Exhibit 4.12
EXECUTION COPY
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TRUST INDENTURE AND MORTGAGE
DATED AS OF NOVEMBER 14, 2006
BETWEEN
JETBLUE AIRWAYS CORPORATION
OWNER
AND
WILMINGTON TRUST COMPANY,
NOT IN ITS INDIVIDUAL CAPACITY,
EXCEPT AS EXPRESSLY STATED HEREIN,
BUT SOLELY AS MORTGAGEE,
MORTGAGEE
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TABLE OF CONTENTS
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GRANTING CLAUSE..........................................................................................1
ARTICLE I DEFINITIONS....................................................................................4
ARTICLE II THE EQUIPMENT NOTES...........................................................................4
SECTION 2.01. Form of Equipment Notes.............................................................4
SECTION 2.02. Issuance and Terms of Equipment Notes..............................................11
SECTION 2.03. [Intentionally Omitted]............................................................13
SECTION 2.04. Method of Payment..................................................................13
SECTION 2.05. Application of Payments............................................................15
SECTION 2.06. Termination of Interest in Collateral..............................................16
SECTION 2.07. Registration Transfer and Exchange of Equipment Notes..............................16
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment Notes...............................17
SECTION 2.09. Payment of Expenses on Transfer; Cancellation......................................18
SECTION 2.10. [Intentionally Omitted.]...........................................................18
SECTION 2.11. Optional Redemptions of Equipment Notes............................................18
SECTION 2.12. Redemptions; Notice of Redemption..................................................19
SECTION 2.13. Subordination......................................................................20
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS...........................................20
SECTION 3.01. Basic Distributions................................................................20
SECTION 3.02. Redemptions........................................................................21
SECTION 3.03. Payments After Event of Default....................................................21
SECTION 3.04. Certain Payments...................................................................23
SECTION 3.05. Other Payments.....................................................................23
SECTION 3.06. Release of Cash Collateral; Release of Spare Engine................................24
SECTION 3.07. Securities Account.................................................................24
ARTICLE IV COVENANTS....................................................................................25
SECTION 4.01. Notice of Change of Location.......................................................25
SECTION 4.02. Liens..............................................................................26
SECTION 4.03. Maintenance........................................................................26
SECTION 4.04. Use, Designated Location and Possession............................................26
SECTION 4.05. Permitted Sale or Dispositions.....................................................29
SECTION 4.06. Certain Assurances.................................................................29
SECTION 4.07. Merger of Owner....................................................................29
SECTION 4.08. Indenture Obligations..............................................................30
SECTION 4.09. Insurance..........................................................................30
ARTICLE V EVENTS OF DEFAULT; REMEDIES OF MORTGAGEE......................................................32
SECTION 5.01. Event of Default...................................................................32
SECTION 5.02. Remedies...........................................................................33
SECTION 5.03. Return of Collateral, Etc..........................................................34
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SECTION 5.04. Remedies Cumulative................................................................35
SECTION 5.05. Discontinuance of Proceedings......................................................36
SECTION 5.06. Waiver of Past Defaults............................................................36
SECTION 5.07. Appointment of Receiver............................................................36
SECTION 5.08. Mortgagee Authorized to Execute Bills of Sale, Etc.................................36
SECTION 5.09. Rights of Note Holders to Receive Payment..........................................37
ARTICLE VI DUTIES OF THE MORTGAGEE......................................................................37
SECTION 6.01. Notice of Event of Default.........................................................37
SECTION 6.02. Action Upon Instructions; Certain Rights and Limitations...........................38
SECTION 6.03. Indemnification....................................................................38
SECTION 6.04. No Duties Except as Specified in Trust Indenture or Instructions...................39
SECTION 6.05. No Action Except Under Trust Indenture or Instructions.............................39
SECTION 6.06. Investment of Amounts Held by Mortgagee............................................39
ARTICLE VII THE MORTGAGEE...............................................................................40
SECTION 7.01. Acceptance of Trusts and Duties....................................................40
SECTION 7.02. Absence of Duties..................................................................40
SECTION 7.03. No Representations or Warranties as to Pledged Spare Parts or Spare
Parts Documents...................................................................40
SECTION 7.04. No Segregation of Monies; No Interest..............................................41
SECTION 7.05. Reliance; Agreements; Advice of Counsel............................................41
SECTION 7.06. Compensation.......................................................................42
SECTION 7.07. Instructions from Note Holders.....................................................42
ARTICLE VIII INDEMNIFICATION............................................................................42
SECTION 8.01. Scope of Indemnification...........................................................42
ARTICLE IX SUCCESSOR AND SEPARATE TRUSTEES..............................................................42
SECTION 9.01. Resignation of Mortgagee; Appointment of Successor.................................42
SECTION 9.02. Appointment of Additional and Separate Trustees....................................43
ARTICLE X SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE AND OTHER DOCUMENTS........................45
SECTION 10.01. Instructions of Majority; Limitations..............................................45
SECTION 10.02. Mortgagee Protected................................................................46
SECTION 10.03. Documents Mailed to Note Holders...................................................46
SECTION 10.04. No Request Necessary for Trust Indenture Supplement................................46
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ARTICLE XI ADDITIONAL QUALIFIED AIRCRAFT TYPES, ADDITIONAL EQUIPMENT NOTES..............................47
SECTION 11.01. Additional Qualified Aircraft Types................................................47
SECTION 11.02. Additional Collateral; Spare Engines...............................................47
SECTION 11.03. Additional Equipment Notes.........................................................55
ARTICLE XI MISCELLANEOUS................................................................................56
SECTION 12.01. Termination of Trust Indenture.....................................................56
SECTION 12.02. No Legal Title to Collateral in Note Holders.......................................57
SECTION 12.03. Sale of Collateral by Mortgagee Is Binding.........................................57
SECTION 12.04. Trust Indenture for Benefit of Owner, Mortgagee, Note
Holders and the other Indenture Indemnitees.......................................57
SECTION 12.05. Notices............................................................................57
SECTION 12.06. Severability.......................................................................58
SECTION 12.07. No Oral Modification or Continuing Waivers.........................................58
SECTION 12.08. Successors and Assigns.............................................................58
SECTION 12.09. Headings...........................................................................58
SECTION 12.10. Normal Commercial Relations........................................................58
SECTION 12.11. Governing Law; Counterpart Form....................................................58
SECTION 12.12. Voting By Note Holders.............................................................59
SECTION 12.13. Bankruptcy.........................................................................59
SECTION 12.14. Agreement as to Fair Market Value..................................................59
SECTION 12.15. Air Carrier Certification..........................................................59
ANNEX A Definitions
ANNEX B Insurance
EXHIBIT A Form of Trust Indenture Location Supplement
EXHIBIT B Form of Trust Indenture Collateral Supplement
SCHEDULE I Designated Locations
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TRUST INDENTURE AND MORTGAGE
TRUST INDENTURE AND MORTGAGE, dated as of November 14, 2006 ("TRUST
INDENTURE"), between JETBLUE AIRWAYS, CORPORATION, a Delaware corporation
("OWNER"), and WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in
its individual capacity, except as expressly stated herein, but solely as
Mortgagee hereunder (together with its successors hereunder, the "MORTGAGEE").
W I T N E S S E T H
WHEREAS, all capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner, which is a certificated air carrier under
Section 44705 of title 49 of the U.S. Code as certified by Owner in Section
12.15 herein, and the Mortgagee desire by this Trust Indenture, among other
things, (i) to provide for the issuance by the Owner of the Equipment Notes and
(ii) to provide for the assignment, mortgage and pledge by the Owner to the
Mortgagee, as part of the Collateral hereunder, among other things, of all of
the Owner's right, title and interest in and to the Pledged Spare Parts and,
except as hereinafter expressly provided, all payments and other amounts
received hereunder in accordance with the terms hereof, as security for, among
other things, the Owner's obligations to the Note Holders and the Indenture
Indemnitees;
WHEREAS, Schedule I to this Trust Indenture specifically describes
the locations at which the Spare Parts and Appliances covered by the security
interest of this Trust Indenture may be maintained by or on behalf of the Owner,
and Section 4.04(b) of this Trust Indenture provides for the designation of
additional locations pursuant to Trust Indenture Location Supplements;
WHEREAS, all things have been done to make the Equipment Notes, when
executed by the Owner and authenticated and delivered by the Mortgagee
hereunder, the valid, binding and enforceable obligations of the Owner; and
WHEREAS, all things necessary to make this Trust Indenture the
valid, binding and legal obligation of the Owner for the uses and purposes
herein set forth, in accordance with its terms, have been done and performed and
have happened;
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND MORTGAGE WITNESSETH, that,
to secure the prompt payment of the Original Amount of, interest on, Break
Amount, if any, Premium, if any, and all other amounts due with respect to, all
Equipment Notes from time to time outstanding hereunder according to their tenor
and effect and to secure the performance and observance by the Owner of all the
agreements, covenants and provisions contained herein and in the other Operative
Agreements for the benefit of the Note Holders and each of the Indemnitees, and
in consideration of the premises and of the covenants herein contained, and of
the acceptance of the Equipment Notes by the holders thereof, and for other
good and valuable consideration the receipt and adequacy whereof are hereby
acknowledged, the Owner has granted, bargained, sold, assigned, transferred,
conveyed, mortgaged, pledged and confirmed, and does hereby grant, bargain,
sell, assign, transfer, convey, mortgage, pledge and confirm, unto the
Mortgagee, its successors in trust and assigns, for the security and benefit of,
the Note Holders and each of the Indenture Indemnitees, a first priority
security interest and mortgage lien on all right, title and interest of the
Owner in, to and under the following described property, rights and privileges,
whether now or hereafter acquired (which, collectively, together with all
property hereafter specifically subject to the Lien of this Trust Indenture by
the terms hereof or any supplement hereto, are included within, and are referred
to as, the "COLLATERAL"), to wit:
(1) All Spare Parts and Appliances, first placed in service after
October 22, 1994 and currently owned or hereafter acquired by the Owner that (I)
are appropriate for incorporation in, installation on, attachment or
appurtenance to, or use in, (a) one or more Airbus model A320 Aircraft or
Embraer model 190 Aircraft (each a "QUALIFIED AIRCRAFT TYPE"), or (b) any Engine
utilized on any such Qualified Aircraft Type, or (c) any other Qualified Spare
Part, or (II) effective on and after the date that the Owner shall have executed
and delivered to the Mortgagee a Trust Indenture Supplement are described in
such Trust Indenture Supplement ((I) and (II) collectively, "QUALIFIED SPARE
PARTS"), provided; however, that the following shall be excluded from the Lien
of this Trust Indenture: (w) any Spare Part or Appliance so long as it is
incorporated in, installed on, attached or appurtenant to, or being used in, an
Aircraft, Engine or Qualified Spare Part that is so incorporated, installed,
attached, appurtenant or being used; (x) any Spare Part or Appliance that has
been incorporated in, installed on, attached or appurtenant to, or used in an
Aircraft, Engine or Qualified Spare Part that has been so incorporated,
installed, attached, appurtenant or used, for so long after its removal from
such Aircraft or Engine as it remains owned by a lessor or conditional seller
of, or subject to a Lien applicable to, such Aircraft or Engine; (y) the
Excluded Parts; and (z) any Spare Part or Appliance leased to, loaned to, or
held on consignment by, the Owner (such Qualified Spare Parts, giving effect to
such exclusions, the "PLEDGED SPARE PARTS");
(2) The rights of the Owner under any warranty or indemnity,
express or implied, regarding title, materials, workmanship, design or patent
infringement or related matters in respect of the Pledged Spare Parts (the
"WARRANTIES");
(3) All proceeds with respect to the sale or other disposition by
the Mortgagee of any Pledged Spare Part or other Collateral pursuant to the
terms of this Trust Indenture, and all insurance proceeds with respect to any
Pledged Spare Part, but excluding any insurance maintained by the Owner and not
required under Section 4.09;
(4) All rents, revenues and other proceeds collected by the
Mortgagee pursuant to Section 5.03(b) and all monies and securities from time to
time deposited or required to be deposited with the Mortgagee by or for the
account of the Owner pursuant to any terms of this Trust Indenture or the
Collateral Maintenance Agreement held or required to be held by the Mortgagee
hereunder, including all Eligible Accounts (including the Securities Account);
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(5) All cash, Investment Securities and other financial assets
held in any Eligible Account by the Mortgagee or an Eligible Institution; all
Cash Collateral; and all security entitlements with respect thereto;
(6) All repair, maintenance and inventory records, logs, manuals
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 Owner, and
all records, logs, documents and other materials required at any time to be
maintained by the Owner pursuant to the FAA or under the Act, in each case with
respect to any of the Pledged Spare Parts (the "SPARE PARTS DOCUMENTS");
(7) All Pledged Spare Engine Collateral, if any; and
(8) All proceeds of the foregoing.
PROVIDED, HOWEVER, that notwithstanding any of the foregoing
provisions, (A) as of the date hereof, the initial Collateral does not include
any Spare Engines, or any Qualified Spare Parts relating to Additional Qualified
Aircraft Types, and the same shall not be included in the Collateral unless and
until the provisions of Sections 11.01 and 11.02 hereof with respect to such
additional Collateral have been satisfied and Owner has executed and delivered
to Mortgagee a Trust Indenture Collateral Supplement in respect thereof; and,
(B) so long as no Event of Default shall have occurred and be continuing, (a)
the Mortgagee or any Person claiming by or through the Mortgagee, shall not take
or cause to be taken any action contrary to the Owner's rights hereunder,
including, without limitation the right to quiet enjoyment of the Pledged Spare
Parts and any Pledged Spare Engine, and to possess, use, retain and control the
Pledged Spare Parts and any Pledged Spare Engine, and all revenues, income and
profits derived therefrom, and (b) the Owner shall have the right, to the
exclusion of the Mortgagee, with respect to the warranties and indemnities
referred to in clause (2) above, to exercise in the Owner's name all rights and
powers (other than to amend, modify or waive any of the warranties or
indemnities contained therein, except in the exercise of the Owner's reasonable
business judgment) and to retain any recovery or benefit resulting from the
enforcement of any warranty or indemnity; and provided further that,
notwithstanding the occurrence or continuation of an Event of Default, the
Mortgagee shall not enter into any amendment of any such warranty or indemnity
which would increase the obligations of the Owner thereunder.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, and its successors and assigns, in trust for the equal and
proportionate benefit and security of the Note Holders and the Indenture
Indemnitees, except as provided in Section 2.13 and Article III hereof, without
any preference, distinction or priority of any one Equipment Note over any other
by reason of priority of time of issue, sale, negotiation, date of maturity
thereof or otherwise for any reason whatsoever, and for the uses and purposes
and in all cases and as to all property specified in clauses (1) through (8)
inclusive above, subject to the terms and provisions set forth in this Trust
Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner shall remain liable under the Indenture
Agreements to perform all of the obligations assumed by it thereunder, except to
the extent prohibited or excluded from doing
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so pursuant to the terms and provisions thereof, and the Mortgagee, the Note
Holders and the Indenture Indemnitees shall have no obligation or liability
under the Indenture Agreements by reason of or arising out of the assignment
hereunder, nor shall the Mortgagee, the Note Holders or the Indenture
Indemnitees be required or obligated in any manner to perform or fulfill any
obligations of the Owner under or pursuant to the Indenture Agreements, or,
except as herein expressly provided, to make any payment, to make any inquiry as
to the nature or sufficiency of any payment received by it, to present or file
any claim, or to take any action to collect or enforce the payment of any
amounts which may have been assigned to it or to which it may be entitled at any
time or times.
The Owner does hereby constitute the Mortgagee the true and lawful
attorney of the Owner, irrevocably, granted for good and valuable consideration
and coupled with an interest and with full power of substitution, and with full
power (in the name of the Owner or otherwise) to ask for, require, demand,
receive, compound and give acquittance for any and all monies and claims for
monies (in each case including insurance and requisition proceeds) due and to
become due under or arising out of the Indenture Agreements, and all other
property which now or hereafter constitutes part of the Collateral, to endorse
any checks or other instruments or orders in connection therewith and to file
any claims or to take any action or to institute any proceedings which the
Mortgagee may deem to be necessary or advisable in the premises; provided that
the Mortgagee shall not exercise any such rights except upon the occurrence and
during the continuance of an Event of Default hereunder.
The Owner agrees that at any time and from time to time, upon the
written request of the Mortgagee, the Owner will promptly and duly execute and
deliver or cause to be duly executed and delivered any and all such further
instruments and documents (including without limitation UCC continuation
statements) as the Mortgagee may reasonably deem necessary to perfect, preserve
or protect the mortgage, security interests and assignments created or intended
to be created hereby or to obtain for the Mortgagee the full benefits of the
assignment hereunder and of the rights and powers herein granted.
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto
as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used but not defined herein shall have the
respective meanings set forth or incorporated by reference, and shall be
construed in the manner described, in Annex A hereto.
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01. FORM OF EQUIPMENT NOTES
The Equipment Notes shall be substantially in the form set forth
below:
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THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES LAWS OF ANY
STATE. ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE SOLD UNLESS EITHER
REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM
SUCH REGISTRATIONS IS AVAILABLE.
JETBLUE AIRWAYS CORPORATION
SERIES [G/A/B][________]*
EQUIPMENT NOTE DUE __________________
No. ____ Date: [__________, ____]
MATURITY DATE
_____________
JETBLUE AIRWAYS CORPORATION, a Delaware corporation ("OWNER"),
hereby promises to pay to [__________________], or the registered assignee
thereof, the principal sum of $[____________] (the "ORIGINAL AMOUNT"), together
with interest on the amount of the Original Amount remaining unpaid from time to
time from the date hereof until paid in full at a rate per annum for each
Interest Period equal to the Debt Rate applicable for this Series for such
Interest Period (calculated on the basis of [A YEAR OF 360 DAYS AND ACTUAL DAYS
ELAPSED] during the period for which such amount accrues(1)). The Original
Amount of this Equipment Note shall be paid [______ ______](2) (the "MATURITY
DATE"). Accrued but unpaid interest shall be due and payable in quarterly
installments commencing on [JANUARY 2ND, 2007](3)
_______________________
* The Initial Equipment Notes shall be designated Series G-1 and Series B-1.
The first Additional Equipment Notes, if any, issued pursuant to Article
XI shall be designated Series G-2 (or A-2 if the related Certificates of
such Series does not have the benefit of a Policy) and/or Series B-2, with
any subsequent issuance of Additional Equipment Notes being designated
Series G-3 (or A-3 if the related Certificates of such Series does not
have the benefit of a Policy) and/or B-3, and so forth in chronological
number designations with each issuance of Additional Equipment Notes.
(1) Applicable to the Initial Equipment Notes and any Additional Equipment
Note bearing a floating Debt Rate. The amount of the interest on any
Additional Equipment Note bearing a fixed Debt Rate shall be calculated on
the basis specified in the applicable Officer's Certificate in respect
thereof delivered pursuant to Section 11.03 and set forth in the form of
such Additional Equipment Note.
(2) The Original Amount of the Initial Equipment Notes shall be paid in full
on January 2, 2014. The amortization of the Original Amount and maturity
thereof for each Additional Equipment Note shall be as specified in the
applicable Officer's Certificate in respect thereof delivered pursuant to
Section 11.03 and set forth in the form of such Additional Equipment Note.
(3) To be the first installment date for payment of interest on the Initial
Equipment Notes. The first installment date of payment on any Additional
Equipment Note shall be as specified in the applicable Officer's
Certificate in respect thereof delivered pursuant to Section 1.03 and set
forth in the form of such Additional Equipment Note.
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and thereafter on April 2nd, July 2nd, October 2nd and January 2nd, of each
year, to and including the Maturity Date. Interest shall be payable with respect
to the first but not the last day of each Interest Period. Notwithstanding the
foregoing, the final payment made on this Equipment Note shall be in an amount
sufficient to discharge in full the unpaid Original Amount and all accrued and
unpaid interest on, and any other amounts due under, this Equipment Note.
Notwithstanding anything to the contrary contained herein, if any date on which
a payment under this Equipment Note becomes due and payable is not a Business
Day, then such payment shall not be made on such scheduled date but shall be
made on the next succeeding Business Day, and such extension of time shall be
included in the computation of interest payable.
For purposes hereof, the term "Trust Indenture" means the Trust
Indenture and Mortgage, dated as of November 14, 2006, between the Owner and
Wilmington Trust Company (the "MORTGAGEE"), as the same may be amended or
supplemented from time to time. All other capitalized terms used in this
Equipment Note and not defined herein shall have the respective meanings
assigned in the Trust Indenture.
This Equipment Note shall bear interest, payable on demand, at the
Payment Due Rate applicable for this Series (calculated on the basis of [A YEAR
OF 360 DAYS AND ACTUAL DAYS ELAPSED](4) during the period for which such amount
accrues) on any overdue payment of all or a portion of the Original Amount and
(to the extent permitted by applicable Law) any overdue interest and any other
amounts payable hereunder which are overdue, in each case for the period the
same is overdue. Amounts shall be overdue if not paid when due (whether at
stated maturity, by acceleration or otherwise).
This Equipment Note is subject to redemption as provided herein [IN
SECTION 2.11] and Section 2.12 of the Trust Indenture but not otherwise. In
addition, this Equipment Note may be accelerated as provided in Section 5.02 of
the Trust Indenture, and the holder by acceptance of this Note agrees to be
bound by said provisions. [INSERT APPLICABLE REDEMPTION PROVISION, INCLUDING
REDEMPTION PRICE AND PREMIUM, IF ANY, FOR THE APPLICABLE ADDITIONAL EQUIPMENT
NOTE](5)
There shall be maintained an Equipment Note Register for the purpose
of registering transfers and exchanges of Equipment Notes of each Series at the
Corporate Trust Office of the Mortgagee or at the office of any successor in the
manner provided in Section 2.07 of the Trust Indenture.
The Original Amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the Corporate
Trust Office of the Mortgagee, or as otherwise provided in the Trust Indenture.
Each such payment shall be made on the date such payment is due and without any
presentment or surrender of this Equipment
_______________________
(4) See footnote #1
(5) Section 2.11 redemption provisions are applicable to the Initial Equipment
Notes. The redemption provisions for Additional Equipment Notes, including
the no-call period, Redemption Price, Premium (if any), and ability to
prepay in whole and/or in part, shall be as specified in the applicable
Officer's Certificate in respect thereof delivered pursuant to Section
11.03 and set forth in the form of such Additional Equipment Note.
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Note, except that in the case of any final payment with respect to this
Equipment Note, the Equipment Note shall be surrendered promptly thereafter to
the Mortgagee for cancellation. The Mortgagee shall remit such amounts received
by it to the holder hereof as set forth in the Trust Indenture.
The holder hereof, by its acceptance of this Equipment Note, agrees
to the provisions of the Trust Indenture, the Collateral Maintenance Agreement
and the Intercreditor Agreement (including, without limitation, those provisions
pertaining to the issuance of Additional Equipment Notes ratably secured by the
Collateral and which may be of the same Series ranking on parity with this
Equipment Note). Without limiting the generality of the foregoing, the holder
hereof agrees that, except as provided in the Trust Indenture, each payment of
all or a portion of the Original Amount, interest, Break Amount, if any, and
Premium, if any, received by it hereunder shall be applied, first, to the
payment of Break Amount, if any, with respect to this Equipment Note, second, to
the payment of accrued interest on this Equipment Note (as well as any interest
on any overdue payment of all or a portion of the Original Amount, any overdue
Break Amount and Premium, if any, or, to the extent permitted by Law, any
overdue interest and other amounts hereunder) to the date of such payment,
third, to the payment of all or the portion of the Original Amount of this
Equipment Note then due, fourth, to the payment of Premium, if any, and any
other amount due hereunder or under the Trust Indenture, and fifth, the balance,
if any, remaining thereafter, to the payment of the Original Amount of this
Equipment Note remaining unpaid.
This Equipment Note is one of the Equipment Notes referred to in the
Trust Indenture which have been or are to be issued by the Owner pursuant to the
terms of the Trust Indenture. The Collateral is held by the Mortgagee as
security, in part, for the Equipment Notes of all Series issued under the Trust
Indenture. The provisions of this Equipment Note are subject to the Trust
Indenture. Reference is hereby made to the Trust Indenture for a complete
statement of the rights and obligations of the holder of, and the nature and
extent of the security for, this Equipment Note and the rights and obligations
of the holders of, and the nature and extent of the security for, any other
Equipment Notes executed and delivered under the Trust Indenture, as well as for
a statement of the terms and conditions of the Trust created by the Trust
Indenture, to all of which terms and conditions in the Trust Indenture each
holder hereof agrees by its acceptance of this Equipment Note.
As provided in the Trust Indenture and subject to certain
limitations therein set forth, this Equipment Note is exchangeable for a like
aggregate Original Amount of Equipment Notes of the same Series of different
authorized denominations, as requested by the holder surrendering the same.
Prior to due presentment for registration of transfer of this
Equipment Note, the Owner and the Mortgagee shall treat the person in whose name
this Equipment Note is registered as the owner hereof for all purposes, whether
or not this Equipment Note be overdue, and neither the Owner nor the Mortgagee
shall be affected by notice to the contrary.
In no event shall the Debt Rate (including any other relevant
amount) hereon at any time exceed the maximum rate of interest permitted under
applicable law.
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[THE INDEBTEDNESS EVIDENCED BY THIS EQUIPMENT NOTE IS, TO THE EXTENT
AND IN THE MANNER PROVIDED IN THE TRUST INDENTURE, SUBORDINATE AND SUBJECT IN
RIGHT OF PAYMENT TO THE PRIOR PAYMENT IN FULL OF THE SECURED OBLIGATIONS (AS
DEFINED IN THE TRUST INDENTURE) IN RESPECT OF ALL SENIOR EQUIPMENT NOTES AT ANY
TIME ISSUED, AND CERTAIN OTHER SECURED OBLIGATIONS AND THIS EQUIPMENT NOTE IS
ISSUED SUBJECT TO SUCH PROVISIONS. THE NOTE HOLDER OF THIS EQUIPMENT NOTE, BY
ACCEPTING THE SAME, (A) AGREES TO AND SHALL BE BOUND BY SUCH PROVISIONS, (B)
AUTHORIZES AND DIRECTS THE MORTGAGEE ON HIS BEHALF TO TAKE SUCH ACTION AS MAY BE
NECESSARY OR APPROPRIATE TO EFFECTUATE THE SUBORDINATION AS PROVIDED IN THE
TRUST INDENTURE AND (C) APPOINTS THE MORTGAGEE HIS ATTORNEY-IN-FACT FOR SUCH
PURPOSE.](6)
Unless the certificate of authentication hereon has been executed by
or on behalf of the Mortgagee by manual signature, this Equipment Note shall not
be entitled to any benefit under the Trust Indenture or be valid or obligatory
for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
* * *
_______________________
(6) To be inserted in the case of any Junior Equipment Note.
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IN WITNESS WHEREOF, the Owner has caused this Equipment Note to be
executed in its corporate name by its officer thereunto duly authorized on the
date hereof.
JETBLUE AIRWAYS CORPORATION
By:___________________________________
Name:
Title:
9
MORTGAGEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes, referred to in the
within-mentioned Trust Indenture.
WILMINGTON TRUST COMPANY, as
Mortgagee
By:___________________________________
Name:
Title:
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SECTION 2.02. ISSUANCE AND TERMS OF EQUIPMENT NOTES
The Initial Equipment Notes shall be dated the Closing Date, shall
be issued in two separate series consisting of Series G-1 and Series B-1 in the
principal amount of the related secured loan as set forth in Section 2.1 of the
Initial Note Purchase Agreement. On the Closing Date, a Series G-1 Equipment
Note and a Series B-1 Equipment Note shall be issued to the Subordination Agent
on behalf of the applicable Pass Through Trustee under the applicable Pass
Through Trust Agreement. Following the Closing Date, Owner may, from time to
time, issue Additional Equipment Notes (as defined in and subject to the
provisions of Article XI herein).
The Equipment Notes of each Series shall be issued in registered
form only. The Equipment Notes shall be issued in denominations of $1,000 and
integral multiples thereof, except that one Equipment Note of each Series may be
in an amount that is not an integral multiple of $1,000.
Each Equipment Note shall bear interest on the unpaid Original
Amount thereof from time to time outstanding from the date thereof until paid in
full at the rate per annum for each Interest Period equal to the applicable Debt
Rate for such Series for such Interest Period (calculated on the applicable
basis set forth in the form of Equipment Note for such Series). Accrued interest
on the Equipment Notes shall be payable in arrears on January 2nd, and on each
April 2nd, July 2nd and October 2nd (each a "PAYMENT DATE") until maturity,
commencing on the first Payment Date from and following the issuance of such
Equipment Notes. Interest on the Equipment Notes shall be payable with respect
to the first but not the last day of each Interest Period. In no event shall the
Debt Rate (including any other relevant amount) on any Equipment Note at any
time exceed the maximum rate of interest permitted under applicable law. The
Original Amount of the Initial Equipment Notes shall be paid in full on January
2, 2014 ("MATURITY DATE" with respect to the Initial Equipment Notes). The
Maturity Date, Original Amount, Debt Rate, Payment Due Rate, Margin, and
redemption provisions of each Series of Additional Equipment Note shall be as
certified to the Mortgagee by Owner pursuant to Section 11.03 in connection with
the issuance thereof.
Notwithstanding the foregoing, the final payment made under each
Equipment Note shall be in an amount sufficient to discharge in full the
applicable unpaid Original Amount and all accrued and unpaid interest on, and
any other amounts due under, such Equipment Note. Each Equipment Note shall bear
interest, payable on demand, at the Payment Due Rate applicable for its
respective Series (calculated on the basis of a year of 360 days and actual days
elapsed during the period for which such amount accrues) on any part of the
Original Amount, and, to the extent permitted by applicable Law, interest and
any other amounts payable thereunder not paid when due for any period during
which the same shall be overdue, in each case for the period the same is
overdue. Amounts under any Equipment Note shall be overdue if not paid when due
(whether at stated maturity, by acceleration or otherwise). Notwithstanding
anything to the contrary contained herein, if any date on which a payment under
any Equipment Note becomes due and payable is not a Business Day then such
payment shall not be made on such scheduled date but shall be made on the next
succeeding Business Day, and such extension of time shall be included in the
computation of interest payable thereunder.
