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TRUST INDENTURE AND SECURITY AGREEMENT
[NW 1999 _]
Dated as of [_______________]
Between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
except as expressly stated herein,
but solely as Owner Trustee,
Owner Trustee
and
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
except as expressly stated herein,
but solely as Indenture Trustee,
Indenture Trustee
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SECURED CERTIFICATES COVERING
ONE BOEING 747-451 AIRCRAFT
BEARING U.S. REGISTRATION XXXX N[______]
LEASED BY NORTHWEST AIRLINES, INC.
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TABLE OF CONTENTS
Page
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GRANTING CLAUSE..............................................................2
ARTICLE I DEFINITIONS.......................................................6
SECTION 1.01. Definitions...................................................6
SECTION 1.02. Reference to Other Documents.................................12
ARTICLE II THE SECURED CERTIFICATES........................................12
SECTION 2.01. Form of Secured Certificates.................................12
SECTION 2.02. Issuance and Terms of Secured Certificates...................18
SECTION 2.03. Payments from Trust Indenture Estate Only....................20
SECTION 2.04. Method of Payment............................................22
SECTION 2.05. Application of Payments......................................24
SECTION 2.06. Termination of Interest in Trust Indenture Estate............25
SECTION 2.07. Registration, Transfer and Exchange of Secured
Certificates...............................................25
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Secured Certificates....27
SECTION 2.09. Payment of Expenses on Transfer; Cancellation................27
SECTION 2.10. Mandatory Redemptions of Secured Certificates................27
SECTION 2.11. Voluntary Redemptions of Secured Certificates................28
SECTION 2.12. Redemptions; Notice of Redemption............................28
SECTION 2.13. Assumption of Secured Certificates by Lessee.................29
SECTION 2.14. Option to Purchase Secured Certificates......................29
SECTION 2.15. Subordination................................................30
ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE TRUST
INDENTURE ESTATE...........................................31
SECTION 3.01. Basic Rent Distribution......................................31
SECTION 3.02. Event of Loss; Replacement; Voluntary Termination;
Refinancing................................................32
SECTION 3.03. Payments After Event of Default..............................33
SECTION 3.04. Certain Payments.............................................36
SECTION 3.05. Other Payments...............................................36
SECTION 3.06. Payments to the Owner Trustee................................37
SECTION 3.07. Application of Payments Under Guarantee......................37
ARTICLE IV COVENANTS OF THE OWNER TRUSTEE, EVENTS OF DEFAULT, REMEDIES OF
INDENTURE TRUSTEE..........................................37
SECTION 4.01. Covenants of the Owner Trustee...............................37
SECTION 4.02. Event of Default.............................................38
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SECTION 4.03. Certain Rights...............................................41
SECTION 4.04. Remedies.....................................................42
SECTION 4.05. Return of Aircraft, Etc......................................44
SECTION 4.06. Remedies Cumulative..........................................45
SECTION 4.07. Discontinuance of Proceedings................................46
SECTION 4.08. Waiver of Past Defaults......................................46
SECTION 4.09. Appointment of Receiver......................................46
SECTION 4.10. Indenture Trustee Authorized to Execute Bills of Sale,
Etc........................................................46
SECTION 4.11. Rights of Certificate Holders to Receive Payment.............47
ARTICLE V DUTIES OF THE INDENTURE TRUSTEE..................................47
SECTION 5.01. Notice of Event of Default...................................47
SECTION 5.02. Action upon Instructions; Certain Rights and Limitations.....48
SECTION 5.03. Indemnification..............................................50
SECTION 5.04. No Duties Except as Specified in Trust Indenture or
Instructions...............................................51
SECTION 5.05. No Action Except Under Lease, Trust Indenture or
Instructions...............................................51
SECTION 5.06. Replacement Airframes and Replacement Engines................51
SECTION 5.07. Indenture Supplements for Replacements.......................54
SECTION 5.08. Effect of Replacement........................................54
SECTION 5.09. Investment of Amounts Held by Indenture Trustee..............54
ARTICLE VI THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE.....................55
SECTION 6.01. Acceptance of Trusts and Duties..............................55
SECTION 6.02. Absence of Duties............................................55
SECTION 6.03. No Representations or Warranties as to Aircraft or
Documents..................................................56
SECTION 6.04. No Segregation of Monies; No Interest........................56
SECTION 6.05. Reliance; Agreements; Advice of Counsel......................57
SECTION 6.06. Capacity in Which Acting.....................................57
SECTION 6.07. Compensation.................................................57
SECTION 6.08. Instructions from Certificate Holders........................58
ARTICLE VII INDEMNIFICATION OF THE INDENTURE TRUSTEE BY THE OWNER TRUSTEE..58
SECTION 7.01. Scope of Indemnification.....................................58
ARTICLE VIII SUCCESSOR AND SEPARATE TRUSTEES...............................59
SECTION 8.01. Notice of Successor Owner Trustee............................59
SECTION 8.02. Resignation of Indenture Trustee; Appointment of
Successor..................................................59
SECTION 8.03. Appointment of Additional and Separate Trustees..............60
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ARTICLE IX SUPPLEMENT AND AMENDMENTS TO THIS TRUST INDENTURE AND OTHER
DOCUMENTS..................................................62
SECTION 9.01. Instructions of Majority; Limitations........................62
SECTION 9.02. Trustees Protected...........................................64
SECTION 9.03. Documents Mailed to Certificate Holders......................64
SECTION 9.04. No Request Necessary for Lease Supplement or Trust
Agreement and Indenture Supplement.........................64
ARTICLE X MISCELLANEOUS....................................................65
SECTION 10.01. Termination of Trust Indenture..............................65
SECTION 10.02. No Legal Title to Trust Indenture Estate in Certificate
Holders....................................................65
SECTION 10.03. Sale of Aircraft by Indenture Trustee Is Binding............65
SECTION 10.04. Trust Indenture for Benefit of the Owner Trustee, the
Indenture Trustee, Owner Participant, Lessee and
Certificate Holders........................................66
SECTION 10.05. Notices.....................................................66
SECTION 10.06. Severability................................................66
SECTION 10.07. No Oral Modification or Continuing Waivers..................66
SECTION 10.08. Successors and Assigns......................................67
SECTION 10.09. Headings....................................................67
SECTION 10.10. Normal Commercial Relations.................................67
SECTION 10.11. Governing Law; Counterpart Form.............................67
SECTION 10.12. Voting By Certificate Holders...............................68
SECTION 10.13. Bankruptcy..................................................68
SECTION 10.14 No Action Contrary to Lessee's Rights Under the Lease........68
EXHIBIT A Form of Trust Agreement and Indenture Supplement
SCHEDULE I Secured Certificates Amortization
SCHEDULE II Pass Through Trust Agreements
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TRUST INDENTURE AND SECURITY AGREEMENT
[NW 1999 _]
TRUST INDENTURE AND SECURITY AGREEMENT [NW 1999 _], dated as of
[_______________] ("Trust Indenture") between FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity,
except as expressly stated herein, but solely as Owner Trustee under the Trust
Agreement referred to below (together with its successors under the Trust
Agreement, the "Owner Trustee"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, not in its individual capacity, except as expressly
stated herein, but solely as Indenture Trustee hereunder (together with its
successors hereunder, the "Indenture Trustee").
W I T N E S S E T H :
WHEREAS, all capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and the Owner Trustee have entered
into the Trust Agreement whereby, among other things, (i) the Owner Trustee has
established a certain trust for the use and benefit of the Owner Participant
subject, however, to the Trust Indenture Estate created pursuant hereto for the
use and benefit of, and with the priority of payment to, the holders of Secured
Certificates issued hereunder, and (ii) the Owner Trustee has been authorized
and directed to execute and deliver this Trust Indenture;
WHEREAS, the parties desire by this Trust Indenture, among other
things, (i) to provide for the issuance by the Owner Trustee to the Pass Through
Trustees (or their designee) of the Secured Certificates evidencing the
participation of the Pass Through Trustees in the payment of Lessor's Cost for
the Aircraft, as provided in the Participation Agreement and (ii) to provide for
the assignment, mortgage and pledge by the Owner Trustee to the Indenture
Trustee, as part of the Trust Indenture Estate hereunder, among other things, of
all of the Owner Trustee's right, title and interest in and to the Aircraft and,
except as hereinafter expressly provided, all of the Owner Trustee's right,
title and interest in, to and under the Lease and all payments and other amounts
received hereunder or thereunder in accordance with the terms hereof or thereof,
as security for, among other things, the Owner Trustee's obligations to the
Indenture Trustee, for the ratable benefit and security of the Certificate
Holders, subject to Section 2.15 and Article III hereof;
WHEREAS, all things have been done to make the Secured Certificates,
when executed by the Owner Trustee and authenticated and delivered by the
Indenture Trustee hereunder, the valid, binding and enforceable obligations of
the Owner Trustee; and
WHEREAS, all things necessary to make this Trust Indenture the
valid, binding and legal obligation of the Owner Trustee for the uses and
purposes herein set forth, in accordance with its terms, have been done and
performed and have happened:
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure the prompt payment of the Principal Amount of,
interest on, Make-Whole Amount, if any, and all other amounts due with respect
to, all Secured Certificates from time to time outstanding hereunder and the
performance and observance by the Owner Trustee of all the agreements, covenants
and provisions herein and in the Participation Agreement and the Secured
Certificates contained, for the benefit of the Certificate Holders and the
prompt payment of all amounts from time to time owing hereunder and under the
Participation Agreement to the Certificate Holders by the Owner Trustee and for
the uses and purposes and subject to the terms and provisions hereof, and in
consideration of the premises and of the covenants herein contained, and of the
acceptance of the Secured Certificates by the holders thereof, and for other
good and valuable consideration the receipt and adequacy whereof are hereby
acknowledged, the Owner Trustee has granted, bargained, sold, assigned,
transferred, conveyed, mortgaged, pledged and confirmed, and does hereby grant,
bargain, sell, assign, transfer, convey, mortgage, pledge and confirm, unto the
Indenture Trustee, its successors in trust and assigns, for the security and
benefit of the Certificate Holders, a first priority security interest in and
mortgage lien on all right, title and interest of the Owner Trustee in, to and
under the following described property, rights and privileges, other than
Excluded Payments (which collectively, excluding Excluded Payments but including
all property hereafter specifically subjected to the Lien of this Trust
Indenture by the Trust Agreement and Indenture Supplement or any mortgage
supplemental hereto, are included within the Trust Indenture Estate), to wit:
(1) the Aircraft (including the Airframe and the Engines and all
replacements thereof and substitutions therefor to which the Owner Trustee shall
from time to time acquire title as provided herein and in the Lease), all as
more particularly described in the Trust Agreement and Indenture Supplement
executed and delivered with respect to the Aircraft or any such replacements or
substitutions therefor, as provided in this Indenture;
(2) the Lease and any Lease Supplement and all Rent thereunder
(including, without limitation, all amounts of Basic Rent, Supplemental Rent and
payments of any kind thereunder (excluding any Excluded Payments)), and the
Guarantee;
(3) the Purchase Agreement (to the extent specified in the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the Consent
and Agreement and the Xxxx of Sale;
(4) all rents, issues, profits, revenues and other income of the
property subjected or required to be subjected to the lien of this Indenture;
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(5) all insurance and requisition proceeds with respect to the
Aircraft, including but not limited to the insurance required under Section 11
of the Lease, but excluding insurance proceeds described in clauses (ii) and
(iii) of the definition of Excluded Payments;
(6) all rights of the Owner Trustee to amounts paid or payable by
Lessee to the Owner Trustee under the Participation Agreement and all rights of
the Owner Trustee to enforce payments of any such amounts thereunder, but
excluding amounts described in clauses (i) and (v) of the definition of Excluded
Payments;
(7) all monies and securities from time to time deposited or
required to be deposited with the Indenture Trustee pursuant to any terms of
this Indenture or the Lease or required hereby or by the Lease to be held by the
Indenture Trustee hereunder (other than Excluded Payments); and
(8) all proceeds of the foregoing.
BUT EXCLUDING from the foregoing and from the Trust Indenture Estate
all Excluded Payments, and the right to enforce and collect the same, and
SUBJECT TO all of the terms and conditions of this Trust Indenture and the
rights of the Owner Trustee and the Owner Participant hereunder.
Concurrently with the delivery hereof, the Owner Trustee is
delivering to the Indenture Trustee the original executed counterpart of the
Lease and the Lease Supplement No. 1 (to each of which a chattel paper receipt
is attached), and executed copies of the Participation Agreement, and the
Purchase Agreement Assignment with the Consent and Agreement attached thereto.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, and its successors and assigns, in trust for the benefit and
security of the Certificate Holders, except as provided in Section 2.15 and
Article III hereof without any preference, distinction or priority of any one
Secured Certificate over any other by reason of priority of time of issue, sale,
negotiation, date of maturity thereof or otherwise for any reason whatsoever,
and for the uses and purposes and in all cases and as to all property specified
in paragraphs (1) through (8) inclusive above, subject to the terms and
provisions set forth in this Trust Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner Trustee shall remain liable under each of
the Indenture Agreements to which it is a party to perform all of the
obligations assumed by it thereunder, except to the extent prohibited or
excluded from doing so pursuant to the terms and provisions thereof, and the
Indenture Trustee and the Certificate Holders shall have no obligation or
liability under the Indenture Agreements, by reason of or arising out of the
assignment hereunder, nor shall the Indenture Trustee or the Certificate Holders
be required or obligated in any manner to perform or fulfill any obligations of
the Owner Trustee under or pursuant to
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any of the Indenture Agreements to which it is a party, or, except as herein
expressly provided, to make any payment, or to make any inquiry as to the nature
or sufficiency of any payment received by it, or present or file any claim, or
take any action to collect or enforce the payment of any amounts which may have
been assigned to it or to which it may be entitled at any time or times.
The Owner Trustee does hereby constitute the Indenture Trustee the
true and lawful attorney of the Owner Trustee, irrevocably, granted for good and
valuable consideration and coupled with an interest and with full power of
substitution, and with full power (in the name of the Owner Trustee or
otherwise) to ask for, require, demand, receive, compound and give acquittance
for any and all monies and claims for monies (in each case including insurance
and requisition proceeds but in all cases excluding Excluded Payments) due and
to become due under or arising out of the Indenture Agreements, and all other
property which now or hereafter constitutes part of the Trust Indenture Estate,
to endorse any checks or other instruments or orders in connection therewith and
to file any claims or to take any action or to institute any proceedings which
the Indenture Trustee may deem to be necessary or advisable in the premises.
Without limiting the generality of the foregoing, but subject to the rights of
the Owner Trustee and the Owner Participant hereunder, during the continuance of
any Event of Default under this Trust Indenture, the Indenture Trustee shall
have the right under such power of attorney to accept any offer in connection
with the exercise of remedies as set forth herein of any purchaser to purchase
the Airframe and Engines and upon such purchase to execute and deliver in the
name of and on behalf of the Owner Trustee an appropriate xxxx of sale and other
instruments of transfer relating to the Airframe and Engines, when purchased by
such purchaser, and to perform all other necessary or appropriate acts with
respect to any such purchase, and in its discretion to file any claim or take
any other action or proceedings, either in its own name or in the name of the
Owner Trustee or otherwise, which the Indenture Trustee may deem necessary or
appropriate to protect and preserve the right, title and interest of the
Indenture Trustee in and to such Rents and other sums and the security intended
to be afforded hereby; provided, however, that no action of the Indenture
Trustee pursuant to this paragraph shall increase the obligations or liabilities
of the Owner Trustee to any Person beyond those obligations and liabilities
specifically set forth in this Trust Indenture and in the other Operative
Documents. Under the Lease, Lessee is directed, so long as this Trust Indenture
shall not have been fully discharged, to make all payments of Rent (other than
Excluded Payments) and all other amounts which are required to be paid to or
deposited with the Owner Trustee pursuant to the Lease (other than Excluded
Payments) directly to, or as directed by, the Indenture Trustee at such address
or addresses as the Indenture Trustee shall specify, for application as provided
in this Trust Indenture. The Owner Trustee agrees that promptly upon receipt
thereof, it will transfer to the Indenture Trustee any and all monies from time
to time received by it constituting part of the Trust Indenture Estate, for
distribution by the Indenture Trustee pursuant to this Trust Indenture, except
that the Owner Trustee shall accept for distribution pursuant to the Trust
Agreement any amounts distributed to it by the Indenture Trustee under this
Trust Indenture.
