5.1(a) of the Master
Sub-License; and
(c) no notice of non-compliance with FAA Slot Regulations has
been received from the FAA with respect to any Acquired Slot.
DATED:_________________________ BY:_________________________________
NAME:
Att: Schedule A (None - No Exceptions)
47
SCHEDULE 1
TO EXHIBIT C
SLOT RELEASE SCHEDULE
Released Slots Slot Release Trigger
-------------- --------------------
(Securities Outstanding in
Millions of Dollars)
(a) JFK - Jet An amount equal to (i) the sum of (x)
$25,000,000, plus (y) 50% of any
Securities issued pursuant to any
exercise of the over-allotment option
contained in the Purchase Agreement,
less (ii) an amount equal to the Applied
Amount
(b) ORD - Jet An amount equal to (i) the sum of (x)
$10,000,000, plus (y) 20% of any
Securities issued pursuant to any
exercise of the over-allotment option
contained in the Purchase Agreement,
less (ii) an amount equal to the Applied
Amount
Note: Slots referred to are as of the date of the Master Sub-License
Agreement. If additional or substitute Slots are conveyed to the Slot Trust in
satisfaction of the Substitution Requirements, such substitute Acquired Slots
shall be subject to release at the same time and under the same circumstances
(and only at the same time and under the same circumstances) as the Acquired
Slots for which they were substituted could have been released under the Master
Sub-License Agreement.
48
EXHIBIT D TO
INDENTURE
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated as of March 31, 1997 (the "Pledge
Agreement") by and between TRANS WORLD AIRLINES, INC., a Delaware Corporation
(together with its successors and assigns, the "Company"), and FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association organized under the
laws of the United States, having an office at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx
Xxxx, Xxxx 00000, as Collateral Agent (the "Collateral Agent").
RECITALS
WHEREAS, the Company and the Trustee have entered into an Indenture dated
as of the date hereof (as at any time amended or supplemented or otherwise
modified, the "Indenture"), providing for the issuance of $50,000,000 (subject
to increase to not more than $57,500,000 as set forth in the Indenture)
aggregate principal amount outstanding of its 12% Senior Secured Notes; and
WHEREAS, in order to secure the payment of the principal amount of and
interest on the Securities and all other obligations of the Company in
connection with the Securities under the Indenture, the Securities and the
Operative Documents, the Company has agreed to pledge and grant a security
interest in the Collateral, as provided for herein; and
WHEREAS, the Company and the Collateral Agent wish to set forth herein
their respective rights, liabilities and obligations with respect to the
Collateral.
NOW, THEREFORE, in consideration of the premises and other benefits to the
Company, the receipt and sufficiency of which are hereby acknowledged, the
Company hereby makes the following representations and warranties and hereby
covenants and agrees as follows:
ARTICLE 1. DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions. Capitalized terms used and not otherwise
-----------
defined herein shall have the meanings ascribed to such terms in Section 1 of
the Definitions Appendix attached hereto as Appendix I, which shall be part of
this Pledge Agreement as if fully set forth in this place.
Section 1.2. Rules of Construction. The rules of construction for this
---------------------
Pledge Agreement are set forth in Section 2 of the Definitions Appendix.
ARTICLE 2. COLLATERAL
Section 2.1. Grant of Security Interest. To secure the due and punctual
--------------------------
payment, performance and observance in full of any and all of the Company's
indebtedness and obligations
evidenced by or set forth in the Securities or the Indenture (including, without
limitation, the principal of, interest on and Liquidated Damages (if any)
payable with respect to, the Securities) and all of its obligations to perform
acts or refrain from taking any action under the Indenture, the Securities, this
Pledge Agreement and the other Operative Documents (all the foregoing
hereinafter called the "Obligations"), the Company hereby pledges and assigns to
the Collateral Agent, and grants to the Collateral Agent for the benefit of the
Holders of the Securities a continuing general, valid, perfected security
interest (senior in right and priority to all Liens except senior or parity
Permitted Liens) in all right, title and interest of the Company in, to and
under, the following, whether now owned or hereafter acquired (collectively,
other than the Slot Trust Assets, the "Collateral"):
(a) The Ground Equipment.
(b) The Beneficial Interest and the Beneficial Interest Certificate.
(c) The Slot Trust Assets, including without limitation any right, title or
interest that the Company, notwithstanding the agreements of the Company set
forth in Section 5.1 of the Declaration, may have in, to or under the Slot Trust
Assets (it being acknowledged and understood by the parties hereto that pursuant
to the Declaration and the Deed of Conveyance, the Company has agreed that all
right, title and interest in and to the Slots specified in the Deed of
Conveyance has been assigned, transferred and conveyed, and that all right,
title and interest in and to any Slots that hereafter are the subject of any
Subsequent Deed of Conveyance will be assigned, transferred and conveyed, to the
Slot Trustee, and it being further acknowledged and agreed that the pledge,
assignment and grant set forth in this Section 2.1(c) does not in any way limit
the Deed of Conveyance or any Subsequent Deed of Conveyance).
(d) The Pledged Stock.
(e) All cash and/or Investment Securities deposited with the Collateral
Agent to be held by the Collateral Agent as security for the Obligations as
provided herein or in the Master Sub-License Agreement.
(f) All other Property which may be granted, bargained, sold, conveyed,
transferred, assigned or pledged pursuant to the terms of this Pledge Agreement
by the Company to the Collateral Agent at any time and all proceeds (as such
term is defined in Article 9 of the New York Uniform Commercial Code as in
effect on the date hereof) of or to any of the Property in which a security
interest is granted under this Section 2.1.
(g) All repair, maintenance and inventory records, logs, manuals and all
other documents and all other documents and materials similar thereto
(including, without limitation, any such records, logs, manuals, documents and
materials that are computer print-outs) at any time maintained, created or used
by the Company, and all records, logs, manuals, documents and other materials
required at any time to be maintained by the Company pursuant to the FAA or
under the Federal Aviation Act, in each case with respect to any of the Ground
Equipment.
2
(h) The tolls, rents, revenues, issues, income, distributions, products and
profits, and all the estate, right, title, interest and claim whatsoever, at
law, as well as in equity, which the Company has or possesses on the date of
delivery of this Pledge Agreement or to which the Company may thereafter become
legally or equitably entitled, from, in or to the Collateral or the Slot Trust
Assets (excluding any cash on hand or in banks, instruments and accounts
receivable arising from the conduct of the Company's business which do not arise
either from the use, operation, storage, control or management of the Collateral
or the Slot Trust Assets by the Collateral Agent pursuant to Article 6 hereof or
through distributions, if any, made by the Slot Trust).
It is the true, clear, and express intention of the Company that the
continuing grant of the security interests provided for in this Pledge Agreement
remain as security for payment and performance of the Obligations until such
Obligations are satisfied and performed in full. The notice of the continuing
grant of this security interest therefor shall not be required to be stated on
the face of any Security, nor shall the Company otherwise be required to
identify such Security as being secured hereby.
Section 2.2. Substitution of Collateral. The Company may from time to
--------------------------
time substitute any Property which is not then Collateral for some or all of the
Non-Slot Collateral then subject to the Lien of this Pledge Agreement in
accordance with this Section 2.2:
(a) The Company may substitute Permitted Substitutes for any Non-Slot
Collateral then subject to the Lien of this Pledge Agreement to the extent
permitted by and in accordance with Section 4.4 and the Substitution
Requirements and, upon the consummation of such substitution, the Collateral
Agent, upon Request of the Company, shall release its Lien on the Collateral for
which Permitted Substitutes are so substituted.
(b) If the Permitted Substitutes are subject to a Lien securing
indebtedness of the Company under a Qualified Senior Financing Agreement which
is to remain outstanding after the substitution, the Lien of this Pledge
Agreement shall be subordinated to such existing Lien as provided in Section
6.5.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to the Collateral Agent as follows:
(a) The Company is an air carrier certificated under Section 44705 of the
Federal Aviation Act.
(b) The Company owns, and has full right, title and interest in, the
Collateral, free and clear of all Liens, except Permitted Liens.
3
(c) The Company maintains public liability, property damage and workers'
compensation insurance and insurance on all its insurable property, including
the Collateral, against fire and other hazards with responsible insurance
carriers to the extent usually maintained by similarly situated companies.
ARTICLE 4. COVENANTS
Section 4.1. Further Assurances. From time to time, the Company shall
------------------
perform any and all acts and execute any and all additional instruments and
documents as may be reasonably requested by the Collateral Agent, the Indenture
Trustee or the Slot Trustee, to carry out the intention of or to facilitate the
performance of the terms of this Pledge Agreement or to secure the rights and
remedies hereunder or thereunder of the Holders of the Securities including,
without limitation, the execution and delivery of instruments of title, any
supplemental agreements and any financing statement or continuation of any
financing statement or other appropriate instrument of recording under the
Uniform Commercial Code as in effect in the jurisdictions in which the
Collateral is located, under the Federal Aviation Act and the rules and
regulations promulgated thereunder or under any other appropriate law or
regulatory scheme applicable to the Collateral.
Section 4.2. Taxes. The Company will, and will cause each Subsidiary
-----
to, promptly pay and discharge, in each case before the same shall become
delinquent, all taxes, assessments, fees, charges, fines and penalties of any
kind which may be imposed (a) upon any of the Collateral, the Acquired Slots,
the Slot Trust or any Property of any Pledged Subsidiary and (b) for the use or
operation thereof by the Company or any of its Subsidiaries, and will at all
times keep the Collateral, the Acquired Slots, and the Property of its Pledged
Subsidiaries free and clear of all taxes, assessments, fees, charges, fines and
penalties of any kind which might in any way affect the title thereto or result
in a Lien which is not a Permitted Lien upon any part or the whole of the
Collateral, the Acquired Slots or any Property of any Pledged Subsidiary;
provided, however, that the Company shall not be required to pay or discharge
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any taxes, assessments, fees, charges, fines or penalties of any kind (i) whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which adequate provision has been made if
required in accordance with generally accepted accounting principles, as in
effect from time to time, and (ii) if the Company delivers to the Collateral
Agent an Officers' Certificate stating that such non-payment and non-discharge
is in the interest of the Company, presents no material risk of sale, forfeiture
or loss of any Collateral, and is not prejudicial in any material respect to the
Holders, except that the Company will pay all such taxes, assessments, fees,
charges, fines or penalties forthwith upon the commencement of proceedings to
foreclose any Lien on any Collateral or Acquired Slot or any Property of any
Pledged Subsidiary which may have attached as security therefor. If any
expenses, taxes, assessments, fees, charges, fines or penalties which are
payable by the Company hereunder shall have been charged or levied against the
Collateral Agent, the Indenture Trustee or the Slot Trustee directly and, after
notice to the Company and opportunity to contest as aforesaid, paid
4
by the Collateral Agent, the Indenture Trustee or the Slot Trustee, the Company
shall reimburse the Collateral Agent, the Indenture Trustee or the Slot Trustee
on presentation of an invoice therefor.
For purposes of this Section 4.2 and notwithstanding any other provision of
this Pledge Agreement, the Collateral Agent, the Indenture Trustee or the Slot
Trustee are the sole parties to, from, or with whom the Company shall be
obligated to communicate or receive any communication or notice, negotiate,
settle, or enter into any stipulation, agree upon or make factual
determinations, elections, or payments regarding any matter arising under this
Section 4.2. Notice received or served by the Company from or upon the
Collateral Agent, the Indenture Trustee or the Slot Trustee shall be deemed
notice duly served from or upon the Company. The Company shall have no
obligation to communicate or deal with any parties except the Collateral Agent,
the Indenture Trustee or the Slot Trustee regarding any matter arising under
this Section 4.2.
The Company will pay, and save the Collateral Agent, the Indenture Trustee
and the Slot Trustee and the Holders of Securities harmless from, any stamp
taxes which shall be payable in connection with this Pledge Agreement, any
supplement or amendment hereof or the original issuance of the Securities except
as herein expressly indicated to the contrary.
If a written claim is made against the Collateral Agent, the Indenture
Trustee or the Slot Trustee or the Holders of Securities for any taxes,
assessments, fees, charges, fines, or penalties which are subject to payment or
indemnification by the Company under this Section 4.2, the Collateral Agent, the
Indenture Trustee or the Slot Trustee shall promptly notify the Company thereof
in writing. If requested by the Company in writing within thirty (30) days (but
twenty (20) days if the Collateral Agent, the Indenture Trustee or the Slot
Trustee received a 30-day statutory notice) of the notice to the Company, the
Collateral Agent, the Indenture Trustee or the Slot Trustee shall, at the
Company's expense and direction, for so long as the Collateral Agent, Indenture
Trustee or the Slot Trustee reasonably believes that the Company is acting in
good faith and the Collateral Agent, the Indenture Trustee or the Slot Trustee
have received adequate indemnification therefor, contest such taxes,
assessments, fees, charges, fines or penalties. The Company shall select the
forum for such contest and shall determine whether such contest shall be by:
(a) resisting or refusing payment of such taxes, assessments, fees,
charges, fines or penalties; or
(b) not paying such taxes, assessments, fees, charges, fines or penalties
except under protest; or
(c) paying such taxes, assessments, fees, charges, fines, or penalties and
seeking a refund thereof.
5
If permissible under applicable law, the Collateral Agent, the Indenture
Trustee or the Slot Trustee shall assign its right to contest the imposition or
levy of any such tax, assessment, fees, charges, fines or penalties to the
Company.
Section 4.3. Maintenance. The Company, at its own cost or expense:
-----------
(a) shall maintain, or cause to be maintained, at all times the Ground
Equipment, the Gate Facilities and the LAX Co. Facilities in material compliance
with all applicable laws, rules, regulations, orders, directives and
instructions issued by the FAA or any other governmental authority having
jurisdiction over the Company, the Ground Equipment, the Gate Facilities or the
LAX Co. Facilities, including making any repairs, modifications, alterations,
replacements and additions necessary therefor;
(b) shall maintain, or cause to be maintained, all material records, logs
and other materials required by the FAA or under the Federal Aviation Act to be
maintained in respect of the Ground Equipment, Gate Facilities or the LAX Co.
Facilities and shall retain complete copies thereof to the extent necessary to
ensure that the value of such Ground Equipment, Gate Facilities and LAX Co.
Facilities will not be materially diminished for lack of a full maintenance
history; and
(c) shall maintain, or shall cause to be maintained, the Ground Equipment
in at least as good condition (taken as a whole) as at the Issue Date, subject
to ordinary wear and tear, and shall perform all maintenance thereon necessary
for that purpose.
Section 4.4. Event of Loss; Use in the Ordinary Course Of Business;
------------------------------------------------------
Release; Thresholds; Effect of Release; Substitution.
----------------------------------------------------
(a) Event of Loss. Upon the occurrence of an Event of Loss with respect to
-------------
any Ground Equipment or Pledged Stock, the Company shall give the Collateral
Agent prompt notice thereof and shall satisfy the applicable Substitution
Requirements.
Upon compliance by the Company with its obligations above and upon Request
by the Company, payment by the Company of the Collateral Agent's costs
(including reasonable legal fees and disbursements) in connection therewith and
satisfaction of any applicable requirements of the TIA, the Collateral Agent
shall execute and deliver the required documents releasing, assigning and
transferring all of the right, title and interest of the Collateral Agent in and
to the Collateral which is the subject of such Event of Loss to the Company or
its designee, whereupon such Collateral shall cease to be Collateral for all
purposes hereof.
(b) Use in the Ordinary Course Of Business. So long as no Event of Default
--------------------------------------
shall have occurred and be continuing, the Company shall have the right, at any
time and from time to time at its own cost and expense, without any release from
or consent by the Collateral Agent, to deal with (but not, except as expressly
otherwise permitted hereunder, to sell, lease, transfer or otherwise dispose of,
or relinquish possession of) the Ground Equipment in any
6
manner consistent with the Company's Ordinary Course Of Business, including,
without limitation, with respect to the Ground Equipment, to dismantle any
Ground Equipment that has become worn out or obsolete or unfit for use, and in
the Ordinary Course to sell or dispose of other parts thereof not reasonably
repairable or usable or any salvage resulting from such dismantling, free from
the Lien of this Pledge Agreement. The Company shall not permit any Ground
Equipment to be moved to a location where it would cease to constitute "Ground
Equipment" except that the Company may, so long as no Event of Default shall
have occurred and be continuing, do so in the Ordinary Course.