11
FOR PURPOSES OF THIS PARAGRAPH, THE TERMS "APPLIED DOWNGRADE
ADVANCE," "APPLIED NON-EXTENSION ADVANCE," "DOWNGRADE ADVANCE," "FINAL ADVANCE,"
"INVESTMENT EARNINGS," "NON-EXTENSION ADVANCE" AND "UNPAID ADVANCE" SHALL HAVE
THE MEANINGS SPECIFIED IN THE APPLICABLE PRIMARY LIQUIDITY FACILITY. The Owner
agrees to pay to the Mortgagee for distribution in accordance with Section 3.04
hereof: (i) an amount equal to the fees payable to the applicable Primary
Liquidity Provider under Section 2.03 of each Primary Liquidity Facility and the
related Fee Letter; (ii) the amount equal to interest on any Downgrade Advance
(other than any Applied Downgrade Advance) payable under Section 3.07 of each
applicable Primary Liquidity Facility minus Investment Earnings from such
Downgrade Advance thereunder; (iii) an amount equal to interest on any
Non-Extension Advance (other than any Applied Non-Extension Advance) payable
under Section 3.07 of each applicable Primary Liquidity Facility minus
Investment Earnings from such Non-Extension Advance(s) thereunder; (iv) if any
payment default shall have occurred and be continuing with respect to interest
on any Equipment Note, the excess, if any, of (1) an amount equal to interest on
any Unpaid Advance, Applied Downgrade Advance or Applied Non-Extension Advance
payable under Section 3.07 of each applicable Primary Liquidity Facility (or, if
the applicable Policy Provider, if any, has made a payment equivalent to such an
Advance, as would have been payable under Section 3.07 of the applicable Primary
Liquidity Facility had such Advance been made) over (2) the sum of Investment
Earnings from any Final Advance under such applicable Primary Liquidity Facility
plus any amount of interest at the Payment Due Rate actually payable (whether or
not in fact paid) by Owner on the overdue scheduled interest on the applicable
Equipment Note; (v) any other amounts owed to the applicable Primary Liquidity
Provider by the Subordination Agent as borrower under each Primary Liquidity
Facility other than amounts due as repayment of advances thereunder or as
interest on such advances, except to the extent payable pursuant to clause (ii),
(iii) or (iv) above; (vi) an amount equal to the fees payable to each Policy
Provider under Section 3.02 of the applicable Policy Provider Agreement and all
other compensation and reimbursement of expenses and disbursements (but
excluding reimbursement of advances) payable to such Policy Provider under such
Policy Provider Agreement (but excluding all such amounts actually paid by the
Owner to such Policy Provider under such Policy Provider Agreement); (vii) all
compensation and reimbursement of expenses, disbursements and advances payable
by Owner under the Pass Through Trust Agreements; and (viii) all compensation
and reimbursement of expenses and disbursements payable to the Subordination
Agent under the Intercreditor Agreement except with respect to any income or
franchise taxes incurred by the Subordination Agent in connection with the
transactions contemplated by the Intercreditor Agreement.
The Equipment Notes shall be executed on behalf of the Owner by one
of its authorized officers. Equipment Notes bearing the signatures of
individuals who were at any time the proper officers of the Owner shall bind the
Owner, notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication and delivery of such Equipment Notes or
did not hold such offices at the respective dates of such Equipment Notes. The
Owner may from time to time execute and deliver Equipment Notes to the Mortgagee
for authentication upon original issue and such Equipment Notes shall thereupon
be authenticated and delivered by the Mortgagee upon the written request of the
Owner signed by an authorized officer of the Owner. No Equipment Note shall be
secured by or entitled to any benefit under this Trust Indenture or be valid or
obligatory for any purposes, unless there appears on such Equipment Note a
certificate of authentication in the form provided for herein executed by the
12
Mortgagee by the manual signature of one of its authorized officers and such
certificate upon any Equipment Notes be conclusive evidence, and the only
evidence, that such Equipment Note has been duly authenticated and delivered
hereunder.
The aggregate Original Amount of Equipment Notes under the Indenture
is unlimited subject to the provisions of Article XI. The aggregate Original
Amount of the Initial Equipment Notes issued hereunder shall not exceed the sum
of the amounts set forth in Section 2.1(a) and (b) of the Initial Note Purchase
Agreement. The aggregate Original Amount of each Series of Additional Equipment
Notes shall not exceed the sum of the amounts set forth in Section 2.1(a) and
(b) of the applicable Note Purchase Agreement relating to such Additional
Equipment Notes.
SECTION 2.03. [INTENTIONALLY OMITTED.]
SECTION 2.04. METHOD OF PAYMENT
(a) Each payment of the Original Amount of, interest on,
Break Amount, if any, Premium, if any, and other amounts due under each
Equipment Note or hereunder will be payable in Dollars by wire transfer of
immediately available funds not later than 11:30 AM, New York time, on the due
date of payment to the Mortgagee at the Corporate Trust Office for distribution
among the Note Holders in the manner provided herein. In the event that
Additional Equipment Notes are issued hereunder, each payment by the Owner shall
be accompanied (or preceded) by a breakdown to the Mortgagee of the components
of such payment on a Series by Series basis. The Owner shall not have any
responsibility for the distribution of such payment to any Note Holder.
Notwithstanding the foregoing or any provision in any Equipment Note to the
contrary, the Mortgagee will use reasonable efforts to pay or cause to be paid,
if so directed in writing by any Note Holder (with a copy to the Owner), all
amounts paid by the Owner hereunder and under such holder's Equipment Note or
Equipment Notes to such holder or a nominee therefor (including all amounts
distributed pursuant to Article III of this Trust Indenture) by transferring, or
causing to be transferred, by wire transfer of immediately available funds in
Dollars, prior to 2:00 p.m., New York City time, on the due date of payment, to
an account maintained by such holder with a bank located in the continental
United States the amount to be distributed to such holder, for credit to the
account of such holder maintained at such bank. If the Mortgagee shall fail to
make any such payment as provided in the immediately foregoing sentence after
its receipt of funds at the place and prior to the time specified above, the
Mortgagee, in its individual capacity and not as trustee, agrees to compensate
such holders for loss of use of funds at the Debt Rate for the applicable Series
until such payment is made and the Mortgagee shall be entitled to any interest
earned on such funds until such payment is made. Any payment made by Owner or
the Mortgagee hereunder shall be made without any presentment or surrender of
any Equipment Note, except that, in the case of the final payment in respect of
any Equipment Note, such Equipment Note shall be surrendered to the Mortgagee
for cancellation promptly after such payment. Notwithstanding any other
provision of this Trust Indenture to the contrary, the Mortgagee shall not be
required to make, or cause to be made, wire transfers as aforesaid prior to the
first Business Day on which it is practicable for the Mortgagee to do in view of
the time of day when the funds to be so transferred were received by it if such
funds were received by Mortgagee after 12 PM, New York time, at the place of
payment, in which case Mortgagee shall make such required payment
13
on the next immediate Business Day. Prior to the due presentment for
registration of transfer of any Equipment Note, the Owner and the Mortgagee
shall deem and treat the Person in whose name any Equipment Note is registered
on the Equipment Note Register as the absolute owner and holder of such
Equipment Note for the purpose of receiving payment of all amounts payable with
respect to such Equipment Note and for all other purposes, and none of the Owner
or the Mortgagee shall be affected by any notice to the contrary. So long as any
signatory to a Note Purchase Agreement or nominee thereof shall be a registered
Note Holder of the Equipment Notes referenced in such Note Purchase Agreement,
all payments to it shall be made to the account of such Note Holder specified in
Schedule 1 to such Note Purchase Agreement and otherwise in the manner provided
in or pursuant to such Note Purchase Agreement unless it shall have specified
some other account or manner of payment by notice to the Mortgagee consistent
with this Section 2.04.
(b) The Mortgagee, as agent for the Owner, shall exclude and
withhold at the appropriate rate from each payment of all or a portion of the
Original Amount of, interest on, Break Amount, if any, Premium, if any, and
other amounts due hereunder or under each Equipment Note (and such exclusion and
withholding shall constitute payment in respect of such Equipment Note) any and
all United States withholding taxes applicable thereto as required by Law. The
Mortgagee agrees to act as such withholding agent and, in connection therewith,
whenever any present or future United States taxes or similar charges are
required to be withheld with respect to any amounts payable hereunder or in
respect of the Equipment Notes, to withhold such amounts and timely pay the same
to the appropriate authority in the name of and on behalf of the Note Holders,
that it will file any necessary United States withholding tax returns or
statements when due, and that as promptly as possible after the payment thereof
it will deliver to each Note Holder (with a copy to the Owner) appropriate
receipts showing the payment thereof, together with such additional documentary
evidence as any such Note Holder may reasonably request from time to time.
If a Note Holder which is a Non-U.S. Person has furnished to the
Mortgagee a properly completed, accurate and currently effective U.S. Internal
Revenue Service Form W-8BEN (or such successor form or forms as may be required
by the United States Treasury Department) that is valid and in effect on the
date on which the payment hereunder or under the Equipment Note(s) held by such
holder is made and has not notified the Mortgagee of the withdrawal or
inaccuracy of such form prior to the date of such payment (and the Mortgagee has
no reason to believe that any information set forth in such form is inaccurate),
the Mortgagee shall withhold only the amount, if any, required by Law (after
taking into account any applicable exemptions properly claimed by the Note
Holder) to be withheld from payments hereunder or under the Equipment Notes held
by such holder in respect of United States federal income tax. If a Note Holder
(x) which is a Non-U.S. Person has furnished to the Mortgagee a properly
completed, accurate and currently effective U.S. Internal Revenue Service Form
W-8ECI in duplicate (or such successor certificate, form or forms as may be
required by the United States Treasury Department as necessary in order to
properly avoid withholding of United States federal income tax), in the calendar
year in which a payment is made (but prior to the making of any payment for such
year) or either of the two preceding calendar years, and has not notified the
Mortgagee of the withdrawal or inaccuracy of such certificate or form prior to
the date of such payment (and the Mortgagee has no reason to believe that any
information set forth in such form is inaccurate) or (y) which is a U.S. Person
has furnished to the Mortgagee a properly completed,
14
accurate and currently effective U.S. Internal Revenue Service Form W-9, if
applicable, prior to a payment hereunder or under the Equipment Notes held by
such holder, no amount shall be withheld from payments in respect of United
States federal income tax. If any Note Holder has notified the Mortgagee that
any of the foregoing forms or certificates is withdrawn or inaccurate, or if
such holder has not filed a form claiming an exemption from United States
withholding tax or if the Code or the regulations thereunder or the
administrative interpretation thereof is at any time after the date hereof
amended to require such withholding of United States federal income taxes from
payments under the Equipment Notes held by such holder, the Mortgagee agrees to
withhold from each payment due to the relevant Note Holder withholding taxes at
the appropriate rate under Law and will, on a timely basis as more fully
provided above, deposit such amounts with an authorized depository and make such
returns, statements, receipts and other documentary evidence in connection
therewith as required by Law.
Owner shall not have any liability for the failure of the Mortgagee
to withhold taxes in the manner provided for herein or for any false, inaccurate
or untrue evidence provided by any Note Holder hereunder.
SECTION 2.05. APPLICATION OF PAYMENTS
Except as otherwise expressly provided herein, each payment of
Original Amount, interest or other amounts due in respect of each Equipment Note
shall be distributed by the Mortgagee to the Note Holders thereof ratably,
without priority of any one Equipment Note of a Series over any other Equipment
Note of the same Series.
In the case of each Equipment Note, each payment of all or a portion
of the Original Amount, Break Amount, if any, Premium, if any, and interest due
thereon shall be applied:
First: to the payment of Break Amount, if any, with respect to such
Equipment Note and any other amount (other than as covered by any of the
following clauses of this Section 2.05) due hereunder or under such Equipment
Note;
Second: to the payment of accrued interest on such Equipment Note
(as well as any interest on any overdue payment of all or a portion of the
Original Amount, any overdue Premium, if any, and to the extent permitted by
Law, any overdue interest and any other overdue amounts thereunder) to the date
of such payment;
Third: to the payment of the Original Amount of such Equipment Note
(or a portion thereof) then due thereunder;
Fourth: to the payment of Premium, if any, and any other amount due
hereunder or under such Equipment Note; and
Fifth: the balance, if any, remaining thereafter, to the payment of
the Original Amount of such Equipment Note remaining unpaid (provided that the
Initial Equipment Notes shall not be subject to redemption except as provided in
Sections 2.11 and 2.12 hereof, and any Additional Equipment Notes may be subject
to redemption in accordance with the terms thereof).
15
SECTION 2.06. TERMINATION OF INTEREST IN COLLATERAL
(a) No Note Holder nor any other Indenture Indemnitee shall, as
such, have any further interest in, or other right with respect to, the
Collateral when and if the Original Amount of, Break Amount, if any, Premium, if
any, and interest on and other amounts due under all Equipment Notes held by
such Note Holder and all other sums then due and payable to such Note Holder,
such Indenture Indemnitee or the Mortgagee hereunder (including, without
limitation, under the third paragraph of Section 2.02 hereof and under the other
Operative Agreements by the Owner (collectively, the "SECURED OBLIGATIONS")
shall have been paid in full.
(b) Notwithstanding that the Secured Obligations may continue to
be outstanding, no Note Holder nor any other Indenture Indemnitee shall, as
such, have any further interest in, or other right with respect to, the amount
of Cash Collateral or any Pledged Spare Engine Collateral released in accordance
with the terms of Section 3.06 herein, or in any other Collateral which ceases
for any reason to be Collateral hereunder.
SECTION 2.07. REGISTRATION TRANSFER AND EXCHANGE OF EQUIPMENT NOTES
The Mortgagee shall keep a register (the "EQUIPMENT NOTE REGISTER")
in which the Mortgagee shall provide for the registration of Equipment Notes of
each Series and the registration of transfers thereof. No such transfer shall be
given effect unless and until registration hereunder shall have occurred. The
Equipment Note Register shall be kept at the Corporate Trust Office of the
Mortgagee. The Mortgagee is hereby appointed "EQUIPMENT NOTE REGISTRAR" for the
purpose of registering Equipment Notes of each Series and transfers of Equipment
Notes of each Series as herein provided. A holder of any Equipment Note
intending to exchange such Equipment Note shall surrender such Equipment Note to
the Mortgagee at the Corporate Trust Office, together with a written request
from the registered holder thereof for the issuance of a new Equipment Note of
the same Series, specifying, in the case of a surrender for transfer, the name
and address of the new holder or holders. Upon surrender for registration of
transfer of any Equipment Note, the Owner shall execute, and the Mortgagee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Equipment Notes of a like aggregate Original Amount
and of the same Series as the Equipment Note so surrendered for transfer. At the
option of the Note Holder, Equipment Notes may be exchanged for other Equipment
Notes of any authorized denominations of a like aggregate Original Amount and of
the same Series as the Equipment Notes being exchanged, upon surrender of the
Equipment Notes to be exchanged to the Mortgagee at the Corporate Trust Office.
Whenever any Equipment Notes are so surrendered for exchange, the Owner shall
execute, and the Mortgagee shall authenticate and deliver, the Equipment Notes
which the Note Holder making the exchange is entitled to receive and each such
Equipment Note shall be issued in a principal amount of at least $1,000. All
Equipment Notes issued upon any registration of transfer or exchange of
Equipment Notes (whether under this Section 2.07 or under Section 2.08 hereof or
otherwise under this Trust Indenture) shall be the valid obligations of the
Owner evidencing the same respective obligations, and entitled to the same
security and benefits under this Trust Indenture, as the Equipment Notes
surrendered upon such registration of transfer or exchange. Every Equipment Note
presented or surrendered for registration of transfer, shall (if so required by
the Mortgagee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Mortgagee duly executed by the Note Holder
or such holder's attorney
16
duly authorized in writing, and the Mortgagee shall require evidence
satisfactory to it as to the compliance of any such transfer with the Securities
Act, and the securities Laws of any applicable state. The Mortgagee shall make a
notation on each new Equipment Note of the amount of all payments of any portion
of the Original Amount previously made on the old Equipment Note or Equipment
Notes with respect to which such new Equipment Note is issued and the date to
which interest on such old Equipment Note or Equipment Notes has been paid.
Interest shall be deemed to have been paid on such new Equipment Note to the
date on which interest shall have been paid on such old Equipment Note, and all
payments of any portion of the Original Amount marked on such new Equipment
Note, as provided above, shall be deemed to have been made thereon. The Owner
shall not be required to exchange any surrendered Equipment Notes as provided
above during the ten (10) day period preceding the due date of any payment on
such Equipment Note. The Owner shall in all cases deem the Person in whose name
any Equipment Note shall have been issued and registered as the absolute owner
and holder of such Equipment Note for the purpose of receiving payment of all
amounts payable by the Owner with respect to such Equipment Note and for all
purposes until a notice stating otherwise is received from the Mortgagee and
such change is reflected on the Equipment Note Register. The Mortgagee will
promptly notify the Owner of each registration of a transfer of an Equipment
Note. Any such transferee of an Equipment Note, by its acceptance of an
Equipment Note, agrees to the provisions of this Trust Indenture, the
Intercreditor Agreement, the Collateral Maintenance Agreement, and the Note
Purchase Agreement applicable to such Equipment Note (including Sections 6.3,
6.4 and 9.1 hereof) and shall be deemed to have covenanted to the parties to the
applicable Note Purchase Agreement in respect of such Equipment Note as to the
matters covenanted by the original Note Holder in such Note Purchase Agreement.
Subject to compliance by the Note Holder and its transferee (if any) of the
requirements set forth in this Section 2.07, Mortgagee and Owner shall use all
reasonable efforts to issue new Equipment Notes upon transfer or exchange within
ten (10) Business Days of the date an Equipment Note is surrendered for transfer
or exchange.
SECTION 2.08. MUTILATED, DESTROYED, LOST OR STOLEN EQUIPMENT NOTES
If any Equipment Note shall become mutilated, destroyed, lost or
stolen, the Owner shall, upon the written request of the holder of such
Equipment Note, execute and the Mortgagee shall authenticate and deliver in
replacement thereof a new Equipment Note, payable in the same Original Amount
dated the same date and of the same Series. If the Equipment Note being replaced
has become mutilated, such Equipment Note shall be surrendered to the Mortgagee
and a photocopy thereof shall be furnished to the Owner. If the Equipment Note
being replaced has been destroyed, lost or stolen, the holder of such Equipment
Note shall furnish to the Owner and the Mortgagee such security or indemnity as
may be required by them to save and hold the Owner and the Mortgagee harmless
and to provide evidence satisfactory to the Owner and the Mortgagee of the
destruction, loss or theft of such Equipment Note and of the ownership thereof.
If a "qualified institutional buyer" of the type referred to in paragraph
(a)(1)(i)(A), (B), (D) or (E) of Rule 144A under the Securities Act (a "QIB") is
the holder of any such destroyed, lost or stolen Equipment Note, then the
written indemnity of such QIB, signed by an authorized officer thereof, in favor
of, delivered to and in form reasonably satisfactory to the Owner shall be
accepted as satisfactory indemnity and security and no further indemnity or
security shall be required as a condition to the execution and delivery of such
new Equipment Note. Subject to compliance by the Note Holder with the
requirements set forth in this Section
17
2.08, Mortgagee and Owner shall use all commercially reasonable efforts to issue
new Equipment Notes within ten (10) Business Days of the date of the written
request therefor from the Note Holder.
SECTION 2.09. PAYMENT OF EXPENSES ON TRANSFER; CANCELLATION
(a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but the Mortgagee, as
Equipment Note Registrar, may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed on Owner and/or Mortgagee
in connection with any registration of transfer or exchange of Equipment Notes.
(b) The Mortgagee shall cancel all Equipment Notes
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Equipment Notes.
SECTION 2.10. [INTENTIONALLY OMITTED.]
SECTION 2.11. OPTIONAL REDEMPTIONS OF EQUIPMENT NOTES
(a) The Initial Equipment Notes may be redeemed in accordance with
Section 2.12 below at any time in whole or (so long as no Payment Default has
occurred and is continuing) in part by the Owner at its sole option (an
"OPTIONAL REDEMPTION") (except that no Initial Equipment Note may be redeemed by
the Owner prior to the third (3rd) anniversary of the Issuance Date thereof
(other than in connection with a redemption to satisfy the Collateral Ratio or
the Subordinated Collateral Ratio as provided in Section 3.1(a)(v) of the
Collateral Maintenance Agreement or the Rotable Ratio as provided in Section
3.1(b)(iii) of the Collateral Maintenance Agreement or the fleet reduction
covenant provided in Section 3.3 of the Collateral Maintenance Agreement) at a
redemption price equal to the sum of the Original Amount (or portion thereof)
subject to such Optional Redemption and accrued and unpaid interest on, and
Premium, if any, and Break Amount, if any, with respect to, such Original
Amount.
(b) Additional Equipment Notes of any Series may be redeemed in
accordance with the redemption provision specified in the applicable Officer's
Certificate for such Additional Equipment Note delivered pursuant to Section
11.03 and set forth in the form of such Additional Equipment Note for such
Series.
(c) Notwithstanding the foregoing, so long as all outstanding
Senior Equipment Notes and the Policy Provider Amounts (other than amounts
described in subclause (c) of the definition of "Excess Reimbursement
Obligations" in the Intercreditor Agreement) have not been paid in full, the
Owner shall not make an Optional Redemption of any Junior Equipment Note (i) if
an Event of Default or failure by Owner to pay any amount of principal of or
interest on any Equipment Note when due has occurred and is continuing as of the
applicable redemption date or (ii) unless (x) the Owner shall have furnished to
the Mortgagee (and, if a Policy Provider is then the Controlling Party, to such
Policy Provider) within sixty (60) days prior to the redemption date a
certificate of an Officer certifying that, based upon the Pledged Spare Parts
and any Pledged Spare Engines included in the Collateral determined as of a date
within ten (10) days prior to the date of such certificate valued using the
Appraised Value of
18
such Pledged Spare Parts and the Adjusted Fair Market Value of any Pledged Spare
Engines (but without requiring a new Independent Appraiser's Certificate), the
Collateral Ratio does not exceed the Maximum Collateral Ratio (after giving
effect to any scheduled redemption of Equipment Notes on such redemption date)
or (y) all outstanding Senior Equipment Notes shall be redeemed in whole
simultaneously with the Optional Redemption of the all outstanding Junior
Equipment Notes, provided that the Controlling Party may, with the consent of
each Policy Provider that is not the Controlling Party, if any, waive compliance
with the requirements of this sentence.
SECTION 2.12. REDEMPTIONS; NOTICE OF REDEMPTION
(a) No redemption of any Equipment Note may be made except
to the extent and in the manner expressly permitted by this Trust Indenture. No
purchase of any Equipment Note may be made by the Mortgagee.
(b) Notice of redemption with respect to the Equipment Notes
shall be given by the Mortgagee by first-class mail, postage prepaid, mailed not
less than twenty (20) nor more than sixty (60) days prior to the applicable
redemption date, to each Note Holder of such Equipment Notes to be redeemed, at
such Note Holder's address appearing in the Equipment Note Register; provided
that such notice shall be revocable by written notice from the Owner to each
Policy Provider and Mortgagee given not later than three (3) Business Days prior
to the redemption date. All notices of redemption shall state: (1) the
redemption date, (2) the applicable basis for determining the redemption price,
(3) that on the redemption date, the redemption price will become due and
payable upon each such Equipment Note, and that, if any such Equipment Notes are
then outstanding, interest on such Equipment Notes shall cease to accrue on and
after such redemption date, and (4) the place or places where such Equipment
Notes are to be surrendered for payment of the redemption price. The Mortgagee
shall promptly provide a copy of any such notice to the Policy Provider.
(c) On or before the redemption date, the Owner (or any
person on behalf of the Owner) shall, to the extent an amount equal to the
redemption price for the Equipment Notes to be redeemed on the redemption date
shall not then be held by the Mortgagee, deposit or cause to be deposited with
the Mortgagee by 12 PM New York time on the redemption date in immediately
available funds the redemption price of the Equipment Notes to be redeemed,
together with all amounts required to be paid by Owner referred to in Clause
"First" of Section 3.02.
(d) Notice of redemption having been given as aforesaid, the
Equipment Notes to be redeemed shall, on the redemption date, become due and
payable at the Corporate Trust Office of the Mortgagee or at any office or
agency maintained for such purposes pursuant to Section 2.07, and from and after
such redemption date (unless there shall be a default in the payment of the
redemption price) any such Equipment Notes then outstanding shall cease to bear
interest. Upon surrender of any such Equipment Note for redemption in accordance
with said notice, such Equipment Note shall be redeemed at the redemption price.
If any Equipment Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal amount thereof shall, until paid, continue
to bear interest from the applicable redemption date at the Debt Rate in effect
for such Equipment Note as of such redemption date.
19
If the Mortgagee shall fail to make any such payment as provided after its
receipt of funds at its Corporate Trust Office prior to the time specified in
(c) above, then Mortgagee, in its individual capacity and not as trustee, agrees
to be liable to such holders for the interest accrued at the applicable Debt
Rate for such Equipment Note from the date such Equipment Note should have been
redeemed until the date of redemption thereof.
SECTION 2.13. SUBORDINATION
(a) The Owner and each Note Holder (by acceptance of its
Equipment Notes of any Series), hereby agree that no payment or distribution
shall be made on or in respect of the Secured Obligations owed to such Note
Holder of such Series, including any payment or distribution of cash, property
or securities after the commencement of a proceeding of the type referred to in
Section 5.01(v), (vi) or (vii) hereof, except as expressly provided in Article
III hereof.
(b) By the acceptance of its Junior Equipment Notes, each
Junior Equipment Note Holder agrees that in the event it receives, in its
capacity as a Note Holder, any payment or distribution on any Secured
Obligations in respect of such Junior Equipment Note which it is not entitled to
receive under this Section 2.13 or Article III hereof, it will hold any amount
so received in trust for the Note Holders of the Senior Equipment Notes (or
other applicable Indenture Indemnitee, as the case may be) and will forthwith
turn over such payment to the Mortgagee in the form received to be applied as
provided in Article III hereof.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS
SECTION 3.01. BASIC DISTRIBUTIONS
Except as otherwise provided in Sections 3.02 and 3.03 hereof, each
scheduled payment of principal or interest on the Equipment Notes received by
the Mortgagee shall be promptly distributed in the following order of priority:
(i) so much of such payment as shall be required to pay in full
the aggregate amount of the payment or payments of the Original Amount and
interest (as well as any interest on any overdue payment of all or any portion
of the Original Amount and, to the extent permitted by Law, on any overdue
interest) then due under all Senior Equipment Notes shall be distributed to the
Note Holders of such Senior Equipment Notes ratably, without priority of one
over the other, in the proportion that the amount of such payment or payments
then due under each Senior Equipment Note, bears to the aggregate amount of the
payments then due under all Senior Equipment Notes;
(ii) after giving effect to paragraph (i) above, so much of such
payment remaining as shall be required to pay in full the aggregate amount of
the payment or payments of the Original Amount and interest (as well as any
interest on any overdue payment of all or any portion of the Original Amount
and, to the extent permitted by Law, on any overdue interest) then due under all
Junior Equipment Notes shall be distributed to the Note Holders of such
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Junior Equipment Notes ratably, without priority of one over the other, in the
proportion that the amount of such payment or payments then due under each
Junior Equipment Note bears to the aggregate amount of the payments then due
under all Junior Equipment Notes.
SECTION 3.02. REDEMPTIONS
Except as otherwise provided in Section 3.03 hereof, any payments
received by the Mortgagee pursuant to an Optional Redemption of Equipment Notes
in accordance with Section 2.11 hereof shall be applied to redemption of the
Equipment Notes by applying such funds in the following order of priority:
First: (a) to reimburse the Mortgagee and the Note Holders for any
reasonable costs or expenses incurred in connection with such redemption for
which they are entitled to reimbursement, or indemnity by Owner, under the
Operative Agreements and then (b) to pay any other Secured Obligations then due
(except as provided in clause "Second" below) to the Mortgagee, the Note Holders
and the other Indenture Indemnitees under this Trust Indenture, the Note
Purchase Agreement or the Equipment Notes (other than amounts specified in
clause Second below);
Second: (i) so much of such payment as shall be required to pay
in full the aggregate amount of the payment or payments of Original Amount and
interest (as well as any interest on any overdue payment of all or any portion
of the Original Amount and, to the extent permitted by Law, on any overdue
interest), Break Amount, if any, and Premium, if any, then due under all
outstanding Senior Equipment Notes shall be distributed to the Note Holders of
such Senior Equipment Notes ratably, without priority of one over the other, in
the proportion that the amount of such payment or payments then due under such
Senior Equipment Note, bears to the aggregate amount of the payments then due
under all Senior Equipment Notes;
(ii) after giving effect to paragraph (i) above, so much
of such payment remaining as shall be required to pay in full the aggregate
amount of the payment or payments of Original Amount and interest (as well as
any interest on any overdue payment of all or any portion of the Original Amount
and, to the extent permitted by Law, on any overdue interest), Break Amount, if
any, and Premium, if any, then due under all outstanding Junior Equipment Notes
shall be distributed to the Note Holders of such Junior Equipment Notes ratably,
without priority of one over the other, in the proportion that the amount of
such payment or payments then due under such Junior Equipment Note bears to the
aggregate amount of the payments then due under all Junior Equipment Notes;
Third: the balance, if any, shall be distributed to Owner, as
provided in clause "Fourth" of Section 3.03 hereof.