The Owner Trustee agrees that at any time and from time to time,
upon the written request of the Indenture Trustee, the Owner Trustee will
promptly and duly execute
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and deliver or cause to be duly executed and delivered any and all such further
instruments and documents as the Indenture Trustee may reasonably deem necessary
or desirable to perfect, preserve or protect the mortgage, security interests
and assignments created or intended to be created hereby or to obtain for the
Indenture Trustee the full benefits of the assignment hereunder and of the
rights and powers herein granted. The parties hereto acknowledge that neither
the Owner Trustee nor the Owner Participant shall have any obligation as to any
recording, filing, refiling or re-recording of any documents or instruments in
regard to maintaining the perfection of the security interests created
hereunder, in the Trust Indenture Estate or any security interest that may be
claimed to have been created by the Lease or the ownership interest of the Owner
Trustee in the Aircraft.
The Owner Trustee does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that it will not assign or
pledge, so long as the assignment hereunder shall remain in effect, and the Lien
hereof shall not have been released pursuant to Section 10.01 hereof, any of its
right, title or interest hereby assigned, to anyone other than the Indenture
Trustee and its predecessor(s) in this transaction, and that it will not, except
as otherwise provided in this Trust Indenture and except with respect to
Excluded Payments to which it is entitled, (i) accept any payment from Lessee
under any Indenture Agreement, (ii) enter into any agreement amending or
supplementing any Indenture Agreement, (iii) execute any waiver or modification
of, or consent under, the terms of, or exercise any rights, powers or privileges
under, any Indenture Agreement, (iv) settle or compromise any claim (other than
those relating to an Excluded Payment) arising under any Indenture Agreement or
(v) submit or consent to the submission of any dispute, difference or other
matter arising under or in respect of any Indenture Agreement to arbitration
thereunder.
The Owner Trustee does hereby further agree that it will not without
the written consent of the Indenture Trustee:
(a) collect or agree to the receipt or collection of any payment
of Rent (other than Excluded Payments), including Basic Rent,
Stipulated Loss Value, Termination Value or any other payment
to be made pursuant to Section 9 or 10 of the Lease prior to
the date for the payment thereof provided for by the Lease or
assign, transfer or hypothecate (other than to the Indenture
Trustee hereunder) any payment of Rent, including Basic Rent,
Stipulated Loss Value, Termination Value or any other payment
to be made pursuant to Section 9 or 10 of the Lease, then due
or to accrue in the future under the Lease in respect of the
Airframe and Engines; or
(b) except as contemplated by the Trust Agreement in connection
with the appointment of a successor owner trustee, sell,
mortgage, transfer, assign or hypothecate (other than to the
Indenture Trustee hereunder) its interest in the Airframe and
Engines or any part thereof or in any amount to be received by
it from the use or disposition of the Airframe
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and Engines, other than amounts distributed to it pursuant to
Article III hereof.
It is hereby further agreed that any and all property described or
referred to in the granting clauses hereof which is hereafter acquired by the
Owner Trustee shall ipso facto, and without any further conveyance, assignment
or act on the part of the Owner Trustee or the Indenture Trustee, become and be
subject to the Lien herein granted as fully and completely as though
specifically described herein, but nothing contained in this paragraph shall be
deemed to modify or change the obligations of the Owner Trustee contained in the
foregoing paragraphs.
The Owner Trustee does hereby ratify and confirm the Lease and does
hereby agree that it will not violate any covenant or agreement made by it
therein, herein or in any of the other Owner Trustee Documents.
Notwithstanding the Granting Clause or any of the foregoing
paragraphs, there is hereby excluded from the foregoing sale, transfer,
assignment, grant, pledge and security interest all Excluded Payments.
IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. For all purposes of this Indenture the
following terms shall have the following meanings (such definitions to be
equally applicable to both the singular and plural forms of the terms defined):
"Actual Knowledge" shall mean, (i) as it applies to the Owner
Trustee or Indenture Trustee, as the case may be, actual knowledge of a
Responsible Officer in the Trust Office of the Owner Trustee or in the Corporate
Trust Office of the Indenture Trustee, as the case may be, and (ii) as it
applies to the Owner Participant, actual knowledge of a vice president or other
higher officer of the Owner Participant having responsibility for the
transactions contemplated by the Operative Documents.
"Amortization Amount" shall mean, with respect to any Principal
Amount Repayment Date, the amount set forth opposite such Date on the
Amortization Schedule.
"Amortization Schedule" shall mean the amortization schedule for the
Secured Certificates delivered pursuant to Section 2.02 hereof.
"Average Life Date" for each Secured Certificate to be redeemed
shall be the date which follows the redemption date by a period equal to the
Remaining Weighted Average
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Life at the redemption date of such Secured Certificate. "Remaining Weighted
Average Life" of such Secured Certificate, at the redemption date of such
Secured Certificate, shall be the number of days equal to the quotient obtained
by dividing (a) the sum of the products obtained by multiplying (i) the amount
of each then remaining installment of principal, including the payment due on
the maturity date of such Secured Certificate, by (ii) the number of days from
and including the redemption date to but excluding the scheduled payment date of
such principal installment; by (b) the then unpaid principal amount of such
Secured Certificate.
"Cash Equivalents" shall mean the investments specified in Section
22(a) of the Lease.
"Certificate Holder" shall mean any holder from time to time of one
or more Secured Certificates.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Continuous Stay Period" shall have the meaning specified in Section
4.04(a) hereof.
"Corporate Trust Department" or "Trust Office" means the principal
corporate trust office of the Owner Trustee located at 00 Xxxxx Xxxx Xxxxxx,
Xxxx Xxxx Xxxx, Xxxx 00000, Attention: Corporate Trust Department, or such other
office at which the Owner Trustee's corporate trust business shall be
administered which the Owner Trustee shall have specified by notice in writing
to Lessee, the Indenture Trustee, the Owner Participant and each Certificate
Holder.
"Corporate Trust Office" shall mean the principal office of the
Indenture Trustee located at Xxx Xxxxxxxxxxxxx Xxxxx, 0xx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Corporate Trust Department, or such other office
at which the Indenture Trustee's corporate trust business shall be administered
which the Indenture Trustee shall have specified by notice in writing to Lessee,
the Owner Trustee, the Loan Participants and each Certificate Holder.
"Debt" shall mean any liability for borrowed money, or any liability
for the payment of money in connection with any letter of credit transaction, or
other liabilities evidenced or to be evidenced by bonds, debentures, notes or
other similar instruments or for the deferred purchase price of property, goods
or services.
"Debt Rate" shall mean, with respect to any Series, the rate per
annum specified for such Series under the heading "Interest Rate" in Schedule I
to the Trust Indenture.
"Default" means any event or condition that with the giving of
notice or the lapse of time or both would become an Event of Default or Lease
Event of Default (excluding Lease Events of Default related to Excluded
Payments).
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"Dollars" and "$" shall mean the lawful currency of the United
States of America.
"Enforcement Date" shall have meaning specified in Section 4.03
hereof.
"Event of Default" shall have the meaning specified in Section 4.02
hereof.
"Excess Amount" shall have the meaning specified in Section 2.03(b)
hereof.
"Excluded Payments" shall mean (i) indemnity payments paid or
payable by Lessee to or in respect of the Owner Participant or the Owner Trustee
in its individual capacity, their respective Affiliates, successors and
permitted assigns and their directors, officers, employees, servants and agents
(collectively, the "Owner Indemnitees") pursuant to Sections 7(b), 7(c), 16 and
17 of the Participation Agreement, (ii) proceeds of public liability insurance
in respect of the Aircraft payable as a result of insurance claims made, or
losses suffered, by the Owner Trustee or the Indenture Trustee in their
respective individual capacities or by any of the Owner Indemnitees, (iii)
proceeds of insurance maintained with respect to the Aircraft by the Owner
Participant (whether directly or through the Owner Trustee) or any other Owner
Indemnitee and permitted under Section 11(e) of the Lease, (iv) all payments
required to be made under the Tax Indemnity Agreement by Lessee and all payments
of Supplemental Rent by Lessee in respect of any amounts payable under the Tax
Indemnity Agreement, (v) fees payable to the Owner Trustee or the Indenture
Trustee pursuant to the last sentence of Section 7(c) of the Participation
Agreement, (vi) provided that the Secured Certificates shall have been duly
assumed by Lessee pursuant to Section 2.13 hereof, the amounts payable to the
Owner Trustee pursuant to the third sentence of Section 19(d) of the Lease plus
all reasonable expenses incurred by the Owner Trustee and the Owner Participant
in connection with such assumption, as applicable, (vii) any payment of the
foregoing under the Guarantee, (viii) interest accrued on any of the above, and
(ix) any right to enforce the payment of any amount described in clauses (i)
through (viii) above and the right to declare an Event of Default in respect of
any of the foregoing amounts.
"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government or
otherwise exercising any executive, legislative, judicial, administrative or
regulatory functions of such government or (b) any other government entity
having jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.
"Guarantor" shall have the meaning specified in the Lease.
"Indenture Agreements" means the Participation Agreement, the Lease,
the Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement, the Guarantee, the Bills of Sale and any other contract, agreement or
instrument from time to time assigned or pledged under the Trust Indenture.
-8-
"Indenture Trustee Event" means either (i) the Secured Certificates
shall have become due and payable pursuant to Section 4.04(b) of the Trust
Indenture or (ii) the Indenture Trustee has taken action or notified the Owner
Trustee that it intends to take action to foreclose the Lien of the Trust
Indenture or otherwise commence the exercise of any significant remedy under the
Trust Indenture or the Lease.
"Law" shall mean (a) any constitution, treaty, statute, law,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision under,
any of the foregoing.
"Lease" shall mean that certain Lease Agreement [NW 1999 _], dated
as of [_______________], entered into by the Owner Trustee and Lessee
concurrently with the execution and delivery hereof, as said Lease Agreement has
been, or may from time to time be, supplemented or amended, or the terms thereof
waived or modified, to the extent permitted by, and in accordance with, the
terms of this Indenture. The term "Lease" shall also include each Lease
Supplement from time to time entered into pursuant to the terms of the Lease.
"Lease Default" shall mean a "Default" as defined in the Lease.
"Lease Event of Default" shall mean an "Event of Default" as defined
in the Lease.
"Lessee" shall mean Northwest Airlines, Inc., a Minnesota
corporation.
"Lessee Operative Documents" means the Participation Agreement, the
Lease, Lease Supplement No. 1, the Tax Indemnity Agreement, the Purchase
Agreement Assignment, the FAA Xxxx of Sale and the Xxxx of Sale.
"Majority in Interest of Certificate Holders" as of a particular
date of determination shall mean the holders of more than a majority in
aggregate unpaid Principal Amount of all Secured Certificates outstanding as of
such date (excluding any Secured Certificates held by the Owner Trustee or the
Owner Participant or any interests of the Owner Participant therein by reason of
subrogation pursuant to Section 4.03 hereof (unless all Secured Certificates
then outstanding shall be held by the Owner Trustee or the Owner Participant) or
Lessee or any affiliate of any thereof).
"Make-Whole Amount" means, with respect to any Secured Certificate,
the amount (as determined by an independent investment banker selected by Lessee
and reasonably acceptable to the Indenture Trustee and the Owner Participant) by
which (a) the present value of the remaining scheduled payments of principal and
interest from the redemption date to maturity of such Secured Certificate
computed by discounting each such payment on a semiannual basis from its
respective Payment Date (assuming a 360-day year of twelve 30-day months) using
a discount rate equal to the Treasury Yield exceeds (b) the outstanding
principal amount of such Secured Certificate plus accrued interest. For purposes
of determining the Make-Whole Amount, "Treasury Yield" at the time of
determination with respect to any Secured Certificate means the interest rate
(expressed as a semiannual equivalent and as a
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decimal and, in the case of United States Treasury bills, converted to a bond
equivalent yield) determined to be the per annum rate equal to the semiannual
yield to maturity for United States Treasury securities maturing on the Average
Life Date of such Secured Certificate and trading in the public securities
market either as determined by interpolation between the most recent weekly
average yield to maturity for two series of United States Treasury securities,
trading in the public securities markets, (A) one maturing as close as possible
to, but earlier than, the Average Life Date of such Secured Certificate and (B)
the other maturing as close as possible to, but later than, the Average Life
Date of such Secured Certificate, in each case as published in the most recent
H.15(519) or, if a weekly average yield to maturity for United States Treasury
securities maturing on the Average Life Date of such Secured Certificate is
reported on the most recent H.15(519), such weekly average yield to maturity as
published in such H.15(519). "H.15(519)" means the weekly statistical release
designated as such, or any successor publication, published by the Board of
Governors of the Federal Reserve System. The date of determination of a
Make-Whole Amount shall be the third Business Day prior to the applicable
redemption date and the "most recent H.15(519)" means the H.15(519) published
prior to the close of business on the third Business Day prior to the applicable
redemption date.
"Mortgaged Property" shall have the meaning specified in Section
3.03 hereof.
"Owner Indemnitee" shall have the meaning specified in the
definition of Excluded Payments herein.
"Owner Participant" shall mean [______________________________], a
[____________________], so long as such party shall have any interest in the
Trust Estate, and transferees thereof as permitted by Section 8 of the
Participation Agreement.
"Participants" shall mean and include the Loan Participants and the
Owner Participant.
"Participation Agreement" shall mean that certain Participation
Agreement [NW 1999 _], dated as of [_______________], among the Owner Trustee,
the Subordination Agent, the Indenture Trustee, Lessee, the Guarantor, the Owner
Participant and the Purchasers as the same may from time to time be supplemented
or further amended, or the terms thereof waived or modified, to the extent
permitted by, and in accordance with, the terms thereof.
"Past Due Rate" shall mean, with respect to the Secured
Certificates, the rate per annum equal to 2% over the Debt Rate as in effect
from time to time.
"Payment Date" shall mean each February 1 and August 1, commencing
on [February/August _, ____] (or, if any such day is not a Business Day, the
immediately succeeding Business Day) until the Secured Certificates have been
paid in full.
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"Principal Amount" with respect to a Secured Certificate means the
stated original principal amount of such Secured Certificate and, with respect
to all Secured Certificates, means the aggregate stated original principal
amounts of all Secured Certificates.
"Principal Amount Repayment Date" shall mean each Payment Date on
which any portion of the Principal Amount is due and payable in accordance with
the Amortization Schedule.
"QIB" shall have the meaning specified in Section 2.08 hereof.
"Replacement Airframe" shall mean any airframe substituted for the
Airframe pursuant to Section 5.06 hereof.
"Replacement Engine" shall mean any engine substituted for an Engine
pursuant to Section 5.06 hereof.
"Responsible Officer" means with respect to the Owner Trustee, a
responsible officer in the Trust Office of the Owner Trustee (including, without
limitation, any authorized officer in the Trust Office of the Owner Trustee),
and with respect to the Indenture Trustee, a responsible officer in the
Corporate Trust Office of the Indenture Trustee.
"Section 1110 Period" shall have the meaning specified in Section
4.04(a) hereof.
"Secured Certificates" shall mean and include any Secured
Certificates issued hereunder, and issued in exchange therefor or replacement
thereof.
"Secured Obligations" shall have the meaning specified in Section
2.06 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Senior Holder" shall have the meaning specified in Section 2.15(c)
hereof.
"Series A" or "Series A Secured Certificates" means Secured
Certificates issued and designated as "Series A" hereunder, in the Principal
Amount and maturities and bearing interest as specified in Schedule I to the
Trust Indenture under the heading "Series A."
"Series B" or "Series B Secured Certificates" means Secured
Certificates issued and designated as "Series B" hereunder, in the Principal
Amount and maturities and bearing interest as specified in Schedule I to the
Trust Indenture under the heading "Series B."
"Series C" or "Series C Secured Certificates" means Secured
Certificates issued and designated as "Series C" hereunder, in the Principal
Amount and maturities and bearing interest as specified in Schedule I to the
Trust Indenture under the heading "Series C."
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"Xxxxx Xxxxxx" means State Street Bank and Trust Company, a
Massachusetts trust company, not in its capacity as Indenture Trustee under the
Trust Indenture, but in its individual capacity.
"Transactions" means the transactions contemplated by the
Participation Agreement and the other Operative Documents.
"Trust Agreement and Indenture Supplement" shall mean a supplement
to the Trust Agreement and to this Indenture, in substantially the form of
Exhibit A hereto, which shall particularly describe the Aircraft, and any
Replacement Airframe and Replacement Engine included in the property of the
Owner Trustee covered by the Trust Agreement.
"Trust Indenture", "this Trust Indenture", "the Trust Indenture",
"Indenture", "this Indenture", and "the Indenture" shall mean this Trust
Indenture and Security Agreement [NW 1999 _] as it may from time to time be
supplemented or amended as herein provided, including supplementing by the Trust
Agreement and Indenture Supplement pursuant hereto.
"Trust Indenture Estate" shall mean all estate, right, title and
interest of the Indenture Trustee in and to the properties referred to in the
Granting Clause of this Trust Indenture, excluding Excluded Payments.
SECTION 1.02. Reference to Other Documents. For all purposes of this
Trust Indenture the terms used but not defined herein are used as defined in the
Lease.