(c) Release of Non-Slot Collateral. The Company shall comply with this
------------------------------
Section 4.4(c) and the Substitution Requirements in connection with and (except
as provided in Section 4.5(a)(v)) at or prior to the completion of any sale or
deemed sale of Ground Equipment or Pledged Stock under this Pledge Agreement.
Upon Request by the Company, payment by the Company of the Collateral Agent's
costs (including reasonable legal fees and disbursements) incurred in complying
with such Request and satisfaction of the applicable Substitution Requirements,
and so long as no Event of Default has occurred and is continuing or would
result therefrom, the Collateral Agent shall release from the Lien of this
Pledge Agreement, assign and transfer to the Company or its designee at any
time, all the right, title and interest of the Collateral Agent in and to any
Ground Equipment or in and to all but not less than all the Pledged Stock of LAX
Co., that is the subject of (i) a contract of sale pursuant to which the Company
in the Ordinary Course has agreed to sell such Ground Equipment or Pledged Stock
on an arm's-length basis to an unaffiliated third party within ninety (90) days
after the date of such release, which contract contains only closing conditions
that are customary to a sale of that kind at that time and which sale is not a
"sale/leaseback" or other similar transaction used by the Company as a financing
vehicle, or (ii) a deemed sale under this Section or Section 4.5(a)(v) or 4.5(d)
hereof; provided, however, that, so long as no Event of Default shall have
occurred and be continuing, (x) the Company shall not be so required to satisfy
the Substitution Requirements with respect to Ground Equipment sold in the
Ordinary Course, (y) the lien hereof shall automatically be released
concurrently with such disposition described in clause (x) and without any
further action, and such disposition shall be free and clear of any lien or
security interest created hereby. If Ground Equipment cannot conveniently be
disposed of in the Ordinary Course because the Company has not maintained the
Ground Equipment Threshold or if the Company otherwise elects to reduce the
Ground Equipment Threshold, the Company may reduce the Ground Equipment
Threshold upon satisfying the applicable Substitution Requirements. If the
holder of any Senior Security Interest shall commence proceedings or taken other
action to foreclose upon or take possession of any Collateral, any such
foreclosure or taking of possession shall be deemed a sale of such Collateral
which the Company shall not permit to occur without first complying with this
Section.
(d) Effect of Release. No purchaser in good faith of property purporting to
-----------------
be released, assigned and transferred pursuant hereto shall be bound to
ascertain the authority of the Collateral Agent to execute the release,
assignment and transfer or to inquire as to the existence of any conditions
herein prescribed for the exercise of such authority; nor shall any purchaser or
grantee of any property or rights permitted by this Article 4 to be sold,
granted or
7
otherwise disposed of by the Company be under any obligation to ascertain or
inquire into the authority of the Company to make any such sale, grant or other
disposition. Any release, assignment and transfer executed by the Collateral
Agent under this Section 4.4 shall be sufficient for the purposes of this Pledge
Agreement and shall constitute a good and valid release, assignment and transfer
of the Property therein described from ownership of the Collateral Agent and the
Lien of this Pledge Agreement.
(e) Substitution. If and whenever the Company shall be required or
------------
permitted to subject any Property to the Lien of this Pledge Agreement pursuant
to any provision of this Pledge Agreement or pursuant to the terms of the Master
Sub-License Agreement or the Indenture, the Company will furnish to the
Collateral Agent the following:
(i) a Supplemental Pledge Agreement duly executed by the Company,
appropriately describing, identifying and locating such Property and
specifically subjecting the same to the Lien of this Pledge
Agreement; and
(ii) in the case of
(a) Ground Equipment, cash, Investment Securities or Property
being subjected to the Lien of this Pledge Agreement, an
Opinion of Counsel, dated the date of execution of said
Supplemental Pledge Agreement, stating that:
(1) said Supplemental Pledge Agreement: (a) has been duly
authorized, executed and delivered by the Company, and (b)
validly subjects to the Lien of this Pledge Agreement
(subject only to Permitted Liens) under applicable Federal
and State laws all the right, title and interest of the
Company in and to the Property specifically described in
said Supplemental Pledge Agreement;
(2) said Supplemental Pledge Agreement (a) is not required
to be filed or recorded in any place within the United
States in order to perfect and preserve the Lien of this
Pledge Agreement under Federal or state laws on the Property
specifically described in said Supplemental Pledge
Agreement; or (b) if any such filing or recording shall be
required, that said filing or recording has been
accomplished in such manner and places, which shall be
specified in such Opinion of Counsel, as is necessary in
order so to perfect and preserve the Lien of this Pledge
Agreement; and (c) in rendering such Opinion, such counsel
may assume that there are no documents with respect to such
Property that have been filed for recording under such
recording system but have not yet been listed in the
available records of such system as having been so filed and
may state that no opinion is expressed as to liens that are
8
perfected without the filing of notice thereof or by
operation of law, such as federal tax liens and liens
arising under Section 1368(a) of Title 29 of the United
States Code, and that the examination of said counsel was
limited to the records of such recording systems and subject
to the accuracy of the personnel administering such system
in the filing, indexing and recording of instruments filed
with such entity; and
(B) Permitted Substitutes subject to a Senior Security Interest,
an Opinion of Counsel, dated the date of execution of such
Supplemental Pledge Agreement, stating that the financing
agreement pertaining thereto is a Qualified Senior Financing
Agreement; and
(iii) an Officer's Certificate stating that:
(A) the Company is the legal and beneficial owner of the Property
specifically described in said Supplemental Pledge Agreement,
free and clear of all Liens, except Permitted Liens; and
(B) in the opinion of the Officers executing the Officer's
Certificate, all conditions precedent provided for in this
Pledge Agreement relating to the subjection of such property
to the Lien of this Pledge Agreement have been complied with.
(f) Release of Collateral Upon Partial Prepayment. Simultaneously with or
---------------------------------------------
promptly following the cancellation of any Securities, whether pursuant to a
partial repurchase of any Securities pursuant to Section 4.15 of the Indenture
or otherwise, following a tender of Securities in payment of the Exercise Price
of the Warrants or in connection with a tender offer for the Securities or
otherwise, if the Company has complied with the Preconditions, and provided that
--------
after giving effect to the release of such Collateral the Company will be in
compliance with the Security Ratio requirements set forth in clause (b) of the
definition thereof, Collateral Agent shall release from the Lien of this Pledge
Agreement and assign and transfer to the Company or its designee all of the
right, title and interest of the Collateral Agent in designated Collateral as
set forth in Schedule 2 hereto (the "Released Collateral") based upon the
reduction in the amount of Securities Outstanding to an amount equal to the
level specified for the release of particular Collateral as set forth in said
Schedule 2 (the "Collateral Release Trigger"). The Collateral Agent shall
execute and deliver to the Company the proper instrument or instruments
(including, without limitation, a Supplemental Pledge Agreement in the form of
Exhibit B and Uniform Commercial Code statements on form UCC-3) to evidence the
release of the Lien on the Released Collateral and to assign, transfer and
deliver to the Company against receipt but without recourse, warranty or
representation the Released Collateral and any other Property or proceeds
received in respect thereof and then in the possession of the Collateral Agent.
9
Section 4.5. Possession, Sublease and Assignment.
-----------------------------------
(a) The Company shall have the right, in the Ordinary Course Of Business,
to (i) sublease (which in this Section includes lease) any Ground Equipment to
any "air carrier" (as defined in the Federal Aviation Act) or to any
manufacturer of Ground Equipment, as the case may be, or any Affiliate thereof,
provided, that the term of the lease does not exceed twelve (12) months; (ii)
--------
transfer possession of any Ground Equipment to the United States Government or
any instrumentality or agency thereof including transfers pursuant to the
Civilian Reserve Air Fleet Program administered pursuant to Executive Order
10999, as amended, or any similar or substitute program; (iii) sublease any
Ground Equipment to any Person as permitted by Section 4.5(b) hereof; (iv)
transfer possession of any Ground Equipment to the manufacturer thereof or any
other organization for testing, overhaul, repairs, maintenance, alterations,
modifications or promotional purposes; or (v) subject any Ground Equipment to an
interchange or pooling, exchange, borrowing or maintenance servicing agreement
arrangement customary in the airline industry and entered into in the Ordinary
Course Of Business which does not contemplate or require the transfer of title
to such Ground Equipment (provided, however, that if the Company's title to any
such Ground Equipment shall be divested under any such agreement or arrangement,
such divestiture shall be deemed to be a sale with respect to such Ground
Equipment and the Company shall immediately comply with Section 4.4(c) hereof in
respect thereof); provided, however, that the Company shall not have the right
-------- -------
to enter into any sublease or other arrangement pursuant to this Section 4.5(a)
if an Event of Default shall have occurred and be continuing. Without the prior
written consent of the Collateral Agent, the Company will not otherwise sell,
sublease, transfer or relinquish possession of Ground Equipment to anyone other
than the Collateral Agent and will not assign any of its rights hereunder,
except as permitted by the provisions of this Section 4.5 and Sections 4.3 and
4.4 hereof or as provided in the Indenture.
(b) Any sublease of any Ground Equipment permitted hereunder (a "Sublease")
shall be fully subject to the following conditions:
(i) Each Sublease of any Ground Equipment shall contain an express
agreement by the sublessee to the effect that: (A) such Sublease is
fully subject and subordinate in all respects to this Pledge Agreement
and to the Collateral Agent's rights and remedies with respect to such
Ground Equipment, (B) upon notice of the occurrence of an Event of
Default given by the Collateral Agent to such sublessee, the
Collateral Agent may avoid such Sublease, and the sublessee shall
forthwith deliver such Ground Equipment to the Collateral Agent and
(C) the Ground Equipment shall be located in the United States (at
other than an Excluded Location).
(ii) All necessary action shall have been taken which is required to
continue the perfection of the Collateral Agent's security interest in
such Ground Equipment and the Collateral Agent's rights under this
Pledge Agreement and the Sublease and all other necessary documents
shall have been filed, registered or
10
recorded in such public offices as may be required to fully preserve
the priority of the interest of the Collateral Agent in such Ground
Equipment under the laws of the United States and any relevant state
law; and the Company shall have furnished an Opinion of Counsel with
respect to such matters satisfactory to the Collateral Agent.
(iii) The Company shall deliver to the Collateral Agent, promptly
after execution thereof, a duly executed copy of such Sublease.
(iv) Each Sublease of Ground Equipment pursuant to Section 4.5(a)
hereof shall be assigned by the Company to the Collateral Agent as
security for the Company's obligations hereunder, and the sublessee
shall be required upon the occurrence and during the continuance of an
Event of Default to make all payments under such Sublease directly to
the Collateral Agent; provided that if such Event of Default shall
cease or shall be waived pursuant to the provision of the Indenture,
the Collateral Agent shall immediately pay all funds so received and
deliver all Investment Securities acquired with such funds to the
Company.
(c) Notwithstanding the foregoing, the Company may at its option, with
respect to any Sublease, decline to comply with the requirements set forth in
this Section 4.5 in which case the Sublease shall be deemed a sale with respect
to the Ground Equipment covered thereunder and the Company shall first comply
with Section 4.4(c) hereof in respect thereof.
(d) No Sublease, interchange or pooling, exchange, borrowing or maintenance
servicing arrangement or other transfer or relinquishment of the possession of
any Ground Equipment or of any of the Company's rights hereunder shall in any
way discharge or diminish any of the Company's obligations to the Collateral
Agent hereunder, cause the sublessee, transferee, assignee or any other Person
(other than the Company) to be deemed to be the "Company" or an obligor on the
Securities for purposes of this Pledge Agreement, or constitute a waiver of any
of the Collateral Agent's rights or remedies hereunder, except to the extent
such obligations, rights or remedies may be inapplicable during the period of
any Sublease as elsewhere herein provided.
Section 4.6. Recording; Registration; Compliance with Laws and Rules.
-------------------------------------------------------
The Company will cause this Pledge Agreement and all agreements supplemental
hereto to be filed and recorded (and to the extent required by law, refiled and
re-recorded) under the Federal Aviation Act, if applicable, and the Uniform
Commercial Code as in effect in the jurisdictions in which the Collateral is
located; and the Company will from time to time do and perform any other acts
and execute, acknowledge, deliver, file and record any and all further
instruments required under the laws of the United States or any other applicable
jurisdiction for the purpose of proper perfection and protection (subject to the
Certificate of Title Exception) of the Collateral Agent's and the Holders of the
Securities rights under this Pledge Agreement or for the purpose of carrying out
the intention of this Pledge Agreement; and the Company will promptly furnish to
11
the Collateral Agent certificates or other evidences of such filing, recording,
refiling and re-recording satisfactory to the Collateral Agent.
Section 4.7. Indemnities. The Company agrees to indemnify, and hold
-----------
harmless the Collateral Agent to the same extent provided to the Indenture
Trustee under Section 7.7 of the Indenture and the Collateral Agent shall have
those rights set forth in such Section 7.7 for the Indenture Trustee. This
covenant of indemnity shall continue in full force and effect notwithstanding
the full payment of principal of and interest on the Securities or the
termination of this Pledge Agreement in any manner whatsoever.
In addition, the Company shall indemnify, protect and hold harmless the
Collateral Agent from and against any and all liabilities, claims, demands,
costs, charges and expenses, including royalty payments and reasonable counsel
fees, in any manner imposed upon or accruing against the Collateral Agent
because of any design, article or material in respect of the Collateral which
infringes, or is claimed to infringe, any patent or other industrial property
right. The Collateral Agent will give notice to the Company of any such claim
known to the Collateral Agent in respect of which liability may be charged
against the Company.
Section 4.8. FAA Records. The Company will maintain or cause to be
-----------
maintained all records, logs and other materials required by the FAA to be
maintained in respect of Collateral, the Acquired Slots, any other Slot Trust
Assets, the Gate Facilities and the LAX Co. Facilities regardless of whether
such requirements are, by their terms, imposed upon the Company, any Pledged
Subsidiary, the Indenture Trustee, the Collateral Agent or the Slot Trustee, and
in the event that any Collateral is repossessed by the Collateral Agent pursuant
to Article 6 hereof, will forthwith deliver, or cause to be delivered, to the
Collateral Agent all such records, logs and other materials relating thereto.
Section 4.9. Restrictions on Liens; Permitted Contests.