SECTION 3.03. PAYMENTS AFTER EVENT OF DEFAULT
Except as otherwise provided in Section 3.04 hereof, all payments
received and amounts held or realized by the Mortgagee (including any amounts
realized by the Mortgagee from the exercise of any remedies pursuant to Article
V hereof) after an Event of Default shall have occurred and be continuing and
after the declaration specified in Section 5.02(b) hereof, as
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well as all payments or amounts then held by the Mortgagee as part of the
Collateral, shall be promptly distributed by the Mortgagee in the following
order of priority: First: so much of such payments or amounts as shall be
required to (i) reimburse the Mortgagee or WTC for any tax (except to the extent
resulting from a failure of the Mortgagee to withhold taxes pursuant to Section
2.04(b) hereof), expense or other loss (including, without limitation, all
amounts to be expended at the expense of, or charged upon the rents, revenues,
issues, products and profits of, the property included in the Collateral, all
such property being herein called the "MORTGAGED PROPERTY" pursuant to Section
5.03(b) hereof) incurred by the Mortgagee or WTC (to the extent not previously
reimbursed), the expenses of any sale, or other proceeding, reasonable
attorneys' fees and expenses, court costs, and any other expenditures incurred
or advances made by the Mortgagee, WTC or the Note Holders in the protection,
exercise or enforcement of any right, power or remedy or any damages sustained
by the Mortgagee, WTC or any Note Holder, liquidated or otherwise, upon such
Event of Default shall be applied by the Mortgagee as between itself, WTC and
the Note Holders in reimbursement of such expenses and any other expenses for
which the Mortgagee, WTC or the Note Holders are entitled to reimbursement under
any Operative Agreement, and (ii) pay all Secured Obligations payable to the
other Indenture Indemnitees hereunder and under the Note Purchase Agreements
(other than amounts specified in clauses Second and Third of this Section 3.03
below), provided that, with respect to any such Secured Obligation the payment
of which is specifically addressed in Section 3.2 of the Intercreditor
Agreement, funds available for payment of all such Secured Obligations shall be
paid by the Mortgagee to the Subordination Agent for deposit into the Collection
Account (as defined in the Intercreditor Agreement) for distribution pursuant to
Section 3.2 of the Intercreditor Agreement; and in the case the aggregate amount
to be so distributed is insufficient to pay as aforesaid in clauses (i) and
(ii), then ratably, without priority of one over the other, in proportion to the
amounts owed each hereunder;
Second: so much of such payments or amounts remaining as shall be
required to reimburse the then existing or prior Note Holders for payments made
by such Note Holders pursuant to Section 6.03 hereof (to the extent not
previously reimbursed) shall be distributed first to such then existing or prior
Senior Equipment Note Holders ratably, without priority of one over the other,
and second to such then existing or prior Junior Equipment Note Holders ratably,
without priority of one over the other, in all cases in accordance with the
amount of the payment or payments made by each such then existing or prior Note
Holder pursuant to said Section 6.03 hereof;
Third: (i) so much of such payments or amounts remaining as
shall be required to pay in full the aggregate unpaid Original Amount of all
Senior Equipment Notes, and the accrued but unpaid interest and other amounts
due thereon (other than Premium which shall not be due and payable), and Break
Amount, if any, with respect to all Senior Equipment Notes and all other Secured
Obligations in respect of the Senior Equipment Notes (other than Premium) to the
date of distribution, shall be distributed to the Note Holders of such Senior
Equipment Notes, and in case the aggregate amount so to be distributed shall be
insufficient to pay in full as aforesaid, then ratably, without priority of one
over the other, in the proportion that the aggregate unpaid Original Amount of
all Senior Equipment Notes held by each holder plus the accrued but unpaid
interest and other amounts due hereunder or thereunder (other than Premium, if
any) to the date of distribution, bears to the aggregate unpaid Original Amount
of all Senior Equipment
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Notes held by all such holders plus the accrued but unpaid interest and other
amounts due thereon (other than Premium) to the date of distribution;
(ii) after giving effect to paragraph (i) above, so much of
such payments or amounts remaining as shall be required to pay in full the
aggregate unpaid Original Amount of all Junior Equipment Notes, and the accrued
but unpaid interest and other amounts due thereon (other than Premium which
shall not be due and payable), and Break Amount, if any, with respect to all
Junior Equipment Notes, and all other Secured Obligations in respect of the
Junior Equipment Notes (other than Premium) to the date of distribution, shall
be distributed to the Note Holders of such Junior Equipment Notes, and in case
the aggregate amount so to be distributed shall be insufficient to pay in full
as aforesaid, then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Original Amount of all Junior Equipment
Notes held by each holder plus the accrued but unpaid interest and other amounts
due hereunder or thereunder (other than Premium) to the date of distribution,
bears to the aggregate unpaid Original Amount of all Junior Equipment Notes held
by all such holders plus the accrued but unpaid interest and other amounts due
thereon (other than Premium) to the date of distribution;
Fourth: the balance, if any, of such payments or amounts remaining
thereafter shall be distributed to the Owner.
No Premium shall be due and payable on the Equipment Notes as a
consequence of the acceleration of the Equipment Notes as a result of an Event
of Default.
SECTION 3.04. CERTAIN PAYMENTS
(a) Any payments received by the Mortgagee for which no
provision as to the application thereof is made in this Trust Indenture and for
which such provision is made in any other Operative Agreement shall be applied
forthwith to the purpose for which such payment was made in accordance with the
terms of such other Operative Agreement, as the case may be.
(b) Notwithstanding anything to the contrary contained in
this Article III, the Mortgagee will distribute promptly upon receipt any
indemnity payment received by it from the Owner in respect of the Mortgagee in
its individual capacity, any Note Holder or any other Indenture Indemnitee, in
each case whether or not pursuant to Section 8 of the Note Purchase Agreement,
directly to the Person entitled thereto. Any payment received by the Mortgagee
under the third paragraph of Section 2.02 hereof shall be distributed to the
Subordination Agent in its capacity as Note Holder to be distributed in
accordance with the terms of the Intercreditor Agreement.
SECTION 3.05. OTHER PAYMENTS
Any payments received by the Mortgagee for which no provision as to
the application thereof is made elsewhere in this Trust Indenture or in any
other Operative Agreement shall be distributed by the Mortgagee to the extent
received or realized at any time, in the order of priority specified in Section
3.01 hereof, and after payment in full of all amounts
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then due in accordance with Section 3.01 the balance, if any, shall be
distributed to the Owner as set forth in clause "Fourth" of Section 3.03 hereof.
SECTION 3.06. RELEASE OF CASH COLLATERAL; RELEASE OF SPARE ENGINES
(a) Upon written request by the Owner to the Mortgagee after
notice of redemption of Equipment Notes has been given to Note Holders pursuant
to Section 2.12 of this Trust Indenture, the Mortgagee shall apply, to the
extent specified in such written request, the Cash Collateral to pay amounts due
with respect to the Equipment Notes to be redeemed on the applicable redemption
date.
(b) If the Collateral Ratio is less than the Maximum
Collateral Ratio, the Subordinated Collateral Ratio is less than the Maximum
Subordinated Collateral Ratio and the Rotable Ratio is greater than the Minimum
Rotable Ratio, in each case as most recently determined pursuant to Article 2 or
Section 3.1 of the Collateral Maintenance Agreement, and the Mortgagee at such
time holds any Cash Collateral or is the holder of a security interest in any
Pledged Spare Engine pursuant to Section 11.02 hereof as of the Valuation Date
for such Collateral Ratio, Subordinated Collateral Ratio and Rotable Ratio (or
subsequent date as of which such ratio was recalculated pursuant to Section 3.1
of the Collateral Maintenance Agreement), then upon at least five (5) business
days prior written notice of the Owner to the Mortgagee and each Policy Provider
to and so long as no Event of Default or Special Default has occurred and is
continuing the Mortgagee shall distribute to the Owner an amount of the Cash
Collateral, or release the lien on any Pledged Spare Engine valued at an amount,
such that the Collateral Ratio would not be greater than the Maximum Collateral
Ratio, the Subordinated Collateral Ratio would not be greater than the Maximum
Subordinated Collateral Ratio and the Rotable Ratio would not be less than the
Minimum Rotable Ratio, giving effect to such payment or such release (but
otherwise using the information used as of such most recent determination date
to determine such ratio). In connection with the release of any Pledged Spare
Engine hereunder, the Mortgagee shall cooperate with the Owner, at the Owner's
cost, to promptly take such actions reasonably necessary to evidence the release
of the lien on such Pledged Spare Engine, including, but not limited to, filing
a termination of the UCC-1 Financing Statement with respect to such Pledged
Spare Engine, filing a release of the lien on such Pledged Spare Engine under
the respective Trust Indenture Collateral Supplement recorded at the FAA and
discharging the international interest with respect to such Pledged Spare Engine
registered at the International Registry.
(c) Upon the termination of this Trust Indenture pursuant to
Section 12.01 herein, the Mortgagee shall promptly distribute to Owner any Cash
Collateral, Investment Securities, investment earnings thereon, and other
property, if any, then remaining in the Securities Account (defined below) and
release any Pledged Spare Engine.
SECTION 3.07. SECURITIES ACCOUNT
WTC agrees to act as an Eligible Institution under this Trust
Indenture in accordance with the provisions of this Trust Indenture (in such
capacity, the "SECURITIES INTERMEDIARY") for the purpose of holding any Cash
Collateral. Except in its capacity as Mortgagee, WTC waives any claim or lien
against any Eligible Account it may have, by
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operation of law or otherwise, for any amount owed to it by Owner. The
Securities Intermediary hereby agrees that, notwithstanding anything to the
contrary in the Trust Indenture, (i) any amounts of Cash Collateral to be held
by the Mortgagee and any investment earnings thereon or other Investment
Securities will be credited to an Eligible Account (the "SECURITIES ACCOUNT")
for which it is a "securities intermediary" (as defined in Section 8-102(a)(14)
of the NY UCC) and the Mortgagee is the "entitlement holder" (as defined in
Section 8-102(a)(7) of the NY UCC) of the "securities entitlement" (as defined
in Section 8-102(a)(17) of the NY UCC) with respect to each "financial asset"
(as defined in Section 8-102(a)(9) of the NY UCC) credited to such Eligible
Account, (ii) all such amounts, Investment Securities and all other property
acquired with cash credited to the Securities Account will be credited to the
Securities Account, (iii) all items of property (whether cash, investment
property, Investment Securities, other investments, securities, instruments or
other property) credited to the Securities Account will be treated as a
"financial asset" under Article 8 of the NY UCC, (iv) its "securities
intermediary's jurisdiction" (as defined in Section 8-110(e) of the NY UCC) with
respect to the Securities Account is the State of New York, and (v) all
securities, instruments and other property in order or registered from and
credited to the Securities Account shall be payable to or to the order of, or
registered in the name of, the Securities Intermediary or shall be endorsed to
the Securities Intermediary or in blank, and in no case whatsoever shall any
financial asset credited to the Securities Account be registered in the name of
the Owner, payable to or to the order of the Owner or specially indorsed to the
Owner except to the extent the foregoing have been specially endorsed by the
Owner to the Securities Intermediary or endorsed in blank. The Mortgagee agrees
that it will hold (and will indicate clearly in its books and records that it
holds) its "securities entitlement" to the "financial assets" credited to the
Securities Account in trust for the benefit of the Note Holders and each of the
Indenture Indemnitees as set forth in the Trust Indenture. The Owner
acknowledges that, by reason of the Mortgagee being the "entitlement holder" in
respect of the Securities Account as provided above, the Mortgagee shall have
the sole right and discretion, subject only to the terms of the Trust Indenture,
to give all "entitlement orders" (as defined in Section 8-102(a)(8) of the NY
UCC) with respect to the Securities Account and any and all financial assets and
other property credited thereto to the exclusion of the Owner; provided,
however, in no event shall the consent of the Owner be required as a condition
to WTC complying with any such entitlement order of the Mortgagee.
ARTICLE IV
COVENANTS
SECTION 4.01. NOTICE OF CHANGE OF LOCATION
The Owner will give Mortgagee timely written notice (but in any
event within thirty (30) days prior to the expiration of the period of time
specified under applicable Law to prevent lapse of perfection) of any change in
its location (as such term is used in Section 9-307 of the UCC) or legal name
and will promptly take any action required by Section 4.06 hereof as a result of
such relocation.
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SECTION 4.02. LIENS
The Owner will not directly or indirectly create, incur, assume or
suffer to exist any Lien on or with respect to the Collateral, title to any of
the foregoing or any interest of the Owner therein, except Permitted Liens. The
Owner shall promptly, at its own expense, take such action as may be necessary
to duly discharge (by bonding or otherwise) any such Lien other than a Permitted
Lien arising at any time.
SECTION 4.03. MAINTENANCE
The Owner, at its own cost and expense:
(a) shall maintain, or cause to be maintained, at all times
the Pledged Spare Parts in accordance with all applicable Laws issued by the FAA
or any other Governmental Entity having jurisdiction over the Owner or any such
Pledged Spare Parts, including making any modifications, alterations,
replacements and additions necessary therefor, and shall utilize, or cause to be
utilized, the same manner and standard of maintenance with respect to each model
of Spare Part or Appliance included in the Pledged Spare Parts as is utilized
for such model of Spare Part or Appliance owned by the Owner and not included in
the Pledged Spare Parts;
(b) shall maintain, or cause to be maintained, all records,
logs and other materials required by the FAA or under the Act to be maintained
in respect of the Pledged Spare Parts and shall not modify its record retention
procedures in respect of the Pledged Spare Parts if such modification would
materially diminish the value of the Pledged Spare Parts, taken as a whole; and
(c) shall maintain, or cause to be maintained, the Pledged
Spare Parts in good working order and condition and shall perform all
maintenance thereon necessary for that purpose, excluding (i) Pledged Spare
Parts that have become worn out or unfit for use and not reasonably repairable
or have become obsolete, (ii) Pledged Spare Parts that are not required for the
Owner's normal operations and (iii) Expendables that have been consumed or used
in the Owner's operations.
(d) shall maintain, or cause to be maintained, all Spare
Parts Documents in respect of the Pledged Spare Parts in the English language.
SECTION 4.04. USE, DESIGNATED LOCATION AND POSSESSION
(a) Subject to the terms of the Collateral Maintenance
Agreement, the Owner 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 Mortgagee,
to deal with the Pledged Spare Parts (and not, for the avoidance of doubt, any
Pledged Spare Engine, which may be dealt with in a manner set forth in Section
11.02 hereof) in any manner consistent with the Owner's ordinary course of
business, including without limitation any of the following:
(i) to incorporate in, install on, attach or make
appurtenant to, or use in, any Aircraft, Engine or Qualified Spare Part leased
to or owned
26
by the Owner (whether or not subject to any Lien) any Pledged Spare Part, free
from the Lien of this Trust Indenture;
(ii) to dismantle any Pledged Spare Part that has
become worn out or obsolete or unfit for use, and to sell or dispose of any such
Pledged Spare Part or any salvage resulting from such dismantling, free from the
Lien of this Trust Indenture; and
(iii) to transfer any or all of the Pledged Spare
Parts located at one or more Designated Locations to one or more other
Designated Locations or to one or more locations which are not Designated
Locations.
(b) The Owner shall keep the Pledged Spare Parts at one or
more of the Designated Locations, except as otherwise permitted under Sections
4.04(a) or 4.05 of this Trust Indenture or under the Collateral Maintenance
Agreement. If and whenever the Owner shall wish to add a location as a
Designated Location, the Owner will furnish to the Mortgagee the following:
(i) a Trust Indenture Supplement duly executed by
the Owner, identifying each location that is to become a Designated Location and
specifically subjecting the Pledged Spare Parts at such location to the Lien of
this Trust Indenture;
(ii) an opinion of counsel, dated the date of
execution of said Trust Indenture Supplement, stating that said Trust Indenture
Supplement has been duly filed for recording in accordance with the provisions
of the Act, and either: (a) no other filing or recording is required in any
other place within the United States in order to perfect the Lien of this Trust
Indenture on the Qualified Spare Parts held at the Designated Locations
specified in such Trust Indenture Supplement under the laws of the United
States, or (b) if any such other filing or recording shall be required that said
filing or recording has been accomplished in such other manner and places, which
shall be specified in such opinion of counsel, as are necessary to perfect the
Lien of this Trust Indenture; and
(iii) An Officer's Certificate stating that in the
opinion of the officer executing such Officer's Certificate, all conditions
precedent provided for in this Trust Indenture relating to the subjection of
such property to the Lien of this Trust Indenture have been complied with.
(c) Without the prior written consent of the Mortgagee, the
Owner will not sell, lease or otherwise in any manner deliver, transfer or
relinquish possession of any Pledged Spare Part to anyone other than the grant
of the security interest to the Mortgagee pursuant to this Trust Indenture,
except as permitted by the provisions of Section 3.2 of the Collateral
Maintenance Agreement and Sections 4.04 and 4.05 of this Trust Indenture and
except that the Owner shall have the right, in the ordinary course of business,
(i) to transfer possession of any Pledged Spare Part to the manufacturer thereof
or any other organization for testing, overhaul, repairs, maintenance,
alterations or modifications or to any Person for the purpose of
27
transport to any of the foregoing or (ii) to subject any Pledged Spare Part to a
pooling, exchange, borrowing or maintenance servicing agreement or arrangement
customary in the airline industry and entered into by the Owner in the ordinary
course of its business; provided, however, that if the Owner's title to any such
Pledged Spare Part shall be divested under any such agreement or arrangement,
such divestiture shall be deemed to be a Sale with respect to such Pledged Spare
Part subject to the provisions of Section 3.2 of the Collateral Maintenance
Agreement.
(d) So long as no Event of Default shall have occurred and
be continuing, the Owner may enter into a lease with respect to any Pledged
Spare Part to any U.S. Air Carrier that is not then subject to any bankruptcy,
insolvency, liquidation, reorganization, dissolution or similar proceeding and
shall not have substantially all of its property in the possession of any
liquidator, trustee, receiver or similar person (a "Permitted Lessee"). In the
case of any such lease, the Owner will include in such lease appropriate
provisions which (t) make such lease expressly subject and subordinate to all of
the terms of this Trust Indenture, including the rights of the Mortgagee to
repossess such Pledged Spare Part and avoid such lease in the exercise of its
rights to repossession of the Pledged Spare Parts under this Trust Indenture,
and the Owner shall remain primarily liable for the performance and observance
of all of the terms of this Trust Indenture and all the terms and conditions of
this Trust Indenture and the other Operative Agreements shall remain in effect,
in each case to the same extent as if such lease or transfer had not occurred;
(u) require the Permitted Lessee to comply with the terms of Section 4.09; and
(v) require that the Pledged Spare Parts subject thereto be used in accordance
with the limitations applicable to the Owner's use, possession and location of
such Pledged Spare Parts provided in this Trust Indenture (including, without
limitation, that such Pledged Spare Parts be kept at one or more Designated
Locations), it being understood that such Permitted Lessee shall be entitled to
incorporate in, install on, attach or make appurtenant to, or use in, any
Aircraft, Engine or Appliance leased to, or owned by, such Permitted Lessee
(whether or not subject to any Lien) any Pledged Spare Part subject thereto,
free from the Lien of this Trust Indenture. No lease permitted under this
Section shall be entered into unless (w) the Owner shall provide written notice
to the Mortgagee and a copy of any such lease (promptly after entering into any
such lease); (x) the Owner shall furnish to the Mortgagee evidence reasonably
satisfactory to the Mortgagee that the insurance required by Section 4.09(a)
remains in effect; (y) all necessary documents shall have been duly filed,
registered or recorded in such public offices as may be required fully to
preserve the first priority security interest (subject to Permitted Liens) of
Mortgagee in the Pledged Spare Parts; and (z) the Owner shall reimburse the
Mortgagee for all of its reasonable out-of-pocket fees and expenses, including,
without limitation, reasonable fees and disbursements of counsel, incurred by
the Mortgagee in connection with any such lease. Except as otherwise provided
herein and without in any way relieving the Owner from its primary obligation
for the performance of its obligations under this Trust Indenture and the
Collateral Maintenance Agreement, the Owner may in its sole discretion permit a
Permitted Lessee to exercise any or all rights which the Owner would be entitled
to exercise under Article IV hereof and Section 3.2 of the Collateral
Maintenance Agreement, and may cause a Permitted Lessee to perform any or all of
the Owner's obligations under Article IV hereof and Section 3.2 of the
Collateral Maintenance Agreement, and the Mortgagee agrees to accept actual and
full performance thereof by a Permitted Lessee in lieu of performance by the
Owner. No pooling agreement, permitted lease or other relinquishment of
possession of any Pledged Spare Part shall in any way discharge or diminish any
of the Owner's obligations under this Trust Indenture or constitute a waiver by
the Mortgagee or the Policy Provider of any rights or remedies hereunder.
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SECTION 4.05. PERMITTED SALE OR DISPOSITIONS
(a) So long as no Event of Default has occurred and is
continuing, the Owner may sell, transfer or dispose of Pledged Spare Parts free
from the Lien of the Trust Indenture, subject to the provisions of the
Collateral Maintenance Agreement.
(b) No purchaser in good faith of property purporting to be
transferred pursuant to Section 4.04(a)(ii) or 4.05(a) shall be bound to
ascertain or inquire into the authority of the Owner to make any such transfer,
free and clear of the Lien of this Trust Indenture. Any instrument of transfer
executed by the Owner under Section 4.04(a)(ii) or 4.05 shall be sufficient for
the purposes of this Trust Indenture and shall constitute a good and valid
release, assignment and transfer of the property therein described free from the
Lien of this Trust Indenture.
SECTION 4.06. CERTAIN ASSURANCES
(a) The Owner shall duly execute, acknowledge and deliver,
or shall cause to be executed, acknowledged and delivered, all such further
agreements, instruments, certificates or documents, and shall do and cause to be
done such further acts and things, in any case, as Mortgagee shall reasonably
request for accomplishing the purposes of this Trust Indenture, provided that
any instrument or other document so executed by the Owner will not expand any
obligations or limit or alter any rights of the Owner in respect of the
transactions contemplated by any Operative Agreement.
(b) The Owner shall promptly take such action with respect
to the recording, filing, re-recording and refiling of this Trust Indenture and
any amendments or supplements hereto, as shall be necessary to continue the
perfection and priority of the Lien created by this Trust Indenture.
(c) The Owner, at its sole cost and expense, will cause the
FAA Filed Documents, the Financing Statements and all continuation statements
(and any amendments necessitated by any consolidation or merger of the Owner,
any conveyance, transfer or lease of all or substantially all of the assets of
the Owner, or any change of the Owner's location as such term is used in Section
9.307 of the UCC) in respect of the Financing Statements to be prepared and,
subject only to the execution and delivery thereof by Mortgagee, duly and timely
filed and recorded, or filed for recordation, to the extent permitted under the
Act (with respect to the FAA Filed Documents) or the UCC or similar law of any
other applicable jurisdiction (with respect to such other documents).
SECTION 4.07. MERGER OF OWNER
(a) In General. Owner shall not consolidate with or merge
into any other person under circumstances in which Owner is not the surviving
corporation, or convey, transfer or lease in one or more transactions all or
substantially all of its assets to any other person, unless:
(i) such person is organized, existing and in good
standing under the Laws of the United States, any State of the United States or
the District of Columbia and, upon consummation of such transaction, such person
will be a U.S. Air Carrier;
29
(ii) such person executes and delivers to Mortgagee
and the Policy Provider a duly authorized, legal, valid, binding and enforceable
agreement, reasonably satisfactory in form and substance to Mortgagee and the
Policy Provider, containing an effective assumption by such person of the due
and punctual performance and observance of each covenant, agreement and
condition in the Operative Agreements and the Policy Provider Documents to which
the Owner is a party to be performed or observed by Owner;
(iii) such person makes such filings and recordings
with the FAA as shall be necessary to evidence such consolidation or merger;
(iv) immediately after giving effect to such
consolidation or merger no Event of Default shall have occurred and be
continuing; and
(v) the Owner shall have delivered to the Mortgagee
an officers' certificate and an opinion (or opinions) of counsel, each stating
that (a) such consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with the terms of this Trust Indenture and (ii)
this Trust Indenture, each other Operative Agreement and the Equipment Notes
constitute the valid and legally binding obligations of such person.
(b) Effect of Merger. Upon any such consolidation or merger
of Owner with or into, or the conveyance, transfer or lease by Owner of all or
substantially all of its assets to, any Person in accordance with this Section
4.07, such Person will succeed to, and be substituted for, and may exercise
every right and power of, Owner under the Operative Agreements with the same
effect as if such person had been named as "Owner" therein. No such
consolidation or merger, or conveyance, transfer or lease, shall have the effect
of releasing Owner or such Person from any of the obligations, liabilities,
covenants or undertakings of Owner under this Trust Indenture, the other
Operative Agreements and the Policy Provider Documents.
SECTION 4.08. INDENTURE OBLIGATIONS
The Owner agrees to perform and observe all of the agreements,
covenants and obligations of the Owner set forth in this Trust Indenture, each
Series of Equipment Notes and the other Operative Agreements (it being
understood that this Section 4.08 shall not restrict the ability to amend or
supplement, or waive compliance with, any Operative Agreement in accordance with
its terms).
SECTION 4.09. INSURANCE
(a) The Owner's Obligation to Insure.
(i) Obligation to Insure. The Owner shall comply
with, or cause to be complied with, each of the provisions of Annex B, which
provisions are hereby incorporated by this reference as if set forth in full
herein.
(ii) Insurance for Own Account. Nothing in this
Section 4.09(a) shall limit or prohibit (a) the Owner from maintaining the
policies of insurance required
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under Annex B with higher limits than those specified in Annex B or (b) the
Mortgagee or any Additional Insured from obtaining insurance for its own account
(and any proceeds payable under such separate insurance shall be payable as
provided in the policy relating thereto); provided, however, that no insurance
may be obtained or maintained that would limit or otherwise adversely affect the
coverage of any insurance required to be obtained or maintained by the Owner
pursuant to this Section 4.09(a) and Annex B.
(b) Application of Insurance Proceeds.
(i) As between the Owner and the Mortgagee, all
insurance proceeds up to the Debt Balance paid under policies required to be
maintained by the Owner pursuant to this Trust Indenture as a result of the
occurrence of an Event of Loss with respect to any Pledged Spare Parts or any
Pledged Spare Engine involving proceeds in excess of the Threshold Amount will
be paid to the Mortgagee. At any time or from time to time after the receipt by
the Mortgagee of such insurance proceeds, upon submission to the Mortgagee of an
Officer's Certificate stating that the Owner has after the occurrence of such
Event of Loss purchased additional Qualified Spare Parts that are located at or
have been shipped by vendor(s) to a Designated Location or replaced any Spare
Engine pursuant to Section 11.02(f)(ii), and stating the aggregate purchase
price for such additional Qualified Spare Parts or the Adjusted Fair Market
Value of such replacement Spare Engine, the Mortgagee shall pay the amount of
such purchase price or the Adjusted Fair Market Value of such replacement Spare
Engine, up to the amount of such insurance proceeds not previously disbursed
pursuant to this sentence or otherwise distributed under this Trust Indenture to
the Owner or its designee.
(ii) All proceeds of insurance required to be
maintained by the Owner in accordance with this Trust Indenture in respect of
any property damage or loss (x) involving proceeds of the Threshold Amount or
less or (y) not constituting an Event of Loss with respect to any Pledged Spare
Parts or any Pledged Spare Engine and insurance proceeds in excess of the Debt
Balance shall be paid over to, and retained by, the Owner.
(iii) If either the Mortgagee or the Owner receives a
payment of such insurance proceeds in excess of its entitlement pursuant to this
Trust Indenture, it shall promptly pay such excess to the other.
(c) Application of Payments During Existence of a Special
Default or Event of Default. Any amount described in this Section 4.09 that is
payable or creditable to, or retainable by, the Owner shall not be paid or
credited to, or retained by, the Owner if at the time such payment, credit or
retention would otherwise occur a Special Default or Event of Default shall have
occurred and be continuing, but shall instead be held by or paid over to the
Mortgagee as security for the obligations of the Owner under this Trust
Indenture and shall be invested pursuant to Section 6.06 hereof. At such time as
there shall not be continuing any Special Default or Event of Default, such
amount and any gains thereon shall be paid to the Owner to the extent not
previously applied in accordance with this Trust Indenture.
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ARTICLE V
EVENTS OF DEFAULT; REMEDIES OF MORTGAGEE
SECTION 5.01. EVENT OF DEFAULT
"Event of Default" means any of the following events (whatever the
reason for such Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of Law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(i) the failure of the Owner to pay (x) principal
of, interest on, Break Amount, if any, or Premium, if any, under any Equipment
Note when due (including when due in connection with an Optional Redemption),
and such failure shall continue unremedied for a period of ten (10) Business
Days, or (y) any other amount payable by it to the Note Holders under this Trust
Indenture or the Note Purchase Agreement when due, and such failure shall
continue for a period in excess of ten (10) Business Days after Owner has
received written notice from Mortgagee or holder of an Equipment Note of the
failure to make such payment when due;
(ii) Owner shall fail (x) to comply with Section 3.1
of the Collateral Maintenance Agreement or (y) to redeem any Equipment Notes
when required pursuant to Section 3.3 of the Collateral Maintenance Agreement;
(iii) Owner shall fail to observe or perform (or
caused to be observed and performed) in any material respect any other covenant,
agreement or obligation set forth herein, in the Collateral Maintenance
Agreement or in any other Operative Agreement to which Owner is a party and such
failure shall continue unremedied for a period of thirty (30) days from and
after the date of written notice thereof to Owner from Mortgagee, unless such
failure is capable of being corrected and Owner shall be diligently proceeding
to correct such failure, in which case there shall be no Event of Default unless
and until such failure shall continue unremedied for a period of 270 days after
receipt of such notice;
(iv) any representation or warranty made by Owner
herein, in any Note Purchase Agreement, in the Collateral Maintenance Agreement
or in any other Operative Agreement to which Owner is a party (a) shall prove to
have been untrue or inaccurate in any material respect as of the date made, (b)
such untrue or inaccurate representation or warranty is material at the time in
question, and (c) the same shall remain uncured (to the extent of the adverse
impact of such incorrectness on the interest of the Mortgagee) for a period in
excess of thirty (30) days from and after the date of written notice thereof
from Mortgagee to Owner;
(v) the Owner shall consent to the appointment of or
taking possession by a receiver, trustee or liquidator of itself or of a
substantial part of its property, or the Owner shall admit in writing its
inability to pay its debts generally as they come due or shall make a general
assignment for the benefit of its creditors, or the Owner shall file a voluntary
petition in bankruptcy or a voluntary petition or an answer seeking
reorganization, liquidation or other relief under any bankruptcy laws or
insolvency laws (as in effect at such time), or an answer admitting the material
allegations of a petition filed against it in any such case, or the
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Owner shall seek relief by voluntary petition, answer or consent, under the
provisions of any other bankruptcy or similar law providing for the
reorganization or winding-up of corporations (as in effect at such time), or the
Owner shall seek an agreement, composition, extension or adjustment with its
creditors under such laws or the Owner's board of directors shall adopt a
resolution authorizing corporate action in furtherance of any of the foregoing;
(vi) an order, judgment or decree shall be entered by
any court of competent jurisdiction appointing, without the consent of the
Owner, a receiver, trustee or liquidator of the Owner or of any substantial part
of its property, or any substantial part of the property of the Owner shall be
sequestered, or granting any other relief in respect of the Owner as a debtor
under any bankruptcy laws or other insolvency laws (as in effect at such time),
and any such order, judgment, decree, or decree of appointment or sequestration
shall remain in force undismissed, unstayed or unvacated for a period of 90 days
after the date of entry thereof;
(vii) a petition against the Owner in a proceeding
under any bankruptcy laws or other insolvency laws (as in effect at such time)
is filed and not withdrawn or dismissed within ninety (90) days thereafter, or
if, under the provisions of any law providing for reorganization or winding-up
of corporations which may apply to the Owner, any court of competent
jurisdiction shall assume jurisdiction, custody or control of the Owner of any
substantial part of its property and such jurisdiction, custody or control shall
remain in force unrelinquished, unstayed or unterminated for a period of 90
days; or
(viii) the Owner shall fail to carry and maintain, or
cause to be carried and maintained, insurance on and in respect of the Pledged
Spare Parts in accordance with the provisions of Section 4.09 and such failure
shall continue unremedied for a period of 30 days;
SECTION 5.02. REMEDIES
(a) If an Event of Default shall have occurred and be
continuing and so long as the same shall continue unremedied, then and in every
such case the Mortgagee may exercise any or all of the rights and powers and
pursue any and all of the remedies pursuant to this Article V and shall have and
may exercise all of the rights and remedies of a secured party under the Uniform
Commercial Code and may take possession of all or any part of the properties
covered or intended to be covered by the Lien created hereby or pursuant hereto
and may exclude the Owner and all persons claiming under it wholly or partly
therefrom and may sell the Collateral as a whole or from time to time in part;
provided, that the Mortgagee shall give the Owner twenty days' prior written
notice of its intention to sell any Collateral. Without limiting any of the
foregoing, it is understood and agreed that the Mortgagee may exercise any right
of sale, lease or other disposition of any Collateral available to it, even
though it shall not have taken possession of such Collateral and shall not have
possession thereof at the time of such sale, lease or other disposition.