ARTICLE II
THE SECURED CERTIFICATES
SECTION 2.01. Form of Secured Certificates.
The Secured Certificates shall be substantially in the form set
forth below:
THIS SECURED CERTIFICATE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES LAWS OF ANY
STATE. ACCORDINGLY, THIS SECURED CERTIFICATE MAY NOT BE SOLD UNLESS EITHER
REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM
SUCH REGISTRATIONS IS AVAILABLE.
FIRST SECURITY BANK, NATIONAL ASSOCIATION, AS OWNER TRUSTEE UNDER TRUST
AGREEMENT [NW 1999 _] DATED AS OF [_______________].
SERIES [___] NON-RECOURSE SECURED CERTIFICATE DUE [_____] ISSUED IN CONNECTION
WITH THE BOEING 000-000 XXXXXXXX XXXXXXX XXXXXX XXXXXX REGISTRATION NUMBER
N[_____].
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No.____ Date: [________]
$__________________
INTEREST RATE MATURITY DATE
[________]
[________,_______]
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual
capacity but solely as Owner Trustee (herein in such capacity called the "Owner
Trustee") under that certain Trust Agreement [NW 1999 _], dated as of
[_______________], between the Owner Participant named therein and the Owner
Trustee (herein as such Trust Agreement may be supplemented or amended from time
to time called the "Trust Agreement"), hereby promises to pay to ___________, or
the registered assignee thereof, the principal sum of $_________ (the "Principal
Amount"), together with interest on the amount of the Principal Amount remaining
unpaid from time to time (calculated on the basis of a year of 360 days
comprised of twelve 30-day months) from the date hereof until paid in full at a
rate per annum equal to the Interest Rate indicated above. The Principal Amount
of this Secured Certificate shall be payable in installments on the dates set
forth in Schedule I hereto equal to the corresponding percentage of the
Principal Amount of this Secured Certificate set forth in Schedule I hereto.
Accrued but unpaid interest shall be due and payable in semi-annual installments
commencing [February/August 1, _____], and thereafter on [August 1] and
[February 1] of each year, to and including [____________]. Notwithstanding the
foregoing, the final payment made on this Secured Certificate shall be in an
amount sufficient to discharge in full the unpaid Principal Amount and all
accrued and unpaid interest on, and any other amounts due under, this Secured
Certificate. Notwithstanding anything to the contrary contained herein, if any
date on which a payment under this Secured Certificate becomes due and payable
is not a Business Day then such payment shall not be made on such scheduled date
but shall be made on the next succeeding Business Day and if such payment is
made on such next succeeding Business Day, no interest shall accrue on the
amount of such payment during such extension.
For purposes hereof, the term "Trust Indenture" means the Trust
Indenture and Security Agreement [NW 1999 _], dated as of [_______________],
between the Owner Trustee and State Street Bank and Trust Company (the
"Indenture Trustee"), as the same may be amended or supplemented from time to
time. All other capitalized terms used in this Secured Certificate and not
defined herein shall have the respective meanings assigned in the Trust
Indenture.
This Secured Certificate shall bear interest, payable on demand, at
the Past Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Principal Amount, any overdue Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest and any other amounts payable hereunder which are overdue, in each case
for the period the same is overdue. Amounts shall be overdue if not paid when
due (whether at stated maturity, by acceleration or otherwise).
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All payments of Principal Amount, interest, Make-Whole Amount, if
any, and other amounts, if any, to be made by the Owner Trustee hereunder and
under the Trust Indenture or the Participation Agreement shall be payable only
from the income and proceeds from the Trust Estate to the extent included in the
Trust Indenture Estate and only to the extent that the Owner Trustee shall have
sufficient income or proceeds from the Trust Estate to the extent included in
the Trust Indenture Estate to enable the Indenture Trustee to make such payments
in accordance with the terms of Section 2.03 and Article III of the Trust
Indenture and each holder hereof, by its acceptance of this Secured Certificate,
agrees that it will look solely to the income and proceeds from the Trust
Indenture Estate to the extent available for distribution to the holder hereof
as above provided and that none of the Owner Participant, the Owner Trustee or
the Indenture Trustee is personally liable or liable in any manner extending to
any assets other than the Trust Indenture Estate to the holder hereof for any
amounts payable or any liability under this Secured Certificate or, except as
provided in the Trust Indenture or in the Participation Agreement, for any
liability under the Trust Indenture or the Participation Agreement; provided,
however, that nothing herein contained shall limit, restrict or impair the right
of the Indenture Trustee, subject always to the terms and provisions of the
Trust Indenture, to accelerate the maturity of this Secured Certificate upon
occurrence of an Event of Default under the Trust Indenture in accordance with
Section 4.04(b) of the Trust Indenture, to bring suit and obtain a judgment
against the Owner Trustee on this Secured Certificate for purposes of realizing
upon the Trust Indenture Estate and to exercise all rights and remedies provided
under the Trust Indenture or otherwise realize upon the Trust Indenture Estate.
There shall be maintained a Secured Certificate Register for the
purpose of registering transfers and exchanges of Secured Certificates at the
Corporate Trust Office of the Indenture Trustee or at the office of any
successor in the manner provided in Section 2.07 of the Trust Indenture.
The Principal Amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the Corporate
Trust Office of the Indenture Trustee, or as otherwise provided in the Trust
Indenture. Each such payment shall be made on the date such payment is due and
without any presentment or surrender of this Secured Certificate, except that in
the case of any final payment with respect to this Secured Certificate, the
Secured Certificate shall be surrendered promptly thereafter to the Indenture
Trustee for cancellation.
The holder hereof, by its acceptance of this Secured Certificate,
agrees that, except as provided in the Trust Indenture, each payment received by
it hereunder shall be applied, first, to the payment of accrued interest on this
Secured Certificate (as well as any interest on any overdue Principal Amount,
any overdue Make-Whole Amount, if any, or, to the extent permitted by Law, any
overdue interest and other amounts hereunder) to the date of such payment,
second, to the payment of the Principal Amount of this Secured Certificate then
due, third, to the payment of Make-Whole Amount, if any, and any other amount
due hereunder or under the Trust Indenture, and fourth, the balance, if any,
remaining thereafter,
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to the payment of Principal Amount of this Secured Certificate remaining unpaid
in the inverse order of their normal maturity.
This Secured Certificate is one of the Secured Certificates referred
to in the Trust Indenture which have been or are to be issued by the Owner
Trustee pursuant to the terms of the Trust Indenture. The Trust Indenture Estate
is held by the Indenture Trustee as security, in part, for the Secured
Certificates. The provisions of this Secured Certificate are subject to the
Trust Indenture. Reference is hereby made to the Trust Indenture and the
Participation Agreement for a complete statement of the rights and obligations
of the holder of, and the nature and extent of the security for, this Secured
Certificate and the rights and obligations of the holders of, and the nature and
extent of the security for, any other Secured Certificates executed and
delivered under the Trust Indenture, as well as for a statement of the terms and
conditions of the trust created by the Trust Indenture, to all of which terms
and conditions in the Trust Indenture and the Participation Agreement each
holder hereof agrees by its acceptance of this Secured Certificate.
As provided in the Trust Indenture and subject to certain
limitations therein set forth, this Secured Certificate is exchangeable for a
like aggregate Principal Amount of Secured Certificates of different authorized
denominations, as requested by the holder surrendering the same.
Prior to due presentment for registration of transfer of this
Secured Certificate, the Owner Trustee and the Indenture Trustee shall treat the
person in whose name this Secured Certificate is registered as the owner hereof
for all purposes whether or not this Secured Certificate be overdue, and neither
of the Owner Trustee nor the Indenture Trustee shall be affected by notice to
the contrary.
This Secured Certificate is subject to redemption as provided in
Sections 2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise. This
Secured Certificate is also subject to assumption by Lessee as provided in
Section 2.13 of the Trust Indenture, to exchange and to purchase by the Owner
Participant or the Owner Trustee as provided in Section 2.14 of the Trust
Indenture but not otherwise.
[The indebtedness evidenced by this Secured Certificate is, to the
extent and in the manner provided in the Trust Indenture, subordinate and
subject in right of payment to the prior payment in full of the Secured
Obligations (as defined in the Trust Indenture) in respect of [Series A Secured
Certificates](1) [Series A and Series B Secured Certificates](2), and this
Secured Certificate is issued subject to such provisions. The Certificate Holder
of this Secured Certificate, by accepting the same, (a) agrees to and shall be
bound by such provisions, (b) authorizes and directs the Indenture Trustee on
his behalf to take such action as may be
----------
(1) To be inserted in the case of a Series B Secured Certificate.
(2) To be inserted in the case of a Series C Secured Certificate.
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necessary or appropriate to effectuate the subordination as provided in the
Trust Indenture and (c) appoints the Indenture Trustee his attorney-in-fact for
such purpose.]**
Unless the certificate of authentication hereon has been executed by
or on behalf of the Indenture Trustee by manual signature, this Secured
Certificate shall not be entitled to any benefit under the Trust Indenture or be
valid or obligatory for any purpose.
THIS SECURED CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
----------
** To be inserted for each Secured Certificate other than any Series A
Secured Certificate.
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IN WITNESS WHEREOF, the Owner Trustee has caused this Secured
Certificate to be executed in its corporate name by its officer thereunto duly
authorized on the date hereof.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By
--------------------------------------
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Secured Certificates referred to in the
within-mentioned Trust Indenture.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By
--------------------------------------
Name:
Title:
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SCHEDULE I
SECURED CERTIFICATES AMORTIZATION
Percentage of
Principal Amount
Payment Date to be Paid
---------------------- ----------------------
[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
SECTION 2.02. Issuance and Terms of Secured Certificates.
The Secured Certificates shall be dated the date of issuance
thereof, shall be issued in [three] separate series consisting of Series A,
Series B and Series C and in the maturities and principal amounts and shall bear
interest as specified in Schedule I hereto. On the date hereof, each Secured
Certificate shall be issued to the Pass Through Trustees (or their designee)
under the Pass Through Agreements as set forth in Schedule II hereto in
connection therewith. The Secured Certificates shall be issued in registered
form only. The Secured Certificates shall be issued in denominations of $1,000
and integral multiples thereof, except that one Secured Certificate of each
Series may be in an amount that is not an integral multiple of $1,000.
Each Secured Certificate shall bear interest at the Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on the unpaid Principal Amount thereof from time to time outstanding,
payable in arrears on [February/August 1, ____], and on each [August 1] and
[February 1] thereafter until maturity. The Principal Amount of each Secured
Certificate shall be payable on the dates and in the installments equal to the
corresponding percentage of the Principal Amount as set forth in Schedule I
hereto which shall be attached as Schedule I to the Secured Certificates.
Notwithstanding the foregoing, the final payment made under each Secured
Certificate shall be in an amount sufficient to discharge in full the unpaid
Principal Amount and all accrued and unpaid interest on, and any other amounts
due under, such Secured Certificate. Each Secured Certificate shall bear
interest at the Past Due Rate (calculated on the basis of a year of 360 days
comprised of twelve 30-day months) on any part of the Principal Amount,
Make-Whole Amount, if any, and to the extent permitted by applicable law,
interest and any other amounts payable thereunder not paid when due for any
period during which the same shall be overdue, in each case for the period the
same is overdue. Amounts shall be overdue if not paid when due (whether at
stated maturity, by acceleration or otherwise). Notwithstanding anything to the
contrary contained herein, if any date on which a payment under any Secured
Certificate becomes due and payable is not a Business Day then such payment
shall not be made on such scheduled date but
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shall be made on the next succeeding Business Day and if such payment is made on
such next succeeding Business Day, no interest shall accrue on the amount of
such payment during such extension.
The Owner Trustee agrees to pay to the Indenture Trustee for
distribution in accordance with Section 3.04 hereof (a) any and all indemnity
amounts received by the Owner Trustee which are payable by Lessee to (i) the
Indenture Trustee in its individual capacity, (ii) the Certificate Holders,
(iii) the Subordination Agent, (iv) the Liquidity Provider, or (v) the Pass
Through Trustees, in each case pursuant to Section 7 of the Participation
Agreement, (b) Owner Trustee's pro rata share of all amounts owed to the
Liquidity Provider by the Subordination Agent under each Liquidity Facility
other than amounts due as (i) repayments of the principal of advances
thereunder, (ii) interest on Interest Drawings, Final Drawings, and Applied
Downgrade Advances and Applied Non-Extension Advances (as defined in the
Liquidity Facilities) under any Liquidity Facility except to the extent included
in Net Interest and Related Charges, and (iii) fees payable to the Liquidity
Provider payable (whether or not in fact paid) under Section 7(a) of the Note
Purchase Agreement (as originally in effect or amended, with the consent of the
Owner Participant), and (c) any and all amounts received by the Owner Trustee
which are payable by Lessee under clause (c) or (d) of the definition of
Supplemental Rent. As used in this Section, "Owner Trustee's pro rata share"
means as of any time:
(A) with respect to all amounts other than Net Interest and Related
Charges, a fraction the numerator of which is the aggregate principal
balance then outstanding of the Secured Certificates and the denominator
of which is the aggregate principal balance then outstanding of all
Equipment Notes, plus
(B) with respect to all Net Interest and Related Charges (x) if
there exists a Payment Default under any Secured Certificate a fraction,
the numerator of which is the aggregate principal balance then outstanding
of the Secured Certificates and the denominator of which is the aggregate
principal balance then outstanding of all Equipment Notes issued under
Indentures under which there exists a Payment Default or (y) at all other
times, zero.
As used in this Section, "Net Interest and Related Charges" means the sum of (i)
the amount, if any, by which interest payable to the Liquidity Provider on any
Interest Drawing, Final Drawing, Applied Downgrade Advance and/or Applied
Non-Extension Advance (as defined in the Liquidity Facilities) exceeds the
amount which would be payable if such drawings bore interest at the Designated
Interest Rate plus (ii) any amounts payable under Section 3.1, Section 3.2,
Section 3.3 or Section 7.7 of each Liquidity Facility (or similar provisions of
any succeeding Liquidity Facility) which result from any Interest Drawing, Final
Drawing, Applied Downgrade Advance or Applied Non-Extension Advance (as defined
in the Liquidity Facilities). As used in this Section "Designated Interest Rate"
means the weighted average Past Due Rate (as defined in the applicable
Indentures) except with respect to that portion of any Final Drawing (or Applied
Downgrade Advance or Applied Non-Extension Advance which becomes a Final
Drawing) which remains in a Cash Collateral Account, Designated
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Interest Rate means the weighted average Investment Earnings of funds in the
Cash Collateral Accounts. As used in this Section, a Payment Default when used
in connection with a Secured Certificate or Equipment Note means a default in
the payment of principal thereof or interest thereon which has not been cured
other than solely because of acceleration. The following terms are used in this
Section as defined in the Intercreditor Agreement without regard to any
amendment, modification or supplement thereto after the Closing Date: Cash
Collateral Accounts, Equipment Notes, Final Drawing, Indentures, Interest
Drawing and Investment Earnings.
The Secured Certificates shall be executed on behalf of the Owner
Trustee by its President or one of its Vice Presidents, Assistant Vice
Presidents or Assistant Secretaries or other authorized officer. Secured
Certificates bearing the signatures of individuals who were at any time the
proper officers of the Owner Trustee shall bind the Owner Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Secured Certificates or
did not hold such offices at the respective dates of such Secured Certificates.
The Owner Trustee may from time to time execute and deliver Secured Certificates
with respect to the Aircraft to the Indenture Trustee for authentication upon
original issue and such Secured Certificates shall thereupon be authenticated
and delivered by the Indenture Trustee upon the written request of the Owner
Trustee signed by a Vice President or Assistant Vice President or other
authorized officer of the Owner Trustee; provided, however, that each such
request shall specify the aggregate Principal Amount of all Secured Certificates
to be authenticated hereunder on original issue with respect to the Aircraft. No
Secured Certificate shall be secured by or entitled to any benefit under this
Trust Indenture or be valid or obligatory for any purposes, unless there appears
on such Secured Certificate a certificate of authentication in the form provided
for herein executed by the Indenture Trustee by the manual signature of one of
its authorized officers and such certificate upon any Secured Certificates shall
be conclusive evidence, and the only evidence, that such Secured Certificate has
been duly authenticated and delivered hereunder.
SECTION 2.03. Payments from Trust Indenture Estate Only.