-----------------------------------------
(a) Restrictions on Liens. The Company will not create, incur, assume or
---------------------
suffer to exist or permit to be created or incurred or assumed or to exist any
Lien upon or against the Collateral, the Acquired Slots, or any other Slot Trust
Assets, the Gate Facilities or the LAX Co. Facilities except for the following
(collectively, the "Permitted Liens"): (i) this Pledge Agreement and the other
Operative Documents and the rights of the Collateral Agent, the Indenture
Trustee, the Slot Trustee, the Holders of Securities and the Company hereunder
and thereunder, (ii) in the case of Ground Equipment or the Beneficial Interest
or Pledged Stock (to the extent the Beneficial Interest or Pledged Stock
constitutes a general intangible under the New York Uniform Commercial Code as
in effect from time to time), Liens for taxes or other governmental charges or
levies not yet due, the payment of which shall not at the time be required to be
made in accordance with Section 4.2 hereof, (iii) in the case of Ground
Equipment, materialmen's, mechanics', workmen's, repairmen's, employees', other
like Liens and other Liens arising in the Ordinary Course Of Business and which
are not overdue for more than forty-five (45) days, except to the extent that
any such Lien is being contested in good faith and by appropriate legal
proceedings which, in the opinion of the Company, do not involve any
12
material danger of the sale, forfeiture or loss of any Collateral or any
interest therein, (iv) in the case of Ground Equipment or the Beneficial
Interest or Pledged Stock (to the extent the Beneficial Interest or Pledged
Stock constitutes a general intangible under the New York Uniform Commercial
Code as in effect from time to time) any judgment Lien, unless the judgment it
secures shall not, within sixty (60) days after the entry thereof, have been
discharged, vacated or reversed or the execution thereof stayed pending appeal,
or shall not have been discharged, vacated or reversed within sixty (60) days
after the expiration of any such stay, (v) in the case of Ground Equipment,
Subleases and other transfers of possession permitted under Sections 4.3 and 4.5
hereof, (vi) in the case of Acquired Slots, the Prior Third Party Licenses,
Third Party Licenses and Slot Trades, (vii) executory contracts for sale or
lease by the Company of any Ground Equipment or Acquired Slots under which
consummation of such sale or lease, or delivery of such Ground Equipment or
Acquired Slots is conditioned on release of such Ground Equipment or Acquired
Slots from this Pledge Agreement or the Slot Trust, (viii) in the case of Ground
Equipment, the right of any Person other than the Company to claim a portion of
the insurance proceeds received or receivable by the Collateral Agent as a
result of an Event of Loss, (ix) in the case of Ground Equipment or the
Beneficial Interest or Pledged Stock (to the extent the Beneficial Interest or
Pledged Stock constitutes a general intangible under the New York Uniform
Commercial Code as in effect from time to time), other non-consensual Liens that
do not secure Indebtedness which in the aggregate exceeds one percent (1%) of
the aggregate principal amount of the Securities at the time Outstanding, and
(x) with respect to Ground Equipment, Senior Security Interests.
(b) Permitted Contests. If no Event of Default shall be continuing, the
------------------
Company shall not be required, nor shall the Collateral Agent have the right,
without prior agreement of the Company, to discharge or remove, as the case may
be, any Lien on or against the whole or any part of any Collateral or the
Acquired Slots, the discharge or removal of which would otherwise be required by
the terms of this Pledge Agreement, the Slot Trust or the Master Sub-License
Agreement, or to comply with any legal requirements, compliance with which would
otherwise be required by this Pledge Agreement, or to pay any charge or other
amount the Company may be obligated to pay to any Person pursuant to this Pledge
Agreement other than an indemnification payment to a Person entitled to such
indemnification pursuant to the terms of Section 4.7 hereof, so long as the
Company shall at its own expense contest the existence, amount, applicability,
extent or validity thereof in good faith by an appropriate proceeding timely
instituted, which, in the case of any Lien so contested, shall operate to
prevent the collection or satisfaction of such Lien, and, in all cases in which
the sale or forfeiture of the whole or any part of such Collateral or the
Acquired Slots shall be at issue, shall operate to prevent such sale or
forfeiture; provided, however, that such proceeding presents no material danger
-------- -------
of the sale, forfeiture or loss of any Collateral or Acquired Slot which has not
been provided for by the Company giving such security as may be required in the
proceeding; and, provided, further, that neither the Collateral Agent, the
-------- -------
Indenture Trustee nor the Slot Trustee (as fiduciaries or in their individual
capacities) nor any holder of Securities would be in any danger of criminal
liability, or any other liability or obligation for which no indemnification is
provided hereunder, by reason of such nonpayment or noncompliance. The
Collateral Agent hereby agrees to execute and deliver at the Company's expense
such documents, including
13
powers of attorney, as the Company may reasonably request in order that the
Company shall be enabled effectively to conduct any such proceeding.
Section 4.10. Warranty of Title. The Company warrants that as of the date
-----------------
of delivery of this Pledge Agreement it is the legal and beneficial owner of the
Collateral (excluding any Property which may become Collateral hereafter) and
has good right to mortgage or transfer, as the case may be, the same. The
Company will at the time it subjects any Property to the Lien of this Pledge
Agreement by supplemental agreement be the legal and beneficial owner of such
Property and will have good right to mortgage the same, subject to Permitted
Liens. The Company warrants that all the Collateral (except Property which may
become Collateral hereafter) is, and at the time the Company subjects any
Property acquired hereafter to the Lien of this Pledge Agreement by supplemental
agreement, the Property so subjected will be, free and clear of all Liens,
except Permitted Liens.
The Company will, at or before the time it subjects any Property to the
Lien of this Pledge Agreement, cause evidence of its title to be duly recorded,
filed, or filed for recording, to the extent required under any applicable law,
by the Company as owner. The Company will at all times defend and protect its
title to the Collateral, against the enforcement against such Collateral of all
claims, Liens, penalties and rights asserted by any and all parties whatsoever
other than holders of Senior Security Interests.
Section 4.11. Actions Regarding the Beneficial Interest Certificates.
------------------------------------------------------
(a) The Collateral Agent shall be entitled to exercise any and all voting
and consensual rights and powers relating or pertaining to the Beneficial
Interest Certificate or any part thereof, subject to Section 9.1 of the Acquired
Slot Trust Agreement.
(b) All distributions with respect to the Beneficial Interest Certificate
shall be paid directly to and shall be retained by the Collateral Agent subject
to the Lien of this Pledge Agreement.
(c) The Company will take all action necessary or appropriate to cause the
Collateral Agent to obtain the benefit of the provisions in clauses (a) and (b)
above and if any payments or distributions on the Beneficial Interest
Certificate are made to the Company, the Company will immediately deliver the
same to the Collateral Agent.
(d) The Beneficial Interest Certificate delivered to the Collateral Agent
on the date hereof shall be accompanied by an irrevocable stock power or powers
(or trust equivalent) executed by the Company and the Company further agrees to
execute any and all additional documents and instruments deemed necessary or
appropriate by the Collateral Agent to facilitate the Collateral Agent's
exercise of remedies pursuant to the terms of this Pledge Agreement; provided,
however, that unless and until there shall occur an acceleration of the
obligations of the Company under the Securities and the Indenture, the Company
shall continue to be the
14
holder of record of the Beneficial Interest and the Beneficial Interest
Certificate on the books of the Slot Trust.
Section 4.12. Reports Regarding Collateral.
----------------------------
(a) The Company shall deliver to the Indenture Trustee and the Collateral
Agent (a) on the Issue Date (as of the last day of the preceding month) and (b)
as of the last day of each month thereafter (within 20 days of the end of each
such month) (i) an inventory of Ground Equipment describing the Adjusted Cost
thereof. The Company shall promptly respond to any request of the Collateral
Agent for an explanation concerning any discrepancies or changes in values
reflected in such reports.
(b) If (i) within fifteen (15) days after the delivery of a Company
Appraiser's Certificate for purposes of satisfying the Substitution
Requirements, the Indenture Trustee gives notice that it desires to have a
Trustee Appraiser redetermine the matters set forth in such Company Appraiser's
Certificate, and (ii) a Trustee Appraiser delivers to the Company, the Indenture
Trustee and the Collateral Agent an Independent Appraiser's Certificate as to
such matters signed by such Trustee Appraiser within fifteen (15) days after the
date of delivery of such Indenture Trustee's notice, the Appraised Values (or
Fair Market Values) of the Collateral subject to such Event of Loss or Request
for release and the Permitted Substitutes evidenced by such Independent
Appraiser's Certificates shall be determined as provided in the definition of
Appraised Value (or Fair Market Value). If (i) within thirty (30) days after
the delivery of a Company Appraiser's Certificate for purposes of establishing
the Security Ratio in connection with an Event of Loss, the Indenture Trustee
gives notice that it desires to have a Trustee Appraiser redetermine the matters
set forth in such Company Appraiser's Certificate, and (ii) a Trustee Appraiser
delivers to the Company, the Indenture Trustee and the Collateral Agent an
Independent Appraiser's Certificate as to such matters signed by the Trustee
Appraiser within thirty (30) days after the delivery of such Indenture Trustee's
notice, the Security Ratio shall be established as provided in paragraph (a) of
the Substitution Requirements. The Company and the Indenture Trustee may but
shall be under no obligation to join in the appointment of a single Independent
Appraiser for purposes of making any determination of Liquidation Value,
Appraised Value or Fair Market Value or establishing the Security Ratio, and if
they do so, the resulting determination of the Independent Appraiser so selected
shall be delivered to the Company, the Indenture Trustee and the Collateral
Agent at such time as the Company, the Indenture Trustee and the Collateral
Agent shall agree and shall be final and binding upon all parties.
Section 4.13. Senior Security Agreements. The Company will at all times
--------------------------
comply in all material respects with all covenants, conditions, warranties,
representations, restrictions and requirements of all Senior Security
Agreements. No waiver or amendment in respect of any material provision of or
default under any Senior Security Agreement shall be permitted if the effect
thereof is to create, or to continue in full force and effect without any
default, remaining terms and provisions which, if they were the terms and
provisions of a new agreement altering or replacing such Senior Security
Agreement, would fail to satisfy the requirements of clause (e)(ii) (in all
cases)
15
and of clause (c) or (e)(i) (whichever applies in the case of the applicable
Senior Security Agreement) of the definition of Qualified Senior Financing
Agreement for such agreement to become a Qualified Senior Financing Agreement
replacing such Senior Security Agreement, or would otherwise cause such Senior
Security Agreement to fail to comply with the requirements for Qualified Senior
Financing Agreements. No provision of the Indenture, this Pledge Agreement or
any of the other Operative Documents purporting to authorize or permit the
Company to take or omit to take any action shall authorize or permit any action
or omission which is not authorized or permitted by the Senior Security
Agreements.
The Indebtedness of the Company secured by each Senior Security Agreement
shall be secured by a Lien on Collateral (including Property becoming a
Permitted Substitute) exclusively, and at no time while any Collateral is
subject thereto is or shall be secured by any Property which is not Collateral
except (i) cash or investment securities, (ii) Property being contemporaneously
subjected to the Lien of the Pledge Agreement as additional Collateral, or (iii)
other Property if and to the extent that the Company, the Collateral Agent (with
the approval of the Required Holders) and the holders of the applicable Senior
Obligations shall agree to provisions giving the Collateral Agent appropriate
rights to such other Property in the event the holder of such Senior Obligations
shall realize upon the Collateral.
Section 4.14. LAX Co. The Company represents and covenants as follows:
------
(a) LAX Co. is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, with all necessary corporate
power and authority to own, lease and operate its properties, and to conduct its
business. The Company agrees that it will not authorize the amendment of the
Articles of Incorporation or By-laws of LAX Co. without the written consent of
the Collateral Agent.
(b) All of the shares of capital stock of LAX Co. described in Schedule 1
hereto constituting the Pledged Stock are duly authorized and validly issued,
fully paid and non-assessable. The Company is the sole legal and beneficial
owner of the Pledged Stock of LAX Co., free and clear of all Liens or options
except for the Liens granted pursuant to this Pledge Agreement. The Company
will not permit LAX Co. to issue additional shares of capital stock unless the
certificates representing such shares are simultaneously delivered to the
Collateral Agent and shall constitute Pledged Stock hereunder. The certificates
for the Pledged Stock of LAX Co. have been delivered to the Collateral Agent
accompanied by undated stock powers duly endorsed in blank and a copy of a
certificate of resolutions of the Company's Board of Directors authorizing
transfer of the Pledged Stock of LAX Co. in accordance with such stock powers.
(c) Simultaneously with the execution and delivery of this Pledge
Agreement, the Company shall deliver to the Collateral Agent the following, in
form and substance reasonably satisfactory to the Collateral Agent:
16
(i) a Secretary's Certificate, dated the date hereof, certifying that
copies of LAX Co.'s Certificate of Incorporation and By-Laws attached
thereto are true and complete and in full force and effect, without
amendment, and that the Ground Lease, the Facilities Lease, the
Facilities Sublease and the Company Subleases in the form attached
thereto are true and complete and in full force and effect, with no
event of default existing thereunder, and that LAX Co. has not
theretofore sold, assigned, transferred or otherwise disposed of any
right, title or interest in, to or under the Ground Lease, the
Facilities Lease, the Facilities Sublease, or the Company Subleases;
and
(ii) an Officers' Certificate dated the date hereof certifying that
the Ground Lease, the Facilities Sublease and the Company Subleases
constitute the legal, valid and binding obligations of LAX Co.,
enforceable in accordance with their respective terms (subject to any
applicable bankruptcy, reorganization, moratorium or other laws or
principles of equity relating to the Company affecting the enforcement
of creditor rights generally).
(d) Upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall be entitled to receive, and the Company shall
deliver, or shall require LAX Co. to deliver (properly endorsed where required
hereby or requested by the Collateral Agent), to the Collateral Agent:
(i) all dividends, distributions, interest and other cash payments in
respect of the Pledged Stock of LAX Co., all of which shall be held by
the Collateral Agent as additional Collateral; and
(ii) promptly upon request of the Collateral Agent from time to time,
such proxies and other documents as may be necessary to allow the
Collateral Agent to exercise the voting power with respect to any or
all shares of Pledged Stock of LAX Co.;
provided, however, that unless an Event of Default occurs and is continuing, the
-------- -------
Company shall be entitled: (A) to exercise in its reasonable judgment, the
voting power and all other incidental rights of ownership with respect to any
shares of Pledged Stock of LAX Co. (subject to the Company's obligation to
deliver to the Collateral Agent such Pledged Stock of LAX Co. hereunder and to
the other provisions of this Pledge Agreement and the rights to the Collateral
Agent hereunder), provided, further, however, that no vote shall be cast, or
consent, waiver or ratification given, or action taken by the Company that would
impair any of LAX Co.'s rights or the Company's rights under the Ground Lease or
the Facilities Lease or be inconsistent with or violate any provision of this
Pledge Agreement or any Inducement Agreement, and (B) to the prompt receipt of
all dividends and other distributions with respect to the Pledged Stock of LAX
Co.
17
(e) Previously, (i) the Company assigned to LAX Co. all of its rights under
the Ground Lease pursuant to an Assumption and Assignment Agreement and
subleased to LAX Co. the premises described in the Facilities Lease pursuant to
a sublease (the "Facilities Sublease"), and (ii) LAX Co. subleased the premises
described in the Ground Lease to the Company pursuant to a sublease (the "Ground
Sublease"), and sub-subleased the premises described in the Facilities Lease to
the Company pursuant to a Sub-Sublease (the "Facilities Sub-Sublease"). LAX Co.
holds all rights under the Ground Lease, subject only to the rights of the City
of Los Angeles under the Ground Lease and to the rights of the Company under the
Ground Sublease. LAX Co. holds all rights as subtenant under the Facilities
Sublease subject only to the rights of the RAIC and the XXXX Xxxx Trustee under
the Facilities Lease and the RAIC Indenture and to the rights of the Company as
sublandlord under the Facilities Sublease and as sub-subtenant under the
Facilities Sub-Sublease. The Company will, or will cause LAX Co. to and LAX Co.
will, or the Company and LAX Co. together will: (i) maintain the Ground Lease,
the Facilities Lease and the Facilities Sublease in effect, (ii) not agree to
any amendment, modification or termination of the Ground Lease, the Facilities
Lease or the Facilities Sublease having any material adverse effect upon their
value and benefit to LAX Co. or that otherwise is materially adverse to the
interests of the Holders, so long as any Securities remain outstanding and (iii)
comply with all covenants under the Ground Lease, the Facilities Lease and the
Facilities Sublease, provided, however, that the Facilities Lease may be
terminated in accordance with its terms upon the payment in full of the RAIC
Bonds and the satisfaction of all other obligations under the RAIC Indenture.
The Company shall and shall cause LAX Co. to send to the Collateral Agent copies
of all notices of default received or sent by it in respect of defaults and
events of default under the Ground Lease and the Facilities Lease and the
Collateral Agent shall have the right to cure any such default or event of
default, but shall be under no obligation to do so.