(b) If an Event of Default shall have occurred and be
continuing, then and in every such case the Mortgagee may (and shall, upon
receipt of a written demand therefor from a Majority in Interest of Note
Holders), at any time, by delivery of written notice or notices to the Owner,
declare all the Equipment Notes to be due and payable, whereupon the unpaid
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Original Amount of all Equipment Notes then outstanding, together with accrued
but unpaid interest thereon, Break Amount, if any, with respect thereto, and
other amounts due thereunder or otherwise payable hereunder, shall immediately
become due and payable without presentment, demand, protest or notice, all of
which are hereby waived; provided that if an Event of Default referred to in
clause (v), (vi) or (vii) of Section 5.01 hereof shall have occurred, then and
in every such case the unpaid Original Amount then outstanding, together with
accrued but unpaid interest, Break Amount, if any, with respect thereto, and all
other amounts due hereunder and under the Equipment Notes shall immediately and
without further act become due and payable without presentment, demand, protest
or notice, all of which are hereby waived.
This Section 5.02(b), however, is subject to the condition that if
at any time after all or any portion of the Original Amount of the Equipment
Notes shall have become so due and payable, and before any judgment or decree
for the payment of the money so due, or any thereof, shall be entered, all
overdue payments of interest upon the Equipment Notes and all other amounts
payable hereunder or under the Equipment Notes (except the portion of the
Original Amount of the Equipment Notes which by such declaration shall have
become payable) shall have been duly paid, and every other Default and Event of
Default with respect to any covenant or provision of this Trust Indenture shall
have been cured, then and in every such case, a Majority in Interest of the Note
Holders may (but shall not be obligated to), by written instrument filed with
the Mortgagee, rescind or annul the Mortgagee's declaration (or such automatic
acceleration) and its consequences; but no such rescission or annulment shall
extend to or affect any subsequent Default or Event of Default or impair any
right consequent thereon.
(c) The Note Holders shall be entitled, at any sale pursuant
to this Section 5.02, to credit against any purchase price bid at such sale by
such holder all or any part of the unpaid obligations owing to such Note Holder
and secured by the Lien of this Trust Indenture (only to the extent that such
purchase price would have been paid to such Note Holder pursuant to Article III
hereof if such purchase price were paid in cash and the foregoing provisions of
this subsection (c) were not given effect).
(d) In the event of any sale of the Collateral, or any part
thereof, pursuant to any judgment or decree of any court or otherwise in
connection with the enforcement of any of the terms of this Trust Indenture, the
unpaid Original Amount of all Equipment Notes then outstanding, together with
accrued interest thereon, Break Amount, if any, and other amounts due
thereunder, shall immediately become due and payable without presentment,
demand, protest or notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as
the Pass Through Trustee under any Pass Through Trust Agreement (or its
designee) is a Note Holder, the Mortgagee will not be authorized or empowered to
acquire title to any Collateral or take any action with respect to any
Collateral so acquired by it if such acquisition or action would cause any Trust
to fail to qualify as a "grantor trust" for federal income tax purposes.
SECTION 5.03. RETURN OF COLLATERAL, ETC.
(a) If an Event of Default shall have occurred and be
continuing, at the request of the Mortgagee, the Owner shall assemble the
Collateral and make it available to the
34
Mortgagee at the Designated Locations and shall promptly execute and deliver to
the Mortgagee such instruments of title and other documents as the Mortgagee may
deem necessary or advisable to enable the Mortgagee or an agent or
representative designated by the Mortgagee, at such time or times and place or
places as the Mortgagee may specify, to obtain possession of all or any part of
the Collateral to which the Mortgagee shall at the time be entitled hereunder.
If the Owner shall for any reason fail to execute and deliver such instruments
and documents after such request by the Mortgagee, the Mortgagee may (i) obtain
a judgment conferring on the Mortgagee the right to immediate possession and
requiring the Owner to execute and deliver such instruments and documents to the
Mortgagee, to the entry of which judgment the Owner hereby specifically consents
to the fullest extent permitted by Law, and (ii) pursue all or part of such
Collateral wherever it may be found and may enter any of the premises of Owner
wherever such Collateral may be or are supposed to be and search for such
Collateral and take possession of and remove such Collateral. All expenses of
obtaining such judgment or of pursuing, searching for and taking such property
shall, until paid, be secured by the Lien of this Trust Indenture.
(b) Upon every such taking of possession, the Mortgagee may,
from time to time, at the expense of the Collateral, make all such expenditures
for maintenance, use, operation, storage, insurance, leasing, control,
management, disposition, modifications or alterations to and of the Collateral,
as it may deem proper. In each such case, the Mortgagee shall have the right to
maintain, use, operate, store, insure, lease, control, manage, dispose of,
modify or alter the Collateral and to exercise all rights and powers of the
Owner relating to the Collateral, as the Mortgagee shall deem best, including
the right to enter into any and all such agreements with respect to the
maintenance, use, operation, storage, insurance, leasing, control, management,
disposition, modification or alteration of the Collateral or any part thereof as
the Mortgagee may determine, and the Mortgagee shall be entitled to collect and
receive directly all rents, revenues and other proceeds of the Collateral and
every part thereof, without prejudice, however, to the right of the Mortgagee
under any provision of this Trust Indenture to collect and receive all cash held
by, or required to be deposited with, the Mortgagee hereunder. Such rents,
revenues and other proceeds shall be applied to pay the expenses of the
maintenance, use, operation, storage, insurance, leasing, control, management,
disposition, improvement, modification or alteration of the Collateral and of
conducting the business thereof, and to make all payments which the Mortgagee
may be required or may elect to make, if any, for taxes, assessments, insurance
or other proper charges upon the Collateral or any part thereof (including the
employment of engineers and accountants to examine, inspect and make reports
upon the properties and books and records of the Owner), and all other payments
which the Mortgagee may be required or authorized to make under any provision of
this Trust Indenture, as well as just and reasonable compensation for the
services of the Mortgagee, and of all persons properly engaged and employed by
the Mortgagee with respect hereto.
SECTION 5.04. REMEDIES CUMULATIVE
Each and every right, power and remedy given to the Mortgagee
specifically or otherwise in this Trust Indenture shall be cumulative and shall
be in addition to every other right, power and remedy herein specifically given
or now or hereafter existing at Law, in equity or by statute, and each and every
right, power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time and as often and in such order as may be
deemed expedient by the Mortgagee, and the exercise or the beginning of the
exercise of any
35
power or remedy shall not be construed to be a waiver of the right to exercise
at the same time or thereafter any other right, power or remedy. No delay or
omission by the Mortgagee in the exercise of any right, remedy or power or in
the pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Owner or to be an
acquiescence therein.
SECTION 5.05. DISCONTINUANCE OF PROCEEDINGS
In case the Mortgagee shall have instituted any proceeding to
enforce any right, power or remedy under this Trust Indenture by foreclosure,
entry or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the
Mortgagee, then and in every such case the Owner and the Mortgagee shall,
subject to any determination in such proceedings, be restored to their former
positions and rights hereunder with respect to the Collateral, and all rights,
remedies and powers of the Owner or the Mortgagee shall continue as if no such
proceedings had been instituted.
SECTION 5.06. WAIVER OF PAST DEFAULTS
Upon written instruction from a Majority in Interest of Note Holders
and the prior written consent of the Policy Provider that is the Controlling
Party, the Mortgagee shall waive any past Default hereunder and its consequences
and upon any such waiver such Default shall cease to exist and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Trust Indenture, but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon; provided, that in the
absence of written instructions from all the Note Holders and the prior written
consent of each Policy Provider and Liquidity Provider, the Mortgagee shall not
waive any Default (i) in the payment of all or any portion of the Original
Amount, Premium, if any, Break Amount, if any, and interest and other amounts
due under any Equipment Note then outstanding, or (ii) in respect of a covenant
or provision hereof which, under Article X hereof, cannot be modified or amended
without the consent of each Note Holder in the case of the Note Holders or each
Policy Provider or Liquidity Provider in the case of the Policy Providers and of
the Liquidity Providers, as the case may be.
SECTION 5.07. APPOINTMENT OF RECEIVER
The Mortgagee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Mortgagee or any successor or nominee
thereof) for all or any part of the Collateral, whether such receivership be
incidental to a proposed sale of the Collateral or the taking of possession
thereof or otherwise, and the Owner hereby consents to the appointment of such a
receiver and will not oppose any such appointment. Any receiver appointed for
all or any part of the Collateral shall be entitled to exercise all the rights
and powers of the Mortgagee with respect to the Collateral.
SECTION 5.08. MORTGAGEE AUTHORIZED TO EXECUTE BILLS OF SALE, ETC.
The Owner irrevocably appoints, while an Event of Default has
occurred and is continuing, the Mortgagee the true and lawful attorney-in-fact
of the Owner (which appointment is coupled with an interest) in its name and
stead and on its behalf, for the purpose of effectuating any sale, assignment,
transfer or delivery for the enforcement of the Lien of this
36
Trust Indenture, whether pursuant to foreclosure or power of sale, assignments
and other instruments as may be necessary or appropriate or entering into any
agreement described in Section 5.03(b), with full power of substitution, the
Owner hereby ratifying and confirming all that such attorney or any substitute
shall do by virtue hereof in accordance with applicable law. Nevertheless, if so
requested by the Mortgagee or any purchaser, the Owner shall ratify and confirm
any such sale, assignment, transfer or delivery, by executing and delivering to
the Mortgagee or such purchaser all bills of sale, assignments, releases and
other proper instruments to effect such ratification and confirmation as may be
designated in any such request.
SECTION 5.09. RIGHTS OF NOTE HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Trust Indenture, the
right of any Note Holder to receive payment of principal of, and premium, if
any, and interest on an Equipment Note on or after the respective due dates
expressed in such Equipment Note, or to bring suit for the enforcement of any
such payment on or after such respective dates in accordance with the terms
hereof, shall not be impaired or affected without the consent of such Note
Holder.
ARTICLE VI
DUTIES OF THE MORTGAGEE
SECTION 6.01. NOTICE OF EVENT OF DEFAULT
If the Mortgagee shall have Actual Knowledge of an Event of Default
or of a Default arising from a failure to pay any installment of principal and
interest on any Equipment Note, the Mortgagee shall give prompt written notice
thereof to the Policy Provider and each Note Holder. Subject to the terms of
Sections 5.06, 6.02 and 6.03 hereof, the Mortgagee shall take such action, or
refrain from taking such action, with respect to such Event of Default or
Default (including with respect to the exercise of any rights or remedies
hereunder) as the Mortgagee shall be instructed in writing by a Majority in
Interest of Note Holders. Subject to the provisions of Section 6.03, if the
Mortgagee shall not have received instructions as above provided within twenty
(20) days after mailing notice of such Event of Default to the Note Holders, the
Mortgagee may, subject to instructions thereafter received pursuant to the
preceding provisions of this Section 6.01, take such action, or refrain from
taking such action, but shall be under no duty to take or refrain from taking
any action, with respect to such Event of Default or Default as it shall
determine advisable in the best interests of the Note Holders; provided,
however, that the Mortgagee may not sell any Pledged Spare Parts without the
consent of a Majority in Interest of Note Holders. For all purposes of this
Trust Indenture, in the absence of Actual Knowledge on the part of the
Mortgagee, the Mortgagee shall not be deemed to have knowledge of a Default or
an Event of Default (except, the failure of Owner to pay any installment of
principal or interest within one (1) Business Day after the same shall become
due, which failure shall constitute knowledge of a Default) unless notified in
writing by the Owner or one or more Note Holders.
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SECTION 6.02. ACTION UPON INSTRUCTIONS; CERTAIN RIGHTS AND
LIMITATIONS
Subject to the terms of Sections 5.02(a), 5.06, 6.01 and 6.03
hereof, upon the written instructions at any time and from time to time of a
Majority in Interest of Note Holders, the Mortgagee shall, subject to the terms
of this Section 6.02, take such of the following actions as may be specified in
such instructions: (i) give such notice or direction or exercise such right,
remedy or power hereunder or under any other Operative Agreement as shall be
specified in such instructions and (ii) give such notice or direction or
exercise such right, remedy or power hereunder or under any other Operative
Agreement with respect to any part of the Collateral as shall be specified in
such instructions; it being understood that without the written instructions of
a Majority in Interest of Note Holders, the Mortgagee shall not, except as
provided in Section 6.01, approve any such matter as satisfactory to the
Mortgagee.
The Mortgagee will execute and the Owner will file such continuation
statements with respect to financing statements relating to the security
interest created hereunder in the Collateral as may be specified from time to
time in written instructions of a Majority in Interest of Note Holders (which
instructions shall be accompanied by the form of such continuation statement so
to be filed). The Mortgagee will furnish to the Policy Provider and each Note
Holder, promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates and other instruments furnished to the
Mortgagee hereunder.
SECTION 6.03. INDEMNIFICATION
The Mortgagee shall not be required to take any action or refrain
from taking any action under Section 6.01 (other than the first sentence
thereof), 6.02 or Article V hereof unless the Mortgagee shall have been
indemnified to its reasonable satisfaction against any liability, cost or
expense (including counsel fees) which may be incurred in connection therewith
pursuant to a written agreement with one or more Note Holders. The Mortgagee
agrees that it shall look solely to the Note Holders for the satisfaction of any
indemnity (except expenses for foreclosure of the type referred to in clause
"First" of Section 3.03 hereof) owed to it pursuant to this Section 6.03. The
Mortgagee shall not be under any obligation to take any action under this Trust
Indenture or any other Operative Agreement and nothing herein or therein shall
require the Mortgagee to expend or risk its own funds or otherwise incur the
risk of any financial liability in the performance of any of its rights or
powers if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it (the written indemnity of any Note Holder who is a QIB, signed by
an authorized officer thereof, in favor of, delivered to and in form reasonably
satisfactory to the Mortgagee shall be accepted as reasonable assurance of
adequate indemnity). The Mortgagee shall not be required to take any action
under Section 6.01 (other than the first sentence thereof) or 6.02 or Article V
hereof, nor shall any other provision of this Trust Indenture or any other
Operative Agreement be deemed to impose a duty on the Mortgagee to take any
action, if the Mortgagee shall have been advised by counsel that such action is
contrary to the terms hereof or is otherwise contrary to Law.
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SECTION 6.04. NO DUTIES EXCEPT AS SPECIFIED IN TRUST INDENTURE OR
INSTRUCTIONS
The Mortgagee shall not have any duty or obligation to use, operate,
store, lease, control, manage, sell, dispose of or otherwise deal with any part
of the Collateral, or to otherwise take or refrain from taking any action under,
or in connection with, this Trust Indenture or any part of the Collateral,
except as expressly provided by the terms of this Trust Indenture or as
expressly provided in written instructions from Note Holders as provided in this
Trust Indenture; and no implied duties or obligations shall be read into this
Trust Indenture against the Mortgagee. The Mortgagee agrees that it will in its
individual capacity and at its own cost and expense (but without any right of
indemnity in respect of any such cost or expense under Section 8.01 hereof),
promptly take such action as may be necessary duly to discharge all liens and
encumbrances on any part of the Collateral which result from claims against it
in its individual capacity not related to the administration of the Collateral
or any other transaction pursuant to this Trust Indenture or any document
included in the Collateral.
SECTION 6.05. NO ACTION EXCEPT UNDER TRUST INDENTURE OR INSTRUCTIONS
The Mortgagee will not use, operate, store, lease, control, manage,
sell, dispose of or otherwise deal with any part of the Collateral except in
accordance with the powers granted to, or the authority conferred upon the
Mortgagee pursuant to this Trust Indenture and in accordance with the express
terms hereof.
SECTION 6.06. INVESTMENT OF AMOUNTS HELD BY MORTGAGEE
Any amounts held by the Mortgagee pursuant to Section 3.02, 3.03 or
3.07 or pursuant to any provision of any other Operative Agreement providing for
amounts to be held by the Mortgagee which are not distributed pursuant to the
other provisions of Article III hereof shall be invested by the Mortgagee from
time to time in Investment Securities as directed by the Owner so long as the
Mortgagee may acquire the same using its best efforts. All Investment Securities
held by the Mortgagee pursuant to this Section 6.06 shall either be (a)
registered in the name of, payable to the order of, or specially endorsed to,
the Mortgagee, or (b) held in an Eligible Account. Unless otherwise expressly
provided in this Trust Indenture, any income realized as a result of any such
investment, net of the Mortgagee's reasonable fees and expenses in making such
investment, shall be held and applied by the Mortgagee in the same manner as the
principal amount of such investment is to be applied and any losses, net of
earnings and such reasonable fees and expenses, shall be charged against the
principal amount invested. The Mortgagee shall not be liable for any loss
resulting from any investment required to be made by it under this Trust
Indenture other than by reason of its willful misconduct or gross negligence or
negligence in the handling of funds, and any such investment may be sold
(without regard to its maturity) by the Mortgagee without instructions whenever
such sale is necessary to make a distribution required by this Trust Indenture.
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ARTICLE VII
THE MORTGAGEE
SECTION 7.01. ACCEPTANCE OF TRUSTS AND DUTIES
The Mortgagee accepts the duties hereby created and applicable to it
and agrees to perform the same but only upon the terms of this Trust Indenture
and agrees to receive and disburse all monies constituting part of the
Collateral in accordance with the terms hereof. The Mortgagee, in its individual
capacity, shall not be answerable or accountable under any circumstances, except
(i) for its own willful misconduct or gross negligence (other than for the
handling of funds, for which the standard of accountability shall be willful
misconduct or negligence), (ii) as provided in the fourth sentence of Section
2.04(a) hereof, and the last sentence of Sections 2.12 and 6.04 hereof, and
(iii) from the inaccuracy of any representation or warranty of the Mortgagee (in
its individual capacity) in the Note Purchase Agreement or expressly made
hereunder. For the avoidance of doubt, the Mortgagee shall also be accountable
in its capacity as Security Trustee with respect to the Security Account, as set
forth in Section 3.07 hereof.
SECTION 7.02. ABSENCE OF DUTIES
Except in accordance with written instructions furnished pursuant to
Section 6.01 or 6.02 hereof, and except as provided in, and without limiting the
generality of, Sections 6.03, 6.04 and 7.07 hereof the Mortgagee shall have no
duty (i) to see to any recording or filing of this Trust Indenture or any other
document, or to see to the maintenance of any such recording or filing, (ii) to
see to any insurance on any Pledged Spare Parts or to effect or maintain any
such insurance, whether or not Owner shall be in default with respect thereto,
(iii) to see to the payment or discharge of any lien or encumbrance of any kind
against any part of the Collateral, (iv) to confirm, verify or inquire into the
failure to receive any financial statements from Owner, or (v) to inspect the
Collateral at any time or ascertain or inquire as to the performance or
observance of any of Owner's covenants herein or any Permitted Lessee's
covenants under any assigned Permitted Lease with respect to any Pledged Spare
Parts.
SECTION 7.03. NO REPRESENTATIONS OR WARRANTIES AS TO PLEDGED SPARE
PARTS OR SPARE PARTS DOCUMENTS
THE MORTGAGEE IN ITS INDIVIDUAL OR TRUST CAPACITY DOES NOT MAKE AND
SHALL NOT BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS,
VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN, QUALITY, DURABILITY,
OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF ANY
PLEDGED SPARE PARTS, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR
NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK
OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT
OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER. The Mortgagee, in its
individual or
40
trust capacities, does not make or shall not be deemed to have made any
representation or warranty as to the validity, legality or enforceability of
this Trust Indenture, the Note Purchase Agreements, or the Equipment Notes, or
as to the correctness of any statement contained in any thereof, except for the
representations and warranties of the Mortgagee in its individual capacity
expressly made in this Trust Indenture or in the Note Purchase Agreements. The
Note Holders make no representation or warranty hereunder whatsoever.
SECTION 7.04. NO SEGREGATION OF MONIES; NO INTEREST
Except as otherwise provided in Section 3.07 hereof, any monies paid
to or retained by the Mortgagee pursuant to any provision hereof and not then
required to be distributed to the Note Holders, or the Owner as provided in
Article III or Section 6.06 hereof need not be segregated in any manner except
to the extent required by Law or Section 6.06 hereof, and may be deposited under
such general conditions as may be prescribed by Law, and the Mortgagee shall not
be liable for any interest thereon (except that the Mortgagee shall invest all
monies held as directed by Owner so long as no Event of Default has occurred and
is continuing (or in the absence of such direction, by the Majority In Interest
of Note Holders) in Investment Securities; provided, however, that any payments
received, or applied hereunder, by the Mortgagee shall be accounted for by the
Mortgagee so that any portion thereof paid or applied pursuant hereto shall be
identifiable as to the source thereof.
SECTION 7.05. RELIANCE; AGREEMENTS; ADVICE OF COUNSEL
The Mortgagee shall not incur any liability to anyone in acting upon
any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties. The
Mortgagee may accept a copy of a resolution of the Board of Directors (or
Executive Committee thereof) of the Owner, certified by the Secretary or an
Assistant Secretary thereof as duly adopted and in full force and effect, as
conclusive evidence that such resolution has been duly adopted and that the same
is in full force and effect. As to the aggregate unpaid Original Amount of
Equipment Notes outstanding as of any date, the Owner may for all purposes
hereof rely on a certificate signed by any Vice President or other authorized
corporate trust officer of the Mortgagee. As to any fact or matter relating to
the Owner the manner of the ascertainment of which is not specifically described
herein, the Mortgagee may for all purposes hereof rely on a certificate, signed
by a duly authorized officer of the Owner, as to such fact or matter, and such
certificate shall constitute full protection to the Mortgagee for any action
taken or omitted to be taken by it in good faith in reliance thereon. In the
administration of the trusts hereunder, the Mortgagee may execute any of the
trusts or powers hereof and perform its powers and duties hereunder directly or
through agents or attorneys and may, at the expense of the Collateral, advise
with counsel, accountants and other skilled persons to be selected and retained
by it, and the Mortgagee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the written advice or written
opinion of any such counsel, accountants or other skilled persons.
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SECTION 7.06. COMPENSATION
The Mortgagee shall be entitled to reasonable compensation,
including expenses and disbursements (including the reasonable fees and expenses
of counsel), for all services rendered hereunder and shall, on and subsequent to
an Event of Default hereunder, have a priority claim on the Collateral for the
payment of such compensation, to the extent that such compensation shall not be
paid by Owner, and shall have the right, on and subsequent to an Event of
Default hereunder, to use or apply any monies held by it hereunder in the
Collateral toward such payments. The Mortgagee agrees that it shall have no
right against the Note Holders for any fee as compensation for its services as
trustee under this Trust Indenture.
SECTION 7.07. INSTRUCTIONS FROM NOTE HOLDERS
In the administration of the trusts created hereunder, the Mortgagee
shall have the right to seek instructions from a Majority in Interest of Note
Holders should any provision of this Trust Indenture appear to conflict with any
other provision herein or should the Mortgagee's duties or obligations hereunder
be unclear, and the Mortgagee shall incur no liability in refraining from acting
until it receives such instructions. The Mortgagee shall be fully protected for
acting in accordance with any instructions received under this Section 7.07.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. SCOPE OF INDEMNIFICATION
The Mortgagee shall be indemnified by the Owner to the extent and in
the manner provided in Section 8 of the Note Purchase Agreements.
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 9.01. RESIGNATION OF MORTGAGEE; APPOINTMENT OF SUCCESSOR
(a) The Mortgagee or any successor thereto may resign at any time
without cause by giving at least 30 days' prior written notice to the Owner and
each Note Holder, such resignation to be effective upon the acceptance of the
trusteeship by a successor Mortgagee. In addition, a Majority in Interest of
Note Holders may at any time (but only with the consent of Owner, which consent
shall not be unreasonably withheld, except that such consent shall not be
necessary if an Event of Default is continuing) remove the Mortgagee without
cause by an instrument in writing delivered to the Owner and the Mortgagee, and
the Mortgagee shall promptly notify each Note Holder thereof in writing, such
removal to be effective upon the acceptance of the trusteeship by a successor
Mortgagee. In the case of the resignation or removal of the Mortgagee, a
Majority in Interest of Note Holders may appoint a successor Mortgagee by an
instrument signed by such holders, which successor, so long as no Event of
42
Default shall have occurred and be continuing, shall be subject to Owner's
reasonable approval. If a successor Mortgagee shall not have been appointed
within 30 days after such notice of resignation or removal, the Mortgagee, the
Owner or any Note Holder may apply to any court of competent jurisdiction to
appoint a successor Mortgagee to act until such time, if any, as a successor
shall have been appointed as above provided. The successor Mortgagee so
appointed by such court shall immediately and without further act be superseded
by any successor Mortgagee appointed as above provided. Owner consents to any
change in the identity of the Mortgagee on the International Registry in respect
of any Pledged Spare Engine to reflect any successor Mortgagee.
(b) Any successor Mortgagee, however appointed, shallexecute and
deliver to the Owner and the predecessor Mortgagee an instrument accepting such
appointment and assuming the obligations of the Mortgagee arising from and after
the time of such appointment, and thereupon such successor Mortgagee, without
further act, shall become vested with all the estates, properties, rights,
powers and duties of the predecessor Mortgagee hereunder in the trust hereunder
applicable to it with like effect as if originally named the Mortgagee herein;
but nevertheless upon the written request of such successor Mortgagee, such
predecessor Mortgagee shall execute and deliver an instrument transferring to
such successor Mortgagee, upon the trusts herein expressed applicable to it, all
the estates, properties, rights and powers of such predecessor Mortgagee, and
such predecessor Mortgagee shall duly assign, transfer, deliver and pay over to
such successor Mortgagee all monies or other property then held by such
predecessor Mortgagee hereunder.
(c) Any successor Mortgagee, however appointed, shall be a bank or
trust company having its principal place of business in the Borough of
Manhattan, City and State of New York; Chicago, Illinois; Hartford, Connecticut;
Wilmington, Delaware; or Boston, Massachusetts and having (or whose obligations
under the Operative Agreements are guaranteed by an affiliated entity having) a
combined capital and surplus of at least $100,000,000, if there be such an
institution willing, able and legally qualified to perform the duties of the
Mortgagee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Mortgagee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Mortgagee shall be a
party, or any corporation to which substantially all the corporate trust
business of the Mortgagee may be transferred, shall, subject to the terms of
paragraph (c) of this Section 9.01, be a successor Mortgagee and the Mortgagee
under this Trust Indenture without further act.
SECTION 9.02. APPOINTMENT OF ADDITIONAL AND SEPARATE TRUSTEES
(a) Whenever (i) the Mortgagee shall deem it necessary or
desirable in order to conform to any Law of any jurisdiction in which all or any
part of the Collateral shall be situated or to make any claim or bring any suit
with respect to or in connection with the Collateral, this Trust Indenture, any
other Indenture Agreement, the Equipment Notes or any of the transactions
contemplated by the Note Purchase Agreements, (ii) the Mortgagee shall be
advised by counsel satisfactory to it that it is so necessary or prudent in the
interests of the Note Holders (and the Mortgagee shall so advise the Owner), or
(iii) the Mortgagee shall have been
43
requested to do so by a Majority in Interest of Note Holders, then in any such
case, the Mortgagee and, upon the written request of the Mortgagee, the Owner,
shall execute and deliver an indenture supplemental hereto and such other
instruments as may from time to time be necessary or advisable either (1) to
constitute one or more bank or trust companies or one or more persons approved
by the Mortgagee, either to act jointly with the Mortgagee as additional trustee
or trustees of all or any part of the Collateral, or to act as separate trustee
or trustees of all or any part of the Collateral, in each case with such rights,
powers, duties and obligations consistent with this Trust Indenture as may be
provided in such supplemental indenture or other instruments as the Mortgagee or
a Majority in Interest of Note Holders may deem necessary or advisable, or (2)
to clarify, add to or subtract from the rights, powers, duties and obligations
theretofore granted any such additional or separate trustee, subject in each
case to the remaining provisions of this Section 9.02. If the Owner shall not
have taken any action requested of it under this Section 9.02(a) that is
permitted or required by its terms within 15 days after the receipt of a written
request from the Mortgagee so to do, or if an Event of Default shall have
occurred and be continuing, the Mortgagee may act under the foregoing provisions
of this Section 9.02(a) without the concurrence of the Owner, and the Owner
hereby irrevocably appoints (which appointment is coupled with an interest) the
Mortgagee, its agent and attorney-in-fact to act for it under the foregoing
provisions of this Section 9.02(a) in either of such contingencies. The
Mortgagee may, in such capacity, execute, deliver and perform any such
supplemental indenture, or any such instrument, as may be required for the
appointment of any such additional or separate trustee or for the clarification
of, addition to or subtraction from the rights, powers, duties or obligations
theretofore granted to any such additional or separate trustee. In case any
additional or separate trustee appointed under this Section 9.02(a) shall die,
dissolve, become incapable of acting, resign or be moved, all the assets,
property, rights, powers, trusts, duties and obligations of such additional or
separate trustee shall revert to the Mortgagee until a successor additional or
separate trustee is appointed as provided in this Section 9.02(a).