(a) Without impairing any of the other rights, powers, remedies,
privileges, liens or security interests of the Certificate Holders under this
Trust Indenture, each Certificate Holder, by its acceptance of a Secured
Certificate, agrees that as between it and the Owner Trustee, except as
expressly provided in this Trust Indenture, the Participation Agreement or any
other Operative Document, (i) the obligation to make all payments of the
Principal Amount of, interest on, Make-Whole Amount, if any, and all other
amounts due with respect to the Secured Certificates, and the performance by the
Owner Trustee of every obligation or covenant contained in this Trust Indenture
and in the Participation Agreement or any of the other Operative Documents,
shall be payable only from the income and proceeds from the Trust Estate to the
extent included in the Trust Indenture Estate and only to the extent that the
Owner Trustee shall have sufficient income or proceeds from the Trust Estate to
the extent included in the Trust Indenture Estate to enable the Indenture
Trustee to make such payments in accordance with the terms of Article III
hereof, and all of the statements, representations,
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covenants and agreements made by the Owner Trustee (when made in such capacity)
contained in this Trust Indenture and any agreement referred to herein other
than the Trust Agreement, unless expressly otherwise stated, are made and
intended only for the purpose of binding the Trust Estate and establishing the
existence of rights and remedies which can be exercised and enforced against the
Trust Estate; therefore, anything contained in this Trust Indenture or such
other agreements to the contrary notwithstanding (except for any express
provisions or representations that the Owner Trustee is responsible for, or is
making, in its individual capacity, for which there would be personal liability
of the Owner Trustee), no recourse shall be had with respect to this Trust
Indenture or such other agreements against the Owner Trustee in its individual
capacity or against any institution or person which becomes a successor trustee
or co-trustee or any officer, director, trustee, servant or direct or indirect
parent or controlling Person or Persons of any of them, and (ii) none of the
Owner Trustee, in its individual capacity, the Owner Participant, the Indenture
Trustee and any officer, director, trustee, servant, employee, agent or direct
or indirect parent or controlling Person or Persons of any of them shall have
any personal liability for any amounts payable, or other obligation owed,
hereunder, under the Participation Agreement or any of the other Operative
Documents or under the Secured Certificates except as expressly provided herein
or in the Participation Agreement; provided, however, that nothing contained in
this Section 2.03(a) shall be construed to limit the exercise and enforcement in
accordance with the terms of this Trust Indenture or such other agreements of
rights and remedies against the Trust Estate. These provisions are not intended
as any release or discharge of the indebtedness represented by the Secured
Certificates and the Trust Indenture, but are intended only as a covenant not to
xxx the Owner Participant, the Owner Trustee or the Indenture Trustee in their
individual capacities, except as expressly provided herein or in the
Participation Agreement, for a deficiency with respect to such indebtedness, the
indebtedness represented by this Trust Indenture and the Secured Certificates to
remain in full force and effect as fully as though these provisions were not
contained in this Trust Indenture. The Owner Trustee hereby acknowledges that
the Certificate Holders have expressly reserved all their rights and remedies
against the Trust Indenture Estate, including the right, in the event of a
default in the payment of all or part of the Principal Amount of, interest on,
Make-Whole Amount, if any, or any other amount due with respect to any Secured
Certificate within the periods provided for in Section 4.02(b) hereof, or upon
the occurrence and continuation of any other Event of Default under this Trust
Indenture, to foreclose upon this Trust Indenture, and/or to receive the
proceeds from the Trust Indenture Estate and otherwise to enforce any other
right under this Trust Indenture. Nothing in this Section 2.03(a) shall (x)
release the Owner Participant from personal liability, or constitute a covenant
not to xxx the Owner Participant, for any breach by it of any of its covenants,
representations or warranties contained in the Participation Agreement or for
any of the payments it has agreed to make pursuant to the Participation
Agreement or (y) release the Owner Trustee or constitute a covenant not to xxx
the Owner Trustee for any breach by it of any representations, warranties or
covenants of the Owner Trustee contained in the Operative Documents or (z)
release the Owner Trustee in its individual capacity from personal liability, or
constitute a covenant not to xxx the Owner Trustee in its individual capacity
for any breach by it of any representations, warranties or covenants of the
Owner Trustee made in its individual capacity in the Operative Documents.
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(b) If (i) all or any part of the Trust Estate becomes the property
of, or the Owner Trustee or Owner Participant becomes, a debtor subject to the
reorganization provisions of the Bankruptcy Code, (ii) pursuant to such
reorganization provisions, including Section 1111(b) of the Bankruptcy Code, the
Owner Trustee (in its individual capacity) or the Owner Participant is required,
by reason of the Owner Trustee (in its individual capacity) or the Owner
Participant being held to have recourse liability to any Certificate Holder or
the Indenture Trustee, directly or indirectly (other than the recourse liability
of the Owner Trustee (in its individual capacity), to make payment on account of
any amount payable as principal, Make-Whole Amount, if any, interest or other
amounts on the Secured Certificates or under this Indenture and (iii) any
Certificate Holder or the Indenture Trustee actually receives any Excess Amount
(as hereinafter defined) which reflects any payment by the Owner Trustee (in its
individual capacity) or the Owner Participant on account of clause (ii) above,
then such Certificate Holder or the Indenture Trustee, as the case may be, shall
promptly refund to the Owner Trustee (in its individual capacity) or the Owner
Participant (whichever shall have made such payment) such Excess Amount.
For purposes of this Section 2.03(b), "Excess Amount" means the
amount by which such payment exceeds the amount that would have been received by
a Certificate Holder or the Indenture Trustee if the Owner Trustee (in its
individual capacity) or the Owner Participant had not become subject to the
recourse liability referred to in clause (ii) above. Nothing contained in this
Section 2.03(b) shall prevent a Certificate Holder or the Indenture Trustee from
enforcing any personal recourse obligation (and retaining the proceeds thereof)
of the Owner Trustee (in its individual capacity) or the Owner Participant under
the Participation Agreement or this Trust Indenture (and any exhibits or annexes
hereto or thereto) or by separate agreement or from retaining any amount paid by
Owner Participant under Section 2.14 or 4.03 hereof.
SECTION 2.04. Method of Payment.
(a) The Principal Amount of, interest on, Make-Whole Amount, if any,
and other amounts due under each Secured Certificate or hereunder will be
payable in Dollars by wire transfer of immediately available funds not later
than 12:00 noon, New York City time, on the due date of payment to the Indenture
Trustee at the Corporate Trust Office for distribution among the Certificate
Holders in the manner provided herein. The Owner Trustee shall not have any
responsibility for the distribution of such payment to any Certificate Holder.
Notwithstanding the foregoing or any provision in any Secured Certificate to the
contrary, the Indenture Trustee will use reasonable efforts to pay or cause to
be paid, if so directed in writing by any Certificate Holder (with a copy to the
Owner Trustee), all amounts paid by the Owner Trustee hereunder and under such
holder's Secured Certificate or Secured Certificates to such holder or a nominee
therefor (including all amounts distributed pursuant to Article III of this
Trust Indenture) by transferring, or causing to be transferred, by wire transfer
of immediately available funds in Dollars, prior to 2:00 p.m., New York City
time, on the due date of payment, to an account maintained by such holder with a
bank located in the continental United States the amount to be distributed to
such holder, for credit to the account
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of such holder maintained at such bank. If the Indenture Trustee shall fail to
make any such payment as provided in the immediately preceding sentence after
its receipt of funds at the place and prior to the time specified above, the
Indenture Trustee, in its individual capacity and not as trustee, agrees to
compensate such holders for loss of use of funds at the Debt Rate until such
payment is made and the Indenture Trustee shall be entitled to any interest
earned on such funds until such payment is made. Any payment made hereunder
shall be made without any presentment or surrender of any Secured Certificate,
except that, in the case of the final payment in respect of any Secured
Certificate, such Secured Certificate shall be surrendered to the Indenture
Trustee for cancellation promptly after such payment. Notwithstanding any other
provision of this Trust Indenture to the contrary, the Indenture Trustee shall
not be required to make, or cause to be made, wire transfers as aforesaid prior
to the first Business Day on which it is practicable for the Indenture Trustee
to do so in view of the time of day when the funds to be so transferred were
received by it if such funds were received after 12:00 noon, New York City time,
at the place of payment. Prior to the due presentment for registration of
transfer of any Secured Certificate, the Owner Trustee and the Indenture Trustee
shall deem and treat the Person in whose name any Secured Certificate is
registered on the Secured Certificate Register as the absolute owner and holder
of such Secured Certificate for the purpose of receiving payment of all amounts
payable with respect to such Secured Certificate and for all other purposes, and
none of the Owner Trustee or the Indenture Trustee shall be affected by any
notice to the contrary. So long as any signatory to the Participation Agreement
or nominee thereof shall be a registered Certificate Holder, all payments to it
shall be made to the account of such Certificate Holder specified in Schedule I
thereto and otherwise in the manner provided in or pursuant to the Participation
Agreement unless it shall have specified some other account or manner of payment
by notice to the Indenture Trustee consistent with this Section 2.04.
(b) The Indenture Trustee, as agent for the Owner Trustee, shall
exclude and withhold at the appropriate rate from each payment of Principal
Amount of, interest on, Make-Whole Amount, if any, and other amounts due
hereunder or under each Secured Certificate (and such exclusion and withholding
shall constitute payment in respect of such Secured Certificate) any and all
United States withholding taxes applicable thereto as required by Law. The
Indenture Trustee agrees to act as such withholding agent and, in connection
therewith, whenever any present or future United States taxes or similar charges
are required to be withheld with respect to any amounts payable hereunder or in
respect of the Secured Certificates, to withhold such amounts (and such
withholding shall constitute payment in respect of such Secured Certificate) and
timely pay the same to the appropriate authority in the name of and on behalf of
the Certificate Holders, that it will file any necessary United States
withholding tax returns or statements when due, and that as promptly as possible
after the payment thereof it will deliver to each Certificate Holder (with a
copy to the Owner Trustee and Lessee) appropriate receipts showing the payment
thereof, together with such additional documentary evidence as any such
Certificate Holder may reasonably request from time to time.
If a Certificate Holder which is a Non-U.S. Person has furnished to
the Indenture Trustee a properly completed and currently effective U.S. Internal
Revenue Service
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Form 1001 or W-8 (or such successor form or forms as may be required by the
United States Treasury Department) during the calendar year in which the payment
hereunder or under the Secured Certificate(s) held by such holder is made (but
prior to the making of such payment), or in either of the two preceding calendar
years, and has not notified the Indenture Trustee of the withdrawal or
inaccuracy of such form prior to the date of such payment (and the Indenture
Trustee has no reason to know that any information set forth in such form is
inaccurate), the Indenture Trustee shall withhold only the amount, if any,
required by Law (after taking into account any applicable exemptions claimed by
the Certificate Holder) to be withheld from payments hereunder or under the
Secured Certificates held by such holder in respect of United States federal
income tax (and such withholding shall constitute payment in respect of such
Secured Certificate). If a Certificate Holder (x) which is a Non-U.S. Person has
furnished to the Indenture Trustee a properly completed and currently effective
U.S. Internal Revenue Service Form 4224 in duplicate (or such successor
certificate, form or forms as may be required by the United States Treasury
Department as necessary in order to avoid withholding of United States federal
income tax), during the calendar year in which the payment is made (but prior to
the making of such payment), and has not notified the Indenture Trustee of the
withdrawal or inaccuracy of such certificate or form prior to the date of such
payment (and the Indenture Trustee has no reason to know that any information
set forth in such form is inaccurate) or (y) which is a U.S. Person has
furnished to the Indenture Trustee a properly completed and currently effective
U.S. Internal Revenue Service Form W-9, if applicable, prior to a payment
hereunder or under the Secured Certificates held by such holder, no amount shall
be withheld from payments in respect of United States federal income tax. If any
Certificate Holder has notified the Indenture Trustee that any of the foregoing
forms or certificates is withdrawn or inaccurate, or if such holder has not
filed a form claiming an exemption from United States withholding tax or if the
Code or the regulations thereunder or the administrative interpretation thereof
are at any time after the date hereof amended to require such withholding of
United States federal income taxes from payments under the Secured Certificates
held by such holder, the Indenture Trustee agrees to withhold from each payment
due to the relevant Certificate Holder withholding taxes at the appropriate rate
under Law and will, on a timely basis as more fully provided above, deposit such
amounts with an authorized depository and make such returns, statements,
receipts and other documentary evidence in connection therewith as required by
applicable law.
Neither the Owner Participant nor the Owner Trustee shall be liable
for the failure of the Indenture Trustee to withhold taxes in the manner
provided for herein or if any Certificate Holder provides false or inaccurate
information on any form required to be delivered under this Section 2.04.
SECTION 2.05. Application of Payments.
In the case of each Secured Certificate, each payment of Principal
Amount, Make-Whole Amount, if any, and interest or other amounts due thereon
shall be applied:
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First: to the payment of accrued interest on such Secured
Certificate (as well as any interest on any overdue Principal Amount, any
overdue Make-Whole Amount, if any, and to the extent permitted by Law, any
overdue interest and any other overdue amounts thereunder) to the date of
such payment;
Second: to the payment of the Principal Amount of such Secured
Certificate (or a portion thereof) then due thereunder;
Third: to the payment of Make-Whole Amount, if any, and any other
amount due hereunder or under such Secured Certificate; and
Fourth: the balance, if any, remaining thereafter, to the payment of
the Principal Amount of such Secured Certificate remaining unpaid
(provided that such Secured Certificate shall not be subject to redemption
except as provided in Sections 2.10, 2.11 and 2.12 hereof).
The amounts paid pursuant to clause "Fourth" above shall be applied to the
installments of Principal Amount of such Secured Certificate in the inverse
order of their normal maturity.
SECTION 2.06. Termination of Interest in Trust Indenture Estate.
A Certificate Holder shall not, as such, have any further interest
in, or other right with respect to, the Trust Indenture Estate when and if the
Principal Amount of, Make-Whole Amount, if any, and interest on and other
amounts due under all Secured Certificates held by such Certificate Holder and
all other sums then payable to such Certificate Holder hereunder and under the
other Operative Documents by the Owner Trustee (collectively, the "Secured
Obligations") shall have been paid in full.
SECTION 2.07. Registration, Transfer and Exchange of Secured
Certificates.
The Indenture Trustee shall keep a register (the "Secured
Certificate Register") in which the Indenture Trustee shall provide for the
registration of Secured Certificates and the registration of transfers of
Secured Certificates. No such transfer shall be given effect unless and until
registration hereunder shall have occurred. The Secured Certificate Register
shall be kept at the Corporate Trust Office of the Indenture Trustee. The
Indenture Trustee is hereby appointed "Secured Certificate Registrar" for the
purpose of registering Secured Certificates and transfers of Secured
Certificates as herein provided. A holder of any Secured Certificate intending
to exchange such Secured Certificate shall surrender such Secured Certificate to
the Indenture Trustee at the Corporate Trust Office, together with a written
request from the registered holder thereof for the issuance of a new Secured
Certificate, specifying, in the case of a surrender for transfer, the name and
address of the new holder or holders. Upon surrender for registration of
transfer of any Secured Certificate, the Owner Trustee shall execute, and the
Indenture Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Secured Certificates of a like
aggregate Principal Amount and of the same series. At the option of the
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Certificate Holder, Secured Certificates may be exchanged for other Secured
Certificates of any authorized denominations of a like aggregate Principal
Amount, upon surrender of the Secured Certificates to be exchanged to the
Indenture Trustee at the Corporate Trust Office. Whenever any Secured
Certificates are so surrendered for exchange, the Owner Trustee shall execute,
and the Indenture Trustee shall authenticate and deliver, the Secured
Certificates which the Certificate Holder making the exchange is entitled to
receive. All Secured Certificates issued upon any registration of transfer or
exchange of Secured Certificates (whether under this Section 2.07 or under
Section 2.08 hereof or otherwise under this Trust Indenture) shall be the valid
obligations of the Owner Trustee evidencing the same respective obligations, and
entitled to the same security and benefits under this Trust Indenture, as the
Secured Certificates surrendered upon such registration of transfer or exchange.
Every Secured Certificate presented or surrendered for registration of transfer,
shall (if so required by the Indenture Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by the Certificate Holder or such holder's
attorney duly authorized in writing, and the Indenture Trustee shall require
evidence satisfactory to it as to the compliance of any such transfer with the
Securities Act, and the securities Laws of any applicable state. The Indenture
Trustee shall make a notation on each new Secured Certificate of the amount of
all payments of Principal Amount previously made on the old Secured Certificate
or Secured Certificates with respect to which such new Secured Certificate is
issued and the date to which interest on such old Secured Certificate or Secured
Certificates has been paid. Interest shall be deemed to have been paid on such
new Secured Certificate to the date on which interest shall have been paid on
such old Secured Certificate, and all payments of the Principal Amount marked on
such new Secured Certificate, as provided above, shall be deemed to have been
made thereon. The Owner Trustee shall not be required to exchange any
surrendered Secured Certificates as provided above during the ten-day period
preceding the due date of any payment on such Secured Certificate. The Owner
Trustee shall in all cases deem the Person in whose name any Secured Certificate
shall have been issued and registered as the absolute owner and holder of such
Secured Certificate for the purpose of receiving payment of all amounts payable
by the Owner Trustee with respect to such Secured Certificate and for all
purposes until a notice stating otherwise is received from the Indenture Trustee
and such change is reflected on the Secured Certificate Register. The Indenture
Trustee will promptly notify the Owner Trustee, the Owner Participant and Lessee
of each registration of a transfer of a Secured Certificate. Any such transferee
of a Secured Certificate, by its acceptance of a Secured Certificate, agrees to
the provisions of the Participation Agreement applicable to Certificate Holders,
including Sections 6, 8(c), 8(e), 8(k), 8(l), 8(q), 8(r), 8(t), 8(cc), 10,
13(b), 13(c), 15(b) and 15(c), and shall be deemed to have represented and
warranted (except as provided above), and covenanted, to the parties to the
Participation Agreement as to the matters represented, warranted and covenanted
by the Purchasers in the Participation Agreement. Subject to compliance by the
Certificate Holder and its transferee (if any) of the requirements set forth in
this Section 2.07, the Indenture Trustee and the Owner Trustee shall use all
reasonable efforts to issue new Secured Certificates upon transfer or exchange
within 10 Business Days of the date a Secured Certificate is surrendered for
transfer or exchange.