(f) The Ground Sublease and the Facilities Sub-Sublease described in
Section 4.13(e) (collectively the "Company Subleases") provide for the payment
by the Company to LAX Co. of periodic cash rentals reflecting no less than the
fair market rental value of the Ground Facilities subject thereto for the term
of the Company Subleases, as confirmed by a Company Appraiser, but in no event
less than amounts sufficient (after taking into account any revenues or other
funds available to LAX Co., including, without limitation, rents and other
amounts received under other subleases by LAX Co. of all or any part of the
Ground Facilities) for LAX Co. to pay all of its obligations under the Ground
Lease, the Facilities Sublease and any other obligations or indebtedness
incurred by LAX Co., and further provide that, except to the extent otherwise
required by the Ground Lease or the Facilities Lease, no rentals may be paid
more than thirty (30) days in advance nor may any advance payment in lieu of
rent be made and that rentals will be paid or payable in equal periodic
installments and may further provide that as long as LAX Co. is wholly-owned by
the Company, the Company shall not be required to pay as periodic rentals an
amount in excess of the amounts sufficient (after taking into account any
revenues or other funds available to LAX Co. as described above) for LAX Co. to
pay all of its obligations under the Ground Lease, the Facilities Sublease and
any other obligations or indebtedness incurred by LAX Co., and may further
provide that at any time when LAX Co. is not wholly-owned by the Company the
Company shall have the option to convert both
18
Company Subleases into month-to-month tenancies, terminable upon no more than
one-month's notice, at a monthly rent equal to the fair market rental value of
the Ground Facilities for such tenancies thereof, as confirmed by a Company
Appraiser. Except as provided in this Section 4.13(f), the Company will, or
will cause LAX Co. to and LAX Co. will, or the Company and LAX Co. together
will, (i) keep the Company Subleases in effect, (ii) not amend, modify or
terminate the Company Subleases in any manner having a material adverse effect
upon their value and benefit to LAX Co. or that otherwise is materially adverse
to the interests of the Holders, so long as any Securities remain outstanding
and (iii) comply with all of its obligations thereunder, provided that nothing
--------
herein limits the rights of the Collateral Agent pursuant to, or the exercise by
any Gate Company of its right to terminate any Gate Sublease pursuant to any
such exercise of rights by the Collateral Agent pursuant to, Section 6.1 hereof.
(g) Other than pursuant to this Pledge Agreement or, to the extent incurred
to date, under the Ground Lease or the Facilities Lease, the Company will not
permit LAX Co. to incur, and LAX Co. will not incur, (i) any indebtedness for
borrowed money except in the Ordinary Course Of Business for leasehold
improvements or facility expansions (in each case for facilities leased to LAX
Co. under the Ground Lease or subleased to LAX Co. under the Facilities Lease),
and refinancings thereof, provided, however, that any such additional
indebtedness shall not exceed the fair market value of improvements to the
property of LAX Co. financed thereby, or (ii) any Liens on any of the assets of
LAX Co. other than to secure the Obligations, the RAIC Bonds, or the
indebtedness authorized to be incurred under the provisions of this section and
other than Liens which if such assets were Ground Equipment, would be Permitted
Liens other than Senior Security Interests. The Company shall cause LAX Co. to,
and LAX Co. shall, maintain and retain sufficient funds to satisfy any ordinary
course obligations which are not payable by the Company under the Company
Subleases or by other sublessees and sufficient proceeds of insurance awards and
condemnation awards to repair, rebuild or restore the Property subject to the
Ground Lease and the Facilities Lease to its condition prior to any casualty or
condemnation as required thereunder to prevent any termination thereof.
(h) The Company will not authorize the filing of a petition in bankruptcy
or reorganization under any Bankruptcy Law for or against LAX Co. nor will the
Company permit LAX Co. to enter into any assignment for the benefit of creditors
or receivership of all or a part of its assets.
(i) LAX Co. will own no assets other than the rights under the Ground Lease
and the Facilities Sublease, and assets incidental thereto, and will conduct no
operations, enter into no contracts and incur no consensual obligations, other
than directly relating thereto or as expressly otherwise permitted hereunder.
(j) The Company will not permit LAX Co. to (i) declare or make any
dividends other than (so long as no Event of Default shall have occurred and be
continuing) cash dividends, or (ii) transfer or encumber any of its assets,
except as provided in Section 4.13(f), provided, however, that LAX Co. (so long
as no Event of Default shall have occurred or be continuing) may enter into
subleases of all or a part of the Ground Facilities in the Ordinary Course Of
19
Business to entities which are not Affiliates on the following terms and
conditions: (A) any such sublease shall be authorized by the Board of Directors
of LAX Co. and the Company; (B) any such sublease shall require periodic cash
rentals reflecting no less than the fair market rental value of the Ground
Facilities subject thereto for the term of such sublease, as confirmed by an
appraisal by a Company Appraiser; (C) the term of such sublease shall not exceed
the term of the Ground Lease; (D) except to the extent otherwise required by the
Ground Lease or the Facilities Lease, no rentals under such sublease may be paid
more than thirty (30) days in advance nor may any advance payment in lieu of
rent be made and all such sublease rentals will be paid or payable in equal
periodic installments (subject to reasonable abatements, adjustments and credits
customary in the then current rental market for such property; provided neither
the Company nor LAX Co. receives any consideration for such abatements,
adjustments and credits other than through payments of rentals thereunder and
such abatements, adjustments or credits may not exceed 10% of the yearly net
fair market rental for such property without the consent of the Collateral
Agent); (E) the entry into such sublease and the terms of such sublease shall be
permitted by the Ground Lease, the Facilities Lease and the Facilities Sublease
and the terms of such sublease shall assure that such Ground Facilities are
maintained in compliance with the Ground Lease, the Facilities Lease and the
Facilities Sublease; and (F) such sublease shall neither reduce the obligations
of the Company or LAX Co. under the Facilities Sublease or the Company Subleases
(except to the extent the same are paid and performed by the sublessee) nor
impair the ability of the Company or LAX Co. to perform its respective
obligations thereunder or under this Pledge Agreement.
Section 4.15. Gate Companies. The Company represents and covenants as
--------------
follows:
(a) Each of the Gate Companies is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with all
necessary corporate power and authority to own, lease and operate its
properties, and to conduct its business. The Company agrees that it will not
authorize the amendment of the Articles of Incorporation or By-laws of any Gate
Company without the written consent of the Collateral Agent.
(b) All of the shares of capital stock of each Gate Company described in
Schedule 1 hereto constituting the Pledged Stock are duly authorized and validly
issued, fully paid and non-assessable. The Company is the sole legal and
beneficial owner of the Pledged Stock of the Gate Companies, free and clear of
all Liens or options, except for the Liens granted pursuant to this Pledge
Agreement. The Company will not permit any Gate Company to issue additional
shares of capital stock unless the certificates representing such shares are
simultaneously delivered to the Collateral Agent and shall constitute Pledged
Stock hereunder. The certificates for the Pledged Stock of the Gate Companies
have been delivered to the Collateral Agent accompanied by undated stock powers
duly endorsed in blank and a copy of a certificate of resolutions of the
Company's Board of Directors authorizing transfer of the Pledged Stock of the
Gate Companies in accordance with such stock powers.
20
(c) Simultaneously with the execution and delivery of this Pledge
Agreement, the Company shall deliver to the Collateral Agent the following, in
form and substance reasonably satisfactory to the Collateral Agent:
(i) a Secretary's Certificate, dated the date hereof, certifying that
copies of each Gate Company's Certificate of Incorporation and By-Laws
attached thereto are true and complete and in full force and effect,
without amendment, and that the Gate Leases, in the form attached
thereto, are true and complete and in full force and effect, with no
event of default existing thereunder; and
(ii) an Officers' Certificate dated the date hereof certifying that
the Gate Leases, constitute the legal, valid and binding obligations
of the applicable Gate Company, enforceable in accordance with their
respective terms (subject to any applicable bankruptcy,
reorganization, moratorium or other laws or principles of equity
relating to the Company affecting the enforcement of creditor rights
generally), and that each Gate Company has not theretofore sold,
assigned, transferred or otherwise disposed of any right, title or
interest in, to or under any Gate Lease or any Gate Sublease.
(d) Upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall be entitled to receive, and the Company shall
deliver, or shall require each Gate Company to deliver (properly endorsed where
required hereby or requested by the Collateral Agent), to the Collateral Agent:
(i) all dividends, distributions, interest and other cash payments in
respect of the Pledged Stock of the Gate Companies, all of which shall
be held by the Collateral Agent as additional Collateral; and
(ii) promptly upon request of the Collateral Agent from time to time,
such proxies and other documents as may be necessary to allow the
Collateral Agent to exercise the voting power with respect to any or
all shares of Pledged Stock of the Gate Companies;
provided, however, that unless an Event of Default occurs and is continuing, the
-------- -------
Company shall be entitled: (A) to exercise in its reasonable judgment, the
voting power and all other incidental rights of ownership with respect to any
shares of Pledged Stock of the Gate Companies (subject to the Company's
obligation to deliver to the Collateral Agent such Pledged Stock of the Gate
Companies hereunder and to the other provisions of this Pledge Agreement and the
rights to the Collateral Agent hereunder), provided, further, however, that no
vote shall be cast, or consent, waiver or ratification given, or action taken by
the Company that would impair any of the Gate Companies' rights or the Company's
rights under the Gate Leases or be inconsistent with or violate any provision of
this Pledge Agreement or any Inducement Agreements, and (B) to the prompt
receipt of all dividends and other distributions with respect to the Pledged
Stock of the Gate Companies.
21
(e) Previously, the Company assigned to the Gate Companies all of its
rights under the Gate Leases pursuant to several Assumption and Assignment
Agreements and subleased the Gate Facilities back from the Gate Companies
pursuant to several subleases (the "Gate Subleases"). The Company shall and
shall cause each Gate Company to send to the Collateral Agent copies of all
notices of default received or sent by it in respect of defaults and events of
default under the Gate Leases and the Collateral Agent shall have the right to
cure any such default or event of default, but shall be under no obligation to
do so. The Company will, or will cause each Gate Company to, or the Company and
the Gate Companies together will, (i) keep the Gate Leases and the Gate
Subleases in effect (except that, with respect to any Gate Lease other than a
Specified Gate Lease or any Gate Sublease other than one relating to a Specified
Gate Lease, so long as no Event of Default shall have occurred and be continuing
and in the Ordinary Course Of Business, the Company and/or the relevant Gate
Company may fail to do so), (ii) not amend, modify or terminate any Gate Lease
or Gate Sublease in any manner having a material adverse effect on their value
and benefit to the Gate Companies or that is otherwise materially adverse to the
interests of the holders of the Securities, so long as any Securities remain
outstanding (except that, with respect to any Gate Lease other than a Specified
Gate Lease or any Gate Sublease other than one relating to a Specified Gate
Lease, so long as no Event of Default shall have occurred and be continuing and
in the Ordinary Course Of Business, the Company and/or the relevant Gate Company
may amend, modifiy or terminate said Gate Lease or Gate Sublease), and (iii)
comply with all of its obligations under the Gate Leases and the Gate Subleases
(provided that nothing in this Section 4.1(e) (x) limits the right of the
Company to transfer or sublease any Gate Lease to the extent permitted by
Section 4.15(i) or (y) limits the rights of the Collateral Agent pursuant to, or
the exercise by any Gate Company of its rights to terminate any Gate Sublease
pursuant to any such exercise of rights by the Collateral Agent pursuant to,
Section 6.1 hereof).
(f) Other than pursuant to this Pledge Agreement or, to the extent incurred
to date, under the Gate Leases, the Company will not permit any Gate Company to
incur, and each Gate Company will not incur, (i) any indebtedness for borrowed
money except in the Ordinary Course Of Business for leasehold improvements or
facility expansions, and refinancings thereof (in each case for facilities
leased to such Gate Company under its Gate Lease), provided, however, that any
such additional indebtedness shall not exceed the fair market value of
improvements to the property of the Gate Company financed thereby, or (ii) any
Liens on any of the assets of such Gate Company, other than to secure the
Obligations, or the indebtedness authorized to be incurred under the provisions
of this section and other than Liens which if such assets were Ground Equipment,
would be Permitted Liens other than Senior Security Interests. The Company
shall cause each Gate Company to, and each Gate Company shall, maintain and
retain sufficient funds to satisfy any ordinary course obligations which are not
payable by the Company under the Gate Subleases, or by other subleases and
sufficient proceeds of insurance awards and condemnation awards to repair,
rebuild or restore the Property subject to the Gate Leases to its condition
prior to any casualty or condemnation as required thereunder to prevent any
termination thereof.
22
(g) The Company will not authorize the filing of a petition in bankruptcy
or reorganization under any Bankruptcy Law for or against any Gate Company nor
will the Company permit any Gate Company to enter into any assignment for the
benefit of creditors or receivership of all or a part of its assets.
(h) No Gate Company will own assets other than the rights under the Gate
Leases and Gate Subleases with respect thereto, and assets incidental thereto
and will conduct no operations, enter into no contracts and incur no consensual
obligations other than directly relating thereto or as otherwise permitted
hereunder.
(i) The Company will not permit the Gate Companies to (i) declare or make
any dividends other than (so long as no Event of Default shall have occurred and
be continuing) cash dividends, or (ii) to transfer or encumber any of their
assets, except as provided in Section 4.14(f), provided, however, that, so long
-------- -------
as no Event of Default shall have occurred or be continuing, each Gate Company
(1) may transfer any of their assets (other than the Specified Gate Leases) in
the Ordinary Course Of Business to entities which are not Affiliates, and (2)
may enter into subleases of all or a part of the Gate Facilities in the Ordinary
Course Of Business to entities which are not Affiliates provided, that any such
--------
subleases with respect to any of the Specified Gate Leases also must meet the
following terms and conditions: (A) any such sublease shall be authorized by the
Board of Directors of the applicable Gate Company and the Company; (B) such
sublease shall not materially impair the ability of the Company or the
applicable Gate Company to perform its respective obligations thereunder or
under this Pledge Agreement; (C) any such sublease shall require periodic cash
rentals reflecting no less than the fair market rental value of the Gate
Facilities subject thereto for the term of such sublease, as confirmed by an
appraisal by a Company Appraiser; (D) the term of such sublease shall not exceed
the term of the Gate Lease; (E) except to the extent otherwise required by the
Gate Lease, no rentals under such sublease may be paid more than thirty (30)
days in advance nor may any advance payment in lieu of rent be made and all such
sublease rentals will be paid or payable in equal periodic installments (subject
to reasonable abatements, adjustments and credits customary in the then current
rental market for such property; provided neither the Company nor the applicable
Gate Company receives any consideration for such abatements, adjustments and
credits other than through payments of rentals thereunder and such abatements,
adjustments or credits may not exceed 10% of the yearly net fair market rental
for such property without the consent of the Collateral Agent); (F) the entry
into such sublease and the terms of such sublease shall be permitted by the
relevant Gate Lease and the terms of such sublease shall assure that such Gate
Facilities are maintained in compliance with the applicable Gate Lease; and (G)
such sublease shall neither reduce the obligations of the Company or the
applicable Gate Company under the applicable Gate Sublease (except to the extent
the same are paid and performed by the sublessee) nor impair the ability of the
Company or the applicable Gate Company to perform its respective obligations
thereunder or under this Pledge Agreement.
23
ARTICLE 5. INSURANCE
Section 5.1. Insurance to Be Carried.
-----------------------
(a) The Company will at all times carry and maintain, at its own
expense, with responsible insurers valid and collectible insurance (subject to
deductibles and self-insurance consistent with the Company's current practices
as of the date hereof) on the Ground Equipment.
All insurance required hereunder shall be of such type as is customarily
carried by corporations engaged in the same or a similar business, similarly
situated with the Company, and owning and operating similar Property and shall
be placed with responsible insurance companies, underwriters or funds.