(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon the
Mortgagee in respect of the custody, investment and payment of monies and all
monies received by any such additional or separate trustee from or constituting
part of the Collateral or otherwise payable under any Operative Agreement to the
Mortgagee shall be promptly paid over by it to the Mortgagee. All other rights,
powers, duties and obligations conferred or imposed upon any additional or
separate trustee shall be exercised or performed by the Mortgagee and such
additional or separate trustee jointly except to the extent that applicable Law
of any jurisdiction in which any particular act is to be performed renders the
Mortgagee incompetent or unqualified to perform such act, in which event such
rights, powers, duties and obligations (including the holding of title to all or
part of the Collateral in any such jurisdiction) shall be exercised and
performed by such additional or separate trustee. No additional or separate
trustee shall take any discretionary action except on the instructions of the
Mortgagee or a Majority in Interest of Note Holders. No trustee hereunder shall
be personally liable by reason of any act or omission of any other trustee
hereunder, except that the Mortgagee shall be liable for the consequences of its
lack of reasonable care in selecting, and the Mortgagee's own actions in acting
with, any additional or separate trustee. Each additional or separate trustee
appointed pursuant to this Section 9.02 shall be subject to, and shall have the
benefit of Articles V through IX and Article XI hereof insofar as they apply to
the Mortgagee. The powers of any additional or separate trustee appointed
pursuant to this Section 9.02 shall not in any case exceed those of the
Mortgagee hereunder.
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(c) If at any time the Mortgagee shall deem it no longer necessary
or in order to conform to any such Law or take any such action or shall be
advised by such counsel that it is no longer so necessary or desirable in the
interest of the Note Holders, or in the event that the Mortgagee shall have been
requested to do so in writing by a Majority in Interest of Note Holders, the
Mortgagee and, upon the written request of the Mortgagee, the Owner, shall
execute and deliver an indenture supplemental hereto and all other instruments
and agreements necessary or proper to remove any additional or separate trustee.
The Mortgagee may act on behalf of the Owner under this Section 9.02(c) when and
to the extent it could so act under Section 9.02(a) hereof.
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 10.01. INSTRUCTIONS OF MAJORITY; LIMITATIONS
(a) The Mortgagee agrees with the Note Holders that it shall not
enter into any amendment, waiver or modification of, supplement or consent to
this Trust Indenture, or any other Operative Agreement to which it is a party,
unless such supplement, amendment, waiver (subject to Section 5.06),
modification or consent is consented to in writing by a Majority in Interest of
Note Holders, but upon the written request of a Majority in Interest of Note
Holders, the Mortgagee shall from time to time enter into any such supplement or
amendment, or execute and deliver any such waiver, modification or consent, as
may be specified in such request and as may be (in the case of any such
amendment, supplement or modification), to the extent such agreement is
required, agreed to by the Owner; provided, however, that (1) without the
consent of each holder of an affected Equipment Note then outstanding, each
Policy Provider and each Liquidity Provider, no such amendment, waiver or
modification of the terms of, or consent under, any thereof, shall (i) modify
any of the provisions of this Section 10.01, or of Article II or III or Section
5.01, 5.02(c), 5.02(d), or 6.02 hereof, the definitions of "Event of Default,"
"Special Default," "Default," "Majority in Interest of Note Holders," "Break
Amount," "Premium" or "Note Holder," or the percentage of Note Holders required
to take or approve any action hereunder, (ii) reduce the amount, or change the
time of payment or method of calculation of any amount, of Original Amount,
Break Amount, if any, Premium, if any, or interest with respect to any Equipment
Note, (iii) reduce, modify or amend any indemnities in favor of the Mortgagee or
the Note Holders (except that the Mortgagee may consent to any waiver or
reduction of an indemnity payable to it), or the other Indenture Indemnitees or
(iv) permit the creation of any Lien on the Collateral or any part thereof other
than Permitted Liens or deprive any Note Holder of the benefit of the Lien of
this Trust Indenture on the Collateral, except as provided in connection with
the exercise of remedies under Article V hereof; and (2) notwithstanding the
foregoing, upon the written request of the Required Subordinated Holders, the
Mortgagee shall from time to time enter into an amendment, supplement or waiver
of the Subordinated Security Provisions contained in the Collateral Maintenance
Agreement as may be agreed by the Owner. Notwithstanding the foregoing, without
the consent of the affected Liquidity Provider or Policy Provider neither the
Owner nor the Mortgagee shall enter into any amendment, waiver or modification
of, supplement or consent to this Trust Indenture or the other
45
Operative Agreements which shall reduce, modify or amend any indemnities in
favor of or other amounts payable to such Liquidity Provider or Policy Provider.
(b) The Owner and the Mortgagee may enter into one or more
agreements supplemental hereto without the consent of any Note Holder for any of
the following purposes: (i) (a) to cure any defect or inconsistency herein or in
the Equipment Notes, or to make any change not inconsistent with the provisions
hereof (provided that such change does not adversely affect the interests of any
Note Holder in its capacity solely as Note Holder) or (b) to cure any ambiguity
or correct any mistake; (ii) to evidence the succession of another party as the
Owner in accordance with the terms hereof or to evidence the succession of a new
trustee hereunder pursuant hereto, the removal of the trustee hereunder or the
appointment of any co-trustee or co-trustees or any separate or additional
trustee or trustees; (iii) to convey, transfer, assign, mortgage or pledge any
property to or with the Mortgagee or, subject to the consent of each Policy
Provider, to make any other provisions with respect to matters or questions
arising hereunder so long as such action shall not adversely affect the
interests of the Note Holders in its capacity solely as Note Holder; (iv) to
correct or amplify the description of any property at any time subject to the
Lien of this Trust Indenture or better to assure, convey and confirm unto the
Mortgagee any property subject or required to be subject to the Lien of this
Trust Indenture; (v) to add any location as a Designated Location; (vi) to add
to the covenants of the Owner for the benefit of the Note Holders, or to
surrender any rights or power herein conferred upon the Owner; (vii) to add to
the rights of the Note Holders; and (viii) to include on the Equipment Notes any
legend as may be required by Law.
SECTION 10.02. MORTGAGEE PROTECTED
If, in the opinion of the institution acting as Mortgagee hereunder,
any document required to be executed by it pursuant to the terms of Section
10.01 hereof affects any right, duty, immunity or indemnity with respect to such
institution under this Trust Indenture, such institution may in its discretion
decline to execute such document.
SECTION 10.03. DOCUMENTS MAILED TO NOTE HOLDERS
Promptly after the execution by the Owner or the Mortgagee of any
document entered into pursuant to Section 10.01 hereof, the Mortgagee shall
mail, by first class mail, postage prepaid, a copy thereof to Owner (if not a
party thereto), to the Policy Provider and to each Note Holder at its address
last set forth in the Equipment Note Register, but the failure of the Mortgagee
to mail such copies shall not impair or affect the validity of such document.
SECTION 10.04. NO REQUEST NECESSARY FOR TRUST INDENTURE SUPPLEMENT
No written request or consent of the Note Holders pursuant to
Section 10.01 hereof shall be required to enable the Mortgagee to execute and
deliver a Trust Indenture Supplement specifically required by the terms hereof.
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ARTICLE XI
ADDITIONAL QUALIFIED AIRCRAFT TYPES; ADDITIONAL EQUIPMENT NOTES
SECTION 11.01. ADDITIONAL QUALIFIED AIRCRAFT TYPES.
The Owner may from time to time, by written notice to the Mortgagee,
designate as Qualified Spare Parts the following: certain Spare Parts and
Appliances first placed in service after October 22, 1994 and owned by Owner
that are appropriate for installation on or use in one or more aircraft types of
models and/or manufacturers different from the existing Qualified Aircraft Type
(each an "ADDITIONAL QUALIFIED AIRCRAFT TYPE", and collectively with the
Qualified Aircraft Type shall be "ELIGIBLE AIRCRAFT"). The designation of an
Additional Qualified Aircraft Type and the minimum fleet requirements therefor
specified in Owner's notice, shall be subject to the approval of each Policy
Provider and the receipt of a Ratings Confirmation with respect to the ratings
then in effect for the Pass Through Certificates (with or without regard to any
Policy, as the case may be), only upon the initial inclusion of such Additional
Qualified Aircraft Type. Notwithstanding the foregoing, no consent of any Policy
Provider and no Ratings Confirmation shall be required for the inclusion of the
Airbus model A319 or A321 Aircraft or the Embraer model 195 Aircraft as
Additional Qualified Aircraft Types. In connection with the initial designation
of any Additional Qualified Aircraft Type the Owner shall deliver to Mortgagee
an Appraised Value of the Collateral (including the Pledged Spare Parts
associated with the Additional Qualified Aircraft Type(s)) together with a Trust
Indenture Collateral Supplement in the form of Exhibit B hereto and related
documentation reasonably requested by the Mortgagee in connection therewith.
Such designation shall become effective on the tenth (10th) day following
delivery of notice to the Mortgagee.
SECTION 11.02. ADDITIONAL COLLATERAL; SPARE ENGINES.
(a) If at any time pursuant to Section 3.1 of the Collateral
Maintenance Agreement Owner elects to pledge one or more Spare Engines as
additional Collateral (a "PLEDGED SPARE ENGINE") to maintain compliance with the
Collateral Ratio, Subordinated Collateral Ratio or Minimum Rotable Ratio, as the
case may be, then Owner may pledge such Spare Engine upon satisfaction of the
following conditions: (i) the sum of the Adjusted Fair Market Value of such
Pledged Spare Engine (based on a certificate of an independent appraiser) and
the aggregate Adjusted Fair Market Value of all other Pledged Spare Engines as
of the most recent Valuation Date would not exceed ten percent (10%) of the sum
of the Adjusted Fair Market Value of such Pledge Spare Engine to be added plus
the aggregate Fair Market Value of all Collateral as of the most recent
Valuation Date; (ii) Owner has furnished one or more legal opinions of counsel
satisfactory to the Mortgagee to the effect that in respect of such Spare
Engine, the Mortgagee is entitled to the benefits under Section 1110 and holds a
first priority perfected security interest and that each of the security
interest and the international interest with respect to such Spare Engine has
been perfected by filing at the FAA Aircraft Registry and has been registered at
the International Registry and is effective against third parties without any
prior registered interests; (iii) Owner has furnished Mortgagee a certificate of
an independent appraiser stating its opinion that the Adjusted Fair Market Value
of such Spare Engine equals at least the value of the additional Qualified Spare
Parts that would have been necessary to meet the Collateral Ratio, the
Subordinated Collateral Ratio or the Minimum Rotable Ratio, as the case
47
may be; (iv) solely in the case of the initial Pledged Spare Engine pledged as
additional Collateral, the Policy Providers acting reasonably, shall have agreed
to such pledge and the Owner shall have received a Ratings Confirmation after
giving effect to the pledge of such Spare Engine as additional Collateral, with
respect to the ratings then in effect for the Pass Through Certificates
(determined without regard to any Policy, as the case may be) and (v) Owner is,
at the time of pledging such Spare Engine, a "transactional user entity"
"situated" in the United States as such terms are used under the Cape Town
Convention and the regulations of the International Registry and whose ownership
interest in the Pledged Spare Engine is reflected on the International Registry
as a contract of sale. In connection with the above conditions for pledging a
Spare Engine, Owner shall, at its own cost and expense, (x) execute and deliver
to Mortgagee a Trust Indenture Collateral Supplement in the form of Exhibit B
hereto specifying the manufacturer, model and serial number of such Pledged
Spare Engine, (y) register the international interest of the Trust Indenture
Collateral Supplement with the International Registry, and (z) duly file such
Trust Indenture Collateral Supplement with the FAA.
(b) The Owner, at its own cost and expense:
(i) shall, or shall cause a Permitted Lessee to, maintain,
service, repair and overhaul each Pledged Spare Engine so as to keep each
Pledged Spare Engine serviceable (except when undergoing overhaul) and in as
good operating condition as when initially delivered to the Owner by the engine
manufacturer, ordinary wear and tear excepted, and as may be necessary and
required under applicable Law, including the Act, airworthiness directives, and
other applicable rules, regulations and requirements by any government
authority, utilizing, except during any period that a Permitted Lease is in
effect, the same manner and standard of maintenance, service, repair or overhaul
used by the Owner with respect to engines similar to such Pledged Spare Engine
operated by the Owner and utilizing, during any period that a Permitted Lease is
in effect, the same manner and standard of maintenance, service, repair or
overhaul used by the Permitted Lessee with respect to engines similar to such
Pledged Spare Engine operated by the Permitted Lessee (but in any event not less
than required if not leased);
(ii) shall maintain, or cause to be maintained, all
records, logs and other materials required by the FAA or under the Act to be
maintained in respect of the Pledged Spare Engine;
(iii) shall maintain, or cause to be maintained, all
documents and records in respect of the Pledged Spare Engine in the English
language; and
(iv) shall, unless otherwise set forth herein with respect
to Pledged Spare Parts, promptly replace or cause to be replaced all parts which
may from time to time be incorporated or installed in or attached to any Pledged
Spare Engine and which may from time to time become worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently rendered
unfit for use for any reason whatsoever, except if a Pledged Spare Engine to
which a part relates has suffered an Event of Loss, and all replacement parts
shall be free and clear of all Liens (except Permitted Liens and except in the
case of replacement property temporarily installed on an emergency basis) and
shall be in as good operating condition as, and shall have a value and utility
at least equal to, the parts replaced (assuming such replaced parts were in the
condition and repair required to be maintained by the terms hereof).
48
(c) Except as expressly provided herein, the Owner shall not
without the prior written consent of the Mortgagee, sell, lease or otherwise in
any manner deliver, transfer or relinquish possession of any Pledged Spare
Engine, provided that, so long as such action shall not deprive the Mortgagee of
the perfected lien of the Trust Indenture on such Pledged Spare Engine, and
subject to the Collateral Maintenance Agreement, Owner shall have the right, at
any time and from time to time, at its own cost and expense, to deal with a
Pledged Spare Engine in any manner consistent with the Owner's ordinary course
of business, including, without limitation, any of the following:
(i) install or permit any Permitted Lessee to install a
Pledged Spare Engine on an airframe owned by the Owner (or such Permitted
Lessee) provided such airframe is free and clear of all Liens, except: (A)
Permitted Liens and those which do not apply to such Pledged Spare Engine and
(B) the rights of third parties under interchange, pooling or borrowing, or
similar arrangements which would be permitted under clause (d)(ii) below;
(ii) install or permit any Permitted Lessee (subject to the
requirements of Section (c)(xii) below) to install a Pledged Spare Engine on an
airframe leased to the Owner (or such Permitted Lessee) or owned by the Owner
(or such Permitted Lessee) subject to a mortgage, conditional sale or other
security agreement covering such airframe; provided that (x) such airframe is
free and clear of all Liens, except (A) the rights of the parties to the lease
or mortgage, conditional sale or other security agreement covering such
airframe, or their assignees and (B) Liens of the type permitted by clause (i)
of this Section 11.02(c), and (y) the Owner or Permitted Lessee, as the case may
be, shall have received from the lessor, mortgagee, secured party or conditional
seller, in respect of such airframe, a written agreement (which may be a copy of
the lease, mortgage, security agreement, conditional sale or other agreement
covering such airframe), whereby such Person expressly agrees that neither it
nor its successors or assigns will acquire or claim any right, title or interest
in, or Lien on, such Pledged Spare Engine by reason of such Pledged Spare Engine
being installed on such airframe at any time while such Pledged Spare Engine is
subject to the Lien of this Trust Indenture;
(iii) install or permit any Permitted Lessee (subject to the
requirements of Section (c)(xii) below) to install a Pledged Spare Engine on an
airframe leased to the Owner (or such Permitted Lessee) or owned by the Owner
(or such Permitted Lessee) subject to a mortgage, conditional sale or other
security agreement under circumstances where neither clause (i) nor clause (ii)
of this Section 11.02(c) is applicable, provided that, as of the date of such
installation, such installation shall be deemed an Event of Loss with respect to
such Pledged Spare Engine and the Owner shall (or shall cause such Permitted
Lessee to) comply with Section 11.02(f) in respect thereof, the Mortgagee not
intending hereby to waive any right or interest it may have to or in such
Pledged Spare Engine under applicable Law until compliance by the Owner with
Section 11.02(f);
(iv) transfer (or permit any Permitted Lessee to transfer)
possession of any Pledged Spare Engine to the U.S. Government, so long as the
Owner (or any Permitted Lessee) shall promptly notify the Mortgagee in writing
thereof and, in the case of a transfer pursuant to the Civil Reserve Air Fleet
("CRAF") Program, provide the Mortgagee with the name and address of the
Contracting Office Representative for the Air Mobility Command of the
49
United States Air Force or other appropriate person to whom notice must be given
and to whom requests or claims must be made to the extent applicable under CRAF;
(v) at any time on at least five (5) Business Days' prior
written notice, terminate the Lien of this Trust Indenture with respect to any
Pledged Spare Engine, provided that, at the time of such termination, the Owner
either, (x) replaces such Pledged Spare Engine with a replacement Spare Engine
by complying with the terms of Section 11.02(f) below to the same extent as if
an Event of Loss had occurred with respect to such Pledged Spare Engine and
meets the requirements of Section 11.02(e) or (y) provides Cash Collateral,
Qualified Spare Parts, or redeems a pro-rata share of the aggregate outstanding
Original Amount of the Equipment Notes, in accordance with the terms of Section
11.02(f)(i)(w),(x) or (y), respectively;
(vi) deliver or permit any Permitted Lessee to deliver
possession of any Pledged Spare Engine (A) to the manufacturer thereof or to any
third-party maintenance provider for testing, service, repair, maintenance or
overhaul work on such Pledged Spare Engine or for alterations or modifications
in or additions to such Pledged Spare Engine or (B) to any Person for the
purpose of transport to a Person referred to in the preceding clause (A);
(vii) subject any Pledged Spare Engine to normal interchange
and pooling agreements customary in the commercial airline industry and entered
into by the Owner in the ordinary course of its business, provided that (A) no
such agreement contemplates or requires the transfer of title to such Pledged
Spare Engine and (B) if the Owner's title to any Pledged Spare Engine shall be
divested under any such arrangement, it shall be deemed to be an Event of Loss
as of the date of such divestiture with respect to such Pledged Spare Engine and
the Owner shall promptly comply with Section 11.02(f) in respect thereof, and
provided, further, that no interchange or pooling agreement with respect to any
Pledged Spare Engine shall in any way discharge or diminish any of the Owner's
obligations under this Trust Indenture or constitute a waiver by the Mortgagee
or the Policy Provider of any rights or remedies hereunder;
(viii) enter into a wet lease with respect to an Aircraft to
which a Pledged Spare Engine is attached, provided that the Owner's obligations
hereunder shall continue in full force and effect notwithstanding any such wet
lease; and
(ix) so long as no Event of Default shall have occurred and
be continuing, the Owner may, at any time, enter into a lease with respect to
any Pledged Spare Engine with (x) any person approved by the Mortgagee or (y)
any U.S. Air Carrier that is not then subject to any bankruptcy, insolvency,
liquidation, reorganization, dissolution or similar proceeding and shall not
have substantially all of its property in the possession of any liquidator,
trustee, receiver or similar person (a "PERMITTED LESSEE"), provided that (A)
any such Permitted Lease (1) shall include provisions for the maintenance,
operation, possession and insurance of the Aircraft that are the same in all
material respects as the applicable provisions of this Trust Indenture, (2)
shall provide that such Permitted Lessee may not further sublease the Pledged
Spare Engine subject thereto and (3) shall not permit the Permitted Lessee to
take any action with respect to the Pledged Spare Engine subject thereto that
Owner is not permitted to take under this Trust Indenture, and, provided,
further, that (A) the rights of any Permitted Lessee or other transferee who
receives possession of a Pledged Spare Engine by reason of a transfer permitted
by this Section 11.02(c) (other than, upon Owner's compliance with Section
11.02(f),
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the transfer of a Pledged Spare Engine which is deemed an Event of Loss) shall
be subject and subordinate to, and any Permitted Lease shall contain a provision
pursuant to which the Permitted Lessee expressly acknowledges that its leasehold
interest is subject and subordinate to, all the terms of this Trust Indenture,
including the rights of the Mortgagee to repossess such Pledged Spare Engine and
avoid such lease in the exercise of its rights to repossession of the Pledged
Spare Engines under this Trust Indenture, and (B) the Owner shall remain
primarily liable for the performance and observance of all of the terms of this
Trust Indenture, and all the terms and conditions of this Trust Indenture and
the other Operative Agreements shall remain in effect, in each case to the same
extent as if such lease or transfer had not occurred.
No lease permitted under this Section shall be entered into
unless (w) the Owner shall provide written notice to the Mortgagee and a copy of
any such lease with a term of more than six (6) months (promptly after entering
into any such lease), (x) the Owner shall furnish to the Mortgagee evidence
reasonably satisfactory to the Mortgagee that the insurance required by Section
4.09 and Part C of Annex B remains in effect, (y) all necessary documents shall
have been duly filed, registered or recorded in such public offices, including
with the FAA and the International Registry, as may be required fully to
preserve the first priority security interest (subject to Permitted Liens) of
the Mortgagee and to perfect and protect Owner's right as Lessor in the Pledged
Spare Engines and (z) the Owner shall reimburse the Mortgagee for all of its
reasonable out-of-pocket fees and expenses, including, without limitation,
reasonable fees and disbursements of counsel, incurred by the Mortgagee in
connection with any such lease. Except as otherwise provided herein and without
in any way relieving the Owner from its primary obligation for the performance
of its obligations under this Trust Indenture and the Collateral Maintenance
Agreement, the Owner may in its sole discretion permit a Permitted Lessee to
exercise any or all rights which the Owner would be entitled to exercise under
Section 11.02(b) hereof, and the Mortgagee agrees to accept actual and full
performance thereof by a Permitted Lessee in lieu of performance by the Owner.
No pooling arrangement, permitted lease or other
relinquishment of possession of any Pledged Spare Engine shall in any way
discharge or diminish any of the Owner's obligations under this Trust Indenture
or constitute a waiver by the Mortgagee or the Policy Provider of any rights or
remedies hereunder;
(d) Solely for purposes of any Pledged Spare Engine, each of the
Owner and Mortgagee agrees that it will take all such action reasonably
requested by the Controlling Party in order to make any registrations with the
International Registry, including becoming a transacting user entity and
providing consents to any registration with respect to the Pledged Spare Engine
pursuant to this Section 11.02.
(e) The Owner's right to make a replacement of a Pledged Spare
Engine under Section 11.02(f) or under Section 11.02(c)(v) shall be subject to
the fulfillment, at the Owner's cost and expense, of the following conditions
precedent:
(i) On the date that such replacement Spare Engine is made
subject to the Lien of this Trust Indenture (the "REPLACEMENT CLOSING DATE"), no
Event of Default shall have occurred and be continuing and an executed
counterpart of each of the following shall have been delivered to the Mortgagee:
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(A) a Trust Indenture Collateral Supplement covering such
Replacement Spare Engine (which shall be filed for recordation
pursuant to the Act) and, contemporaneously, the international
interest with respect to such Replacement Spare Engine has been
registered at the International Registry;
(B) such Uniform Commercial Code financing statements covering the
Lien created by this Trust Indenture as deemed necessary by the
Mortgagee to protect the security interests of the Mortgagee in such
Replacement Spare Engine;
(C) a certificate of an Independent Appraiser certifying that such
Replacement Spare Engine has a value, utility and remaining useful
life (without regard to hours or cycles) at least equal to the
Pledged Spare Engine so replaced (assuming that such Pledged Spare
Engine had been maintained in accordance with the terms hereof);
(D) an officer's certificate of the Owner containing a
representation and warranty of the Owner that the Owner has good and
marketable title to such Replacement Spare Engine, free and clear of
all Liens other than Permitted Liens; and
(E) a copy or other evidence satisfactory to Mortgagee of Owner's
registration with the International Registry with respect to its
ownership interest in such Replacement Spare Engine;
(ii) The Mortgagee and (so long as no Policy Provider
Default shall have occurred and be continuing) the Policy Provider each shall
have received evidence reasonably satisfactory to it as to the due compliance
with Section 4.09 and Section 11.02(a) with respect to the Adjusted Fair Market
Value of such Replacement Spare Engine based on an Independent Appraiser's
Certificate confirming that when added to the aggregate Adjusted Fair Market
Value of all other Pledged Spare Engines as of the most recent Valuation Date,
the aggregate Adjustable Fair Market Value of all Spare Engines does not exceed
ten percent (10%) of the aggregate Fair Market Value of all Collateral as of the
most recent Valuation Date plus the Adjusted Fair Market Value of such
Replacement Spare Engine;
(iii) On the Replacement Closing Date, the Owner shall be
the owner of such Replacement Spare Engine and shall cause such Replacement
Spare Engine to be subjected to the Lien of this Trust Indenture, free and clear
of Liens (other than Permitted Liens); and
(iv) The Mortgagee shall, at the expense of the Owner, have
received (A) an opinion addressed to the Mortgagee to the effect that (i) such
Replacement Spare Engine has been made subject to the Lien of this Trust
Indenture and (ii) the Mortgagee is entitled to the benefits under Section 1110
and holds a first priority perfected security interest and that each of the
security interest and the international interest with respect to such Spare
Engine has been perfected by filing at the FAA Aircraft Registry and has been
registered at the International Registry and is effective against third parties
without any prior registered interests, to the same extent as available to the
Mortgagee with respect to such Pledged Spare Engine immediately prior to such
substitution and (B) an opinion of FAA counsel addressed to the Mortgagee
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respecting the due filing of the Trust Indenture Supplement with respect to such
Replacement Spare Engine for recordation with the FAA and registration with the
International Registry and the perfection and priority of the Lien of this Trust
Indenture thereon.
(f) Upon the occurrence of an Event of Loss with respect to a
Pledged Spare Engine, the Owner shall forthwith (and in any event within fifteen
(15) days after such occurrence) give the Mortgagee and each Policy Provider
written notice of such Event of Loss. The Owner shall, within forty-five (45)
days after the occurrence of any Event of Loss with respect to a Pledged Spare
Engine, give the Mortgagee and each Policy Provider written notice of its
election to perform one of the following options (it being agreed that, if the
Owner shall not have given notice of such election within such 45-day period,
the Owner shall be deemed to have elected the option in clause (i) of this
Section 11.02(f)):
(i) on or prior to the sixtieth (60th) day following the
Event of Loss, (w) subject to the lien of this Indenture additional
Qualified Spare Parts with a Fair Market Value as of the most recent
Valuation Date at least equal to the redemption amount under clause (y)
below and in accordance with the terms of Section 3.1(a)(i) of the
Collateral Maintenance Agreement, (x) deposit with the Mortgagee Cash
Collateral under this Trust Indenture, in accordance with the terms of
Section 3.1(a)(iv) of the Collateral Maintenance Agreement, in an amount
equal to the Adjusted Fair Market Value of the applicable Pledged Spare
Engine as of the most recent Valuation Date, or (y) redeem a pro rata
share of the aggregate outstanding Original Amount of Equipment Notes in
accordance with the terms of Section 3.1(a)(v) of the Collateral
Maintenance Agreement in an amount equal to the Adjusted Fair Market Value
as of the most recent valuation date of the Pledged Spare Engine which
suffered an Event of Loss, or
(ii) cause to be subjected to the Lien of this Trust
Indenture in replacement thereof not later than the sixtieth (60th) day
following the occurrence of such Event of Loss, another Spare Engine
satisfying the conditions of Section 11.02(e)(i)(C) ("REPLACEMENT SPARE
ENGINE"); provided that if the Owner does not perform its obligation to
effect such replacement in accordance with this Section 11.02(f) during
the period of time provided herein, then the Owner shall deposit the Cash
Collateral or redeem the Equipment Notes as contemplated by clause (i)
above within the period of time specified therein; provided, further, that
if the Owner shall have deposited Cash Collateral pursuant to clause (i)
and then satisfies the condition for a Replacement Engine within thirty
(30) days thereof, then Mortgagee shall return such Cash Collateral to the
Owner and, if such action is not taken, on the thirty-first (31st) day
after such deposit the Owner shall have irrevocably elected to use such
deposited Cash Collateral to effect an Optional Redemption pursuant to
clause (i)(y) above. Upon the Owner having provided a Replacement Spare
Engine as provided for above, the Lien of this Trust Indenture shall
attach to such Replacement Spare Engine.
Upon the Owner having provided a Replacement Spare Engine, a
deposit of Cash Collateral or an Optional Redemption pursuant to this
Section 11.02(f), the Mortgagee shall, at the cost and expense of the
Owner, release from the Lien of this Trust Indenture the Pledged Spare
Engine subject to such Event of Loss and all Pledged Spare Engine
Collateral related thereto as provided in Section 3.06(b); and provided
further,
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Mortgagee shall assign without recourse or representation to the Owner all
claims it may have against any other Person arising from the Event of Loss
in respect of such Pledged Spare Engine and the Owner shall be entitled to
receive all insurance proceeds and other proceeds from any award in
respect of condemnation, confiscation, seizure or requisition with respect
to such released Pledged Spare Engine, including all investment interest
thereon, to the extent not previously applied to the purchase price of any
Replacement Spare Engine.