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SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Secured
Certificates.
If any Secured Certificate shall become mutilated, destroyed, lost
or stolen, the Owner Trustee shall, upon the written request of the holder of
such Secured Certificate, execute and the Indenture Trustee shall authenticate
and deliver in replacement thereof a new Secured Certificate, payable in the
same Principal Amount dated the same date and captioned as issued in connection
with the Aircraft. If the Secured Certificate being replaced has become
mutilated, such Secured Certificate shall be surrendered to the Indenture
Trustee and a photocopy thereof shall be furnished to the Owner Trustee. If the
Secured Certificate being replaced has been destroyed, lost or stolen, the
holder of such Secured Certificate shall furnish to the Owner Trustee, the Owner
Participant and the Indenture Trustee such security or indemnity as may be
required by them to save the Owner Trustee, the Owner Participant and the
Indenture Trustee harmless and evidence satisfactory to the Owner Trustee, the
Owner Participant and the Indenture Trustee of the destruction, loss or theft of
such Secured Certificate and of the ownership thereof. If a "qualified
institutional buyer" of the type referred to in paragraph (a)(l)(i)(A), (B), (D)
or (E) of Rule 144A under the Securities Act (a "QIB") is the holder of any such
destroyed, lost or stolen Secured Certificate, then the written indemnity of
such QIB, signed by an authorized officer thereof, in favor of, delivered to and
in form reasonably satisfactory to Lessee, the Owner Participant, the Owner
Trustee and the Indenture Trustee shall be accepted as satisfactory indemnity
and security and no further indemnity or security shall be required as a
condition to the execution and delivery of such new Secured Certificate. Subject
to compliance by the Certificate Holder of the requirements set forth in this
Section 2.08, the Indenture Trustee and the Owner Trustee shall use all
reasonable efforts to issue new Secured Certificates within 10 Business Days of
the date of the written request therefor from the Certificate Holder.
SECTION 2.09. Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Certificate Holder for any
registration of transfer or exchange of Secured Certificates, but the Indenture
Trustee, as Secured Certificate Registrar, may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Secured
Certificates.
(b) The Indenture Trustee shall cancel all Secured Certificates
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Secured Certificates.
SECTION 2.10. Mandatory Redemptions of Secured Certificates.
(a) On the date on which Lessee is required pursuant to Section
10(a)(i) of the Lease to make payment for an Event of Loss with respect to the
Aircraft, all of the Secured Certificates shall be redeemed in whole at a
redemption price equal to 100% of the unpaid Principal Amount thereof, together
with all accrued interest thereon to the date of
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redemption and all other amounts payable hereunder or under the Participation
Agreement to the Certificate Holders but without Make-Whole Amount.
(b) If the Lease is terminated with respect to the Aircraft by
Lessee pursuant to Section 9 or Section 19(d) thereof and Lessee shall not have
assumed all of the obligations of the Owner Trustee hereunder pursuant to
Section 2.13 and to Section 8(x) of the Participation Agreement, on the date the
Lease is so terminated all the Secured Certificates shall be redeemed in whole
at a redemption price equal to 100% of the unpaid Principal Amount thereof,
together with accrued interest thereon to the date ofredemption and all other
amounts payable hereunder or under the Participation Agreement to the
Certificate Holders plus Make-Whole Amount, if any.
SECTION 2.11. Voluntary Redemptions of Secured Certificates.
Any or all of the Secured Certificates may be redeemed by the Owner
Trustee in connection with a transaction described in, and subject to the terms
and conditions of, Section 17 of the Participation Agreement upon at least 30
days' revocable prior written notice to the Indenture Trustee and the
Certificate Holders, and the Secured Certificates shall, as provided in Section
17 of the Participation Agreement, be redeemed in whole at a redemption price
equal to 100% of the unpaid Principal Amount thereof, together with accrued
interest thereon to the date of redemption and all other amounts payable
hereunder or under the Participation Agreement to the Certificate Holders plus
Make-Whole Amount, if any.
SECTION 2.12. Redemptions; Notice of Redemption.
(a) Neither any redemption of any Secured Certificate nor any
purchase by the Owner Trustee of any Secured Certificate may be made except to
the extent and in the manner expressly permitted by this Trust Indenture. No
purchase of any Secured Certificate may be made by the Indenture Trustee.
(b) Notice of redemption or purchase with respect to the Secured
Certificates shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed not less than 15 nor more than 60 days prior to the
applicable redemption date, to each Certificate Holder of such Secured
Certificates to be redeemed or purchased, at such Certificate Holder's address
appearing in the Secured Certificate Register; provided that, in the case of a
redemption to be made pursuant to Section 2.10(b) or Section 2.11, such notice
shall be revocable and shall be deemed revoked in the event that the Lease does
not in fact terminate on the specified termination date or if notice of such
redemption shall have been given in connection with a refinancing of Secured
Certificates and the Indenture Trustee receives written notice of such
revocation from Lessee or the Owner Trustee not later than three days prior to
the redemption date. All notices of redemption shall state: (1) the redemption
date, (2) the applicable basis for determining the redemption price, (3) that on
the redemption date, the redemption price will become due and payable upon each
such Secured Certificate, and that, if any such Secured Certificates are then
outstanding, interest on such Secured
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Certificates shall cease to accrue on and after such redemption date, and (4)
the place or places where such Secured Certificates are to be surrendered for
payment of the redemption price.
(c) On or before the redemption date, the Owner Trustee (or any
person on behalf of the Owner Trustee) shall, to the extent an amount equal to
the redemption price for the Secured Certificates to be redeemed or purchased on
the redemption date shall not then be held in the Trust Indenture Estate,
deposit or cause to be deposited with the Indenture Trustee by 12:00 noon on the
redemption date in immediately available funds the redemption price of the
Secured Certificates to be redeemed or purchased.
(d) Notice of redemption or purchase having been given as aforesaid
(and not deemed revoked as contemplated in the proviso to Section 2.12(b)), the
Secured Certificates to be redeemed or purchased shall, on the redemption date,
become due and payable at the Corporate Trust Office of the Indenture Trustee or
at any office or agency maintained for such purposes pursuant to Section 2.07,
and from and after such redemption date (unless there shall be a default in the
payment of the redemption price) any such Secured Certificates then outstanding
shall cease to bear interest. Upon surrender of any such Secured Certificate for
redemption or purchase in accordance with said notice, such Secured Certificate
shall be redeemed at the redemption price. If any Secured Certificate called for
redemption or purchase shall not be so paid upon surrender thereof for
redemption, the principal amount thereof shall, until paid, continue to bear
interest from the applicable redemption date at the interest rate in effect for
such Secured Certificate as of such redemption date.
SECTION 2.13. Assumption of Secured Certificates by Lessee.
If, in accordance with Section 8(x) of the Participation Agreement,
and subject to the provisions of Section 8(o) thereof, Lessee shall assume (on a
full recourse basis) all of the obligations of the Owner Trustee hereunder,
under the Secured Certificates and all other Operative Documents by supplemental
indenture satisfactory to the Indenture Trustee (which shall contain (i) the
provisions substantially similar to Sections 6, 7, 8, 10, 11 and 12 of the Lease
and (ii) other provisions necessary or advisable to effectuate such assumption),
then upon delivery of such supplemental indenture, payment by Lessee of all
expenses (including reasonable fees and expenses of counsel) for the Owner
Trustee and the Owner Participant, delivery by the Guarantor of a guarantee of
the Secured Certificates and other amounts owing to the Certificate Holders
substantially in the form of the Guarantee, and delivery of an opinion of
counsel for Lessee that such assumption has been duly and validly effected, the
Owner Trustee shall be released and discharged from any further obligations
hereunder and under the Secured Certificates and all other Operative Documents
and the Owner Participant shall be released and discharged from any further
obligations under the Participation Agreement and any other Operative Document
to which it is a party, except with respect to any such obligations that accrued
prior thereto.
SECTION 2.14. Option to Purchase Secured Certificates.
Either the Owner Trustee or the Owner Participant may, upon the
events and subject to the terms and conditions and for the price set forth in
this Section 2.14, purchase all
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but not less than all of the Secured Certificates outstanding hereunder, and
each Certificate Holder agrees that it will, upon such events and subject to
such terms and conditions and upon receipt of such price, sell, assign, transfer
and convey to such purchaser or its nominee (without recourse or warranty of any
kind except as to its title to the Secured Certificates and except against Liens
on such Secured Certificates arising by, through or under such holder), all of
the right, title and interest of such Certificate Holder in and to the Trust
Indenture Estate, this Trust Indenture and the Secured Certificates held by it,
and such purchaser or its nominee shall assume all of such holder's obligations
under the Participation Agreement and hereunder.
Such option to purchase the Secured Certificates may be exercised by
the Owner Trustee or the Owner Participant upon any of the following events,
and, in any such event, the purchase price thereof shall equal for each Secured
Certificate the aggregate unpaid Principal Amount thereof, plus accrued and
unpaid interest thereon to the date of purchase and all other amounts (other
than the Make-Whole Amount, except as provided in the next sentence) then
payable hereunder or under the Participation Agreement to the holder thereof.
Such option to purchase the Secured Certificates may be exercised: (i) upon an
Indenture Trustee Event or (ii) in the event there shall have occurred and be
continuing a Lease Event of Default, provided that if such option is exercised
pursuant to this clause (ii) at a time when there shall have occurred and be
continuing for less than 180 days a Lease Event of Default, the purchase price
thereof shall equal the price provided in the preceding sentence plus the
Make-Whole Amount, if any.
Such option to purchase the Secured Certificates may be exercised by
the Owner Trustee or the Owner Participant giving written notice of its election
of such option to the Indenture Trustee, which notice shall specify a date for
such purchase not more than 30 days or less than 15 days after the date of such
notice. The Indenture Trustee shall not exercise any of the remedies hereunder
or, without the consent of the Owner Trustee or the Owner Participant, under the
Lease, during the period from the time that a notice of exercise by the Owner
Participant of such option to purchase becomes irrevocable until the date on
which such purchase is required to occur pursuant to the terms of the preceding
sentence. Such election to purchase the Secured Certificates shall become
irrevocable upon the sixteenth day preceding the date specified in the written
notice described in the first sentence of this paragraph.
If the Owner Trustee or the Owner Participant on or before the date
of such purchase shall so request, the Certificate Holders will comply with all
the provisions of Section 2.07 to enable new Secured Certificates to be issued
to the Owner Trustee or the Owner Participant or its nominee in such
denominations as the Owner Trustee or the Owner Participant shall request. All
taxes, charges and expenses required pursuant to Section 2.09 in connection with
the issuance of such new Secured Certificate shall be borne by the Owner
Participant.
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SECTION 2.15. Subordination.
(a) The Owner Trustee and, by acceptance of its Secured Certificates
of any Series, each Certificate Holder of such Series, hereby agree that no
payment or distribution shall be made on or in respect of the Secured
Obligations owed to such Certificate Holder of such Series, including any
payment or distribution of cash, property or securities after the commencement
of a proceeding of the type referred to in Section 4.02(g) hereof, except as
expressly provided in Article III hereof.
(b) By the acceptance of its Secured Certificates of any Series
(other than Series A), each Certificate Holder of such Series agrees that in the
event that such Certificate Holder, in its capacity as a Certificate Holder,
shall receive any payment or distribution on any Secured Obligations in respect
of such Series which it is not entitled to receive under this Section 2.15 or
Article III hereof, it will hold any amount so received in trust for the Senior
Holder (as defined in Section 2.15(c) hereof) and will forthwith turn over such
payment to the Indenture Trustee in the form received to be applied as provided
in Article III hereof.
(c) As used in this Section 2.15, the term "Senior Holder" shall
mean, (i) the Certificate Holders of Series A until the Secured Obligations in
respect of Series A Secured Certificates have been paid in full and (ii) after
the Secured Obligations in respect of Series A Secured Certificates have been
paid in full, the Certificate Holders of Series B until the Secured Obligations
in respect of Series B Secured Certificates have been paid in full.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 3.01. Basic Rent Distribution.
Except as otherwise provided in Section 3.03 hereof, each
installment of Basic Rent, any payment of interest on overdue installments of
Basic Rent and any payment received by the Indenture Trustee pursuant to Section
4.03 hereof shall be promptly distributed in the following order of priority:
First, (i) so much of such installment or payment as shall be required to
pay in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as
any interest on any overdue Principal Amount and, to the
extent permitted by applicable law, on any overdue interest
and any other overdue amounts) then due under all Series A
Secured Certificates shall be distributed to the Certificate
Holders of Series A ratably, without priority of one over the
other, in the proportion that the amount of such payment or
payments
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then due under each Series A Secured Certificate bears to the
aggregate amount of the payments then due under all Series A
Secured Certificates;
(ii) after giving effect to paragraph (i) above, so much of such
installment or payment remaining as shall be required to pay
in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as
any interest on any overdue Principal Amount and, to the
extent permitted by applicable law, on any overdue interest
and any other overdue amounts) then due under all Series B
Secured Certificates shall be distributed to the Certificate
Holders of Series B ratably, without priority of one over the
other, in the proportion that the amount of such payment or
payments then due under each Series B Secured Certificate
bears to the aggregate amount of the payments then due under
all Series B Secured Certificates; and
(iii) after giving effect to paragraph (ii) above, so much of such
installment or payment remaining as shall be required to pay
in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as
any interest on any overdue Principal Amount and, to the
extent permitted by applicable law, on any overdue interest
and any other overdue amounts) then due under all Series C
Secured Certificates shall be distributed to the Certificate
Holders of Series C ratably, without priority of one over the
other, in the proportion that the amount of such payment or
payments then due under each Series C Secured Certificate
bears to the aggregate amount of the payments then due under
all Series C Secured Certificates; and
Second, the balance, if any, of such installment remaining thereafter
shall be distributed to the Owner Trustee; provided, however,
that if an Event of Default shall have occurred and be
continuing, then such balance shall not be distributed as
provided in this clause "Second" but shall be held by the
Indenture Trustee as part of the Trust Indenture Estate and
invested in accordance with Section 5.09 hereof until
whichever of the following shall first occur: (i) all Events
of Default shall have been cured or waived, in which event
such balance shall be distributed as provided in this clause
"Second" without reference to this proviso, (ii) Section 3.03
hereof shall be applicable, in which event such balance shall
be distributed in accordance with the provisions of such
Section 3.03, or (iii) the 120th day after the receipt of such
payment in which case such payment shall be distributed as
provided in this clause "Second" without reference to this
proviso.
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SECTION 3.02. Event of Loss; Replacement; Voluntary Termination;
Refinancing.