(b) Without limiting anything set forth in this Article 5:
(i) all liability policies shall: (A) be primary without right of
contribution from any other insurance carried by the Collateral Agent,
and (B) name the Collateral Agent as additional insured under a
standard mortgagee clause, provided that the inclusion of more than
one insured shall not operate to increase the insurer's limit of
liability or to avoid the coverage of an insured as respects claims
against said insured by the other insured or the employees of such
other insured; and
(ii) all policies (other than liability policies) required hereunder
covering loss or damage to any Collateral shall name the Collateral
Agent as loss payee under a standard mortgagee clause and shall
provide that proceeds payable under such policies shall be paid
exclusively to the Collateral Agent as loss payee.
Section 5.2. Alteration of Insurance. All policies (other than war-risk
-----------------------
policies) required by Section 5.1 hereof shall provide for not less than thirty
(30) days' prior written notice to the Collateral Agent before any material
alteration which adversely affects the interests of the Collateral Agent, or
cancellation of the insurance evidenced thereby, shall be effective as to the
Collateral Agent, or if it is not commercially possible at the time to obtain
the notice specified above, shall provide for as long a period of prior notice
as shall then be commercially possible to obtain (it being understood that in
the case of cancellation for non-payment of premium, ten (10) days prior notice
is the longest notice commercially possible to obtain on the date hereof).
Section 5.3. Additional Insurance. Nothing contained herein shall
--------------------
prevent the Company from carrying additional insurance in excess of that
required hereunder in respect of any Collateral at its own expense.
Section 5.4. Insurance Certificates. On or prior to the date of this
----------------------
Pledge Agreement and annually on or before the anniversary date of such
insurance policy, the Company will
24
furnish to the Collateral Agent a certificate from the Company's independent
insurance broker describing in reasonable detail the insurance then carried and
maintained on the Collateral.
Section 5.5. Proceeds of Insurance.
---------------------
(a) So long as no Event of Default has occurred and is continuing, all
proceeds of insurance required hereby which are received by the Collateral Agent
or the Company as the result of the occurrence of an Event of Loss with respect
to any Collateral shall be immediately paid over to or retained by the Company,
provided that the Company has fully complied with the terms of Section 4.4 and
has made all payments then due and required to be made by the Company under the
Indenture, and otherwise shall be paid over to or retained by the Collateral
Agent to be held as Temporary Cash Collateral or, if the Company so notifies the
Collateral Agent at any time, Cash Collateral hereunder.
(b) So long as no Event of Default has occurred and is continuing, all
proceeds of insurance required hereby which are received by the Collateral Agent
or the Company as the result of any property damage or loss to any Collateral
not constituting an Event of Loss will be immediately applied in payment for
repair (whether such payment be for repair or partial repair already made or for
advance payments or deposits requested by the person mailing such repair) or
replacement in accordance with the terms of Section 4.3, if not already paid for
by the Company, or, if already paid for by the Company, will be immediately
applied to reimburse the Company for such payment, and any balance remaining
after such application or payment shall be immediately paid over to or retained
by the Company.
(c) All proceeds of insurance required hereby which are received by the
Collateral Agent or the Company as a result of any property damage or loss to
ground equipment, or other Property, not constituting Ground Equipment or other
Collateral shall be immediately paid over to or retained by the Company.
(d) All proceeds of insurance received by the Collateral Agent hereunder
and not then required to be paid over to the Company shall be held by the
Collateral Agent as Temporary Cash Collateral hereunder or, if the Company so
notifies the Collateral Agent at any time, Cash Collateral.
ARTICLE 6. REMEDIES
Section 6.1. Remedies. In case of the happening and during the
--------
continuance of any Event of Default (as applied to the Non-Slot Collateral) and
upon the acceleration of the obligations of the Company under the Securities and
the Indenture (as applied to the Slot Collateral) and so long as such Event of
Default shall not have been cured or waived and/or such acceleration shall not
have been rescinded, as the case may be, the Collateral Agent may transfer to or
register in its name (or any of its nominees) as Collateral Agent the Beneficial
Interest Certificate and any Pledged Stock and may take possession of the
Collateral or any part or the
25
whole of any type of the Collateral, and may by its agents enter upon the
premises of the Company or of any sublessee where any part or the whole of such
type of the Collateral may be and take possession of any part or the whole of
such type of the Collateral and withdraw the same from said premises, retaining
all payments which up to that time may have been made on account of such type of
the Collateral and otherwise, and shall be entitled to collect, receive and
retain all unpaid charges of any kind earned by such type of the Collateral or
any part thereof, and may lease such portion of the Collateral or any part
thereof, or with or without retaking possession thereof sell the same or any
part thereof, free from any and all claims of the Company at law or in equity,
in one lot and as an entirety or in separate lots, insofar as may be necessary
to perform and fulfill the Obligations, at public or private sale with or
without advertisement, for cash or upon credit, in its discretion, and may
proceed otherwise to enforce its rights and the rights of the Holders of
Securities in the manner herein provided. Upon any such sale, the Collateral
Agent itself may bid for the Property offered for sale or any part thereof. Any
such sale may be held or conducted at such place and at such time as the
Collateral Agent may specify, or as may be required by law, and without
gathering at the place of sale the Collateral to be sold, and in general in such
manner as the Collateral Agent may determine, but so that the Company may and
shall have a reasonable opportunity to bid at any such sale. Subject to the
second paragraph of Section 6.2 hereof and to Section 6.3 hereof, upon such
taking possession or withdrawal or lease or sale of part or the whole of such
type of the Collateral, the Company shall cease to have any rights or remedies
in respect of such type of the Collateral hereunder, but all such rights and
remedies shall be deemed thenceforth to have been waived and surrendered by the
Company, and no payments theretofore made by the Company for the rent or use of
such type of the Collateral shall, in case of the happening of any Event of
Default and such taking possession, withdrawal, lease or sale by the Collateral
Agent, give to the Company any legal or equitable interest or title in or to
such type of the Collateral or any part of it or any cause or right of action at
law or in equity in respect of such type of the Collateral against the
Collateral Agent or the Holders of Securities. No such taking possession,
withdrawal, lease or sale of such type of the Collateral by the Collateral Agent
and no omission of or delay in taking any such action shall be a bar to the
recovery by the Collateral Agent from the Company of the Obligations and the
Collateral Agent may xxx for and collect, and the Company shall be and remain
liable for, the Obligations until such sums shall have been realized as, with
the proceeds of the lease or sale of such portion of the Collateral, if any,
shall be sufficient for the discharge of all of the Obligations whether or not
they shall have then matured. The Company hereby expressly waives any and all
claims against the Collateral Agent and its agent or agents for damages of
whatever nature in connection with any retaking of Collateral in any
commercially reasonable manner.
Upon any sale of the Collateral pursuant to this Section 6.1, whether made
under the power of sale hereby given or pursuant to judicial proceedings, to the
extent permitted by law:
A. the principal of and accrued interest on all Outstanding Securities,
if not previously due, shall at once become and be immediately due and payable;
26
B. the Collateral Agent may make and deliver to the purchaser or
purchasers a good and sufficient deed, xxxx of sale and instrument of assignment
and transfer of the property sold; and
C. the Collateral Agent is hereby irrevocably appointed the true and
lawful attorney of the Company, in its name and stead, to make all necessary
deeds, bills of sale and instruments of assignment and transfer of the property
thus sold; and for that purpose it may execute all necessary deeds, bills of
sale and instruments of assignment and transfer, and may substitute one or more
persons, firms or corporations with like power, the Company hereby ratifying and
confirming all that its said attorney or such substitute or substitutes shall
lawfully do by virtue hereof; but if so requested by the Trustee or by any
purchaser, the Company shall ratify and confirm any such sale or transfer by
executing and delivering to the Trustee or to such purchaser or purchasers all
proper deeds, bills of sale, instruments of assignment and transfer and releases
as may be designated in any such request.
In the case of the happening and during the continuance of any Event of
Default, the Collateral Agent (or its nominees) shall be entitled to exercise
any and all voting and consensual rights and powers relating or pertaining to
the Pledged Stock or any part thereof.
Section 6.2. Application of Proceeds. If, in the case of the happening
-----------------------
of any Event of Default or acceleration, the Collateral Agent shall exercise any
of the powers conferred upon it by Section 6.1 hereof, all payments made by the
Company to the Collateral Agent hereunder after such Event of Default, and the
proceeds of any judgment collected by the Collateral Agent hereunder, and
(subject to the rights of the holders of any Senior Security Interests therein)
the proceeds of every sale or lease by the Collateral Agent hereunder of any
part or the whole of the Collateral, together with any other sums which may then
be held by the Collateral Agent under any of the provisions hereof, shall be
applied by the Collateral Agent in the manner set forth in Section 6.10 of the
Indenture.
After all such payments shall have been made in full, the title to any part
or the whole of the Collateral remaining unsold shall be conveyed by the
Collateral Agent to the Company or its named designee free from any further
liabilities or obligations to the Collateral Agent hereunder. If after applying
all such sums of money realized by the Collateral Agent as aforesaid there shall
remain any amount due to the Collateral Agent under the provisions hereof, the
Company agrees to pay the amount of such deficit to the Collateral Agent.
Section 6.3. Obligations of Company Not Affected by Remedies. No
-----------------------------------------------
retaking of possession of part or the whole of the Collateral by the Collateral
Agent, nor any withdrawal, lease or sale thereof, nor any action or failure or
omission to act against the Company or in respect of the Collateral, on the part
of the Collateral Agent or on the part of the Holder of any Securities, nor any
delay or indulgence granted to the Company by the Collateral Agent or by any
such Holder, shall affect the obligations of the Company hereunder. The
Collateral Agent may at any time upon notice in writing to the Company, apply to
any court of competent jurisdiction for instructions as to the application and
distribution of the property held by it.
27
Section 6.4. Remedies Cumulative and Subject to Applicable Law. No
-------------------------------------------------
right, power or remedy herein conferred upon or reserved to the Collateral
Agent, the Indenture Trustee and the Slot Trustee and/or the Holders of the
Securities is intended to be exclusive of any other right, power or remedy
conferred upon or reserved to any one or more of them and every right, power and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right, power and remedy given hereunder or under the Indenture or
the other Operative Documents or now or hereafter existing at law or in equity
or otherwise (including without limitation under the Uniform Commercial Code as
in effect in any applicable jurisdiction) and may be exercised from time to time
and as often and in such order as may be deemed expedient by the Collateral
Agent, the Indenture Trustee, the Slot Trustee and/or the Holders of the
Securities. The exercise by any of them of any right, power or remedy shall not
be construed as a waiver of the right of any of them to exercise at the same
time or thereafter any other right, power or remedy, nor as an election
precluding exercise at the same time or thereafter of any alternative right,
power or remedy. The exercise of any right, power or remedy shall be subject to
applicable law.
Section 6.5. Subordination to Senior Security Interests. Notwithstanding
------------------------------------------
any provisions of this Article 6, or any other Section of this Pledge Agreement
or any other Operative Document to the contrary, the lien and the security
interest granted hereby upon any Collateral which secures the payment of any
Senior Obligations shall be subject and subordinate to the respective Senior
Security Interests having a Lien therein, and neither the Collateral Agent nor
any of the Holders of the Securities shall be entitled to foreclose upon, take
possession of or terminate the Company's interest in respect of such Collateral,
or apply such Collateral or any portion thereof, including any Proceeds of any
sale or other remedy hereunder, to the payment of any principal or interest on
the Obligations, unless the Senior Obligations which are secured by such
Collateral are paid in full. The foregoing shall in no way limit or restrict
the right of the Collateral Agent or the Holders to accelerate the indebtedness
of the Company under the Securities and to take any and all actions which they
determine to be necessary or appropriate to collect such indebtedness from
assets and properties of the Company, other than the Collateral then subject to
such Senior Security Interests, and to protect and preserve the Lien granted
hereby in and to such Collateral and the Proceeds thereof as a junior and
subordinate lien and security interest subject only to the respective prior
Liens of the Senior Security Interests on the Collateral securing payment of the
respective Senior Obligations, and to exercise any and all rights and remedies
against and seek to collect such indebtedness from any such Collateral (subject
to all other provisions of the Indenture and Operative Documents) after the
Senior Obligations secured thereby are paid in full.
The Collateral Agent shall not be deemed to have consented to any release,
substitution, sale, revocation, condemnation, seizure, alteration, modification,
amendment, suspension or other disposition of the Collateral securing such
Senior Obligations unless the Collateral Agent shall have received a certificate
from the Company to the effect that the Company has complied with all applicable
provisions of the Operative Documents in connection therewith. The Collateral
Agent shall not be entitled to foreclose upon, take possession of or terminate
the
28
Company's interest in any Collateral subject to a Senior Security Interest. At
such time as any Senior Obligation is paid in full, and such holder of a Senior
Security Interest releases its security interest and Lien on any such Collateral
(subject to all other provisions of the Indenture and Operative Documents): the
Lien granted hereby to the Collateral Agent shall automatically become a first
priority Lien, subject only to the other Permitted Liens, upon the released
Collateral; the Collateral Agent, as secured party hereunder, is and
automatically shall be entitled to all consent and approval rights of the
releasing holder of the Senior Security Interest granted in and afforded by the
provisions of the appropriate Senior Security Agreement regarding the
substitution, sale, release, revocation, condemnation, seizure, alteration,
modification, amendment, suspension or other disposition of the Collateral
released by the holder of such Senior Security Interest; and the Company shall
take prompt action under Sections 4.01 and 4.06 to confirm, preserve or
effectuate the rights provided by this Section.
Section 6.6. Senior Security Interests. The Company acknowledges and
-------------------------
agrees that Sections 4.13 and 6.5 and all other provisions hereof and of the
Indenture and other Operative Documents relating to Senior Obligations,
Qualified Senior Financing Agreements, Senior Security Interests and Senior
Security Agreements (the "Senior Security Provisions") are included herein and
therein as a convenience in the event that the Required Holders consent to a
Senior Security Interest, and that until and unless and to the extent the
Required Holders so consent, the Senior Security Provisions shall have no
effect. The Company shall not enter into any Senior Security Agreement, or
create or permit to be created any Senior Security Interest, without the prior
written consent of the Required Holders, which consent may be withheld by the
Required Holders in their sole and absolute discretion. In soliciting the
consent of the Required Holders to the creation of a Senior Security Interest,
the Company will make fair and adequate disclosure to the Holders of the Senior
Security Provisions.
ARTICLE 7. TERMINATION
Section 7.1. Termination. The Company agrees that this is a continuing
-----------
agreement and shall remain in full force and effect until the earlier of (i) the
Company pays in full and performs all of its Obligations hereunder and under the
Securities, and (ii) (x) the occurrence of the Indenture Discharge Date and (y)
the payment of all Obligations then due and payable, at which time the
Collateral Agent shall have no further interest in and to the Collateral or the
Slot Trust Assets, and will at the Company's expense release all of the
Collateral Agent's interest in and to the Collateral and the Slot Trust Assets,
including any cash and/or Investment Securities held in accordance with the
terms of this Pledge Agreement and/or the Master Sub-License Agreement.
29
ARTICLE 8. COLLATERAL AGENT
Section 8.1. Duties of Collateral Agent.
--------------------------
The Collateral Agent has been appointed as Collateral Agent hereunder. The
Collateral Agent shall be obligated, and shall have the right hereunder to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking action (including, without limitation, the
release of Collateral or the substitution of Permitted Substitutes) solely in
accordance with this Pledge Agreement and the Indenture. The Collateral Agent
may resign and a successor Collateral Agent may be appointed in the manner
provided for a successor Trustee in the Indenture. Upon the acceptance of any
appointment as a Collateral Agent by a successor Collateral Agent, that
successor Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Collateral Agent under
this Pledge Agreement, and the retiring Collateral Agent shall thereupon be
discharged from its duties and obligations under this Pledge Agreement. After
any retiring Collateral Agent's resignation, the provisions of this Pledge
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Pledge Agreement while it was Collateral Agent. The
Collateral Agent agrees to and shall have the benefit of all provisions of the
Indenture and the Operative Documents stated therein to be applicable to the
Collateral Agent.