(g) Solely for purposes of any Pledged Spare Engine, each of the
Owner and Mortgagee agrees that it will take all such action reasonably
requested by the Controlling Party in order to make any registrations with the
International Registry, including becoming a transacting user entity and
providing consents to any registration with respect to the Pledged Spare Engine
pursuant to this Section 11.02.
(h) Subject to the terms of the Collateral Maintenance Agreement,
the Owner shall have the right, at any time and from time to time, at its own
cost and expense, without any consent by the Mortgagee, to:
(i) remove in the ordinary course of maintenance, service,
repair, overhaul or testing, any parts of any Pledged Spare Engine,
whether or not worn out, lost, stolen, destroyed, seized, confiscated,
damaged beyond repair or permanently rendered unfit for use, provided that
the Owner (or a Permitted Lessee) will replace such parts as promptly as
practicable; and
(ii) make or cause to be made such alterations and
modifications in and additions to any Pledged Spare Engine as it deems
desirable in the proper conduct of its business and to remove parts which
it deems to be obsolete or no longer suitable or appropriate for use,
provided such alteration, modification, addition or removal does not
materially diminish the value, utility or remaining useful life of such
Pledged Spare Engine below its value, utility or remaining useful life
immediately prior to such alteration, modification, addition or removal
(assuming such Pledged Spare Engine was in the condition required by this
Trust Indenture immediately prior thereto).
(i) On or reasonably promptly after a Pledged Spare Engine
becomes subject to the Lien of this Indenture in accordance with the terms of
Section 11.02(a), the Owner agrees to affix and maintain (or cause to be affixed
and maintained), at its expense, on such Pledged Spare Engine a nameplate
bearing the inscription:
"THIS ENGINE IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF
WILMINGTON TRUST COMPANY, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY
AS MORTGAGEE."
(such nameplate to be replaced, if necessary, with a nameplate reflecting the
name of any successor Mortgagee). Such nameplate may be removed temporarily in
the course of maintenance of such Pledged Spare Engine.
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SECTION 11.03. ADDITIONAL EQUIPMENT NOTES.
(a) Subject to the terms and conditions of this Section 11.03, the
aggregate Original Amount of Equipment Notes outstanding hereunder is unlimited
and the Owner may from time to time after the Closing Date, issue additional
Equipment Notes ("ADDITIONAL EQUIPMENT NOTES") ratably secured by the Lien on
the Collateral granted hereunder. The Additional Equipment Notes may be issued
in one or more offerings in each case either (i) Senior Equipment Notes
designated Series G (if the related Pass Through Trust holding such Senior
Equipment Note also holds a Policy for the benefit of the holders of
Certificates issued by such Pass Through Trust) or Series A (if the related Pass
Through Trust does not hold such Policy), and having the same priority of
payment as the Series G-1 Equipment Note (together with the Series G-1 Equipment
Note, the "SENIOR EQUIPMENT NOTES") or (ii) two series consisting of a series of
Senior Additional Equipment Note and another series designated Series B and
having the same priority of payment as the Series B-1 Equipment Note (together
with the Series B-1 Equipment Note, the "JUNIOR EQUIPMENT NOTES"). The sale of
each Series of Additional Equipment Notes shall be funded through the issuance
and sale of related Pass Through Certificates ("ADDITIONAL CERTIFICATES") issued
by related Pass Through Trusts which will evidence fractional undivided
ownership interests in the Additional Equipment Note of such Series acquired and
held by the related Pass Through Trust. For the avoidance of doubt, all Senior
Equipment Notes rank on a parity basis, regardless if designated Series G or
Series A.
(b) If Owner desires to issue Additional Equipment Notes, it shall
deliver to the Mortgagee of an Officer's Certificate requesting such issuance
and providing the following information with respect to each proposed Series of
Additional Equipment Notes: (i) whether such Equipment Notes are to be
designated Series G or A or Series B, (ii) the Original Amount of such Series
(and payment and amortization provision ,if any, thereof); (iii) the Debt Rate
(and any related definitions and calculation provision for determining the Debt
Rate and each component thereof, as applicable), Margin, redemption provisions
(including no-call period, Redemption Price, Premium(if any), and whole and/or
partial prepayment), and Payment Due Rate to be applicable for such Series; (iv)
the Maturity Date of such Series; (v) the Issuance Date for such Series; (vi)
the applicable Liquidity Facility Provider(s), if any, the applicable Policy
Provider, if any, for the related Pass Through Certificates; and (vii) such
other provisions with respect to the Additional Equipment Notes as the Owner
shall specify (and which shall not be in violation of the provisions of this
Indenture).
(c) The following conditions must be satisfied in order to issue
any Series of Additional Equipment Notes:
(i) except for the Original Amount (and amortization
thereof), Debt Rate (and calculation thereof), Margin, redemption provisions
(including no-call period, Redemption Price and Premium(if any) and whole and/or
partial prepayment), Payment Due Rate and Maturity Date, the terms and
conditions of each Series of Additional Equipment Note shall be substantially
similar to the terms of the Initial Equipment Notes having the same priority of
payment as such Series, including being subject to the terms of the
Intercreditor Agreement, the Collateral Maintenance Agreement and this Trust
Indenture;
55
(ii) immediately after and giving effect to such issuance,
the Maximum Collateral Ratio, Subordinated Collateral Ratio and Minimum Rotable
Ratio under Section 3.1 of the Collateral Maintenance Agreement shall be and
continue to be in compliance;
(iii) no Default or Event of Default shall have occurred and
be continuing prior to or as a result of the issuance of Additional Equipment
Notes;
(iv) the applicable Note Purchase Agreement for such
Additional Equipment Notes, with the then current Pass Through Trustee as
trustee, shall have been duly executed and delivered and all conditions to the
purchase of such Additional Equipment Notes thereunder shall have been
satisfied; and
(v) the applicable Pass Through Trust(s) purchasing such
Series of Additional Equipment Notes pursuant to the applicable Note Purchase
Agreement shall have been duly formed and the conditions specified in Section
10.2 of the Intercreditor Agreement for the issuance by each such Pass Through
Trust of Additional Certificate(s) in respect of such Additional Equipment Notes
shall have been satisfied.
(c) In the event that Additional Equipment Notes are issued, (i)
the Maximum Collateral Ratio and the Minimum Rotable Ratio shall apply to all
Senior Equipment Notes on an aggregated basis and (ii) the Maximum Subordinated
Collateral Ratio shall apply to all Equipment Notes and all Additional Equipment
Notes on an aggregated basis. The option to redeem the Series G-1 Equipment
Note, or any Initial Equipment Note, in order to comply with any of the
foregoing ratios, will apply to all Senior Equipment Notes collectively, or the
Initial Equipment Notes and all Additional Equipment Notes collectively, as the
case may be. The requirement, as a result of a violation of the minimum fleet
size covenant, (i) to redeem the Series G-1 Equipment Note will apply to all
Senior Equipment Notes collectively, and (ii) to redeem the Series B-1 Equipment
Note will apply to all Junior Equipment Notes collectively, as the case may be.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. TERMINATION OF TRUST INDENTURE
Upon (or at any time after) payment in full of the Original Amount
of, Premium, if any, Break Amount, if any, and interest on and all other amounts
due under all Equipment Notes and provided that there shall then be no other
Secured Obligations due to the Indenture Indemnitees, the Note Holders and the
Mortgagee hereunder or under the Note Purchase Agreement, the Collateral
Maintenance Agreement or other Operative Agreement, the Owner shall direct the
Mortgagee to execute and deliver to or as directed in writing by the Owner an
appropriate instrument releasing the Pledged Spare Parts and all other
Collateral from the Lien of the Trust Indenture and the Mortgagee shall execute
and deliver such instrument as aforesaid; provided, however, that this Trust
Indenture and the trusts created hereby shall earlier terminate and this Trust
Indenture shall be of no further force or effect upon any sale or other final
disposition by the Mortgagee of all property constituting part of the Collateral
and the final distribution by the Mortgagee of all monies or other property or
proceeds constituting part of the
56
Collateral in accordance with the terms hereof. Except as aforesaid otherwise
provided, this Trust Indenture and the trusts created hereby shall continue in
full force and effect in accordance with the terms hereof.
SECTION 12.02. NO LEGAL TITLE TO COLLATERAL IN NOTE HOLDERS
No holder of an Equipment Note shall have legal title to any part of
the Collateral. No transfer, by operation of law or otherwise, of any Equipment
Note or other right, title and interest of any Note Holder in and to the
Collateral or hereunder shall operate to terminate this Trust Indenture or
entitle such holder or any successor or transferee of such holder to an
accounting or to the transfer to it of any legal title to any part of the
Collateral.
SECTION 12.03. SALE OF COLLATERAL BY MORTGAGEE IS BINDING
Any sale or other conveyance of the Collateral, or any part thereof
(including any part thereof or interest therein), by the Mortgagee made pursuant
to the terms of this Trust Indenture shall bind the Note Holders and shall be
effective to transfer or convey all right, title and interest of the Mortgagee,
the Owner and such holders in and to such Collateral or part thereof. No
purchaser or other grantee shall be required to inquire as to the authorization,
necessity, expediency or regularity of such sale or conveyance or as to the
application of any sale or other proceeds with respect thereto by the Mortgagee.
SECTION 12.04. TRUST INDENTURE FOR BENEFIT OF OWNER, MORTGAGEE, NOTE
HOLDERS AND THE OTHER INDENTURE INDEMNITEES
Nothing in this Trust Indenture, whether express or implied, shall
be construed to give any person other than the Owner, the Mortgagee, the Note
Holders and the other Indenture Indemnitees, any legal or equitable right,
remedy or claim under or in respect of this Trust Indenture.
SECTION 12.05. NOTICES
Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, demands, authorizations, directions, consents,
waivers or documents provided or permitted by this Trust Indenture to be made,
given, furnished or filed shall be in writing, personally delivered or mailed by
certified mail, postage prepaid, or by facsimile or electronic mail in each case
with confirmed receipt and provided such facsimile or electronic notice is also
sent by delivery or certified mail as aforementioned, and (i) if to the Owner,
addressed to it at 000-00 Xxxxxx Xxxxxxxxx, Xxxxxx Xxxxx, Xxx Xxxx 00000,
Attention: General Counsel, facsimile number (000) 000-0000, (ii) if to
Mortgagee, addressed to it at its office at Xxxxxx Square North, 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Administration, facsimile number (000) 000-0000, (iii) if to any Note Holder or
any Indenture Indemnitee, addressed to such party at such address as such party
shall have furnished by notice to the Owner and the Mortgagee, or, until an
address is so furnished, addressed to the address of such party (if any) set
forth on Schedule 1 to the applicable Note Purchase Agreement or in the
Equipment Note Register. Whenever any notice in writing is required to be given
by the Owner or the Mortgagee or any Note Holder to any of the other of them,
such notice shall be deemed given and such requirement satisfied when such
notice is received, or if such notice is
57
mailed by certified mail, postage prepaid, three (3) Business Days after being
mailed, addressed as provided above. Any party hereto may change the address to
which notices to such party will be sent by giving notice of such change to the
other parties to this Trust Indenture.
SECTION 12.06. SEVERABILITY
Any provision of this Trust Indenture which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 12.07. NO ORAL MODIFICATION OR CONTINUING WAIVERS
No term or provision of this Trust Indenture or the Equipment Notes
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the Owner and the Mortgagee, in compliance with
Section 10.01 hereof. Any waiver of the terms hereof or of any Equipment Note
shall be effective only in the specific instance and for the specific purpose
given.
SECTION 12.08. SUCCESSORS AND ASSIGNS
All covenants and agreements contained herein shall be binding upon,
and inure to the benefit of, each of the parties hereto and the permitted
successors and assigns of each, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by any Note Holder
shall bind the successors and assigns of such holder. Each Note Holder by its
acceptance of an Equipment Note agrees to be bound by this Trust Indenture and
the other Operative Agreements applicable to a Note Holder.
SECTION 12.09. HEADINGS
The headings of the various Articles and sections herein and in the
table of contents hereto are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
SECTION 12.10. NORMAL COMMERCIAL RELATIONS
Anything contained in this Trust Indenture to the contrary
notwithstanding, Mortgagee may conduct any banking or other financial
transactions, and have banking or other commercial relationships, with Owner,
fully to the same extent as if this Trust Indenture were not in effect,
including without limitation the making of loans or other extensions of credit
to Owner for any purpose whatsoever, whether related to any of the transactions
contemplated hereby or otherwise.
SECTION 12.11. GOVERNING LAW; COUNTERPART FORM
THIS TRUST INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
58
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS
TRUST INDENTURE IS BEING DELIVERED IN THE STATE OF NEW YORK. This Trust
Indenture may be executed by the parties hereto in separate counterparts (or
upon separate signature pages bound together into one or more counterparts),
each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument. EACH
PARTY HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS TRUST INDENTURE.
SECTION 12.12. VOTING BY NOTE HOLDERS
All votes of the Note Holders shall be governed by a vote of a
Majority in Interest of Note Holders, except as otherwise provided herein.
SECTION 12.13. BANKRUPTCY
It is the intention of the parties that the Mortgagee shall be
entitled to the benefits of Section 1110 with respect to the right to take
possession of the Pledged Spare Parts and any Pledged Spare Engine and to
enforce any of its other rights or remedies as provided herein in the event of a
case under Chapter 11 of the Bankruptcy Code in which Owner is a debtor, and in
any instance where more than one construction is possible of the terms and
conditions hereof or any other pertinent Operative Agreement, each such party
agrees that a construction which would preserve such benefits shall control over
any construction which would not preserve such benefits.
SECTION 12.14. AGREEMENT AS TO FAIR MARKET VALUE
The Owner and the Mortgagee acknowledge that the use of Fair Market
Value (or Adjusted Fair Market Value in the case of any Pledges Spare Engines)
herein or in the other Operative Agreements is strictly and solely for
convenience in establishing the amount of Collateral and any substitutions
therefor under the Operative Agreements. Accordingly, the Fair Market Value or
Adjusted Fair Market Value, as the case may be, of any Collateral subjected to
the Lien of a Collateral Agreement is not an indication of and shall not be
deemed an agreement by the parties as the basis for valuation of such Collateral
for purposes of determining the value of the Mortgagee's secured claim against
the Owner, adequate protection of the Mortgagee's interest in the Collateral or
for any other purpose in any bankruptcy, receivership or insolvency proceeding
involving the Owner or any remedial action brought by the Mortgagee or
Collateral Agent 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 Fair Market Value or Adjusted Fair
Market Value, as the case may be, by the parties hereto.
SECTION 12.15. AIR CARRIER CERTIFICATION
The Owner, in compliance with 14 C.F.R. 49.53(a)(1) and (2),
certifies that the Owner is an air carrier, certificated by the FAA under 49
U.S.C. 44705, and that the Pledged Spare Parts are maintained by or on behalf
the Owner at the Designated Locations.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Indenture and Mortgage to be duly executed by their respective officers thereof
duly authorized as of the day and year first above written.
JETBLUE AIRWAYS CORPORATION
By:_____________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Mortgagee
By:_____________________________________
Name:
Title:
60
ANNEX A
DEFINITIONS
GENERAL PROVISIONS
(a) In each Operative Agreement, unless otherwise expressly provided, a
reference to:
(i) each of "Owner," "Mortgagee," "Note Holder" or any other
person includes, without prejudice to the provisions of any Operative Agreement,
any successor in interest to it and any permitted transferee, permitted
purchaser or permitted assignee of it;
(ii) words importing the plural include the singular and words
importing the singular include the plural;
(iii) any agreement, instrument or document, or any annex, schedule
or exhibit thereto, or any other part thereof, includes, without prejudice to
the provisions of any Operative Agreement, that agreement, instrument or
document, or annex, schedule or exhibit, or part, respectively, as amended,
modified or supplemented from time to time in accordance with its terms and in
accordance with the Operative Agreements, and any agreement, instrument or
document entered into in substitution or replacement therefor;
(iv) any provision of any Law includes any such provision as
amended, modified, supplemented, substituted, reissued or reenacted prior to the
Closing Date, and thereafter from time to time;
(v) the words "Agreement," "this Agreement," "hereby," "herein,"
"hereto," "hereof" and "hereunder" and words of similar import when used in any
Operative Agreement refer to such Operative Agreement as a whole and not to any
particular provision of such Operative Agreement;
(vi) the words "including," "including, without limitation,"
"including, but not limited to," and terms or phrases of similar import when
used in any Operative Agreement, with respect to any matter or thing, mean
including, without limitation, such matter or thing; and
(vii) a "Section," an "Exhibit," an "Annex" or a "Schedule" in any
Operative Agreement, or in any annex thereto, is a reference to a section of, or
an exhibit, an annex or a schedule to, such Operative Agreement or such annex,
respectively.
(b) Each exhibit, annex and schedule to each Operative Agreement is
incorporated in, and shall be deemed to be a part of, such Operative Agreement.
(c) Unless otherwise defined or specified in any Operative Agreement,
all accounting terms therein shall be construed and all accounting
determinations thereunder shall be made in accordance with GAAP.
(d) Headings used in any Operative Agreement are for convenience only
and shall not in any way affect the construction of, or be taken into
consideration in interpreting, such Operative Agreement.
(e) For purposes of each Operative Agreement, the occurrence and
continuance of a Default or Event of Default referred to in Section 5.01(v),(vi)
or (vii) shall not be deemed to prohibit the Owner from taking any action or
exercising any right that is conditioned on no Special Default, Default or Event
of Default having occurred and be continuing if such Special Default, Default or
Event of Default consists of the institution of reorganization proceedings with
respect to Owner under Chapter 11 of the Bankruptcy Code and the trustee or
debtor-in-possession in such proceedings shall have agreed to perform its
obligations under the Trust Indenture with the approval of the applicable court
and thereafter shall have continued to perform such obligations in accordance
with Section 1110.
DEFINED TERMS
"Above-Cap Liquidity Agreement" is defined in the Intercreditor Agreement
"Above-Cap Liquidity Provider" is defined in the Intercreditor Agreement
"Act" means part A of subtitle VII of title 49, United States Code.
"Actual Knowledge" means (a) as it applies to Mortgagee, actual knowledge
of a responsible officer in the Corporate Trust Office, and (b) as it applies to
Owner, actual knowledge of a Vice President or more senior officer of Owner or
any other officer of Owner having responsibility for the transactions
contemplated by the Operative Agreements; provided that each of Owner and
Mortgagee shall be deemed to have "Actual Knowledge" of any matter as to which
it has received notice from Owner, any Note Holder or Mortgagee, such notice
having been given pursuant to Section 11.05 of the Trust Indenture.
"Additional Equipment Notes" is defined in Section 11.03 of the Trust
Indenture.
"Additional Insureds" is defined in paragraph (i) of Section C to Annex B
of the Trust Indenture.
"Additional Parts" is defined in Section 3.1(a)(i) of the Collateral
Maintenance Agreement.
"Additional Qualified Aircraft Type" is defined in Section 11.01 of the
Trust Indenture.
"Adjusted Fair Market Value" in respect of a Pledged Spare Engine, means
the Fair Market Value of such Pledged Spare Engine reflecting the actual
technical status and maintenance conditions of such Pledged Spare Engine as
based on applicable documentation outlining the maintenance status thereof.
"Affiliate" is defined in the Intercreditor Agreement.
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"Aircraft" means any contrivance invented, used, or designed to navigate,
or fly in, the air.
"Annual Methodology" means, in determining an opinion as to the Fair
Market Value of the Collateral, taking at least the following actions: (i)
reviewing the Parts Inventory Report prepared as of the applicable Valuation
Date; (ii) reviewing the Independent Appraiser's internal value database for
values applicable to Qualified Spare Parts included in the Collateral; (iii)
developing a representative sampling of a reasonable number of the different
Qualified Spare Parts included in Collateral for which a market check will be
conducted; (iv) checking other sources, such as manufacturers, other airlines,
U.S. government procurement data and airline parts pooling price lists, for
current market prices of the sample parts referred to in clause (v); (v)
establishing an assumed ratio of Serviceable Parts to Unserviceable Parts as of
the applicable Valuation Date based upon information provided by the Owner and
the Independent Appraiser's limited physical review of the Collateral referred
to in the following clause (vi); (vi) visiting at least two locations selected
by the Independent Appraiser where the Pledged Spare Parts are kept by the Owner
(neither of which was visited for purposes of the last appraisal under Section
2.1 or 2.2 of the Collateral Maintenance Agreement, whichever was most recent),
provided that at least one such location shall be one of the top three locations
at which the Owner keeps the largest number of Pledged Spare Parts, to conduct a
limited physical inspection of the Collateral; (vii) conducting a limited review
of the inventory reporting system applicable to the Pledged Spare Parts,
including checking information reported in such system against information
determined through physical inspection pursuant to the preceding clause (vi);
and (viii) reviewing a sampling of the Spare Parts Documents (including
tear-down reports).
"Annual Valuation Date" is defined in Section 2.1 of the Collateral
Maintenance Agreement.
"Appliance" means an instrument, equipment, apparatus, a part, an
appurtenance, or an accessory used, capable of being used, or intended to be
used, in operating or controlling Aircraft in flight, including a parachute,
communication equipment, and another mechanism installed in or attached to
Aircraft during flight, and not a part of an Aircraft, Engine, or Propeller.
"Applicable Margin" means (i) 0.23%, in the case of the Series G-1
Equipment Note and 2.875%, in the case of the Series B-1 Equipment Note; and
(ii) in the case of any Additional Equipment Notes of any Series, means the
amount certified to the Mortgagee by the Owner pursuant to Article XI of the
Trust Indenture in connection with the issuance thereof.
"Applicable Period" is defined in Section 3.2 of the Collateral
Maintenance Agreement.
"Appraisal Compliance Report" means, as of any date, a report providing
information relating to the calculation of the Collateral Ratio, the
Subordinated Collateral Ratio and the Rotable Ratio, which shall be
substantially in the form of Appendix I to the Collateral Maintenance Agreement.
"Appraised Value" means, with respect to any Collateral, the Fair Market
Value of such Collateral as most recently determined pursuant to (i) the report
attached as Appendix II to the
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Prospectus Supplement or (ii) Article 2 and, if applicable, Section 3.1 of the
Collateral Maintenance Agreement or Section 11.01 of the Trust Indenture.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
Sections 101 et seq.
"Beneficial Owner" when used in relation to an Equipment Note means a
Person that, by reason of direct ownership, contract, share ownership or
otherwise, has the right to receive or participate in receiving, directly or
indirectly, payments of principal, interest or Premium in respect of such
Equipment Note; provided that a Person shall not be deemed to be a Beneficial
Owner of an Equipment Note solely because another Person in which such a Person
owns common stock or other equity securities is a registered holder or
Beneficial Owner of such Equipment Note unless such Person is an Affiliate of
such other Person.
"Break Amount" means: (I) in respect to any Additional Equipment Note, the
amount determined as set forth in the form of such Additional Equipment Note;
and (II) in respect of the Initial Equipment Notes, as of any date of payment,
redemption or acceleration of such Equipment Note (the "Applicable Date"), an
amount determined by the Reference Agent on the date that is two (2) Business
Days prior to the Applicable Date pursuant to the formula set forth below;
provided, however, that no Break Amount will be payable (x) if the Break Amount,
as calculated pursuant to the formula set forth below, is equal to or less than
zero or (y) on or in respect of any Applicable Date that is a Payment Date (or,
if such Payment Date is not a Business Day, the next succeeding Business Day).
Break Amount = Z-Y
Where:
X = with respect to any applicable Interest Period, the sum of
(i) the amount of the outstanding principal amount of such Equipment Note
as of the first day of the then applicable Interest Period plus (ii)
interest payable thereon during such entire Interest Period at then
effective LIBOR.
Y = X, discounted to present value from the last day of the
then applicable Interest Period to the Applicable Date, using then
effective LIBOR as the discount rate.
Z = X, discounted to present value from the last day of the
then applicable Interest Period to the Applicable Date, using a rate equal
to the applicable London interbank offered rate for a period commencing on
the Applicable Date and ending on the last day of the then applicable
Interest Period, determined by the Reference Agent as of two Business Days
prior to the Applicable Date as the discount rate.
"Business Day" is defined in the Intercreditor Agreement.
"Cape Town Convention" means the official English language texts of the
Convention on International Interests in Mobile Equipment and the Protocol to
the Convention on International
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Interests in Mobile Equipment on Matters Specific to Aircraft Equipment which
were signed in Cape Town, South Africa on November 16, 2001.
"Capped Interest Rate" is defined in the Intercreditor Agreement.
"Cash Collateral" means cash and/or Investment Securities deposited or to
be deposited with the Securities Intermediary in accordance with the provisions
of Section 3.07 of the Trust Indenture.
"Citizen of the United States" is defined in 49 U.S.C. ss. 40102(a)(15).
"Closing" means the closing of the transactions contemplated by the Note
Purchase Agreement for the Initial Equipment Notes.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended; provided that,
when used in relation to a Plan, "Code" shall mean the Internal Revenue Code of
1986 and any regulations and rulings issued thereunder, all as amended and in
effect from time to time.
"Collateral" is defined in the Granting Clause of the Trust Indenture.
"Collateral Agent" means the Mortgagee and each other Person acting as
agent on behalf of the Note Holders under any other Collateral Agreement.
"Collateral Agreement" means the Trust Indenture and any other agreement
under which a security interest has been granted pursuant to Section 3.1(a)(ii)
of the Collateral Maintenance Agreement.
"Collateral Maintenance Agreement" means the Collateral Maintenance
Agreement, dated as of the Issuance Date, among the Owner, the Mortgagee and the
Policy Provider.
"Collateral Ratio" shall mean a percentage determined by dividing (i) the
aggregate outstanding Original Amount of all Senior Equipment Notes minus the
sum of the Cash Collateral held by the Securities Intermediary by (ii) the Fair
Market Value of all Collateral (excluding any Cash Collateral), as set forth in
the most recent Independent Appraiser's Certificate delivered by the Owner
pursuant to Article 2 of the Collateral Maintenance Agreement, as supplemented
pursuant to Section 3.1 of the Collateral Maintenance Agreement, if applicable.
"Controlling Party" is defined in the Intercreditor Agreement.
"Corporate Trust Office" means the principal office of Mortgagee located
at Mortgagee's address for notices under the Note Purchase Agreement or such
other office at which Mortgagee's corporate trust business shall be administered
which Mortgagee shall have specified by notice in writing to Owner and each Note
Holder.
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"Debt Balance" means 110% of the aggregate Original Amount of all
Equipment Notes outstanding, from time to time;
"Debt Rate" means (i) for purposes of interest on the Initial Equipment
Notes, in the case of the first Interest Period, the Initial Period Debt Rate
(as defined in Schedule 2 to the Note Purchase Agreement) and, in the case of
any subsequent Interest Period, a rate per annum of LIBOR for such Interest
Period, as determined pursuant to the Reference Agency Agreement, plus the
Applicable Margin, provided that, if a Payment Default has occurred and is
continuing on any Payment Date and continues through the applicable Interest
Period, the Debt Rate on the Series G-1 Equipment Note for the Interest Period
commencing on such Payment Date shall not exceed the Capped Interest Rate, (ii)
for purposes of interest on any Additional Equipment Notes, the rate of interest
specified in the applicable Officer's Certificate in respect of such Additional
Equipment Notes pursuant to Section 11.03 of the Trust Indenture in connection
with the issuance thereof and (iii) for any other purpose, with respect to any
period, the weighted average interest rate per annum during such period borne by
the outstanding Equipment Notes, excluding any interest payable at the Payment
Due Rate.
"Default" means any event or condition that with the giving of notice or
the lapse of time or both would become an Event of Default.
"Designated Locations" means the locations in the U.S. designated from
time to time by the Owner at which the Pledged Spare Parts may be maintained by
or on behalf of the Owner, which initially shall be the locations set forth on
Schedule I to the Trust Indenture and shall include the additional locations
designated by the Owner pursuant to Section 4.04(b) of the Trust Indenture.
"Dollars," "United States Dollars" or "$" means the lawful currency of the
United States.
"DOT" means the Department of Transportation of the United States or any
Government Entity succeeding to the functions of such Department of
Transportation.
"Eligible Account" means an account established by and with an Eligible
Institution at the request of the Mortgagee, which institution agrees, for all
purposes of the New York UCC including Article 8 thereof, that (a) such account
shall be a "securities account" (as defined in Section 8-501 of the New York
UCC), (b) such institution is a "securities intermediary" (as defined in Section
8-102(a)(14) of the New York UCC), (c) all property (other than cash) credited
to such account shall be treated as a "financial asset" (as defined in Section
8-102(9) of the New York UCC), (d) the Mortgagee shall be the "entitlement
holder" (as defined in Section 8-102(7) of the New York UCC) in respect of such
account, (e) it will comply with all entitlement orders issued by the Mortgagee
to the exclusion of the Owner, (f) it will waive or subordinate in favor of the
Mortgagee all claims (including without limitation, claims by way of security
interest, lien or right of set-off or right of recoupment), and (g) the
"securities intermediary jurisdiction" (under Section 8-110(e) of the New York
UCC) shall be the State of New York.
"Eligible Aircraft" means any Qualified Aircraft Type and any Additional
Qualified Aircraft Type constituting Collateral subject to Section 11.02(a) of
the Trust Indenture.
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"Eligible Institution" means the corporate trust department of (a)
Wilmington Trust Company, acting solely in its capacity as a "securities
intermediary" (as defined in Section 8-102(a)(14) of the UCC), or (b) a
depository institution organized under the laws of the United States of America
or any one of the states thereof or the District of Columbia (or any U.S. branch
of a foreign bank), which has a long-term unsecured debt rating from Moody's and
Standard & Poor's of at least A-3 or its equivalent.
"Engine" means an engine used, or intended to be used, to propel an
Aircraft, including a part, appurtenance, and accessory of the Engine, except a
Propeller.
"Equipment Note Register" is defined in Section 2.07 of the Trust
Indenture.
"Equipment Notes" means and includes any equipment notes issued under the
Trust Indenture in the form specified in Section 2.01 thereof (as such form may
be varied pursuant to the terms of the Trust Indenture, including without
limitation pursuant to any certification delivered to the Mortgagee by the Owner
pursuant to Article XI of the Trust Indenture in connection with the issuance of
any Series of Additional Equipment Notes), and any Equipment Note or Additional
Equipment Note issued under the Trust Indenture in exchange for or replacement
thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, and any
regulations and rulings issued thereunder all as amended and in effect from time
to time.