Except as otherwise provided in Section 3.03 hereof, any payments
received by the Indenture Trustee (i) with respect to the Aircraft as the result
of an Event of Loss, (ii) pursuant to a voluntary termination of the Lease
pursuant to Section 9 or 19(d) thereof, or (iii) in connection with a
refinancing of the Secured Certificates pursuant to Section 17 of the
Participation Agreement shall be applied to redemption of the Secured
Certificates and to all other amounts payable hereunder or to the Indenture
Trustee or any Certificate Holder under the Participation Agreement by applying
such funds in the following order of priority:
First, (a) to reimburse the Indenture Trustee and the Certificate Holders
for any reasonable costs or expenses incurred in connection with
such redemption for which they are entitled to reimbursement, or
indemnity by Lessee, under the Operative Documents and then (b) to
pay any other amounts then due to the Indenture Trustee and the
Certificate Holders under this Trust Indenture, the Participation
Agreement or the Secured Certificates;
Second, (i) to pay the amounts specified in paragraph (i) of clause
"Third" of Section 3.03 hereof plus Make-Whole Amount, if any,
then due and payable in respect of the Series A Secured
Certificates;
(ii) after giving effect to paragraph (i) above, to pay the amounts
specified in paragraph (ii) of clause "Third" of Section 3.03
hereof plus Make-Whole Amount, if any, then due and payable in
respect of the Series B Secured Certificates; and
(iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "Third" of
Section 3.03 hereof plus Make-Whole Amount, if any, then due
and payable in respect of the Series C Secured Certificates;
and
Third, as provided in clause "Fourth" of Section 3.03 hereof;
provided, however, that if a Replacement Airframe or Replacement Engine shall be
substituted for the Airframe or Engine subject to such Event of Loss as provided
in Section 10 of the Lease and in accordance with Section 5.06 hereof, any
insurance, condemnation or similar proceeds which result from such Event of Loss
and are paid over to the Indenture Trustee shall be held by the Indenture
Trustee as permitted by Section 6.04 hereof (provided that such moneys shall be
invested as provided in Section 5.09 hereof) as additional security for the
obligations of Lessee under the Lessee Operative Documents and, unless otherwise
applied pursuant to the Lease, such proceeds (and such investment earnings)
shall be released to Lessee at Lessee's written request upon the release of such
damaged Airframe or Engine and the replacement thereof as provided in the Lease.
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SECTION 3.03. Payments After Event of Default.
Except as otherwise provided in Section 3.04 hereof, all payments
received and amounts held or realized by the Indenture Trustee (including any
amounts realized by the Indenture Trustee from the exercise of any remedies
pursuant to Section 15 of the Lease or Article IV hereof) after both an Event of
Default shall have occurred and be continuing and the Secured Certificates shall
have become due and payable pursuant to Section 4.04(b) hereof, as well as all
payments or amounts then held by the Indenture Trustee as part of the Trust
Indenture Estate, shall be promptly distributed by the Indenture Trustee in the
following order of priority:
First, so much of such payments or amounts as shall be required to
reimburse the Indenture Trustee for any tax, expense or other loss
(including, without limitation, all amounts to be expended at the
expense of, or charged upon the tolls, rents, revenues, issues,
products and profits of, the property included in the Trust
Indenture Estate (all such property being herein called the
"Mortgaged Property") pursuant to Section 4.05(b) hereof) incurred
by the Indenture Trustee (to the extent not previously reimbursed),
the expenses of any sale, taking or other proceeding, reasonable
attorneys' fees and expenses, court costs, and any other
expenditures incurred or expenditures or advances made by the
Indenture Trustee or the Certificate Holders in the protection,
exercise or enforcement of any right, power or remedy or any damages
sustained by the Indenture Trustee or any Certificate Holder,
liquidated or otherwise, upon such Event of Default shall be applied
by the Indenture Trustee as between itself and the Certificate
Holders in reimbursement of such expenses and any other expenses for
which the Indenture Trustee or the Certificate Holders are entitled
to reimbursement under any Operative Document and in the case the
aggregate amount to be so distributed is insufficient to pay as
aforesaid, then ratably, without priority of one over the other, in
proportion to the amounts owed each hereunder;
Second, so much of such payments or amounts remaining as shall be required
to reimburse the then existing or prior Certificate Holders for
payments made pursuant to Section 5.03 hereof (to the extent not
previously reimbursed) shall be distributed to such then existing or
prior Certificate Holders ratably, without priority of one over the
other, in accordance with the amount of the payment or payments made
by each such then existing or prior Certificate Holder pursuant to
said Section 5.03 hereof;
Third, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount
of all Series A Secured Certificates, and the accrued but
unpaid interest and other amounts due thereon and all other
Secured Obligations in respect of the Series A Secured
Certificates to the date of distribution, shall be
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distributed to the Certificate Holders of Series A, and in
case the aggregate amount so to be distributed shall be
insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the proportion that
the aggregate unpaid Principal Amount of all Series A Secured
Certificates held by each holder plus the accrued but unpaid
interest and other amounts due hereunder or thereunder to the
date of distribution, bears to the aggregate unpaid Principal
Amount of all Series A Secured Certificates held by all such
holders plus the accrued but unpaid interest and other amounts
due thereon 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 Principal Amount of all Series B
Secured Certificates, and the accrued but unpaid interest and
other amounts due thereon and all other Secured Obligations in
respect of the Series B Secured Certificates to the date of
distribution, shall be distributed to the Certificate Holders
of Series B, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series B Secured Certificates held by each holder plus the
accrued but unpaid interest and other amounts due hereunder or
thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series B Secured Certificates
held by all such holders plus the accrued but unpaid interest
and other amounts due thereon to the date of distribution; and
(iii) after giving effect to paragraph (ii) above, so much of such
payments or amounts remaining as shall be required to pay in
full the aggregate unpaid Principal Amount of all Series C
Secured Certificates, and the accrued but unpaid interest and
other amounts due thereon and all other Secured Obligations in
respect of the Series C Secured Certificates to the date of
distribution, shall be distributed to the Certificate Holders
of Series C, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid Principal Amount of all
Series C Secured Certificates held by each holder plus the
accrued but unpaid interest and other amounts due hereunder or
thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series C Secured Certificates
held by all such holders plus the accrued but unpaid interest
and other amounts due thereon to the date of distribution; and
Fourth, the balance, if any, of such payments or amounts remaining
thereafter shall be distributed to the Owner Trustee.
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No Make-Whole Amount shall be due and payable on the Secured
Certificates as a consequence of the acceleration of the Secured Certificates.
SECTION 3.04. Certain Payments.
(a) Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in this Trust Indenture and for
which such provision is made in the Lease, the Participation Agreement or any
other Operative Document shall be applied forthwith to the purpose for which
such payment was made in accordance with the terms of the Lease, the
Participation Agreement or such other Operative Document, as the case may be.
(b) The Indenture Trustee will distribute promptly upon receipt any
indemnity payment received by it from the Owner Trustee or Lessee in respect of
(i) the Indenture Trustee in its individual capacity, (ii) any Certificate
Holder, (iii) the Subordination Agent, (iv) the Liquidity Provider, and (v) the
Pass Through Trustees, in each case whether pursuant to Section 7 of the
Participation Agreement or as Supplemental Rent, directly to the Person entitled
thereto. Any payment received by the Indenture Trustee under clause (b) of the
third paragraph of Section 2.02 shall be distributed to the Subordination Agent
to be distributed in accordance with the terms of the Intercreditor Agreement,
and any payment received by the Indenture Trustee under clause (c) of the third
paragraph of Section 2.02 shall be distributed directly to the Persons entitled
thereto.
(c) [Intentionally Omitted]
(d) Notwithstanding anything to the contrary contained in this
Article III, any amounts received by the Indenture Trustee which constitute
Excluded Payments shall be distributed promptly upon receipt by the Indenture
Trustee directly to the Person or Persons entitled thereto.
(e) Notwithstanding any provision of this Trust Indenture to the
contrary, any amounts held by the Indenture Trustee that would, but for the
provisions of Section 3.03 hereof, otherwise be distributed to Lessee shall,
notwithstanding the provisions of said Section, be distributed to Lessee unless
and until a Lease Event of Default shall have occurred and be continuing.
SECTION 3.05. Other Payments.
Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in the Lease, the Participation
Agreement, elsewhere in this Trust Indenture or in any other Operative Document
shall be distributed by the Indenture Trustee to the extent received or realized
at any time (i) prior to the payment in full of all Secured Obligations due the
Certificate Holders, in the order of priority specified in Section 3.01 hereof
subject to the proviso thereto, and (ii) after payment in full of all Secured
Obligations due the Certificate Holders, in the following order of priority:
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First, to the extent payments or amounts described in clause "First" of
Section 3.03 hereof are otherwise obligations of Lessee under the
Operative Documents or for which Lessee is obligated to indemnify
against thereunder, in the manner provided in clause "First" of
Section 3.03 hereof, and
Second, in the manner provided in clause "Fourth" of Section 3.03 hereof.
Further, and except as otherwise provided in Sections 3.02, 3.03 and
3.04 hereof, all payments received and amounts realized by the
Indenture Trustee under the Lease or otherwise with respect to the
Aircraft (including, without limitation, all amounts realized upon
the sale or release of the Aircraft after the termination of the
Lease with respect thereto), to the extent received or realized at
any time after payment in full of all Secured Obligations due the
Certificate Holders, shall be distributed by the Indenture Trustee
in the order of priority specified in clause (ii) of the immediately
preceding sentence of this Section 3.05.
SECTION 3.06. Payments to the Owner Trustee.
Any amounts distributed hereunder by the Indenture Trustee to the
Owner Trustee shall be paid to the Owner Trustee (within the time limits
contemplated by Section 2.04(a)) by wire transfer of funds of the type received
by the Indenture Trustee at such office and to such account or accounts of such
entity or entities as shall be designated by notice from the Owner Trustee to
the Indenture Trustee from time to time. The Owner Trustee hereby notifies the
Indenture Trustee that unless and until the Indenture Trustee receives notice to
the contrary from the Owner Trustee, all amounts to be distributed to the Owner
Trustee pursuant to clause "Second" of Section 3.01 hereof shall be distributed
by wire transfer of funds of the type received by the Indenture Trustee to the
Owner Participant's account (within the time limits contemplated by Section
2.04(a)) specified in Schedule I to the Participation Agreement.
SECTION 3.07 Application of Payments Under Guarantee.
All payments received by the Indenture Trustee pursuant to the
Guarantee shall be distributed forthwith by the Indenture Trustee in the same
order of priority, and in the same manner, as it would have distributed the
payment in respect of which such payment under the Guarantee was received.
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ARTICLE IV
COVENANTS OF THE OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Covenants of the Owner Trustee.
The Owner Trustee hereby covenants and agrees (the covenants and
agreements only in clause (b) below being made by the Owner Trustee in its
individual capacity) as follows:
(a) the Owner Trustee will duly and punctually pay the Principal
Amount of, Make-Whole Amount, if any, and interest on and other amounts
due under the Secured Certificates and hereunder in accordance with the
terms of the Secured Certificates and this Trust Indenture and all
amounts, if any, payable by it to the Certificate Holders under the
Participation Agreement;
(b) the Owner Trustee in its individual capacity covenants and
agrees that it shall not, directly or indirectly, cause or permit to exist
a Lessor Lien attributable to it in its individual capacity with respect
to the Aircraft or any other portion of the Trust Estate; that it will
promptly, at its own expense, take such action as may be necessary to duly
discharge such Lessor Lien attributable to it in its individual capacity;
and that it will make restitution to the Trust Estate for any actual
diminution of the assets of the Trust Estate resulting from such Lessor
Liens attributable to it in its individual capacity;
(c) in the event the Owner Trustee shall have Actual Knowledge of an
Event of Default, a Default or an Event of Loss, the Owner Trustee will
give prompt written notice of such Event of Default, Default or Event of
Loss to the Indenture Trustee, each Certificate Holder, Lessee and the
Owner Participant;
(d) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates and other instruments furnished
to the Owner Trustee under the Lease, including, without limitation, a
copy of any Termination Notice and a copy of each report or notice
received pursuant to Section 9(a) and 11(c) of the Lease to the extent
that the same shall not have been furnished to the Indenture Trustee
pursuant to the Lease;
(e) except pursuant to the Operative Documents or with the consent
of the Indenture Trustee (acting pursuant to instructions given in
accordance with Section 9.01 hereof), the Owner Trustee will not contract
for, create, incur, assume or suffer to exist any Debt, and will not
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or
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capability of so doing, or otherwise), endorse or otherwise be or become
contingently liable, directly or indirectly, in connection with the Debt
of any other person; and
(f) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to Lessee and the carrying out of the transactions contemplated
hereby and by the Lease, the Participation Agreement, the Trust Agreement
and the other Operative Documents.
SECTION 4.02. Event of Default.
"Event of Default" means any of the following events (whatever the
reason for such Event of Default and whether such event shall be voluntary or
involuntary or come about or be effected by operation of Law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(a) any Lease Event of Default (provided that any such Lease Event
of Default caused solely by a failure of Lessee to pay to the Owner
Trustee or the Owner Participant when due any amount that is included in
the definition of Excluded Payments shall not constitute an Event of
Default unless notice is given by the Owner Trustee to the Indenture
Trustee that such failure shall constitute an Event of Default); or
(b) the failure of the Owner Trustee to pay when due any payment of
Principal Amount of, interest on, Make-Whole Amount, if any, or other
amount due and payable under any Secured Certificate or hereunder (other
than any such failure arising by virtue of a tax withheld pursuant to
Section 2.04(b) hereof or as a result of a Lease Event of Default or a
Lease Default) and such failure shall have continued unremedied for ten
(10) Business Days in the case of any payment of Principal Amount or
interest or Make-Whole Amount, if any, thereon and, in the case of any
other amount, for ten (10) Business Days after the Owner Trustee or the
Owner Participant receives written demand from the Indenture Trustee or
any Certificate Holder; or
(c) any Lien required to be discharged by the Owner Trustee, in its
individual capacity pursuant to Section 4.01(b) hereof or in its
individual or trust capacity pursuant to Section 8(h) of the Participation
Agreement, or by the Owner Participant pursuant to Section 8(h) of the
Participation Agreement shall remain undischarged for a period of thirty
(30) days after the Owner Trustee and the Owner Participant shall have
received written notice from the Indenture Trustee or any Certificate
Holder of such Lien; or
(d) any representation or warranty made by the Owner Participant or
the Owner Trustee herein, in the Participation Agreement or in any
document or certificate furnished by the Owner Participant or the Owner
Trustee to the Indenture Trustee or any Certificate Holder in connection
with the transactions contemplated by
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the Operative Documents shall prove to have been false or incorrect when
made in any material respect and continues to be material; and if such
misrepresentation is capable of being corrected and if such correction is
being sought diligently, such misrepresentation shall not have been
corrected within sixty (60) days (or, without affecting Section 4.02(f)
hereof, in the case of the representations made in Section 8(c) of the
Participation Agreement as to the citizenship of the Owner Trustee in its
individual capacity or of the Owner Participant, respectively, as soon as
is reasonably practicable but in any event within sixty (60) days)
following notice thereof from the Indenture Trustee or any Certificate
Holder to the Owner Trustee or the Owner Participant, as the case may be;
or
(e) other than as provided in (c) above or (f) below, any failure by
the Owner Trustee or Owner Participant to observe or perform any other
covenant or obligation of the Owner Trustee or Owner Participant, as the
case may be, for the benefit of the Indenture Trustee or the Certificate
Holders contained in the Participation Agreement, Section 4.01(a) of the
Trust Agreement, the Secured Certificates or this Trust Indenture which is
not remedied within a period of sixty (60) days after notice thereof has
been given to the Owner Trustee and the Owner Participant; or
(f) if at any time when the Aircraft is registered under the laws of
the United States, the Owner Participant shall not be a Citizen of the
United States, and as the result thereof the registration of the Aircraft
under the Federal Aviation Act, and regulations then applicable
thereunder, shall cease to be effective; provided that no Event of Default
shall be deemed to have occurred under this paragraph (f) unless such
circumstances continue unremedied for more than sixty (60) days after the
Owner Participant has Actual Knowledge of the state of facts that resulted
in such ineffectiveness and of such loss of citizenship; or
(g) at any time either (i) the commencement of an involuntary case
or other proceeding in respect of the Owner Participant, the Owner Trustee
or the Trust Estate in an involuntary case under the federal bankruptcy
laws, as now or hereafter constituted, or any other applicable federal or
state bankruptcy, insolvency or other similar law in the United States or
seeking the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Owner Participant, the
Owner Trustee or the Trust Estate or for all or substantially all of its
property, or seeking the winding-up or liquidation of its affairs and the
continuation of any such case or other proceeding undismissed and unstayed
for a period of ninety (90) consecutive days; or (ii) the commencement by
the Owner Participant, the Owner Trustee or the Trust Estate of a
voluntary case or proceeding under the federal bankruptcy laws, as now
constituted or hereafter amended, or any other applicable federal or state
bankruptcy, insolvency or other similar law in the United States, or the
consent by the Owner Participant, the Owner Trustee or the Trust Estate to
the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of
the Owner Participant, the Owner Trustee or the Trust Estate or for all or
substantially all of its property, or the making
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by the Owner Participant, the Owner Trustee or the Trust Estate of any
assignment for the benefit of creditors or the Owner Participant or the
Owner Trustee shall take any action to authorize any of the foregoing;
provided, however, that an event referred to in this Section 4.02(g) with
respect to the Owner Participant shall not constitute an Event of Default
if within thirty (30) days of the commencement of the case or proceeding a
final non-appealable order, judgment or decree shall be entered in such
case or proceeding by a court or a trustee, custodian, receiver or
liquidator, to the effect that, no part of the Trust Estate (except for
the Owner Participant's beneficial interest therein) and no right, title
or interest under the Trust Indenture Estate shall be included in, or be
subject to, any declaration or adjudication of, or proceedings with
respect to, the bankruptcy, insolvency or liquidation of the Owner
Participant referred to in this Section 4.02(g).