ARTICLE 9. MISCELLANEOUS
Section 9.1. Benefits of Agreement Restricted. Subject to the provisions
--------------------------------
of Section 9.10 hereof, nothing in this Pledge Agreement or the Securities,
express or implied, shall give or be construed to give to any Person, other than
the parties hereto and the Holders of the Securities, any legal or equitable
right, remedy or claim under or in respect of this Pledge Agreement or under any
covenant, condition or provision herein contained, all such covenants,
conditions and provisions, subject to Section 9.10 hereof, being for the sole
benefit of the parties hereto and the Holders of the Securities.
Section 9.2. Funds May Be Held by the Collateral Agent; Investments in
---------------------------------------------------------
Investment Securities.
---------------------
(a) (i) Subject to the provisions of Section 9.2(b), any money at any
time paid to or held by the Collateral Agent hereunder until paid out by the
Collateral Agent as herein provided may be carried by the Collateral Agent on
deposit with itself, or on deposit or invested with one or more banks or
investment banking or brokerage institutions acting on its behalf, and the
Collateral Agent shall not have any liability for interest upon any such money
except as otherwise agreed with the Company.
(ii) At any time and from time to time, if no Event of Default shall
have occurred and be continuing and subject to Section 9.2(b), the Collateral
Agent shall invest and
30
reinvest any funds held by it in Investment Securities to be held by the
Collateral Agent in trust for the benefit of the Holders of the Securities. Any
such investments may be made by the Collateral Agent through its own bond or
investment department, or through one or more banks or investment banking or
brokerage institutions acting on its behalf.
(iii) Funds held in trust for the benefit of the Holders of the
Securities by the Collateral Agent on deposit with itself or elsewhere,
Investment Securities held in trust for the benefit of the Holders of the
Securities, funds and/or Investment Securities held for the Company by the
Collateral Agent, and funds or Investment Securities held under Section 9.2(b)
shall each be held in distinct, identifiable accounts, and no other funds or
investments of any nature or from any source whatsoever may be held in such
accounts.
(iv) The Collateral Agent shall sell any Investment Securities held
by it and retain the proceeds of such a sale as Collateral hereunder.
(v) The Collateral Agent shall retain, for the benefit of the
Holders of the Securities, (a) any interest earned on deposits carried pursuant
to the first paragraph of this Section 9.2(a), and (b) any interest (other than
accrued interest paid for at the time of purchase of an investment) or other
profit which may accrue upon, or be realized from any sale or redemption of,
Investment Securities.
(b) Notwithstanding the foregoing and so long as no Event of Default shall
have occurred and be continuing, any funds or Investment Securities held by the
Collateral Agent as Temporary Cash Collateral shall be held for the benefit of
the Holders of the Securities and shall be invested and reinvested by the
Collateral Agent in Investment Securities as specified in a Request. Any such
investments may be made by the Collateral Agent through its own bond or
investment department, or through one or more banks or investment banking or
brokerage institutions acting on its behalf if specified in such Request. No
later than six (6) months after the Event of Loss or proposed release
occasioning the deposit with the Collateral Agent of such Temporary Cash
Collateral, if no Event of Default shall have occurred and be continuing and
upon satisfaction by the Company of the applicable Substitution Requirements,
the Collateral Agent shall return to the Company Temporary Cash Collateral in an
amount equal to the entire amount of the related deposit, plus or minus any net
earnings or loss thereon during the time it was held as Temporary Cash
Collateral, or, if the Appraised Value of the Ground Equipment or Slots being
substituted for such Temporary Cash Collateral (determined under paragraph
(f)(ii) of the Substitution Requirements) is less than the Appraised Value of
the Ground Equipment, Acquired Slots or Pledged Stock on account of whose loss,
sale or deemed sale such Temporary Cash Collateral was furnished (determined
under paragraph (a)(ii)(C), (b)(ii) or (f)(ii) of the Substitution
Requirements), in an amount equal to such portion of such deposit, plus or minus
such net earnings or loss, as is allocable to such lesser Appraised Value. If an
Event of Default shall have occurred and be continuing or six (6) months shall
have elapsed since the date of such Event of Loss or release, such Temporary
Cash Collateral shall cease to be such and shall be held by the Collateral Agent
for the benefit of the Holders of the Securities under Section 9.2(a).
31
(c) All Investment Securities shall be issued in the name of the
Collateral Agent and held by it, or, if not so held, the Collateral Agent shall
be reflected as the owner of, or secured party in respect of, such Investment
Securities in the register of the issuer of such Investment Securities. In no
event shall the Collateral Agent invest in, or hold, Investment Securities in a
manner which would cause the Collateral Agent not to have a Lien on, and first
priority perfected security interest in, such Investment Securities under the
applicable provisions of the Uniform Commercial Code in effect where the
Collateral Agent holds such Investment Securities, or if not held by it, in
effect where the registrar is located, or other applicable law then in effect,
and in no event shall the Collateral Agent hold cash other than in a manner
which would cause the Collateral Agent to have a Lien on, and first priority
perfected security interest in, such cash.
(d) The Collateral Agent shall deliver to the Company within five (5)
Business Days after December 31 of each year a statement which sets forth the
amount of cash and/or Investment Securities held by the Collateral Agent and,
with respect to Investment Securities, a schedule identifying each Investment
Security and the face or principal amount thereof.
(e) If the Company elects to repurchase the Securities, the Collateral
Agent shall release the Temporary Cash Collateral and Cash Collateral and
cooperate with the Company and the Indenture Trustee in connection with
applications of Temporary Cash Collateral and Cash Collateral to the purchase of
Securities in accordance with, and to the extent permitted by, the provisions of
Section 3.2 of the Indenture.
Section 9.3. Certificates and Opinions of Counsel; Statements to Be
------------------------------------------------------
Contained Therein; Bases Therefor. Subject to the next sentence, upon any
---------------------------------
application or Request by the Company to the Collateral Agent to take any action
under any of the provisions of this Pledge Agreement, the Company shall furnish
to the Collateral Agent an Officers' Certificate and an Opinion of Counsel in
compliance with, but only if required by Sections 11.4 and/or 11.5 of the
Indenture.
Section 9.4. Appraiser's Certificate. Unless otherwise specifically
-----------------------
provided, an Independent Appraiser's Certificate shall be sufficient evidence of
the Appraised Value and Fair Market Value to the Company of any Property under
this Pledge Agreement.
Section 9.5. Notices; Waivers. Any request, demand, authorization,
----------------
direction, notice, consent, waiver or other document provided or permitted by
this Pledge Agreement to be made upon, given or furnished to, or filed with
(a) the Collateral Agent, by any Holder or by the Company shall be
sufficient for every purpose hereunder if in writing and made, given, furnished
or filed by personal delivery or registered or certified mail to or with the
Collateral Agent at First Security Bank, N.A., Corporate Trust Services, 00
Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000.
32
(b) the Company, by any Holder or by the Collateral Agent shall be
sufficient for every purpose hereunder if in writing and made, given, furnished
or filed by personal delivery or mailed, first class postage prepaid, to the
Company at One City Centre, 000 X. 0xx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxxxx, Senior Vice President and General Counsel,
or to any of the above parties at any other address subsequently furnished in
writing by it to each of the other parties listed above. An affidavit by any
person representing or acting on behalf of the Company or the Collateral Agent
as to such mailing, having any registry receipt required by this Section
attached, shall be conclusive evidence of the giving of such demand, notice or
communication.
Where this Pledge Agreement provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Collateral Agent,
but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
Section 9.6. Amendments, Etc.
---------------
(a) Except as provided in Section 9.6(b) hereof and subject to Section
4.11 and Article 9 of the Indenture, this Pledge Agreement may be amended by the
Company and the Collateral Agent only with the affirmative vote of the Required
Holders.
(b) The Company and the Collateral Agent may also amend this Pledge
Agreement without the vote of the Holders of the Securities if such parties each
deem it necessary to cure any ambiguity, defect or inconsistency or conform this
Pledge Agreement to the requirements of applicable Federal or State laws or
regulations; provided that such amendment or amendments do not have a material
adverse effect on the interests of the Holders.
Section 9.7. No Waiver; Remedies.
-------------------
(a) No failure on the part of the Collateral Agent to exercise, and no
delay in exercising any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative, may be exercised singly or concurrently, and are
not exclusive of any remedies provided by law or the Indenture, the Securities
or any of the other Operative Documents.
(b) Failure by the Collateral Agent at any time or times hereafter to
require strict performance by the Company or any other Person of any of the
provisions, warranties, terms or conditions contained herein or in any of the
Indenture, the Securities or any other Operative Documents now or at any time or
times hereafter executed by the Company or any such other Person and delivered
to the Collateral Agent shall not waive, affect or diminish any right of the
33
Collateral Agent at any time or times hereafter to demand strict performance
thereof, and such right shall not be deemed to have been modified or waived by
any course of conduct or knowledge of the Collateral Agent or any agent, officer
or employee of the Collateral Agent.
Section 9.8. Conflict with Trust Indenture Act of 1939. If and to the
-----------------------------------------
extent that any provision of this Pledge Agreement limits, qualifies or
conflicts with the duties imposed by Sections 310 to 317, inclusive of the TIA,
such imposed duties shall control.
Section 9.9. Holidays. In the event that any date for the payment of any
--------
amount due hereunder shall not be a Business Day, then (notwithstanding any
other provision of this Pledge Agreement) such payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the due date, and no interest shall accrue for the
period from such due date to and including the next succeeding Business Day.
Section 9.10. Successors and Assigns. This Pledge Agreement and all
----------------------
obligations of the Company hereunder shall be binding upon the successors and
assigns of the Company, and shall, together with the rights and remedies of the
Collateral Agent hereunder, inure to the benefit of the Collateral Agent, the
Indenture Trustee, the Holders, and their respective successors and assigns.
Section 9.11. Governing Law. The laws of the State of New York shall
-------------
govern this Pledge Agreement without regard to principles of conflict of laws.
Section 9.12. Indemnification. The Company agrees to pay, and to save the
---------------
Indenture Trustee and the Collateral Agent harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
excise, sales or other similar taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Pledge Agreement.
Section 9.13. Effect of Headings. The Article and Section headings and
------------------
the Table of Contents contained in this Pledge Agreement are and shall be
without substantive meaning or content of any kind whatsoever and are not a part
of this Pledge Agreement.
Section 9.14. No Adverse Interpretation of Other Agreement. This Pledge
--------------------------------------------
Agreement may not be used to interpret any agreement of the Company or any of
its Subsidiaries which is unrelated to the Indenture, the Securities or the
Operative Documents. Any such agreement may not be used to interpret this
Pledge Agreement.
Section 9.15. No Recourse Against Others. A director, officer, employee
--------------------------
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under this Pledge Agreement or for any claim based
on, in respect of or by reason of such obligations or their creation.
34
Section 9.16. Duplicate Originals. The parties may sign any number of
-------------------
copies of this Pledge Agreement. Each signed copy shall be an original, but all
of them together represent the same agreement.
Section 9.17. Severability. In case any provision in this Pledge
------------
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and a Holder shall have no claim therefor against the
Collateral Agent.
35
IN WITNESS WHEREOF, the parties have caused this Pledge Agreement to be
duly executed, all as of the date first above written.
TRANS WORLD AIRLINES, INC.
By: ______________________________
Name:
Title:
Agreed and accepted as of the date first written above:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Collateral Agent
By: _____________________________________
Name:
Title:
36
EXHIBIT A
FORM OF SUPPLEMENTAL PLEDGE AGREEMENT
(To Add Collateral)
SUPPLEMENTAL PLEDGE AGREEMENT No. ____
SUPPLEMENTAL PLEDGE AGREEMENT NO. ___, dated as of _____________ between
TRANS WORLD AIRLINES, INC., a Delaware corporation (together with its successors
and assigns, the "Company"), having an office at One City Centre, 000 X. 0xx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, and FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, as Collateral Agent under the
Pledge Agreement described below, having its principal office at 00 Xxxxx Xxxx
Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, (together with its successors in trust, the
"Collateral Agent").
WHEREAS, the Company has heretofore executed and delivered to the
Collateral Agent a Pledge and Security Agreement, dated as of March 31, 1997
(the "Pledge Agreement"), covering the property of the Company therein
described, to secure (subject to the provisions of the Pledge Agreement and the
Indenture) the due and punctual payment and performance of the Obligations (as
defined in the Pledge Agreement) outstanding from time to time;
[ WHEREAS, the Pledge Agreement (and any Supplemental Pledge Agreements) has
(have) been duly recorded with the Federal Aviation Administration at Oklahoma
City, Oklahoma, pursuant to the Federal Aviation Act of 1958, as amended, on the
following date as a document or conveyance bearing the following number:
DOCUMENT OR
DATE OF RECORDING CONVEYANCE NO.
Pledge Agreement......]
WHEREAS, the Company, as provided in the Pledge Agreement, is hereby
executing and delivering or heretofore has executed and delivered, to the
Collateral Agent one or more Supplemental Pledge Agreements for the purposes of
specifically subjecting to the Lien of the Pledge Agreement certain property
herein described. (Recite any other filing or recording data.)
WHEREAS, the Company is the legal and beneficial owner of the property
specifically described in Schedule I annexed hereto (and located at the
(Designated Location) (location) described in Schedule I annexed hereto), free
and clear of all mortgages, security interests, pledges, liens, claims, charges
and encumbrances of every kind whatsoever, except only Permitted Liens (as
defined in the Definitions Appendix referred to in the Pledge Agreement) and
desires to execute and deliver this Supplemental Pledge Agreement for the
purpose of specifically subjecting said property to the Lien of the Pledge
Agreement;
A-1
WHEREAS, all things necessary to make this Supplemental Pledge Agreement
the valid, binding and legal obligation of the Company, including all proper
corporate action on the part of the Company, have been done and performed and
have happened;
NOW, THEREFORE, THIS SUPPLEMENTAL PLEDGE AGREEMENT WITNESSETH, that, to
secure (subject to the provisions of the Pledge Agreement) the due and punctual
payment and performance of the Obligations (as defined therein), the Company
does hereby transfer, grant, bargain, sell, assign, convey, mortgage,
hypothecate and pledge to the Collateral Agent the property described in
Schedule I annexed hereto.
TO HAVE AND TO HOLD all and singular the aforesaid property described in
Schedule I annexed hereto unto the Collateral Agent in trust and for the uses
and purposes and subject to the terms, provisions, agreements and covenants set
forth in the Pledge Agreement.
This Supplemental Pledge Agreement shall be construed as supplemental to
the Pledge Agreement and shall form a part thereof, and the Pledge Agreement is
hereby incorporated by reference herein and is hereby ratified, approved and
confirmed.
This Supplemental Pledge Agreement is intended to be delivered in the State
of New York and shall be governed by the laws of that State.
This Supplemental Pledge Agreement may be executed in any number of
counterparts, each of such counterparts shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute but one and the
same Supplemental Pledge Agreement.
A-2
IN WITNESS WHEREOF, the parties have caused this Pledge Agreement to be
duly executed, all as of the date first above written.
TRANS WORLD AIRLINES, INC.
By: ______________________________
Name:
Title:
Agreed and accepted as of the date first written above:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Collateral Agent
By: _____________________________________
Name:
Title:
A-3
STATE OF MISSOURI )
) ss.:
COUNTY OF __________ )
On the ____ day of ________ 19___, before me personally came
__________________,to me known, who, being by me duly sworn, did depose and say
that he resides at ________________________________; that he is a
_______________ of TRANS WORLD AIRLINES, INC., the corporation described in and
that executed the above instrument; and that he signed his name thereto by order
of the Board of Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
[NOTARIAL SEAL]
_____________________________
Notary Public
STATE OF ____________ )
) ss:
COUNTY OF __________ )
On the _____ day of _____________, 19__, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that she resides at ______________________________; that she is a
______________ of FIRST SECURITY BANK, NATIONAL ASSOCIATION, the national
banking association described in and that executed the above instrument as
Collateral Agent; and that she signed her name thereto by order of the Board of
Directors of said national banking association.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
[NOTARIAL SEAL]
____________________________
Notary Public
A-4
SCHEDULE I to EXHIBIT A
A-5
EXHIBIT B
FORM OF SUPPLEMENTAL PLEDGE AGREEMENT
(To Release Collateral)
SUPPLEMENTAL PLEDGE AGREEMENT NO.__
SUPPLEMENTAL PLEDGE AGREEMENT NO. ___, dated as of ___ between TRANS
WORLD AIRLINES, INC., a Delaware corporation (together with its successors and
assigns, the "Company"), having an office at One City Centre, 000 X. 0xx Xxxxxx,
Xx. Xxxxx, Xxxxxxxx 00000, and FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, as Collateral Agent under the Pledge Agreement
described below, having its principal office at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx
Xxxx, Xxxx 00000, (together with its successors in trust, the "Collateral
Agent").