"Event of Default" is defined in Section 5.01 of the Trust Indenture.
"Event of Loss" means with respect to any Pledged Spare Part or Pledged
Spare Engine constituting part of the Collateral (together, for purposes of this
definition "Collateral"), (i) the loss of, or any prohibition of use thereof due
to destruction, damage beyond economic repair or rendition of any of the
Collateral permanently unfit for normal use by Owner for any reason whatsoever
(other than the use of Expendables in the Owner's operations); (ii) any damage
to any of the Collateral which results in the receipt of insurance proceeds with
respect to such Collateral on the basis of an actual or constructive loss; (iii)
the loss of possession of any of the Collateral by the Owner for ninety (90)
consecutive days (or, if earlier, the date on which the Owner has confirmed to
the Mortgagee in writing that the Owner cannot recover such Collateral as a
result of the theft, hijacking or disappearance of such Collateral); (iv) any
seizure, condemnation, confiscation, taking or requisition (including loss of
title), or any prohibition of use, of any of the Collateral by any Government
Entity or purported Government Entity (other than a requisition of use by the
U.S. Government) or any law, rule, regulation or order thereof or other action
thereby for a period exceeding one-hundred eighty (180) consecutive days; (v)
the return of any Collateral to the Manufacturer or Seller or either of their
agents pursuant to any warranty settlement or patent indemnity settlement; or
(vi) in respect of any Pledged Spare Engine, any event treated as an Event of
Loss under Section 11.02(c)(iii) or (vii) of the Trust Indenture.
"Excluded Parts" means Spare Parts and Appliances held by the Owner at a
location that is not a Designated Location.
"Expendables" means Qualified Spare Parts, other than Rotables.
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"Expenses" means any and all liabilities, obligations, losses, damages,
settlements, penalties, claims, actions, suits, costs, expenses and
disbursements (including, without limitation, reasonable fees and disbursements
of legal counsel, accountants, appraisers, inspectors or other professionals,
and costs of investigation).
"FAA" means the Federal Aviation Administration of the United States or
any Government Entity succeeding to the functions of such Federal Aviation
Administration.
"FAA Filed Documents" means the Trust Indenture and any Trust Indenture
Supplement.
"FAA Regulations" means the Federal Aviation Regulations issued or
promulgated pursuant to the Act from time to time.
"Fair Market Value" means, with respect to any Collateral, its fair market
value determined on the basis of a hypothetical sale negotiated in an arm's
length free market transaction between a willing and able seller and a willing
and able buyer, neither of whom is under undue pressure to complete the
transaction, under then current market conditions, provided that cash shall be
valued at its Dollar amount. With respect to any Pledged Spare Engine, "Fair
Market Value" assumes that such Pledged Spare Engine's physical condition is
average for an Engine of its type and age, and its maintenance time status is at
mid-life, mid-time (or benefiting from an above-average maintenance status if
its new or nearly new); provided that, where Fair Market Value is used in
reference to all Collateral, it will refer to the Adjusted Fair Market Value of
any Pledged Spare Engines in the Collateral.
"Financing Statements" means, collectively, (a) UCC-1 (and, where
appropriate, UCC-3) financing statements covering the Collateral, by Owner, as
debtor, showing Mortgagee as secured party, for filing in Delaware and each
other jurisdiction that, in the opinion of Mortgagee, is necessary to perfect
its Lien on the Collateral, and (b) UCC-3 financing statements evidencing
termination of the Lien on any released Pledged Spare Engine.
"GAAP" means generally accepted accounting principles as set forth in the
statements of financial accounting standards issued by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants, as
such principles may at any time or from time to time be varied by any applicable
financial accounting rules or regulations issued by the SEC and, with respect to
any person, shall mean such principles applied on a basis consistent with prior
periods except as may be disclosed in such person's financial statements.
"Government Entity" means (a) any federal, state, provincial or similar
government, and any body, board, department, commission, court, tribunal,
authority, agency or other instrumentality of any such government or otherwise
exercising any executive, legislative, judicial, administrative or regulatory
functions of such government or (b) any other government entity having
jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.
"Indemnitee" means (i) WTC and Mortgagee, (ii) each separate or additional
trustee appointed pursuant to the Trust Indenture, (iii) the Subordination
Agent, (iv) the Liquidity Providers, the Liquidity Guarantor(s) and the Policy
Provider(s), (v) the Pass Through Trustees,
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(vi) each Affiliate of the persons described in clauses (i) and (ii), (vii) each
Affiliate of the persons described in clauses (iii), (iv) and (v), (viii) the
respective directors, officers, employees, agents and servants of each of the
persons described in clauses (i), (ii) and (vi), (ix) the respective directors,
officers, employees, agents and servants of each of the persons described in
clauses (iii), (iv), (v) and (vii), (x) the successors and permitted assigns of
the persons described in clauses (i), (ii) and (viii), and (xi) the successors
and permitted assigns of the persons described in clauses (iii), (iv), (v) and
(ix); provided that the persons described in clauses (iii), (iv), (v), (vii),
(ix) and (xi) are Indemnitees only for purposes of Section 8.1 of the Note
Purchase Agreement.
"Indenture Agreements" means any contract, agreement or instrument from
time to time assigned or pledged under the Trust Indenture.
"Indenture Indemnitee" means (i) WTC and the Mortgagee, (ii) each separate
or additional trustee appointed pursuant to the Trust Indenture, (iii) the
Subordination Agent, (iv) the Liquidity Provider(s), any Liquidity Guarantor(s)
and the Policy Provider(s), (v) each Pass Through Trustee and (vi) each of the
respective directors, officers, employees, agents and servants of each of the
persons described in clauses (i) through (v) inclusive above.
"Independent Appraiser" means Simat, Helliesen & Xxxxxxx, Inc. or any
other Person certified by ISTAT (or any successor organization thereto) selected
by the Owner and approved by the Policy Provider (so long as the Policy Provider
is the Controlling Party), such approval not to be unreasonably withheld or
delayed, (i) engaged in a business which includes appraising Aircraft and assets
relating to the operation and maintenance of Aircraft from time to time and (ii)
who does not have any material financial interest in the Owner and is not
connected with the Owner or any of its Affiliates as an officer, director,
employee, promoter, underwriter, partner or person performing similar functions.
"Independent Appraiser's Certificate" means a certificate signed by an
Independent Appraiser and attached as Appendix II to the Prospectus Supplement
or delivered thereafter pursuant to Article 2 or Section 3.1 of the Collateral
Maintenance Agreement or Section 11.02(e) of the Trust Indenture.
"Initial Equipment Notes" means the Series G-1 Equipment Note and the
Series B-1 Equipment Note.
"Initial Policy Provider" means MBIA Insurance Corporation, its successors
and assigns.
"Intercreditor Agreement" means that certain Intercreditor Agreement among
the Pass Through Trustees, the Liquidity Providers, the Policy Providers and the
Subordination Agent, dated as of the Issuance Date, provided that, for purposes
of any obligation of Owner, no amendment, modification or supplement to, or
substitution or replacement of, such Intercreditor Agreement shall be effective
unless consented to by Owner.
"Interest Period" means (i) in the case of the first Interest Period, the
period commencing on (and including) the Issuance Date and ending on (but
excluding) the first Payment Date following the Issuance Date and (ii) in the
case of each subsequent Interest Period, the period
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commencing on (and including) the last day of the immediately preceding Interest
Period, and ending on (but excluding) the next Payment Date.
"Interest Rate Determination Date" means, (i) with respect to any Interest
Period applicable to the Initial Equipment Notes, the second Business Day prior
to the first day of such Interest Period, and (ii) with respect to any Interest
Period applicable to any Additional Equipment Notes, the date specified in the
applicable Officer's Certificate delivered pursuant to Section 11.03 of the
Trust Indenture.
"international interest" is defined in the Cape Town Convention.
"International Registry" is defined in the Cape Town Convention.
"Investment Security" means (a) any bond, note or other obligation which
is a direct obligation of or guaranteed by the U.S. or any agency thereof; (b)
any obligation which is a direct obligation of or guaranteed by any state of the
U.S. or any subdivision thereof or any agency of any such state or subdivision,
and which has the highest rating published by Moody's or Standard & Poor's; (c)
any commercial paper issued by a U.S. obligor and rated at least P-1 by Moody's
or A-1 by Standard & Poor's; (d) any money market investment instrument relying
upon the credit and backing of any bank or trust company which is a member of
the Federal Reserve System and which has a combined capital (including capital
reserves to the extent not included in capital) and surplus and undivided
profits of not less than $250,000,000 (including the Mortgagee and its
Affiliates if such requirements as to Federal Reserve System membership and
combined capital and surplus and undivided profits are satisfied), including,
without limitation, certificates of deposit, time and other interest-bearing
deposits, bankers' acceptances, commercial paper, loan and mortgage
participation certificates and documented discount notes accompanied by
irrevocable letters of credit and money market fund investing solely in
securities backed by the full faith and credit of the United States; or (e)
repurchase agreements collateralized by any of the foregoing.
"IRS" means the Internal Revenue Service of the United States or any
Government Entity succeeding to the functions of such Internal Revenue Service.
"Issuance Date" means the "Closing Date" as defined in the Intercreditor
Agreement.
"JetBlue Cash Balance" means the sum of (a) the amount of cash and cash
equivalents that would have been shown on the balance sheet of JetBlue and its
consolidated subsidiaries prepared in accordance with GAAP as of any Valuation
Date, plus (b) the amount of marketable securities that would have been
reflected on such balance sheet which had, as of such Valuation Date, a maturity
of less than one year and which, but for their maturity, would have qualified to
be reflected on such balance sheet as cash equivalents.
"Junior Equipment Note" is defined in Section 11.03(a) of the Trust
Indenture.
"Law" means (a) any constitution, treaty, statute, law, decree,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision under,
any of the foregoing.
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"Leading Policy Provider" is defined in the Intercreditor Agreement.
"LIBOR" is defined in the Intercreditor Agreement.
"Lien" is defined in the Intercreditor Agreement.
"Liquidity Facility" and "Liquidity Facilities" are defined in the
Intercreditor Agreement.
"Liquidity Guarantor" is defined in the Intercreditor Agreement.
"Liquidity Provider" and "Liquidity Providers" are defined in the
Intercreditor Agreement.
"Loans" is defined in Section 3.2 of the Collateral Maintenance Agreement.
"Majority in Interest of Note Holders" means as of a particular date of
determination, the holders of a majority in aggregate unpaid Original Amount of
all Series of Equipment Notes outstanding as of such date (excluding any
Equipment Notes held by Owner or any of its Affiliates, unless all Equipment
Notes then outstanding shall be held by Owner or any Affiliate of Owner);
provided that for the purposes of directing any action or casting any vote or
giving any consent, waiver or instruction hereunder, any Note Holder of an
Equipment Note or Equipment Notes may allocate, in such Note Holder's sole
discretion, any fractional portion of the principal amount of such Equipment
Note or Equipment Notes in favor of or in opposition to any such action, vote,
consent, waiver or instruction.
"Material Adverse Change" means, with respect to any person, any event,
condition or circumstance that materially and adversely affects such person's
business or consolidated financial condition or its ability to observe or
perform its obligations, liabilities and agreements under the Operative
Agreements.
"Maturity Date" means January 2, 2014 with respect to the Initial
Equipment Notes and, with respect to any Additional Equipment Note shall be as
defined in the form of such Additional Equipment Note.
"Maximum Collateral Ratio" means forty-five percent (45%).
"Maximum Subordinated Collateral Ratio" means seventy-five percent (75%).
"Minimum Rotable Ratio" means one-hundred fifty percent (150%).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgaged Property" is defined in Section 3.03 of the Trust Indenture.
"Mortgagee" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as mortgagee under the
Trust Indenture.
"Moves" is defined in Section 3.2 of the Collateral Maintenance Agreement.
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"Net Worth" means, for any person, the excess of its total assets over its
total liabilities.
"Non-U.S. Person" means any Person other than a United States person, as
defined in Section 7701(a)(30) of the Code.
"Nonappraisal Compliance Report" means a report providing information
relating to compliance by the Owner with Section 2.3 of the Collateral
Maintenance Agreement, which shall be substantially in the form of Appendix II
to the Collateral Maintenance Agreement.
"Note Holder" means at any time each registered holder of one or more
Equipment Notes of any Series.
"Note Purchase Agreement" is defined in the Intercreditor Agreement.
"NY UCC" means the UCC as in effect on the date of determination in the
State of New York.
"Officer's Certificate" means, in respect of any party to the Note
Purchase Agreement, a certificate signed by the Chairman, the President, any
Vice President (including those with varying ranks such as Executive, Senior,
Assistant or Staff Vice President), the Treasurer or the Secretary of such
party.
"Operative Agreements" means, collectively, the Note Purchase Agreements,
the Policy Provider Documents, the Collateral Maintenance Agreement, the Trust
Indenture, all Trust Indenture Supplements and the Equipment Notes, including
any Additional Equipment Notes.
"Optional Redemption" is defined in Section 2.11 of the Trust Indenture.
"Original Amount," with respect to an Equipment Note of any Series, means
the stated original principal amount of such Equipment Note and, with respect to
all Equipment Notes of all Series, means the aggregate stated original principal
amounts of all Equipment Notes of all such Series.
"Owner" is defined in the first paragraph of the Trust Indenture.
"Owner Person" means Owner, any lessee, assignee, successor or other user
or person in possession of any Pledged Spare Part with or without color of
right, or any Affiliate of any of the foregoing (excluding any Tax Indemnitee or
any related Tax Indemnitee with respect thereto, or any person using or claiming
any rights with respect to a Pledged Spare Part directly by or through any of
the persons in this parenthetical).
"Parts Inventory Report" means, as of any date, a list identifying the
Pledged Spare Parts by manufacturer's part number and brief description and
stating the quantity of each such part included in the Pledged Spare Parts as of
such specified date.
"Pass Through Certificates" has the meaning ascribed to "Certificates" in
the Intercreditor Agreement.
12
"Pass Through Trust" means each "Senior Trust" and "Junior Trust" (as such
terms are defined in the Intercreditor Agreement).
"Pass Through Trust Agreement" means each Junior Trust Agreement and
Senior Trust Agreement (as such terms are defined in the Intercreditor
Agreement).
"Pass Through Trustee" means Wilmington Trust Company, a Delaware banking
corporation, in its capacity as trustee under each Pass Through Trust Agreement.
"Pass Through Trustee Agreements" means the Pass Through Trust Agreements,
the Note Purchase Agreements, and the Intercreditor Agreement.
"Payment Date" means each January 2nd, April 2nd, July 2nd and October
2nd, and with respect to the Initial Equipment Notes, commencing on January 2nd,
2007.
"Payment Default" means a Default under Section 5.01(i) of the Trust
Indenture.
"Payment Due Rate" means (a) with respect to (i) any payment made to a
Note Holder under any Series of Equipment Notes, the Debt Rate applicable to
such Series plus 2% and (ii) any other payment made under any Operative
Agreement to any other Person, the Debt Rate applicable to such payment plus 2%
or, if less, (b) the maximum rate permitted by applicable law.
"Permitted Days" is defined in Section 2.1 of the Collateral Maintenance
Agreement.
"Permitted Lease" means a lease permitted under Section 4.04(d) of the
Trust Indenture.
"Permitted Lessee" with respect to a Pledged Spare Part is defined in
Section 4.04(d) of the Trust Indenture, and with respect to a Pledged Spare
Engine is defined in Section 11.02(c)(ix) of the Trust Indenture..
"Permitted Lien" means (a) the rights of Mortgagee under the Operative
Agreements, or of any Permitted Lessee under any Permitted Lease; (b) Liens
attributable to Mortgagee (both in its capacity as trustee under the Trust
Indenture and in its individual capacity); (c) the rights of others under
agreements or arrangements to the extent expressly permitted by the terms of
Section 4.04 or 4.05 of the Trust Indenture; (d) Liens for Taxes of Owner (and
its U.S. federal tax law consolidated group), or Liens for Taxes of any Tax
Indemnitee (and its U.S. federal tax law consolidated group) for which Owner is
obligated to indemnify such Tax Indemnitee under any of the Operative
Agreements, in any such case either not yet due or being contested in good faith
by appropriate proceedings so long as such Liens and such proceedings do not
involve any material risk of the sale, forfeiture or loss of the Pledged Spare
Parts or Pledged Spare Engines or the interest of Mortgagee therein or impair
the Lien of the Trust Indenture; (e) materialmen's, mechanics', workers',
repairers', employees' or other like Liens arising in the ordinary course of
business for amounts the payment of which is either not yet delinquent for more
than sixty (60) days or is being contested in good faith by appropriate
proceedings, so long as such Liens and such proceedings do not involve any
material risk of the sale, forfeiture or loss of the Pledged Spare Parts or
Pledged Spare Engines or the interest of Mortgagee therein or impair the Lien of
the Trust Indenture; (f) Liens arising out of any judgment or award against
Owner (or any
13
Permitted Lessee), so long as such judgment shall, within sixty (60) days after
the entry thereof, have been discharged or vacated, or execution thereof stayed
pending appeal or shall have been discharged, vacated or reversed within 60 days
after the expiration of such stay, and so long as during any such sixty (60) day
period there is not, or any such judgment or award does not involve, any
material risk of the sale, forfeiture or loss of the Pledged Spare Parts or
Pledged Spare Engines or the interest of Mortgagee therein or impair the Lien of
the Trust Indenture; (g) insurer's salvage rights, (h) any ownership or other
registrable interest of Owner permitted or required under the Operative
Documents and registered on the International Registry in respect of any Pledged
Spare Engine, and (i) any other Lien with respect to which Owner (or any
Permitted Lessee) shall have provided a bond, cash collateral or other security
adequate in the reasonable opinion of Mortgagee.
"Persons" or "persons" means individuals, firms, partnerships, joint
ventures, trusts, trustees, Government Entities, organizations, associations,
corporations, limited liability companies, government agencies, committees,
departments, authorities and other bodies, corporate or incorporate, whether
having distinct legal status or not, or any member of any of the same.
"Plan" means any employee benefit plan within the meaning of Section 3(3)
of ERISA, or any plan within the meaning of Section 4975(e)(1) of the Code.
"Pledged Spare Engine" has the meaning set forth in Section 11.02(a) of
the Trust Indenture.
"Pledged Spare Engine Collateral" means a Pledged Spare Engine together
with all of Owner's rights of warranty or indemnity in respect thereof, all
related Pledged Spare Engine Documents, and all proceeds of the foregoing.
"Pledged Spare Engine Documents" means all repair, maintenance and
technical records, logs, manuals, engine disc sheets 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 Owner pursuant to the FAA or under the Act,
with respect to any Pledged Spare Engine.
"Pledged Spare Parts" has the meaning set forth in clause (1) of the
Granting Clause of the Trust Indenture.
"Policy" is defined in the Intercreditor Agreement.
"Policy Provider", "Policy Provider Agreement","Policy Provider Amounts",
"Policy Provider Documents" and "Policy Provider Obligations" are defined in the
Intercreditor Agreement.
"Premium" means (i) with respect to the Series B-1 Equipment Note redeemed
pursuant to Section 2.11 of the Trust Indenture, the following percentage of the
principal amount of such Series B-1 Equipment Note: (x) if redeemed on or after
the third anniversary of the Issuance Date and before the fourth anniversary of
the Issuance Date, 4%; and (y) if redeemed on or after such fourth anniversary
and before the fifth anniversary of the Issuance Date, 2%; provided that
14
no Premium shall be payable under this clause (i) in connection with a
redemption of any Equipment Note made by the Owner to satisfy the Maximum
Collateral Ratio, Maximum Subordinated Collateral Ratio or Minimum Rotable Ratio
requirement pursuant to Section 3.1 of the Collateral Maintenance Agreement or
in connection with a redemption required under Section 3.3 of the Collateral
Maintenance Agreement; (ii) with respect to the Series G-1 Equipment Note
redeemed pursuant to Section 3.3 of the Collateral Maintenance Agreement prior
to the third anniversary of the Issuance Date, 1% of the principal amount of
such Series G-1 Equipment Note , (iii) with respect to any Series B-1 Equipment
Note redeemed pursuant to Section 3.3 of the Collateral Maintenance Agreement
(x) prior to the fourth anniversary of the Issuance Date, 4% of the principal
amount of such Series B-1 Equipment Note or (y) on or after such fourth
anniversary and before the fifth anniversary of the Issuance Date, 2% of the
principal amount of such Series B-1 Equipment Note; and (iii) with respect to
any Additional Equipment Note, the percentage specified in the applicable
Officer's Certificate in respect thereof delivered pursuant to Section 11.03 of
the Trust Indenture and set forth in the form of such Additional Equipment Note.
"Primary Liquidity Facility" is defined in the Intercreditor Agreement.
"Primary Liquidity Provider" is defined in the Intercreditor Agreement
"Propeller" includes a part, appurtenance, and accessory of a propeller.
"Prospectus Supplement" means the final Prospectus Supplement, dated
November 7, 2006, to the Prospectus, dated June 30, 2006, of the Owner relating
to the offering of the Pass Through Certificates.
"QIB" is defined in Section 2.08 of the Trust Indenture.
"Qualified Aircraft Type" means any Airbus model A320 aircraft and Embraer
model 190 aircraft.
"Qualified Spare Parts" has the meaning provided in clause (1) of the
Granting Clause of the Trust Indenture.
"Rating Agencies" is defined in the Intercreditor Agreement.
"Ratings Confirmation" is defined in the Intercreditor Agreement.
"Redemption Action" means the sending of a notice of redemption pursuant
to Section 2.12 of the Trust Indenture with respect to an Optional Redemption of
any Series of Equipment Notes and the deposit of funds sufficient to pay the
redemption price in full (including accrued interest and Premium, if any, but
excluding Break Amount, if any, which shall be deposited on or prior to the
scheduled redemption date) for such Optional Redemption.
"Redemption Price" is defined in Schedule 2 to the applicable Note
Purchase Agreement.
"Reference Agency Agreement" means the Reference Agency Agreement dated as
of the Issuance Date among WTC, as reference agent thereunder, the Subordination
Agent and Owner.
15
"Reference Agent" is defined in the Reference Agency Agreement.
"Replacement Closing Date" is defined in Section 11.02(f)(i) of the Trust
Indenture.
"Replacement Spare Engine" is defined in Section 11.02(f)(ii) of the Trust
Indenture.
"Required Subordinated Holders" means the holders of a majority of the
outstanding Original Amount of Junior Equipment Notes.
"Rotable" means a Qualified Spare Part that wears over time and can be
repeatedly restored to a serviceable condition over a period approximating the
life of the flight equipment to which it relates.
"Rotable Part" means a Spare Part or Appliance that wears over time and
can be repeatedly restored to a serviceable condition over a period
approximating the life of the flight equipment to which it relates.
"Rotable Ratio" shall mean a percentage determined by dividing (i) the
Fair Market Value of the Rotables, as set forth in the most recent Independent
Appraiser's Certificate delivered by the Owner pursuant to Article 2 of the
Collateral Maintenance Agreement, as supplemented pursuant to Section 3.1 of the
Collateral Maintenance Agreement, if applicable, by (ii) the aggregate principal
amount of all outstanding Senior Equipment Notes minus the sum of the Cash
Collateral held by the Mortgagee.
"Sales" is defined in Section 3.2 of the Collateral Maintenance Agreement.
"SEC" means the Securities and Exchange Commission of the United States,
or any Government Entity succeeding to the functions of such Securities and
Exchange Commission.
"Section 1110" means 11 U.S.C. Section 1110 of the Bankruptcy Code or any
successor or analogous section of the federal bankruptcy law in effect from time
to time.
"Section 1110 Period" means the continuous period of (i) 60 days specified
in Section 1110(a)(2)(A) of the Bankruptcy Code (or such longer period, if any,
agreed to under Section 1110(b) of the Bankruptcy Code), plus (ii) an additional
period, if any, commencing with the trustee or debtor-in-possession in such
proceeding entering into an agreement of the kind described in Section
1110(a)(2)(A) of the Bankruptcy Code and continuing until such time as such
trustee or debtor-in-possession fails to perform its obligations thereunder such
that the Mortgagee is entitled to take possession of the Pledged Spare Parts or
any Pledged Spare Engine pursuant to the Trust Indenture.
"Secured Obligations" is defined in Section 2.06 of the Trust Indenture.
"Securities Account" is defined in Section 3.07 of the Trust Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Intermediary" is defined in Section 3.07 of the Trust
Indenture.
16
"Security" means a "security" as defined in Section 2(l) of the Securities
Act.
"Semiannual Methodology" means the Annual Methodology, excluding actions
referred to in clauses (iii) and (iv) of the definition of Annual Methodology.
"Semiannual Valuation Date" is defined in Section 2.2 of the Collateral
Maintenance Agreement.
"Senior Equipment Note" is defined in Section 11.03(a) of the Trust
Indenture.
"Series" means any series of Equipment Note issued under this Indenture.
"Series B-1 Equipment Note" means the Equipment Note issued on the Closing
Date under the Trust Indenture and designated "Series B".
"Series G-1 Equipment Note" means the Equipment Note issued on the Closing
Date under the Trust Indenture and designated Series G.
"Serviceable Parts" means Pledged Spare Parts in condition satisfactory
for incorporation in, installation on, attachment or appurtenance to or use in
an Aircraft, Engine or other Qualified Spare Part.
"Spare Engine" shall mean any Engine first placed in service after October
22, 1994, that is owned by Owner and appropriate for installation on an Eligible
Aircraft, whether or not actually installed thereon.
"Spare Part" means an accessory, appurtenance, or part of an Aircraft
(except an Engine or Propeller), Engine (except a Propeller), Propeller, or
Appliance, that is to be installed at a later time in an Aircraft, Engine,
Propeller or Appliance.
"Spare Parts Documents" has the meaning set forth in clause (6) of the
Granting Clause of the Trust Indenture.
"Special Default" means (i) the failure by Owner to pay any amount of
principal of or interest on any Equipment Note when due or (ii) the occurrence
of any Default or Event of Default referred to in Section 5.01(v), (vi) or (vii)
of the Trust Indenture.
"Special Valuation Date" is defined in Section 2.4 of the Collateral
Maintenance Agreement.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc.
"Subordinated Collateral Ratio" shall mean a percentage determined by
dividing (i) the aggregate unpaid Original Amount of all Equipment Notes minus
the sum of the Cash Collateral held by the Securities Intermediary by (ii) the
Fair Market Value of all Collateral (excluding any Cash Collateral), as set
forth in the most recent Independent Appraiser's Certificate delivered by
17
the Owner pursuant to Article 2 of the Collateral Maintenance Agreement, as
supplemented pursuant to Section 3.1 of the Collateral Maintenance Agreement, if
applicable.
"Subordinated Security Provisions" is defined in Section 4.1 of the
Collateral Maintenance Agreement.
"Subordination Agent" means Wilmington Trust Company, as subordination
agent under the Intercreditor Agreement, or any successor thereto.
"Subordination Agent Agreements" means the Note Purchase Agreements, the
Policy Provider Documents, the Primary Liquidity Facilities, the Reference
Agency Agreement, the Above-Cap Liquidity Agreements and the Intercreditor
Agreement.
"Tax Indemnitee" means (a) WTC and Mortgagee, (b) each separate or
additional trustee appointed pursuant to the Trust Indenture, (c) each Note
Holder, (d) each Policy Provider, (e) the Subordination Agent, and (f) the
respective successors, assigns, agents and servants of the foregoing.
"Taxes" means all license, recording, documentary, registration and other
similar fees and all taxes, levies, imposts, duties, charges, assessments or
withholdings of any nature whatsoever imposed by any Taxing Authority, together
with any penalties, additions to tax, fines or interest thereon or additions
thereto.
"Taxing Authority" means any federal, state or local government or other
taxing authority in the United States, any foreign government or any political
subdivision or taxing authority thereof, any international taxing authority or
any territory or possession of the United States or any taxing authority
thereof.
"Temporary Cash Collateral" is defined in Section 3.1(e) of the Collateral
Maintenance Agreement.
"Threshold Amount" means $2,000,000.
"Transaction Expenses" means all costs and expenses reasonably incurred by
Mortgagee in connection with (a) the preparation, execution and delivery of the
Operative Agreements and the recording or filing of any documents, certificates
or instruments in accordance with any Operative Agreement, including, without
limitation, the FAA Filed Documents and the Financing Statements, (b) the
initial fee of Mortgagee under the Trust Indenture and (c) the reasonable fees
and disbursements of counsel for Mortgagee and special counsel in Oklahoma City,
Oklahoma, in each case, in connection with the Closing.
"Transactions" means the transactions contemplated by the Note Purchase
Agreements.
"Transfer" means the transfer, sale, assignment or other conveyance of all
or any interest in any property, right or interest.
18
"Transferee" means a person to which any Note Holder purports or intends
to Transfer any or all of its right, title or interest in any Equipment Note, as
described in Section 9 of the applicable Note Purchase Agreement.
"Trust Indenture" or "Indenture" means this Trust Indenture and Mortgage,
dated as of November 14, 2006, between Owner and Mortgagee.
"Trust Indenture Collateral Supplement" means a Trust Indenture and
Mortgage Collateral Supplement, substantially in the form of Exhibit B to the
Trust Indenture, with appropriate modifications to reflect the purpose for which
it is being used.
"Trust Indenture Location Supplement" means a Trust Indenture and Mortgage
Location Supplement, substantially in the form of Exhibit A to the Trust
Indenture, with appropriate modifications to reflect the purpose for which it is
being used.
"Trust Indenture Supplement" means a Trust Indenture Collateral Supplement
or a Trust Indenture Location Supplement.
"UCC" means the Uniform Commercial Code as in effect in any applicable
jurisdiction.
"Underwriter" is defined in the Intercreditor Agreement.
"Underwriting Agreement" means (i) with respect to the Certificates issued
in connection with the Initial Equipment Notes, the Underwriting Agreement dated
November 7, 2006 between Owner and Xxxxxx Xxxxxxx & Co. Incorporated, as
representative of the several underwriters, and (ii) with respect to the
Certificates issued in connection with any Additional Equipment Notes, any
underwriting agreement, private placement or analogous agreement pursuant to
which the initial offering and sale of the applicable Certificates is effected,
in each case as the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"United States" or "U.S." means the United States of America; provided
that for geographic purposes, "United States" means, in aggregate, the 50 states
and the District of Columbia of the United States of America.