SECTION 4.03. Certain Rights.
The Indenture Trustee shall give the Certificate Holders, the Owner
Trustee and the Owner Participant prompt written notice of any Event of Default
of which the Indenture Trustee has Actual Knowledge and, if any such Event of
Default results from a Lease Event of Default, shall give the Certificate
Holders, the Owner Trustee and the Owner Participant not less than ten (10)
Business Days' prior written notice of the date (the "Enforcement Date") on or
after which the Indenture Trustee may commence and consummate the exercise of
any remedy or remedies described in Section 4.04, 4.05 or 4.06 hereof, or the
exercise of any remedy or remedies pursuant to the provisions of Section 15 of
the Lease. If an Event of Default shall have occurred and be continuing, the
Owner Trustee shall have the following rights hereunder, any of which may be
exercised directly by the Owner Participant.
If as a result of the occurrence of an Event of Default in respect
of the nonpayment by Lessee of Basic Rent due under the Lease, the Indenture
Trustee shall have insufficient funds to make any payment of Principal Amount
and interest on any Secured Certificate on the day it becomes due and payable,
the Owner Trustee or the Owner Participant may, but shall not be obligated to,
pay the Indenture Trustee prior to the Enforcement Date, in the manner provided
in Section 2.04 hereof, for application in accordance with Section 3.01 hereof,
an amount equal to the portion of the Principal Amount and interest (including
interest, if any, on any overdue payments of such portion of Principal Amount
and interest) then due and payable on the Secured Certificates, and, unless the
Owner Trustee has cured Events of Default in respect of payments of Basic Rent
on each of the three immediately preceding Basic Rent payment dates, or the
Owner Trustee has cured six previous Events of Default in respect of payments of
Basic Rent, such payment by the Owner Trustee shall, solely for purposes of this
Trust Indenture be deemed to cure any Event of Default which would otherwise
have arisen on account of the nonpayment by Lessee of such installment of Basic
Rent (but not any other Default or Event of Default which shall have occurred
and be continuing).
If any Event of Default (other than in respect of the nonpayment of
Basic Rent by Lessee) which can be cured has occurred, the Owner Trustee or the
Owner Participant
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may, but shall not be obligated to, cure such Event of Default prior to the
Enforcement Date as is necessary to accomplish the observance or performance of
the defaulted covenant, condition or agreement.
Except as hereinafter in this Section 4.03 provided, the Owner
Trustee shall not, as a result of exercising the right to cure any such Event of
Default, obtain any Lien on any of the Mortgaged Property or any Rent payable
under the Lease for or on account of costs or expenses incurred in connection
with the exercise of such right, nor shall any claim of the Owner Trustee
against Lessee or any other party for the repayment of such costs or expenses
impair the prior right and security interest of the Indenture Trustee in and to
the Mortgaged Property. Upon any payment by the Owner Trustee or the Owner
Participant pursuant to the first or second preceding paragraphs of this Section
4.03, the Owner Trustee or the Owner Participant, as the case may be, shall be
subrogated to the rights of the Indenture Trustee and the Certificate Holders in
respect of the Basic Rent which was overdue at the time of such payment and
interest payable by Lessee on account of its being overdue and any Supplemental
Rent in respect of the reimbursement of amounts paid by the Owner Trustee
pursuant to the immediately preceding paragraph (but in either case shall have
no rights as a secured party hereunder), and thereafter, the Owner Trustee or
the Owner Participant, as the case may be, shall be entitled to receive such
overdue Basic Rent or Supplemental Rent, as the case may be, and interest
thereon upon receipt thereof by the Indenture Trustee (and shall be entitled to
bring an action against Lessee to enforce such payment); provided, however, that
(i) if the Principal Amount and interest on the Secured Certificates shall have
become due and payable pursuant to Section 4.04(b) hereof, such subrogation
shall, until the Principal Amount of, interest on, Make-Whole Amount, if any,
and all other amounts due with respect to all Secured Certificates shall have
been paid in full, be subordinate to the rights of the Indenture Trustee and the
Certificate Holders in respect of such payment of overdue Basic Rent,
Supplemental Rent and such interest and (ii) the Owner Trustee shall not be
entitled to seek to recover any such payment (or any payment in lieu thereof)
except pursuant to the foregoing right of subrogation by demand or suit for
damages.
SECTION 4.04. Remedies.
(a) Subject to the provisions of Section 2.14 hereof, if an Event of
Default shall have occurred and be continuing and so long as the same shall
continue unremedied, then and in every such case the Indenture Trustee may,
subject to the second paragraph of this Section 4.04(a), on and after the
Enforcement Date if such Event of Default results from a Lease Event of Default,
exercise any or all of the rights and powers and pursue any and all of the
remedies pursuant to this Article IV and shall have and may exercise all of the
rights and remedies of a secured party under the Uniform Commercial Code and, in
the event such Event of Default is also a Lease Event of Default, any and all of
the remedies pursuant to Section 15 of the Lease and may take possession of all
or any part of the properties covered or intended to be covered by the Lien
created hereby or pursuant hereto and may exclude the Owner Participant, the
Owner Trustee and Lessee and all persons claiming under any of them wholly or
partly therefrom, provided, that the Indenture Trustee shall give the Owner
Trustee and the Owner Participant twenty (20) days' prior written notice of its
intention to sell the Aircraft.
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Without limiting any of the foregoing, it is understood and agreed that the
Indenture Trustee may exercise any right of sale of the Aircraft available to
it, even though it shall not have taken possession of the Aircraft and shall not
have possession thereof at the time of such sale.
Anything in this Trust Indenture to the contrary notwithstanding,
the Indenture Trustee shall not be entitled to exercise any remedy hereunder as
a result of an Event of Default which arises solely by reason of one or more
events or circumstances which constitute a Lease Event of Default unless the
Indenture Trustee as security assignee of the Owner Trustee shall have exercised
or concurrently be exercising one or more of the remedies provided for in
Section 15 of the Lease to terminate the Lease or take possession and/or sell
the Aircraft; provided, however, that such requirement to exercise one or more
of such remedies under the Lease shall not apply in circumstances where the
Indenture Trustee is, and has been, for a continuous period in excess of 60 days
or such other period as may be specified in Section 1110(a)(1)(A) of the
Bankruptcy Code (such 60-day or other period being the "Section 1110 Period"),
involuntarily stayed or prohibited by applicable law or court order from
exercising such remedies under the Lease (a "Continuous Stay Period"); provided
further, however, that the requirement to exercise one or more of such remedies
under the Lease shall nonetheless be applicable during a Continuous Stay Period
subsequent to the expiration of the Section 1110 Period to the extent that the
continuation of such Continuous Stay Period subsequent to the expiration of the
Section 1110 Period (A) results from an agreement by the trustee or the
debtor-in-possession in such proceeding during the Section 1110 Period with the
approval of the relevant court to perform the Lease in accordance with Section
1110(a)(1)(A) of the Bankruptcy Code and continues to perform as required by
Section 1110(a)(1)(A-B) of the Bankruptcy Code or (B) is an extension of the
Section 1110 Period with the consent of the Indenture Trustee pursuant to
Section 1110(b) of the Bankruptcy Code or (C) results from Lessee's assumption
during the Section 1110 Period with the approval of the relevant court of the
Lease pursuant to Section 365 of the Bankruptcy Code or (D) is the consequence
of the Indenture Trustee's own failure to give any requisite notice to any
Person. In the event that the applicability of Section 1110 of the Bankruptcy
Code to the Aircraft is being contested by Lessee in judicial proceedings, so
long as the Indenture Trustee fails to participate in such proceedings, the
Owner Trustee shall have the right (without affecting in any way any rights or
remedy of the Indenture Trustee hereunder) to participate in such proceedings.
It is expressly understood and agreed that, subject only to the
immediately preceding paragraph, the inability, described in such paragraphs, of
the Indenture Trustee to exercise any right or remedy under the Lease shall in
no event and under no circumstances prevent the Indenture Trustee from
exercising any or all of its rights, powers and remedies under this Trust
Indenture, including, without limitation, this Article IV.
(b) If an Event of Default shall have occurred and be continuing,
then and in every such case the Indenture Trustee may (and shall, upon receipt
of a written demand therefor from a Majority in Interest of Certificate
Holders), subject to Section 4.03 hereof, at any time, by delivery of written
notice or notices to the Owner Trustee and the Owner Participant, declare all
the Secured Certificates to be due and payable, whereupon the unpaid
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Principal Amount of all Secured Certificates then outstanding, together with
accrued but unpaid interest thereon (without Make-Whole Amount) and other
amounts due thereunder, shall immediately become due and payable without
presentment, demand, protest or notice, all of which are hereby waived.
This Section 4.04(b), however, is subject to the condition that, if
at any time after the Principal Amount of the Secured Certificates shall have
become so due and payable, and before any judgment or decree for the payment of
the money so due, or any thereof, shall be entered, all overdue payments of
interest upon the Secured Certificates and all other amounts payable under the
Secured Certificates (except the Principal Amount of the Secured Certificates
which by such declaration shall have become payable) shall have been duly paid,
and every other Default and Event of Default with respect to any covenant or
provision of this Trust Indenture shall have been cured, then and in every such
case a Majority in Interest of Certificate Holders may (but shall not be
obligated to), by written instrument filed with the Indenture Trustee, rescind
and annul the Indenture Trustee's declaration and its consequences; but no such
rescission or annulment shall extend to or affect any subsequent Default or
Event of Default or impair any right consequent thereon.
(c) Any Certificate Holder shall be entitled, at any sale pursuant
to Section 15 of the Lease or this Section 4.04, to credit against any purchase
price bid at such sale by such holder all or any part of the unpaid obligations
owing to such Certificate Holder and secured by the Lien of this Trust Indenture
(but only to the extent that such purchase price would have been paid to such
Certificate Holder pursuant to Article III hereof if such purchase price were
paid in cash and the foregoing provisions of this subsection (c) were not given
effect).
(d) In the event of any sale of the Trust Indenture Estate, or any
part thereof, pursuant to any judgment or decree of any court or otherwise in
connection with the enforcement of any of the terms of this Trust Indenture, the
unpaid Principal Amount of all Secured Certificates then outstanding, together
with accrued interest thereon, and other amounts due thereunder, shall
immediately become due and payable without presentment, demand, protest or
notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as the Pass
Through Trustee under any Pass Through Trust Agreement or the Subordination
Agent on its behalf is a Certificate Holder, the Indenture Trustee will not be
authorized or empowered to acquire title to any Mortgaged Property or take any
action with respect to any Mortgaged Property so acquired by it if such
acquisition or action would cause any Pass Through Trust to fail to qualify as a
"grantor trust" for federal income tax purposes.
SECTION 4.05. Return of Aircraft, Etc.
(a) If an Event of Default shall have occurred and be continuing,
subject to Sections 4.03 and 4.04 hereof, at the request of the Indenture
Trustee, the Owner Trustee shall promptly execute and deliver to the Indenture
Trustee such instruments of title and other documents as the Indenture Trustee
may deem necessary or advisable to enable the Indenture
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Trustee or an agent or representative designated by the Indenture Trustee, at
such time or times and place or places as the Indenture Trustee may specify, to
obtain possession of all or any part of the Mortgaged Property included in the
Trust Indenture Estate to which the Indenture Trustee shall at the time be
entitled hereunder. If the Owner Trustee shall for any reason fail to execute
and deliver such instruments and documents after such request by the Indenture
Trustee, the Indenture Trustee may (i) obtain a judgment conferring on the
Indenture Trustee the right to immediate possession and requiring the Owner
Trustee to execute and deliver such instruments and documents to the Indenture
Trustee, to the entry of which judgment the Owner Trustee hereby specifically
consents to the fullest extent permitted by applicable law, and (ii) pursue all
or part of such Mortgaged Property wherever it may be found and, in the event
that a Lease Event of Default has occurred and is continuing, may enter any of
the premises of Lessee wherever such Mortgaged Property may be or be supposed to
be and search for such Mortgaged Property and take possession of and remove such
Mortgaged Property. All expenses of obtaining such judgment or of pursuing,
searching for and taking such property shall, until paid, be secured by the Lien
of this Trust Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may,
from time to time, at the expense of the Mortgaged Property, make all such
expenditures for maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, modifications or alterations to and of the
Mortgaged Property, as it may deem proper. In each such case, the Indenture
Trustee shall have the right to maintain, use, operate, store, insure, lease,
control, manage, dispose of, modify or alter the Mortgaged Property and to carry
on the business and to exercise all rights and powers of the Owner Participant
and the Owner Trustee relating to the Mortgaged Property, as the Indenture
Trustee shall deem best, including the right to enter into any and all such
agreements with respect to the maintenance, use, operation, storage, insurance,
leasing, control, management, disposition, modification or alteration of the
Mortgaged Property or any part thereof as the Indenture Trustee may determine,
and the Indenture Trustee shall be entitled to collect and receive directly all
tolls, rents (including Rent), revenues, issues, income, products and profits of
the Mortgaged Property and every part thereof, except Excluded Payments, without
prejudice, however, to the right of the Indenture Trustee under any provision of
this Trust Indenture to collect and receive all cash held by, or required to be
deposited with, the Indenture Trustee hereunder. Such tolls, rents (including
Rent), revenues, issues, income, products and profits shall be applied to pay
the expenses of the maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, improvement, modification or alteration of the
Mortgaged Property and of conducting the business thereof, and to make all
payments which the Indenture Trustee may be required or may elect to make, if
any, for taxes, assessments, insurance or other proper charges upon the
Mortgaged Property or any part thereof (including the employment of engineers
and accountants to examine, inspect and make reports upon the properties and
books and records of the Owner Trustee), and all other payments which the
Indenture Trustee may be required or authorized to make under any provision of
this Trust Indenture, as well as just and reasonable compensation for the
services of the Indenture Trustee, and of all persons properly engaged and
employed by the Indenture Trustee with respect hereto.
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SECTION 4.06. Remedies Cumulative.
Each and every right, power and remedy given to the Indenture
Trustee specifically or otherwise in this Trust Indenture shall be cumulative
and shall be in addition to every other right, power and remedy herein
specifically given or now or hereafter existing at law, in equity or by statute,
and each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time and as often and in such
order as may be deemed expedient by the Indenture Trustee, and the exercise or
the beginning of the exercise of any power or remedy shall not be construed to
be a waiver of the right to exercise at the same time or thereafter any other
right, power or remedy. No delay or omission by the Indenture Trustee in the
exercise of any right, remedy or power or in the pursuance of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default on the part of the Owner Trustee or Lessee or to be an acquiescence
therein.
SECTION 4.07. Discontinuance of Proceedings.
In case the Indenture Trustee shall have instituted any proceeding
to enforce any right, power or remedy under this Trust Indenture by foreclosure,
entry or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the
Indenture Trustee, then and in every such case the Owner Trustee, the Indenture
Trustee and Lessee shall, subject to any determination in such proceedings, be
restored to their former positions and rights hereunder with respect to the
Mortgaged Property, and all rights, remedies and powers of the Owner Trustee,
the Indenture Trustee or Lessee shall continue as if no such proceedings had
been instituted.
SECTION 4.08. Waiver of Past Defaults.
Upon written instruction from a Majority in Interest of Certificate
Holders, the Indenture Trustee shall waive any past Default hereunder and its
consequences and upon any such waiver such Default shall cease to exist and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Trust Indenture, but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon; provided,
that in the absence of written instructions from all the Certificate Holders,
the Indenture Trustee shall not waive any Default (i) in the payment of the
Principal Amount, Make-Whole Amount, if any, and interest and other amounts due
under any Secured Certificate then outstanding, or (ii) in respect of a covenant
or provision hereof which, under Article IX hereof, cannot be modified or
amended without the consent of each Certificate Holder.
SECTION 4.09. Appointment of Receiver.
The Indenture Trustee shall, as a matter of right, be entitled to
the appointment of a receiver (who may be the Indenture Trustee or any successor
or nominee thereof) for all or any part of the Mortgaged Property, whether such
receivership be incidental to a proposed sale of the Mortgaged Property or the
taking of possession thereof or otherwise, and the
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Owner Trustee hereby consents to the appointment of such a receiver and will not
oppose any such appointment. Any receiver appointed for all or any part of the
Mortgaged Property shall be entitled to exercise all the rights and powers of
the Indenture Trustee with respect to the Mortgaged Property.
SECTION 4.10. Indenture Trustee Authorized to Execute Bills of Sale,
Etc.