WHEREAS, the Company has heretofore executed and delivered to the
Collateral Agent a Pledge and Security Agreement, dated as of March 31, 1997
(the "Pledge Agreement"), covering the property of the Company therein
described, to secure (subject to the provisions of the Pledge Agreement and the
Indenture) the due and punctual payment and performance of the Obligations (as
defined in the Pledge Agreement) outstanding from time to time;
[WHEREAS, the Pledge Agreement [and any Supplemental Pledge
Agreements] has [have] been duly recorded with the Federal Aviation
Administration at Oklahoma City, Oklahoma, pursuant to the Federal Aviation Act
of 1958, as amended, on the following date as a document or conveyance bearing
the following number:
DOCUMENT OR
DATE OF RECORDING CONVEYANCE NO.
Pledge Agreement.....]
WHEREAS, the Company, as provided in the Pledge Agreement, is hereby
executing and delivering or heretofore has executed and delivered, to the
Collateral Agent one or more Supplemental Pledge Agreements for the purposes of
specifically releasing from the Lien of the Pledge Agreement certain property
herein described. [Recite any other filing or recording data.]
WHEREAS, the Company desires to execute and deliver this Supplemental
Pledge Agreement for the purpose of specifically releasing said property from
the Lien of the Pledge Agreement;
WHEREAS, all things necessary to make this Supplemental Pledge
Agreement the valid, binding and legal obligation of the Company, including all
proper corporate action on the part of the Company, have been done and performed
and have happened;
B-1
NOW, THEREFORE, THIS SUPPLEMENTAL PLEDGE AGREEMENT WITNESSETH, that,
the Collateral Agent releases from the Lien of the Pledge Agreement the property
described in Schedule I annexed hereto. This Supplemental Pledge Agreement shall
be construed as supplemental to the Pledge Agreement and shall form a part
thereof, and the Pledge Agreement is hereby incorporated by reference herein and
is hereby ratified, approved and confirmed.
This Supplemental Pledge Agreement is intended to be delivered in the
State of New York and shall be governed by the laws of that State.
This Supplemental Pledge Agreement may be executed in any number of
counterparts, each of such counterparts shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute but one and the
same Supplemental Pledge Agreement.
This release is made without covenant or warranty, without recourse,
and without affecting the rights of the Collateral Agent to any and all
Collateral other than that specifically released hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Pledge Agreement to be duly executed, as of the date and year first above
written.
TRANS WORLD AIRLINES, INC.
By: _____________________________
Name:
Title:
Agreed and accepted as of the date first written above:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Collateral Agent
By: _____________________________________
Name:
Title:
B-2
STATE OF MISSOURI )
) ss.:
COUNTY OF __________ )
On the ____ day of _______________, 19___, before me personally came
___________________ to me known, who, being by me duly sworn, did depose and say
that he resides at ________________________________; that he is a ______________
of TRANS WORLD AIRLINES, INC., the corporation described in and that executed
the above instrument; and that he signed his name thereto by order of the Board
of Directors of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
[NOTARIAL SEAL]
____________________________
Notary Public
STATE OF ________ )
) ss.:
COUNTY OF _________ )
On the ____ day of ____________ 19__, before me personally came
___________________ to me known, who, being by me duly sworn, did depose and say
that she resides at ________________________________________; that she is a
______________ of FIRST SECURITY BANK, NATIONAL ASSOCIATION; the national
banking association described in and that executed the above instrument as
Collateral Agent; and that she signed her name thereto by order of the Board of
Directors of said national banking association.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
[NOTARIAL SEAL]
_______________________________
Notary Public
B-3
SCHEDULE I to EXHIBIT B
B-4
SCHEDULE 1
GROUND EQUIPMENT AND PLEDGED STOCK
1. Ground Equipment: At the Locations Listed on Exhibit I attached hereto.
-----------------------------------------------------------------------
Detailed schedule of Ground Equipment at Exhibit III.
----------------------------------------------------
2. Pledged Stock of LAX Holding Co., Inc.
--------------------------------------
Certificate No. 1 for 100 shares of Common Stock, par value $.01
3. Pledged Stock of TWA-LAX Gate Company, Inc.
-------------------------------------------
Certificate No. 1 for 100 shares of Common Stock, par value $.01
4. Pledged Stock of TWA San Francisco Gate Company, Inc.
-----------------------------------------------------
Certificate No. 1 for 100 shares of Common Stock, par value $.01
5. Pledged Stock of TWA-Omnibus Gate Company., Inc.
------------------------------------------------
Certificate No. 1 for 100 shares of Common Stock, par value $.01
S1-1
Exhibit I to Schedule 1
-----------------------
GROUND EQUIPMENT LOCATIONS
--------------------------
TWA LOCATION CITY/AIRPORT STATE COUNTY
------------ ------------ ----- ------
000 Xxx Xxxx Xxx Xxxx Xxx Xxxx
000 Xxx Xxxx Xxx Xxxx Xxx Xxxx
510 BOS Boston Massachusetts Suffolk
511 BDL Hartford Connecticut Hartford
518 Jamaica New York Queens
000 Xxx Xxxx Xxx Xxxx Xxx Xxxx
000 Xxx Xxxx Xxx Xxxx Xxx Xxxx
000 Xxx Xxxx Xxx Xxxx Xxx Xxxx
000 Xxx Xxxx Xxx Xxxx Xxx Xxxx
535 PHL Philadelphia Pennsylvania Philadelphia
538 Camden New Jersey Camden
000 Xxx Xxxx Xxx Xxxx Xxx Xxxx
549 BWI Baltimore Maryland Xxxx Arundel
554 Syracuse New York Onondaga
558 DCA D.C. (National) Virginia Alexandria
559 Washington, D.C. Washington, D.C. District of Columbia
560 IAD D.C. (Dulles) Xxxxxxxx Xxxxxx
X0-0
TWA LOCATION CITY/AIRPORT STATE COUNTY
------------ ------------ ----- ------
569 Williamsport Pennsylvania
000 XXX Xxxxxxxxxx Xxxxxxxxxxxx Allegheny
000 XXX Xxxxxxx-Xxxxxx Xxxxx Xxxxxxxx Wake
588 Orlando Florida Orange City
000 XXX Xxxxxxx Xxxxxxx Orange City
590 MIA Miami Florida Dade
000 XXX Xxxx Xxxxxxxxxx Xxxxxxx Broward
595 TPA Tampa Florida Hillsborough
000 XXX Xxxxxxxxxxxx Xxxxxxx Xxxxx
601 SRQ Sarasota Florida Sarasota
000 XXX Xxxx Xxxx Xxxxx Xxxxxxx Xxxx Xxxxx
605 RSW Ft. Xxxxx Florida Xxx
000 XXX Xxxxxxx Xxxxxxxx Norfolk
614 CLT Charlotte North Carolina Mecklenburg
615 CLE Cleveland Ohio Cuyahoga
000 XXX Xxxxxxx Xxxxxxx Xxxxxx and Xxxxxxx
000 Xxxxxxx Xxxxxxxxxxx
000 XXX Xxxxxxxx Xxxx Franklin
626 Columbus Ohio Franklin
000 XXX Xxxxxxx Xxxxxxxx Xxxxx
637 Norfolk Virginia Xxxxxxx
X0-0
TWA LOCATION CITY/AIRPORT STATE COUNTY
------------ ------------ ----- ------
645 DAY Dayton Ohio Xxxxxxxxxx
000 XXX Xxxxxxxx (Cincinnati) Kentucky Kenton
655 SDF Louisville Kentucky Jefferson
669 ORD Chicago (X'Xxxx) Illinois Xxxx
000 Xxxxxxx Xxxxxxxx Xxxx
673 MKE Xxxxxxxxx Xxxxxxxxx Xxxxxxxxx
000 Xxxxxx Xxxxxxxx Peoria
000 XXX Xxxxxx Xxxxxxxx Rock Island
690 M.P. Minneapolis Minnesota Hennepin
000 XXX Xxx Xxxxxxx Xxxxxxxxx Xxxxxxx Xxxxxx
704 Memphis Tennessee
000 Xxx Xxxxxxx Xxxxxxxxx
000 Xxxxxxxxx Xxxxxxxxx
000 Xxxxxxxxxx Xxxxxxxxx
000 XXX Xxxxxxxxxxxx Xxxxxxx Xxxxxx
721 SGF Springfield Missouri Xxxxxx
000 Xx. Xxxxx Xxxxxxxx Xx. Xxxxx Xxxx
000 Xx. Xxxxx Xxxxxxxx
000 Xx. Xxxxx Xxxxxxxx
000 XXX Xxxxx Xxxxxxxx Xxxxxxx
744 Kansas City Missouri Platte
S1-4
TWA LOCATION CITY/AIRPORT STATE COUNTY
------------ ------------ ----- ------
000 XXX Xxxxx Xxxxxx Xxxx Linn
000 XXX Xxx Xxxxxx Xxxx Polk
750 MKC Kansas City Missouri Platte
753 Kansas City Missouri Xxxxxxx
000 Xxxxxxx Xxxxx Xxxxxx
765 DFW Dallas-Ft. Worth Texas Dallas, Tarrant
000 XXX Xxxxxxx Xxxxx Xxxxxx
000 XXX Xxxxxx Xxxx Xxxxxxxx Pulaski
770 ICT Wichita Kansas Sedgwick
773 TUL Tulsa Oklahoma Tulsa
776 OKC Oklahoma City Oklahoma Xxxxxxxx, Xxxxxxxxx
000 XXX Austin Texas Xxxxxx
782 SAT San Antonio Texas Bekar
805 Ft. Xxxxxx Colorado
000 XXX Xxxxxxxx Xxxxxxx Xxxxxxxx El Paso
809 Englewood Colorado Arapahoe
810 DEN Denver Colorado Denver
816 Lincoln Nebraska Lancaster
817 FSD Sioux City South Dakota Union
825 ABQ Albuquerque New Mexico Bernadillo
827 Reno Nevada
X0-0
XXX XXXXXXXX XXXX/XXXXXXX XXXXX COUNTY
------------ ------------ ----- ------
833 Las Vegas Nevada Xxxxx
000 Xxxxxxxxxx Xxxxxxx
840 PHX Phoenix Arizona Maricopa
847 LAS Las Vegas Nevada Xxxxx
849 Sacramento California Sacramento
000 XXX Xxx Xxxxx Xxxxxxxxxx San Diego
000 Xxxxxxxx Xxxxxxxxxx Los Angeles
859 Los Angeles California Los Angeles
000 Xxx Xxxxxxx Xxxxxxxxxx
000 Xxxxxxxx Xxxxx Xxxxxxxxxx Los Angeles
867 LAX Los Angeles California Los Angeles
869 Ontario California San Bernardino
871 Hollywood California Los Angeles
872 Los Angeles California Los Angeles
000 Xxxxx Xxxx Xxxxxxxxxx Orange
000 Xxxxxxx Xxxxx Xxxxxxxxxx Los Angeles
878 SJC San Jose California Santa Xxxxx
880 Van Nuys California Los Angeles
882 Los Angeles California Los Angeles
883 San Francisco California San Francisco
886 Palo Alto California Santa Xxxxx
S1-6
TWA LOCATION CITY/AIRPORT STATE COUNTY
------------ ------------ ----- ------
889 SNA Santa Ana California Orange
890 SFO San Francisco California San Matco
892 San Francisco California San Francisco
894 PDX Portland Oregon Multnomah
000 XXX Xxxxxxx Xxxxxxxxxx Xxxx
000 Xxx Xxxx Xxxxxxxxxx San Xxxx
898 HNL Honolulu Hawaii Honolulu
963 SLC Salt Lake City Utah Salt Lake
981
999 Airport Operations System Equipment/*/
______________________________
/*/ [This equipment is not stored at one location. It consists of metal
containers used to store passenger luggage in the aircraft and are moved daily
from one location to another.]
S1-7
EXHIBIT II
LOCATION OF GROUND LEASES
Name of Gate Company Location of Airports
-------------------- --------------------
TWA-San Francisco Gate Company, Inc. San Francisco
TWA-LAX Gate Company, Inc. Los Angeles
TWA-Omnibus Gate Company, Inc. Hartford
Philadelphia
Pittsburgh
Raleigh-Xxxxxx
Xxxxxxx
Miami
Jacksonville
West Palm Beach
Norfolk
Columbus
Detroit
Dayton
Louisville
Erlanger (Cincinnati)
Milwaukee
Moline
Minneapolis
Indianapolis
Springfield
Omaha
Cedar Rapids
Houston
Little Rock
Tulsa
Austin
San Antonio
Albuquerque
Las Vegas
San Xxxx
Santa Xxx
Portland
Salt Lake City
S1-8
SCHEDULE 2
COLLATERAL RELEASE SCHEDULE
Released Collateral Collateral Release Trigger
------------------- --------------------------
(Securities Outstanding
in Millions of Dollars)
1. Pledged Stock
a. TWA-Omnibus Gate Company
Inc. and LAX Holding Co., Inc. An amount equal to (i) the sum of
(x) $37,500,000, plus (y) 75% of
any Securities issued pursuant to
any exercise of the over-allotment
option contained in the Purchase
Agreement, less (ii) an amount
equal to the Applied Amount
b. TWA San Francisco
Gate Company, Inc. An amount equal to (i) the sum of
(x) $25,000,000, plus (y) 50% of
any Securities issued pursuant to
any exercise of the over-allotment
option contained in the Purchase
Agreement, less (ii) an amount
equal to the Applied Amount
2. Ground Equipment An amount equal to (i) the sum of
(x) $10,000,000, plus (y) 20% of
any Securities issued pursuant to
any exercise of the over-allotment
option contained in the Purchase
Agreement, less (ii) an amount
equal to the Applied Amount
Note: Collateral referred to is as of the date of the Pledge Agreement. If
additional Collateral is pledged to the Collateral Agent in satisfaction
of the Substitution Requirements, such additional Collateral shall be
subject to release at the same time and under the same circumstances (and
only at the same time and under the same circumstances) as the Collateral
for which it was substituted could have been released under this
Schedule.