"Unserviceable Parts" means Pledged Spare Parts that are not Serviceable
Parts.
"U.S. Air Carrier" means any United States air carrier that is a Citizen
of the United States holding an air carrier operating certificate issued
pursuant to chapter 447 of title 49 of the United States Code for aircraft
capable of carrying 10 or more individuals or 6000 pounds or more of cargo, and
as to which there is in force an air carrier operating certificate issued
pursuant to Part 121 of the FAA Regulations, or which may operate as an air
carrier by certification or otherwise under any successor or substitute
provisions therefor or in the absence thereof.
"U.S. Government" means the federal government of the United States, or
any instrumentality or agency thereof the obligations of which are guaranteed by
the full faith and credit of the federal government of the United States.
19
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the option of the issuer thereof.
"U.S. Person" means any Person described in Section 7701 (a)(30) of the
Code.
"Valuation Dates" is defined in Section 2.4 of the Collateral Maintenance
Agreement.
"Warranties" is defined in clause (2) of the Granting Clause of the Trust
Indenture.
"WTC" means Wilmington Trust Company, a Delaware banking corporation, not
in its capacity as Mortgagee under the Trust Indenture, but in its individual
capacity.
20
-------------------------------
ANNEX B - INSURANCE
TRUST INDENTURE
-------------------------------
ANNEX B
INSURANCE
Capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference in Annex A to the Trust
Indenture.
A. LIABILITY INSURANCE
The Owner will carry or cause to be carried at all times, at no
expense to any Additional Insured (as defined below), third party liability
insurance with respect to the Pledged Spare Parts, which is (i) of an amount and
scope as may be customarily maintained by the Owner for equipment similar to the
Pledged Spare Parts and (ii) maintained in effect with insurers of nationally or
internationally recognized responsibility (such insurers being referred to
herein as "Approved Insurers").
B. PROPERTY INSURANCE
The Owner will carry or cause to be carried at all times, at no
expense to any Additional Insured, with Approved Insurers insurance covering
physical damage to the Pledged Spare Parts providing for the reimbursement of
the actual expenditure incurred in repairing or replacing any damaged or
destroyed Pledged Spare Part or, if not repaired or replaced, for the payment of
the amount it would cost to repair or replace such Pledged Spare Part, on the
date of loss, with proper deduction for obsolescence and physical depreciation.
Any policies of insurance carried in accordance with this Annex B
covering the Pledged Spare Parts and any policies taken out in substitution or
replacement for any such policies shall provide that (A) all insurance proceeds
up to the Debt Balance paid under such policies as a result of the occurrence of
an Event of Loss with respect to any Pledged Spare Parts involving proceeds in
excess of the Threshold Amount will be paid to the Mortgagee, it being agreed
that the Mortgagee shall pay the amount of such proceeds to the Owner or its
order to the extent required under Section 4.09(b) of the Trust Indenture, and
(B) the entire amount of any insurance proceeds not involving an Event of Loss
with respect to any Pledged Spare Parts or involving proceeds of the Threshold
Amount or less and the amount of insurance proceeds in excess of the Debt
Balance shall be paid to the Owner or its order; provided that if a Special
Default or Event of Default shall have occurred and be continuing and the
insurers have been notified thereof by the Mortgagee or the Policy Provider, the
amount of any proceeds of any loss with respect to the Pledged Spare Parts shall
be paid to the Mortgagee.
C. PLEDGED SPARE ENGINES
(a) In connection with any Pledged Spare Engine, the Owner shall
also maintain or cause to be maintained, at no expense to any Additional
Insured, in respect of such Pledged Spare Engine the following insurances:
(i) Liability: Airline liability insurance, including third
party and passenger legal liability, bodily injury liability, war risk and
allied perils liability ("LIABILITY WAR RISK INSURANCE"), property damage
liability, and contractual liability (exclusive of manufacturer's product
liability insurance) with respect to the Pledged Spare Engine (x) in such amount
as is customarily maintained by Owner in respect of Engines similar to the
Pledged Spare Engine and (y) with Approved Insurers.
During any period that a Pledged Spare Engine is on the ground and
not in operation, Owner may carry or cause to be carried, in lieu of the
insurance required by the above paragraph, insurance otherwise conforming to the
provisions of the paragraph above except that (A) the amounts of coverage shall
not be required to exceed the amounts of bodily injury liability and property
damage liability insurance from time to time applicable to the same or similar
type of engines owned or leased by other U.S. Air Carriers which are on the
ground and not in operation, and (B) the scope of risks covered and the type of
insurance shall be consistent with industry practice from time to time
applicable to the same or similar type of engines owned or lease by
similarly-situated U.S. Air Carriers and which are on the ground and not in
operation.
(ii) Property: (A) "All-Risk" ground and flight aircraft hull
insurance covering each Aircraft on which any Pledged Spare Engine is installed
and such Pledged Spare Engine while so installed thereon and all-risk property
damage insurance covering such Pledged Spare Engine (with flight, taxiing and
ingestion coverages), (B) fire, transit and extended coverage of Engines while
removed from any airframe, and (C) war risk and allied perils insurance,
including government confiscation and expropriation and hijacking insurance
(collectively, "HULL WAR RISK INSURANCE", and collectively, with Liability War
Risk Insurance, "WAR RISK INSURANCE") at all times in an aggregate amount
applicable to all of the Pledged Spare Engines not less than one hundred ten
percent (110%) of the Adjusted Fair Market Value as of the most recent Valuation
Date; provided that, in the case of Hull War Risk Insurance, such insurance
shall be maintained by Owner if and to the extent that a majority of
similarly-situated U.S. Air Carriers operating similarly-sized equipment on
similar routes maintain such insurance.
2
(b) Notwithstanding any provisions of this Annex B Section C, the
Mortgagee agrees to accept, in lieu of any insurance against any risk with
respect to a Pledged Spare Engine, indemnification from, or insurance provided
by, the government of the United States or any instrumentality thereof the
obligations of which are supported by the full faith and credit of the U.S.
government (including by the FAA, under a war risk and allied perils policy of a
scope contained in the policy commonly known as "Amendment No. 7" [or any later
iteration thereof]) which policy as it relates to the Owner is the FAA's Policy
number [P5-WR-090105-B6] as the same may be replaced or revised. Any notice
provision required by the insurances pursuant to Section E (iii) below, shall be
deemed satisfied in respect of any U.S. Government indemnification program
(including the aforementioned FAA policy) if the U.S. Government is obligated to
publish notice of any cancellation, reduction, change or lapse described therein
in the Federal Register; provided Owner notifies each Additional Insured
(defined below) of any such published notice.
(c) As between the Owner and the Mortgagee, all insurance proceeds
received as a result of the occurrence of an Event of Loss with respect to any
Pledged Spare Engine under policies required to be maintained by the Owner
pursuant to the Trust Indenture will be applied in accordance with Section
4.09(b) of this Trust Indenture. All proceeds of insurance required to be
maintained by the Owner in respect of any property damage or loss not
constituting an Event of Loss with respect to any Pledged Spare Engine will be
applied in payment (or to reimburse the Owner) for repairs or for replacement
property, and any balance remaining after such repairs or replacement with
respect to such damage or loss shall, subject to Section 4.09(c), be paid over
to, or retained by, the Owner.
D. GENERAL PROVISIONS
Any policies of insurance carried in accordance with Sections A, B,
and C including any policies taken out in substitution or replacement for such
policies:
(i) shall name the Mortgagee, the Trustee, the Liquidity
Providers, Liquidity Guarantor, and Policy Providers as additional insureds
(collectively, the "Additional Insureds"), as their respective interests may
appear;
(ii) shall provide that, in respect of the interests of the
Additional Insureds in such policies, the insurance shall not be invalidated or
impaired by any act or omission (including misrepresentation and nondisclosure)
by the Owner (or any Permitted Lessee) or any other Person and shall insure the
Additional Insureds regardless of any breach or violation of any representation,
warranty, declaration, term or condition contained in such policies by the Owner
(or any Permitted Lessee);
(iii) shall provide that, if such insurance is cancelled for any
reason whatsoever, or if the same is allowed to lapse for nonpayment of premium,
or if any material change is made in the insurance which adversely affects the
interest of any of the Additional Insureds, such cancellation, lapse or change
shall not be effective as to the Additional Insureds for 30 days (10 days for
nonpayment of premiums or cancellation by the Owner; 7 days in the case of War
Risk Insurance) after receipt by the Additional Insureds of written notice by
such insurers of such cancellation, lapse or change, provided that if any notice
period specified above
3
is not reasonably obtainable, such policies shall provide for as long a period
of prior notice as shall then be reasonably obtainable;
(iv) shall waive any right of recourse, subrogation, setoff,
recoupment, counterclaim or other deduction against any Additional Insured;
(v) shall be primary without right of contribution from any
other insurance that may be available to any Additional Insured;
(vi) shall provide that all of the liability insurance provisions
thereof, except the limits of liability, shall operate in all respects as if a
separate policy had been issued covering each party insured thereunder;
(vii) shall provide that none of the Additional Insureds shall be
liable for any insurance premium; and
(viii) in respect of insurances covering Pledged Spare Engines,
Owner may procure endorsements to the relevant insurance policies required to be
maintained pursuant to Section 4.09 and Section C of this Annex B so as to
incorporate the terms of AVN67B, or any successor provision, into such policies,
in which event, to the extent that any provision of any such AVN67B endorsement
conflicts or is otherwise inconsistent with the requirements of Section 4.09 or
Annex B (including Sections C and D), then such endorsement shall be deemed to
satisfy such requirements to the extent covered by such endorsement. If the
terms of AVN67B are incorporated into such policies, Owner will cause its
insurance broker to issue an undertaking letter to the Additional Insureds
confirming that the insurance broker will promptly advise the Additional
Insureds upon becoming aware of the cancellation of or any material change in
such insurance policies.
E. REPORTS AND CERTIFICATES; OTHER INFORMATION
On or prior to the Closing Date and on or prior to each renewal date
of the insurance policies required hereunder, the Owner will furnish or cause to
be furnished to the Mortgagee and the Policy Provider insurance certificates
describing in reasonable detail the insurance maintained by the Owner or any
Permitted Lessee hereunder and a report, signed by the Owner's regularly
retained independent insurance broker (the "Insurance Broker"), stating the
opinion of such Insurance Broker that all premiums in connection with the
insurance then due have been paid and that the insurance terms are in compliance
with the requirements of this Annex B. The Owner will request the Insurance
Broker to agree to advise the Mortgagee in writing of any default in the payment
of any premium and of any other act or omission on the part of the Owner or any
Permitted Lessee of which it has knowledge and which might invalidate or render
unenforceable, in whole or in part, any insurance on the Pledged Spare Parts or
Pledged Spare Engines, if applicable, or cause the cancellation, termination or
interruption of such insurance; and, if the Insurance Broker does not so agree,
the Owner shall advise the Mortgagee in writing of any such default in payment
at least 30 days (7 days in the case of War Risk Insurance and 10 days in the
case of nonpayment of premium) prior to the cancellation lapse, or material
adverse change of any insurance maintained pursuant to this Annex B).
4
F. RIGHT TO PAY PREMIUMS
None of the Mortgagee and the other Additional Insureds shall have
any obligation to pay any premium, commission, assessment or call due on any
such insurance (including reinsurance). Notwithstanding the foregoing, in the
event of cancellation of any insurance due to the nonpayment of premiums, the
Policy Provider or the Mortgagee shall have the option, in its sole discretion,
to pay any such premium in respect of the Pledged Spare Parts or Pledged Spare
Engine, if applicable, that is due in respect of the coverage pursuant to the
Trust Indenture and to maintain such coverage, as the Policy Provider or the
Mortgagee may require, until the scheduled expiry date of such insurance and, in
such event, the Owner shall, upon demand, reimburse the Policy Provider or the
Mortgagee for amounts so paid by it.
G. DEDUCTIBLES; SELF-INSURANCE
The Owner may self-insure by way of deductible, premium adjustment
or franchise provisions or otherwise in the insurance covering the risks
required to be insured against pursuant to this Annex B in such amounts as shall
be consistent with normal industry practice for similarly-situated U.S. Air
Carriers.
5
EXHIBIT A
TO
TRUST INDENTURE AND MORTGAGE
TRUST INDENTURE AND MORTGAGE LOCATION SUPPLEMENT NO. ______
This TRUST INDENTURE AND MORTGAGE LOCATION SUPPLEMENT NO. _______,
dated [____________ ___, ____] (herein called this "TRUST INDENTURE SUPPLEMENT")
of JETBLUE AIRWAYS, CORPORATION, as Owner (the "OWNER").
W I T N E S S E T H:
WHEREAS, the Owner and Wilmington Trust Company, as Mortgagee (the
"MORTGAGEE"), have heretofore executed and delivered a Trust Indenture and
Mortgage, dated as of November 14, 2006(the "TRUST INDENTURE"), and terms
defined in the Trust Indenture and used herein have such defined meanings unless
otherwise defined herein;
WHEREAS, the Trust Indenture grants a Lien on, among other things,
certain Spare Parts and Appliances to secure (subject to the provisions of the
Trust Indenture), among other things, the Owner's obligations to the Note
Holders and the Indenture Indemnities;
WHEREAS, the Owner has previously designated the locations at which
the Pledged Spare Parts may be maintained by or on behalf of the Owner in the
Trust Indenture [AND IN TRUST INDENTURE LOCATION SUPPLEMENT NO. __];
WHEREAS, the Trust Indenture [AND THE TRUST INDENTURE SUPPLEMENTS]
has [HAVE] been duly recorded with the Federal Aviation Administration at
Oklahoma City, Oklahoma, pursuant to the Act on the following date as a document
or conveyance bearing the following number:
DATE OF DOCUMENT OR
RECORDING CONVEYANCE NO.
Trust Indenture..........
WHEREAS, the Owner, as provided in the Trust Indenture, is hereby
executing and delivering to the Mortgagee this Trust Indenture Location
Supplement for the purposes of adding locations at which the Pledged Spare Parts
may be maintained by or on behalf of the Owner; and
WHEREAS, all things necessary to make this Trust Indenture Location
Supplement the valid, binding and legal obligation of the Owner, including all
proper corporate action on the part of the Owner, have been done and performed
and have happened;
NOW, THEREFORE, THIS TRUST INDENTURE LOCATION SUPPLEMENT WITNESSETH,
that the locations listed on Schedule 1 hereto shall be Designated Locations for
purposes of the Trust Indenture at which Pledged Spare Parts may be maintained
by or on behalf
of the Owner, and all Pledged Spare Parts at such Designated Locations shall be
subjected to the Lien of the Trust Indenture.
This Trust Indenture Location Supplement shall be construed as
supplemental to the Trust Indenture and shall form a part thereof, and the Trust
Indenture is hereby incorporated by reference herein and is hereby ratified,
approved and confirmed.
THIS TRUST INDENTURE LOCATION SUPPLEMENT IS DELIVERED IN THE STATE
OF NEW YORK. THIS TRUST INDENTURE LOCATION SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Owner, in compliance with 14 C.F.R. 49.53(a)(1) and (2),
certifies that the Owners is an air carrier, certificated by the FAA under 49
U.S.C. 44705, and that the Pledged Spare Parts are maintained by or on behalf
the Owner at the Designated Locations.
Delivery of an executed counterpart of a signature page to this
Trust Indenture Location Supplement by telecopier shall be effective as delivery
of an original executed counterpart of this Trust Indenture Supplement.
* * *
2
IN WITNESS WHEREOF, the Owner has caused this Trust Indenture
Location Supplement to be duly executed by one of its officers, thereunto duly
authorized, on the day and year first above written.
JETBLUE AIRWAYS CORPORATION
By:_____________________________________
Name:
Title:
3
SCHEDULE I TO EXHIBIT A
TO THE TRUST INDENTURE
[LIST OF ADDED DESIGNATED LOCATION(S)]
4
SCHEDULE I TO THE TRUST INDENTURE
DESIGNATED LOCATIONS
(INCLUDING ADDRESS)
----------------------------------------------------------------------
BLUECITIES AIRPORT \ CODE
----------------------------------------------------------------------
Corporate Headquarters FHH1
000-00 Xxxxxx Xxxx
Xxxxxx Xxxxx, XX 00000
----------------------------------------------------------------------
Stores Dept
JFK International Airport JFK1
Terminal 6
Xxxxxxx, XX 00000
----------------------------------------------------------------------
JFK International Airport XXX0
Xxxxxxxx 000
Xxxxxxx, XX 00000
----------------------------------------------------------------------
PROVISIONING WAREHOUSE
XXX Xxxxxxxxxxxxx Xxxxxxx XXX0
Xxxxxxxx 00
Xxxxxxx, XX 00000
----------------------------------------------------------------------
00 Xxx Xxxxx Xxxxxxx Xxxxx XXX0
Xxxxx 00
Xxxxxx, XX 00000
----------------------------------------------------------------------
Reservations Center
6322 South 0000 Xxxx XXX0
Xxxxx X00
Xxxx Xxxx Xxxx, XX 00000
----------------------------------------------------------------------
Orlando Support Campus OSC1
0000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
----------------------------------------------------------------------
LiveTV-Hanger MCO2
0000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
----------------------------------------------------------------------
LiveTV-Headquarters
0000 Xxxxxxx Xxxxx XXX0
Xxxxx 0000
Xxxxxxxx, XX 00000
----------------------------------------------------------------------
Trust Indenture & Mortgage [JetBlue Spare Parts 2006]
----------------------------------------------------------------------
BLUECITIES AIRPORT \ CODE
----------------------------------------------------------------------
Greater Rochester International Airport ROC1
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
----------------------------------------------------------------------
Xxxxxxxxxx Xxxxxxxxxxxxx Xxxxxxx XXX0
0000 Xxxxxxx Xxxxx #0
Xxxxx Xxxxxxxxxx, XX 00000
----------------------------------------------------------------------
Xxxxxxx Xxxxxxxxxxxxx Xxxxxxx XXX0
#1 Airport Drive, B6 Ticket Counter
Xxxxxxx, XX 00000
----------------------------------------------------------------------
PROVISIONING WAREHOUSE & MX AREA
Building M OAK2
000 Xxxx Xxxxxxx Xxx
Xxxxxxx, XX 00000
----------------------------------------------------------------------
Ontario International Airport ONT1
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
----------------------------------------------------------------------
Buffalo-Niagara International Airport BUF1
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
----------------------------------------------------------------------
Orlando International Airport MCO1
0000 Xxxxxxx Xxxx #X
Xxxxxxx, XX 00000
----------------------------------------------------------------------
Tampa International Aiport TPA1
Landslide Terminal, Level Two, Blue Side
Xxxxx, XX 00000
----------------------------------------------------------------------
Fort Lauderdale Hollywood Int'l Airport FLL1
00 Xxxxxxxx Xxxxx, Xxxxxxxx 0
Xxxx Xxxxxxxxxx, XX 00000
----------------------------------------------------------------------
Palm Beach International Airport PBI1
0000 XXXX, Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
----------------------------------------------------------------------
X.X. Xxxxxxx Xxxxxxxxxxxxx Xxxxxxx XXX0
00000 Xxxxxxxxxx Xxxxxxx X.X.
Xxxx Xxxxx, XX 00000
----------------------------------------------------------------------
Trust Indenture & Mortgage [JetBlue Spare Parts 2006]
----------------------------------------------------------------------
BLUECITIES AIRPORT \ CODE
----------------------------------------------------------------------
Salt Lake City International Airport SLC1
000 Xxxxx Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, XX 00000
----------------------------------------------------------------------
Seattle-Tacoma International Airport
Room MT 6025 SEA1
00000 Xxxxxxx Xxxxxxx Xx.
Xxxxxxx, XX 00000
----------------------------------------------------------------------
Syracuse Xxxxxxx International Airport
1000 Col. Xxxxxx Xxxxxxx Boulevard SYR1
Room ST103.1
Xxxxxxxx, XX 00000
----------------------------------------------------------------------
Denver International Airport
Concourse A, Room A1035 DEN1
0000 Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
----------------------------------------------------------------------
Xxx Xxxxxxx Xxxxxxxxxxxxx Xxxxxxx XXX0
000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
----------------------------------------------------------------------
Long Beach Airport LGB1
0000 Xxxxxx Xxxxxxx Xxxxx
Xxxx Xxxxx, XX 00000
----------------------------------------------------------------------
PROVISIONING WAREHOUSE LGB2
4225 Xxxxxx Xxxxxxx Drive
Long Beach, C 90808
----------------------------------------------------------------------
Washington Dulles Int'l Airport IAD1
Xxxx Xxxxxxxx Xxxx XX000
Xxxxxx, XX 00000
----------------------------------------------------------------------
PROVISIONING WAREHOUSE
Washington Dulles IAD2
00000 Xxxxx Xx. Xxxx 00
Xxxxxx, XX 00000
----------------------------------------------------------------------
McCarran Airport LAS1
0000 Xxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
----------------------------------------------------------------------
XXX Xxxxxxxxxxxxx Xxxxxxx XXX0
Concourse B - Office 16
Carolina, Puerto Rico 00983
----------------------------------------------------------------------
Trust Indenture & Mortgage [JetBlue Spare Parts 2006]
----------------------------------------------------------------------
BLUECITIES AIRPORT \ CODE
----------------------------------------------------------------------
San Diego International Airport
0000 Xxxxx Xxxxxx Xxxxx XXX0
Xxxxxxxx 0
Xxx Xxxxx, XX 00000
----------------------------------------------------------------------
Xxxxx International Airport BOS1
000 Xxxxxxxx X
Xxxxxx, XX 00000-0000
----------------------------------------------------------------------
PROVISIONING WAREHOUSE
00 Xxxxx Xxxxxx Xxxxxx XXX0
Xxxxx 000
Xxxxxx, XX 00000
----------------------------------------------------------------------
Xxxxxxxxxx Xxxxxxxxxxxxx Xxxxxxx XXX0
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
----------------------------------------------------------------------
San Xxxx International Airport
0000 Xxxxxxx Xxxx XXX0
Xxx Xxxx, XX 00000
----------------------------------------------------------------------
Xxxxxx Xxxxxxxxx Airport BQN1
Hanger 000
Xxxxxxxxx, Xxxxx Xxxxxx Xxxx 00000
----------------------------------------------------------------------
LaGuardia Xxxxxxx XXX0
Xxxxxxx Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
----------------------------------------------------------------------
PROVISIONING WAREHOUSE
LSGSC LGA2
Hanger 7 Xxxxx
Xxxxxxxx, XX 00000
----------------------------------------------------------------------
Xxxxxxx Xxxxxxxxxxxxx Xxxxxxx XXX0
0000 X. Xxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
----------------------------------------------------------------------
Xxxxxxxx Xxxxxxxxxxxxx Xxxxxxx XXX0
0000 X.X. Xxxxxxx Xxx-0000
Xxxxxxxx, XX 00000
----------------------------------------------------------------------
Xxx Xxxx Airport BUR1
0000 Xxxxxxxxx Xxx
Xxxxxxx, XX 00000
----------------------------------------------------------------------
Trust Indenture & Mortgage [JetBlue Spare Parts 2006]
----------------------------------------------------------------------
BLUECITIES AIRPORT \ CODE
----------------------------------------------------------------------
Xxxxx Xxxxxxxxx Airport PSE1
Xxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
----------------------------------------------------------------------
Newark Liberty Int'l Airport
Terminal A EWR1
Xxxxxx, XX 00000
----------------------------------------------------------------------
PROVISIONING WAREHOUSE
Xxxxxxx Xxxx Xxxx 000 XXX0
Xxxxxx Xxxxxxx Airport
Xxxxxx, XX 00000
----------------------------------------------------------------------
Xxxxxx Xxxxxxxxx Int'l Airport AUS1
0000 Xxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
----------------------------------------------------------------------
Xxxxxxxx Xxxxxxxxxxxxx Xxxxxxx
Xxxxx 000 XXX0
1 Xxxxxxx X. Xxxx Terminal Drive
Richmond International Xxxxxxx, XX 00000
----------------------------------------------------------------------
Portland International Jetport PWM1
0000 Xxxxxxxxx Xx.
Xxxxxxxx, Xxxxx 00000
----------------------------------------------------------------------
Jacksonville Intl Airport JAX1
0000 Xxxxxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
----------------------------------------------------------------------
Pittsburgh Int'l Airport PIT1
Xxxxxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000-0000
----------------------------------------------------------------------
Charlotte Xxxxxxx Int'l Airport CLT1
0000 Xxxx Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
----------------------------------------------------------------------
Xxxxxxx-Xxxxxx Xxx'x Xxxxxxx XXX0
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
----------------------------------------------------------------------
Xxxxxxxxx Xxxxxxxxxxxxx Xxxxxxx XXX0
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
----------------------------------------------------------------------
Trust Indenture & Mortgage [JetBlue Spare Parts 2006]
----------------------------------------------------------------------
BLUECITIES AIRPORT \ CODE
----------------------------------------------------------------------
Xxxxxxx X. Hobby Airport HOU1
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
----------------------------------------------------------------------
Sarasota Bradenton Int'l Airport SRQ1
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
----------------------------------------------------------------------
Tucson Int'l Airport TUS1
0000 X. Xxxxxx Xxxx
Xxxxxx, XX 00000
----------------------------------------------------------------------
Port Columbus Int'l Airport CMH1
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
----------------------------------------------------------------------
SDV (USA) Inc. SDV9
000-00 000xx Xxx
Xxxxxxx, XX 00000
----------------------------------------------------------------------
Trust Indenture & Mortgage [JetBlue Spare Parts 2006]
EXHIBIT B
TO
TRUST INDENTURE AND MORTGAGE
TRUST INDENTURE AND MORTGAGE COLLATERAL SUPPLEMENT NO. _____
This TRUST INDENTURE AND MORTGAGE COLLATERAL SUPPLEMENT NO. _______,
dated [___________ ___, ____] (herein called this "TRUST INDENTURE SUPPLEMENT")
of JETBLUE AIRWAYS, CORPORATION, as Owner (the "OWNER").
W I T N E S S E T H:
WHEREAS, the Owner and Wilmington Trust Company, as Mortgagee (the
"MORTGAGEE"), have heretofore executed and delivered a Trust Indenture and
Mortgage, dated as of November 14, 2006 (the "TRUST INDENTURE"), and terms
defined in the Trust Indenture and used herein have such defined meanings unless
otherwise defined herein;
WHEREAS, the Trust Indenture grants a Lien on, among other things,
certain Spare Parts and Appliances to secure (subject to the provisions of the
Trust Indenture), among other things, the Owner's obligations to the Note
Holders and the Indenture Indemnities;
WHEREAS, the Trust Indenture [AND THE TRUST INDENTURE SUPPLEMENTS]
has [HAVE] been duly recorded with the Federal Aviation Administration at
Oklahoma City, Oklahoma, pursuant to the Act on the following date as a document
or conveyance bearing the following number:
DATE OF DOCUMENT OR
RECORDING CONVEYANCE NO.
Trust Indenture..........
WHEREAS, the Owner, as provided in the Trust Indenture, is hereby
executing and delivering to the Mortgagee this Trust Indenture Collateral
Supplement for the purposes of adding [certain additional Spare Parts and
Appliances to the Pledged Spare Parts][the Spare Engine] described below to the
Collateral:
Engine Manufacturer:
Engine Model:
Serial No: ; and]
WHEREAS, all things necessary to make this Trust Indenture
Collateral Supplement the valid, binding and legal obligation of the Owner,
including all proper corporate action on the part of the Owner, have been done
and performed and have happened;
NOW, THEREFORE, THIS TRUST INDENTURE COLLATERAL SUPPLEMENT
WITNESSETH, that Owner hereby confirms that the following shall be included as
[Qualified Spare Parts for purposes of subclause (1)] [Pledged Spare Engine
Collateral for purposes of subclause (7)] of the Granting Clause of the Trust
Indenture and shall
be subject to the Lien of the Trust Indenture to the same extent as other
[Qualified Spare Parts][Collateral] (but subject to the exclusions set forth in
the Trust Indenture): all [SPARE PARTS AND APPLIANCES] [ROTABLE PARTS] first
placed in service after October 22, 1994 and currently owned or hereafter
acquired by the Owner that are appropriate for incorporation in, installation
on, attachment or appurtenance to, or use in, a Airbus Model A320 or Embraer
Model 190 Aircraft [or other Eligible Aircraft models] or any Engine, or other
Spare Part or Appliance utilized on any such Aircraft.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Mortgagee, and its successors and assigns, in trust for the equal and
proportionate benefit and security of the Note Holders and the Indenture
Indemnitees, except as provided in Section 2.13 and Article II of the Trust
Indenture, without any preference, distinction or priority of any one Equipment
Note over any other by reason of priority of time of issue, sale, negotiation,
date of maturity thereof or otherwise for any reason whatsoever, and for the
uses and purposes set forth in the Trust Indenture.
This Trust Indenture Collateral Supplement shall be construed as
supplemental to the Trust Indenture and shall form a part thereof, and the Trust
Indenture is hereby incorporated by reference herein and is hereby ratified,
approved and confirmed.
THIS TRUST INDENTURE COLLATERAL SUPPLEMENT IS DELIVERED IN THE STATE
OF NEW YORK. THIS TRUST INDENTURE COLLATERAL SUPPLEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[The Owner, in compliance with 14 C.F.R. 49.53(a)(1) and (2),
certifies that the Owners is an air carrier, certificated by the FAA under 49
U.S.C. 44705, and that the Pledged Spare Parts are maintained by or on behalf
the Owner at the Designated Locations.]
Delivery of an executed counterpart of a signature page to this
Trust Indenture Collateral Supplement by telecopier shall be effective as
delivery of an original executed counterpart of this Trust Indenture Supplement.
* * *
IN WITNESS WHEREOF, the Owner has caused this Trust Indenture
Collateral Supplement to be duly executed by one of its officers, thereunto duly
authorized, on the day and year first above written.
JETBLUE AIRWAYS CORPORATION
By:_____________________________________
Name:
Title:
SCHEDULE I TO THE TRUST INDENTURE
DESIGNATED LOCATIONS
(INCLUDING ADDRESS)