S2-1
EXHIBIT E TO INDENTURE
FORM OF INTERCREDITOR AGREEMENT
-------------------------------
This Intercreditor Agreement dated this ___ day of _____________, 1997, by
and between (i) FIRST SECURITY BANK, NATIONAL ASSOCIATION, as trustee (the
"Trustee") under the Indenture dated March 31, 1997 between Trustee and Trans
World Airlines, Inc. (the "Company") pursuant to which the Company authorized
the issuance of the Company's 12% Senior Secured Notes due April 1, 2002 (the
"Notes") and (ii) ___________________________, as trustee (the "New Trustee")
under the Indenture dated __________ __, 1997 between the New Trustee and the
Company pursuant to which the Company issued its securities consisting of
_____________________________________________________________ (the "New Notes").
RECITALS
--------
WHEREAS, the Note Trustee holds a first priority Lien in and against the
Collateral pursuant to the Senior Note Trust Documents; and
WHEREAS, ON ___________ __, _____ the Company granted to First Security
Bank, as trustee (the "Trustee") under the Indenture dated as of ____________
__, 1997 between the Trustee and the Company pursuant to which the Company
issued its Notes, a first priority lien in and against the Collateral pursuant
to the Pledge and Security Agreement dated as of March 31, 1997 with respect to
the Notes (the "Notes Pledge Agreement"); and
WHEREAS, the Required Holders have consented, pursuant to the Pledge
Agreement and the Indenture, that the Trustee's Lien in and to the Collateral
will be subordinate to the first priority Lien in the Collateral granted to the
New Trustee and that the Trustee may not take certain action with respect to the
Collateral while the Lien of the New Trustee is outstanding and, in particular,
as long as the prior Lien to the New Trustee in the Collateral exists, the
Trustee is not to have any ability to foreclose upon or otherwise exercise any
rights with respect to such Collateral; and
WHEREAS, it is the further intention of the parties that the New Trustee
shall be able to dispose of any or all Collateral in accordance with its rights
under the New Trust Documents and in accordance with law, but that the Trustee
shall retain its legal rights with respect to any such disposition;
NOW, THEREFORE, the parties hereto agree as follows:
1
SECTION 1. DEFINITIONS
-----------
In addition to the terms defined above:
1.1 "Collateral" shall mean the Ground Equipment, Slots, Pledged Stock and
other collateral more fully described in Schedule A of this Agreement.
1.2 "Company" shall mean Trans World Airlines, Inc. and its successors or
assigns or any obligor on the Notes and the New Notes.
1.3 "Creditors" shall mean, individually and collectively, the New Trustee
and the Trustee and their respective successors and assigns.
1.4 "New Trustee" shall mean __________________ National Association, in
its capacities as Trustee and Collateral Agent for the holders of the New Notes
pursuant to the New Trust Documents until a successor replaces it, and
thereafter any such successor.
1.5 "New Trust Documents" shall mean the Indenture dated _____________,
____, the Notes due ________________ ___, 199__ issued thereunder, and the
Operative Documents (as defined in such Indenture) dated _____________ __, _____
by and between the Company and ________________, as Collateral Agent, each as
amended or supplemented from time to time.
1.6 "New Trust Obligations" shall mean the New Notes and all other
Obligations under and defined in the New Trust Documents.
1.7 "New Trustee" shall mean ____________________ National Association, in
its capacity as Trustee and Collateral Agent for the holders of the New Notes
pursuant to the Notes Trust Documents, until a successor replaces it, and
thereafter means any such successor.
1.8 "Required Holders" means the "Required Holders" as defined in the
Indenture.
1.9 "Trustee" shall mean First Security Bank, National Association in its
capacity as Trustee, Collateral Agent and Slot Trustee for the holders of the
Notes pursuant to the Trust Documents.
1.10 "Trust Documents" shall mean the Indenture dated March 31 1997, by
and between the Company and First Security Bank, National Association, as
trustee; the Notes, and the Operative Documents, dated as of March 31, 1997, by
and between the Company and First Security Bank, National Association, as
Collateral Agent, each as amended or supplemented from time to time.
1.11 "Trust Obligations" shall mean the Notes and all other Obligations
under the Notes Trust Documents.
2
1.12 "Insolvency Proceeding" shall mean any action or proceeding by or
against the Company seeking a reorganization, arrangement, composition,
readjustment, liquidation or other similar relief under the U.S. Bankruptcy Code
or any present or future insolvency statute, law or regulation relative to the
Company or its properties, or any proceedings for voluntary liquidation,
dissolution or other winding up of the Company, or the appointment of any
trustee, receiver or liquidator for the Company or any part of any of its
properties, or any assignment for the benefit of creditors or any marshaling of
assets of the Company.
1.13 "Lien" shall mean any security interest, mortgage, lien, collateral
assignment or right of setoff in, upon, of or against any property whether
consensual or non-consensual, whether arising under statute or common law, and
howsoever evidenced or acquired.
1.14 "Permitted Substitutes" shall have the meaning provided in the Notes
Trust Documents.
1.15 "UCC" shall mean the Uniform Commercial Code as adopted in the state
of New York.
SECTION 2. SECURITY INTERESTS
------------------
2.1 (a) The Trustee acknowledges that the Company has granted the New
Trustee, and the New Trustee holds, a valid and perfected Lien in and against
the Collateral, which Lien secures payment and performance of the Trust
Obligations.
(b) The New Trustee acknowledges that the Company has granted the
Trustee, and the Trustee continues to hold, a valid and perfected Lien in and
against the Collateral, which Lien secures payment and performance of the Trust
Obligations.
(c) The New Trustee agrees that, in addition to acting as a secured
party in possession on its own behalf, it shall act as bailee (for purposes of
Section 9-305 of the UCC) for the Trustee, as a secured creditor, with respect
to any proceeds of Collateral that are in the possession of the New Trustee,
which proceeds shall be accounted for separately. The Trustee's interest in such
proceeds shall be subject to the priority provisions of Section 2.2 below. The
New Trustee agrees that the New Trustee's role as bailee shall in no way modify
or enlarge the New Trust Trustee's obligations as a secured party in possession
under Section 9-207 of the UCC, nor shall it restrict the Note Trustee from
taking any action permitted in the New Trust Documents with respect to such
proceeds, including without limitation its right to redeem New Notes, its right
to be reimbursed for its fees and expenses, and its obligation in certain
circumstances to pay over such proceeds to the Company for repair or replacement
of Collateral subject to the Lien of the New Trustee pursuant to the New Trust
Documents and subject to the Lien of the Trustee pursuant to the Trust
Documents.
2.2 Notwithstanding the order or time of creation, acquisition,
attachment, or the order, time or manner of perfection, or the order or time of
filing or recordation of any document or
3
instrument, or other method of perfecting a Lien in favor of each of the
Creditors in and against the Collateral, the Liens of the New Trustee in and
against the Collateral have and shall have priority over the Liens of the
Trustee in and against the Collateral, and such Liens of the Trustee are and
shall be subject and subordinate to the Liens of the New Trustee in and against
the Collateral to the full extent of the New Trust Obligations outstanding at
any time and from time to time.
SECTION 3. RIGHTS WITH RESPECT TO COLLATERAL
---------------------------------
3.1 The New Trustee shall have the exclusive right to take any action with
respect to the Collateral, including without limitation the right to inspect,
and the right to enforce covenants relating to maintenance, usage, and
condition, and the Trustee shall have no right to take any remedial or
enforcement action with respect to the Collateral without the prior written
consent of the New Trustee, which may be withheld in the sole and absolute
discretion of the New Trustee, provided that the of covenants relating to
maintenance, usage and condition which parallels or supplements such action
taken by the New Trustee so long as the Trustee gives prior written notice of
such action to the New Trustee of its rights under the New Trust Documents.
The Trustee shall have any right to inspect records with respect to Collateral
provided to it in the Trust Documents, and to assure and assess compliance by
the Company of its covenants with respect thereto under the Trust Documents, so
long as the exercise of such rights does not interfere with the exercise by the
New Trustee of its rights under the New Trust Documents.
3.2 The New Trustee shall have the exclusive right to take or retake
control or possession of the Collateral and, in its sole and absolute
discretion, to hold, use, prepare for sale, sell, lease, dispose of or liquidate
the Collateral in any manner, subject however to the provisions of Section 3.5.
3.3 Before or after an event of default under the Trust Documents, the
Trustee shall have no right to take control of possession of the Collateral, no
right to hold, use, prepare for sale, sell, lease, dispose of or liquidate the
Collateral, and no right to take any other action with respect to the
Collateral, other than the right to make periodic refilings as required by
applicable law to continue perfection of its lien. The Trustee acknowledges
that under the Operative Documents it has no authority or power to, and shall
not purport to attempt to, exercise any rights or remedies or seek to foreclose
its Lien in and against the Collateral, and, except as provided in Section 3.1,
shall not take any other action, directly or indirectly, that would interfere in
any manner with the rights or interests of the New Trustee in and against the
collateral.
3.4 At any time, the Trustee agrees that it shall, upon satisfaction by
the Company of the provisions of Section 4.4 of the Pledge Agreement relating to
the sale of Collateral, release the Lien of the Notes Pledge Agreement upon
particular items of Collateral in connection with the sale of such Collateral by
the Company.
3.5 (a) Upon or after the occurrence of an event of default under the New
Trust Documents and acceleration of the New Trust Obligations, the New Trustee
may request a release of the Lien of the Pledge Agreement upon the Collateral
specified in the request to be disposed of by
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the New Trustee and subject to the Lien of the New Trust Documents, provided
such written request shall (1) specify the event of default; (2) describe and
provide notice of the foreclosure or other remedial action contemplated for
which such release is required and the steps being taken to effectuate it; (3)
acknowledge the Lien of the Pledge Agreement for purposes of the distribution of
proceeds of the exercise of such rights and remedies under Section 9.504 of the
UCC or other applicable law; and (4) include the form of release requested.
(b) No later than give (5) days after receipt of the request
described in (a), the Trustee shall deliver to the New Trustee the release of
the specified Collateral in the form requested. The Trustee shall be deemed to
have given such release upon the expiration of the five (5) day period, but
shall not be relived of the obligation to deliver a release.
(c) The delivery of said release shall not relieve the New Trustee of
its obligations under applicable law, including the UCC, nor shall it deprive
the Trustee of any rights it has under the applicable law, including the UCC,
other than the right to prevent the foreclosure or other remedial action set
forth in the request for said release. Without limitation, the Trustee shall
retain its right to distribution of proceeds under Section 9-504 of the UCC, and
the right under Section 9-507 of the UCC of a secured party to recover a loss
after a non-complying disposition of collateral has occurred.
(d) Without limiting the jurisdiction of any other court, the Trustee
consents to the jurisdiction of the U. S. Bankruptcy Court for the District of
Delaware in any action by the Trustee to enforce its obligations under this
section.
3.6 The Trustee agrees that, upon satisfaction of the provisions of
Section 3.5, it will, in order to allow the New Trustee to effectuate any sale,
lease or other disposition of Collateral as herein provided, take any additional
action necessary to release or otherwise terminate its Lien in an against the
subject Collateral, and immediately upon request will deliver any additional
release documents or other documents as the New Trustee may demand or require to
effectuate the release.
3.7 The commencement or existence of an Insolvency Proceeding involving
the Company shall in no way limit or restrict the rights granted to the New
Trustee under this Agreement. Without limitation, the Trustee agrees to consent
to the sale of any Collateral for purposes of Section 363 of the Bankruptcy
Code, and to consent to the granting of relief from stay to the New Trustee
pursuant to Section 362 of the Bankruptcy Code as long as the opportunity is
provided to the Trustee to concurrently obtain such relief, all conditioned upon
the satisfaction of Section 3.5 hereof, provided nothing herein shall limit the
rights of the Trustee to make claim with respect to the Notes, or to seek
adequate protection of its interest in the Collateral in a manner that does not
interfere with the rights or interests of the New Trustee in and against the
Collateral.
3.8 The New Trustee agrees that upon the satisfaction of the Trust
Obligations in full, it shall release its Lien upon the Collateral in favor of
the Trustee and shall pay any remaining proceeds of Collateral directly to the
Trustee, so long as the Notes have not yet been paid in full. The
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Company, by its acknowledgment of this Agreement, agrees and consents to this
provisions, and authorizes the New Trustee to take actions therewith.
SECTION 4. EFFECT OF CERTAIN AMENDMENTS, ETC.
----------------------------------
ON RIGHT AND BENEFITS
---------------------
4.1 The rights and benefits provided to the New Trustee and the Trustee
and the covenants made under this Intercreditor Agreement, including without
limitation the priorities provided in Section 2.2 and the rights with respect to
the Collateral provided in Section 3, shall not be altered or otherwise affected
by any amendment, modification, supplement, extension, renewal, restatement or
refinancing of the New Obligations or the Trust Obligations, or by any action or
inaction which either such party may take or fail to take in respect of the
Collateral, provided that the New Trustee acknowledges the existence of, but is
in no way bound by, limitations upon the ability of the Company to modify,
amend, supplement, extend, refinance or renew the New Obligations or to waive
rights thereunder agreed to by the Company pursuant to the Notes Pledge
Agreement.
SECTION 5. MISCELLANEOUS
-------------
5.1 The parties hereto shall execute and deliver such additional documents
and take such additional action as may be reasonably necessary to effectuate the
provisions and purposes of this Intercreditor Agreement.
5.2 The provisions of this Intercreditor Agreement shall continue in full
force and effect until all of the New Obligations have been fully and
indefeasibly paid and satisfied.
5.3 The provisions of this Intercreditor Agreement are not inconsistent
with any provisions in the Trust Documents relating to the Collateral or the New
Trustee's rights, directly or indirectly, therein, or to any right to payment on
the New Notes, including without limitation any agreement or term sheet between
the New Trustee and the Company.
5.4 In the event that, prior to the expiration or termination of this
Intercreditor Agreement, the Trustee receives, in violation of the provisions of
this Intercreditor Agreement with respect to priority and rights in Collateral,
any funds or other property which are the proceeds of the Collateral, the New
Trustee immediately shall deliver such funds or other property to the New
Trustee.
5.5 This Intercreditor Agreement may be executed in any number of
counterparts, each of which shall be deemed an original hereof and admissible
into evidence, and all of which together shall be deemed to be a single
instrument.
5.6 This Intercreditor Agreement represents the entire agreement and
understanding concerning the subject matter hereof between the parties hereto
and supersedes all other prior and contemporaneous agreements, understandings,
negotiations and discussions, representations and
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warranties, commitments, offers and contracts concerning the subject matter
hereof, whether oral or written.
5.7 In the event of breach of any provisions of this Intercreditor
Agreement by the Trustee, the Trust shall be liable to pay all costs and
expenses, including reasonable attorneys' fees, of the New Trustee incurred to
enforce this Agreement or remedy such breach, and the Trust shall be liable to
the New Trustee and the holders of the New Notes for any damages incurred as a
result of such breach. In the event of breach of any provision of this
Intercreditor Agreement by the New Trustee, the New Trust shall be liable to
pay all costs and expenses, including reasonable attorneys' fees, of the Trustee
incurred to enforce this Agreement or remedy such breach, and the New Trustee
shall be liable to the Trustee and the holders of the Notes for any damages
incurred as a result of such breach.
5.8 The provisions of this Agreement shall not waive, limit, modify or
abrogate any obligations of the Company to the Trustee under the Trust Documents
or the Operative Documents defined therein. In particular, but without
limitation, the release or deemed release of the Lien of the Trustee hereunder
shall not (1) be deemed a waiver or relinquishment of any Default or Event of
Default under and as defined in the Trust Documents; or (2) relieve the Company
of any obligation to meet the substitution requirements under the Trust
Documents upon the disposition of Collateral.
5.9 The terms and provisions of this Intercreditor Agreement shall be for
the sole benefit of the undersigned and their respective successors and assigns,
who shall have the right to amend it from time to time upon their mutual
agreement, and no other person, firm, entity or corporation, including without
limitation the Company, shall have any right, benefit, priority or interest
under, or because of the existence of, this Agreement.
5.10 The validity, interpretation and effect of this Intercreditor
Agreement shall be governed by the laws of the State of New York and applicable
federal law. In any action or proceeding arising out of or relating to this
Agreement, each of the parties hereby waives trial by jury.
5.11 If any portion or provisions of this Agreement is determined to be
invalid or unenforceable, all other provisions of this Agreement shall remain in
full force and effect and this Agreement shall be binding between the parties
hereto with respect to such remaining provisions.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their proper and duly authorized officers as of the day and
year first above written.
___________________________________________
as New Trustee and Collateral Agent for the
New Trust Documents
By:________________________________________
Title:_____________________________________
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Trustee and Collateral Agent for the
Trust Documents
By:________________________________________
Title:_____________________________________
ACKNOWLEDGED BY:
TRANS WORLD AIRLINES, INC.
By:________________________
Title:_____________________
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Schedule A
Collateral
1. Ground Equipment, Slots and Pledged Stock listed on attached Schedule I.
2. Permitted Substitutes of the above.
3. Proceeds of all of the foregoing.
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