The Owner Trustee irrevocably appoints the Indenture Trustee the
true and lawful attorney-in-fact of the Owner Trustee in its name and stead and
on its behalf, for the purpose, if an Event of Default shall have occurred and
be continuing, of effectuating any sale, assignment, transfer or delivery for
the enforcement of the Lien of this Trust Indenture, whether pursuant to
foreclosure or power of sale, assignments and other instruments as may be
necessary or appropriate, with full power of substitution, the Owner Trustee
hereby ratifying and confirming all that such attorney or any substitute shall
do by virtue hereof in accordance with applicable law. Nevertheless, if so
requested by the Indenture Trustee or any purchaser, the Owner Trustee shall
ratify and confirm any such sale, assignment, transfer or delivery, by executing
and delivering to the Indenture Trustee or such purchaser all bills of sale,
assignments, releases and other proper instruments to effect such ratification
and confirmation as may be designated in any such request.
SECTION 4.11. Rights of Certificate Holders to Receive Payment.
Notwithstanding any other provision of this Trust Indenture, the
right of any Certificate Holder to receive payment of principal of, and premium,
if any, and interest on a Secured Certificate on or after the respective due
dates expressed in such Secured Certificate, or to bring suit for the
enforcement of any such payment on or after such respective dates in accordance
with the terms hereof, shall not be impaired or affected without the consent of
such Certificate Holder.
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default.
If the Indenture Trustee shall have Actual Knowledge of an Event of
Default or of a Default arising from a failure to pay Rent, the Indenture
Trustee shall give prompt written notice thereof to the Owner Trustee, the Owner
Participant, Lessee, and each Certificate Holder. Subject to the terms of
Sections 4.03, 4.04, 4.08, 5.02 and 5.03 hereof, the Indenture Trustee shall
take such action, or refrain from taking such action, with respect to such Event
of Default or Default (including with respect to the exercise of any rights or
remedies hereunder) as the Indenture Trustee shall be instructed in writing by a
Majority in Interest of Certificate Holders. Subject to the provisions of
Section 5.03, if the Indenture Trustee shall not have received instructions as
above provided within twenty (20) days after mailing notice
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of such Event of Default to the Certificate Holders, the Indenture Trustee may,
subject to instructions thereafter received pursuant to the preceding provisions
of this Section 5.01, take such action, or refrain from taking such action, but
shall be under no duty to take or refrain from taking any action, with respect
to such Event of Default or Default as it shall determine advisable in the best
interests of the Certificate Holders; provided, however, that the Indenture
Trustee may not sell the Aircraft or any Engine without the consent of a
majority in interest of Certificate Holders. If the Indenture Trustee shall at
any time declare the Lease to be in default pursuant to Section 15 thereof or
shall elect to foreclose or otherwise enforce this Trust Indenture, the
Indenture Trustee shall forthwith notify the Owner Participant, the Certificate
Holders, the Owner Trustee and Lessee. For all purposes of this Trust Indenture,
in the absence of Actual Knowledge on the part of the Indenture Trustee, the
Owner Trustee or the Owner Participant, the Indenture Trustee, the Owner Trustee
or the Owner Participant, as the case may be, shall not be deemed to have
knowledge of a Default or an Event of Default (except, in the case of the
Indenture Trustee, the failure of Lessee to pay any installment of Basic Rent
within one (1) Business Day after the same shall become due, if any portion of
such installment was then required to be paid to the Indenture Trustee, which
failure shall constitute knowledge of a Default) unless notified in writing by
Lessee, the Owner Trustee, the Owner Participant or one or more Certificate
Holders.
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations.
(a) Subject to the terms of Sections 2.14, 4.03, 4.04(a), 4.08, 5.01
and 5.03 hereof, upon the written instructions at any time and from time to time
of a Majority in Interest of Certificate Holders, the Indenture Trustee shall,
subject to the terms of this Section 5.02, take such of the following actions as
may be specified in such instructions: (i) give such notice or direction or
exercise such right, remedy or power hereunder as shall be specified in such
instructions; (ii) give such notice or direction or exercise such right, remedy
or power under the Lease, the Participation Agreement, the Purchase Agreement,
or any other part of the Trust Indenture Estate as shall be specified in such
instructions; and (iii) after the occurrence and during the continuance of an
Event of Default, approve as satisfactory to the Indenture Trustee all matters
required by the terms of the Lease to be satisfactory to the Owner Trustee, it
being understood that without the written instructions of a Majority in Interest
of Certificate Holders, the Indenture Trustee shall not approve any such matter
as satisfactory to the Indenture Trustee; provided, that anything contained in
this Trust Indenture, the Lease or the other Operative Documents to the contrary
notwithstanding:
(1) the Owner Trustee or the Owner Participant may, without the
consent of the Indenture Trustee, demand, collect, xxx for or otherwise
obtain all amounts included in Excluded Payments from Lessee or the
Guarantor, exercise any election or option or make any decision or
determination or to give or receive any notice, consent, waiver or
approval in respect of any Excluded Payment and seek legal or equitable
remedies to require Lessee or the Guarantor to maintain the insurance
coverage referred to in Section 11 of the Lease; provided, that the rights
referred to in this clause (1) shall not be deemed to include the exercise
of any remedies provided for in Section
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15 of the Lease other than the right to proceed by appropriate court
action, either at law or in equity, to enforce payment by Lessee or the
Guarantor of such amounts included in Excluded Payments or performance by
Lessee or the Guarantor of such insurance covenant, or to recover damages
for the breach thereof or for specific performance of any covenant of
Lessee or the Guarantor;
(2) unless an Event of Default and an Indenture Trustee Event shall
have occurred and be continuing and except as provided in clause (4)
below, the Indenture Trustee shall not, without the consent of the Owner
Trustee, which consent shall not be withheld if no right or interest of
the Owner Trustee or the Owner Participant shall be diminished or impaired
thereby, (i) enter into, execute and deliver amendments, modifications,
waivers or consents in respect of any of the provisions of the Lease, or
(ii) approve any accountants, engineers, appraisers or counsel as
satisfactory to render services for or issue opinions to the Owner Trustee
pursuant to the Operative Documents; provided that, whether or not an
Event of Default shall have occurred and be continuing, no amendment,
modification, waiver or consent in respect of the Lease shall affect the
amount or timing of, or the right to enforce payment of, any Excluded
Payment;
(3) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee and the Owner
Participant shall have the right, together with the Indenture Trustee, (i)
to receive from Lessee all notices, certificates, reports, filings,
opinions of counsel and other documents and all information which any
thereof is permitted or required to give or furnish to the Owner Trustee
or Lessor pursuant to any Operative Document (including pursuant to
Section 7(b) of the Participation Agreement), (ii) to exercise inspection
rights pursuant to Section 12 of the Lease, (iii) to retain all rights
with respect to insurance maintained for its own account which Section
11(e) of the Lease specifically confers on Lessor or the Owner
Participant, (iv) to exercise, to the extent necessary to enable it to
exercise its rights under Section 4.03 hereof, the rights of Lessor under
Section 21 of the Lease and (v) to give notices of default under Section
14 of the Lease;
(4) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee shall have the
right to the exclusion of the Indenture Trustee to adjust Rent, Stipulated
Loss Values and Termination Values as provided in Section 3(d) of the
Lease and to select counsel with respect to any opinion relating to tax
matters to be delivered solely to the Owner Participant;
(5) whether or not a Default or Event of Default under the Trust
Indenture has occurred and is continuing, the Owner Trustee may, without
the consent of the Indenture Trustee, (i) solicit and make bids with
respect to the Aircraft under Section 9 of the Lease in respect of a
termination of the Lease by Lessee pursuant to Section 9 thereof, (ii)
determine "fair market sales value" and "fair market rental value" under
Section 19 of the Lease for all purposes except following an Event of
Default pursuant
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to Section 15 of the Lease, and (iii) make an election pursuant to and in
accordance with the provisions of Section 9(c) of the Lease; and
(6) so long as no Event of Default shall have occurred and be
continuing, except as provided in clauses (2) and (3) above, all rights of
the "Lessor" under the Lease shall be exercised by the Owner Trustee to
the exclusion of the Indenture Trustee including, without limitation, the
right to (i) exercise all rights with respect to Lessee's use and
operation, modification or maintenance of the Aircraft and any Engine
which the Lease specifically confers on Lessor, and (ii) consent to and
approve any assignment pursuant to Section 13 of the Lease; provided that
the foregoing shall not limit (A) any rights separately granted to the
Indenture Trustee under the Operative Documents or (B) the right of the
Indenture Trustee to receive any funds to be delivered to the "Lessor"
under the Lease (except with respect to Excluded Payments) and under the
Purchase Agreement.
Notwithstanding anything to the contrary contained herein, the
Indenture Trustee shall have the right, to the exclusion of the Owner Trustee
and the Owner Participant, to (A) declare the Lease to be in default under
Section 15 thereof and (B) subject only to the provisions of Sections 4.03,
4.04(a) and 2.14 hereof, exercise the remedies set forth in such Section 15
(other than in connection with Excluded Payments) at any time that a Lease Event
of Default shall have occurred and be continuing.
The Indenture Trustee will execute and the Owner Trustee will file
or cause to be filed such continuation statements with respect to financing
statements relating to the security interest created hereunder in the Trust
Indenture Estate as specified by Lessee pursuant to Section 8(e) of the
Participation Agreement or as may be specified from time to time in written
instructions of a Majority in Interest of Certificate Holders (which
instructions may, by their terms, be operative only at a future date and which
shall be accompanied by the form of such continuation statement so to be filed).
The Indenture Trustee will furnish to each Certificate Holder (and, during the
continuation of an Indenture Trustee Event, to the Owner Trustee and Owner
Participant), promptly upon receipt thereof, duplicates or copies of all
reports, notices, requests, demands, certificates and other instruments
furnished to the Indenture Trustee under the Lease or hereunder, including,
without limitation, a copy of any Termination Notice (as defined in the Lease)
and a copy of each report or notice received pursuant to Sections 9(a) and 11(c)
of the Lease, respectively, to the extent that the same shall not have been
furnished to such Certificate Holder pursuant hereto or to the Lease.
(b) If any Lease Event of Default shall have occurred and be
continuing and the Owner Trustee shall not have cured fully such Lease Event of
Default under and in accordance with Section 4.03 hereof, on request of a
Majority in Interest of Certificate Holders, the Indenture Trustee shall declare
the Lease to be in default pursuant to Section 15 thereof and exercise those
remedies specified by such Certificate Holders. The Indenture Trustee agrees to
provide to the Certificate Holders, the Owner Trustee, the Owner Participant and
Lessee concurrently with such declaration by the Indenture Trustee, notice of
such declaration by the Indenture Trustee.
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SECTION 5.03. Indemnification.
The Indenture Trustee shall not be under any obligation to take any
action under this Trust Indenture and nothing herein or therein shall require
the Indenture Trustee to expend or risk its own funds or otherwise incur the
risk of any financial liability in the performance of any of its rights or
powers if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it (the written indemnity of any Certificate Holder who is a QIB,
signed by an authorized officer thereof, in favor of, delivered to and in form
reasonably satisfactory to Indenture Trustee shall be accepted as reasonable
assurance of adequate indemnity). The Indenture Trustee shall not be required to
take any action under Section 5.01 (other than the first sentence thereof) or
5.02 or Article IV hereof, nor shall any other provision of this Trust Indenture
or any other Operative Document be deemed to impose a duty on the Indenture
Trustee to take any action, if the Indenture Trustee shall have been advised by
counsel that such action is contrary to the terms hereof or of the Lease or is
otherwise contrary to Law.
SECTION 5.04. No Duties Except as Specified in Trust Indenture or
Instructions.
The Indenture Trustee shall not have any duty or obligation to use,
operate, store, lease, control, manage, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Trust Indenture Estate, or to otherwise
take or refrain from taking any action under, or in connection with, this Trust
Indenture or any part of the Trust Indenture Estate, except as expressly
provided by the terms of this Trust Indenture or as expressly provided in
written instructions from Certificate Holders as provided in this Trust
Indenture; and no implied duties or obligations shall be read into this Trust
Indenture against the Indenture Trustee. The Indenture Trustee agrees that it
will in its individual capacity and at its own cost and expense (but without any
right of indemnity in respect of any such cost or expense under Section 7.01
hereof), promptly take such action as may be necessary duly to discharge all
liens and encumbrances on any part of the Trust Indenture Estate which result
from claims against it in its individual capacity not related to the ownership
of the Aircraft or the administration of the Trust Indenture Estate or any other
transaction pursuant to this Trust Indenture or any document included in the
Trust Indenture Estate.
SECTION 5.05. No Action Except Under Lease, Trust Indenture or
Instructions.
The Owner Trustee and the Indenture Trustee agree that they will not
use, operate, store, lease, control, manage, sell, dispose of or otherwise deal
with the Aircraft or any other part of the Trust Indenture Estate except (i) as
required by the terms of the Lease or (ii) in accordance with the powers granted
to, or the authority conferred upon, the Owner Trustee and the Indenture Trustee
pursuant to this Trust Indenture and in accordance with the express terms
hereof.
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SECTION 5.06. Replacement Airframes and Replacement Engines.
At any time an Airframe or Engine is to be replaced under or
pursuant to Section 10 of the Lease by a Replacement Airframe or Replacement
Engine, the Owner Trustee shall direct the Indenture Trustee to execute and
deliver to the Owner Trustee an appropriate instrument releasing such Airframe
and/or Engine as appropriate from the Lien of this Trust Indenture and the
Indenture Trustee shall execute and deliver such instrument as aforesaid, but
only upon compliance by Lessee with the applicable provisions of Section 10 of
the Lease and upon receipt by or deposit with the Indenture Trustee of the
following:
(1) A written request from the Owner Trustee, requesting such
release specifically describing the Airframe and/or Engine(s) so to be released.
(2) A certificate signed by a duly authorized officer of Lessee
stating the following:
A. With respect to the Replacement of any Airframe:
(i) a description of the Airframe which shall be identified
by manufacturer, model, FAA registration number (or
other applicable registration information) and
manufacturer's serial number;
(ii) a description of the Replacement Airframe to be received
(including the manufacturer, model, FAA registration
number (or other applicable registration information)
and manufacturer's serial number) as consideration for
the Airframe to be released;
(iii) that the Replacement Airframe is of the same or an
improved model as the Airframe requested to be released
from this Indenture;
(iv) the value, utility and remaining useful life (without
regard to hours or cycles) of the Replacement Airframe
as of the date of such certificate (which in the
judgment of Lessee shall be not less than the then
value, utility and remaining useful life (without regard
to hours or cycles) of the Airframe requested to be
released (assuming such Airframe was in the condition
and repair required to be maintained under the Lease));
and
(v) that no Lease Event of Default and no event which, with
lapse of time or notice, or both, would become a Lease
Event of Default, has occurred which has not been
remedied or waived, and that Lessee will not be in
default, by the making and granting of the request for
release and the addition of a Replacement Airframe,
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in the performance of any of the terms and covenants of
the Lease.
B. with respect to the replacement of any Engine:
(i) a description of the Engine which shall be identified by
manufacturer's serial number;
(ii) a description of the Replacement Engine (including the
manufacturer's name and serial number) as consideration
for the Engine to be released;
(iii) that such Replacement Engine is substantially the same
as the Engine to be released (or an improved model);
(iv) the value, utility and remaining useful life (without
regard to hours or cycles) of the Replacement Engine as
of the date of such certificate (which value shall not
be less than the then value, utility and remaining
useful life (without regard to hours or cycles) of the
Engine to be released (assuming such Engine was in the
condition and repair required to be maintained under the
Lease));
(v) that each of the conditions specified in Section 10(b)
of the Lease with respect to such Replacement Engine
have been satisfied; and
(vi) that, with respect to the replacement of an Engine
pursuant to Section 9(d) of the Lease, no Lease Event of
Default and no Lease Default has occurred which has not
been remedied or waived.
(3) (a) The appropriate instruments (i) transferring to the Owner
Trustee title to the Replacement Airframe or Replacement Engine to be received
as consideration for the Airframe or Engine to be released and (ii) assigning to
the Owner Trustee the benefit of all manufacturer's and vendor's warranties
generally available with respect to such Replacement Airframe or Replacement
Engine, and a Trust Agreement and Indenture Supplement subjecting such
Replacement Airframe or Replacement Engine and any related warranty rights to
the lien of this Indenture.
(b) With respect to the replacement of any Engine, such Uniform
Commercial Code financing statements covering the lien created by this Indenture
as deemed necessary or desirable by counsel for the Indenture Trustee to protect
the lien under the Indenture in the Replacement Engine.
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(4) A certificate from either an aircraft engineer (who may be an
employee of Lessee) or a firm of independent aircraft appraisers selected by
Lessee confirming the accuracy of the information set forth in clause (2)A(iv)
of this Section 5.06.
(5) The opinion of in-house counsel to Lessee, or other counsel
satisfactory to the Indenture Trustee, stating that the Replacement Airframe or
Replacement Engine has been validly subjected to the lien of this Indenture and
covered by the Lease, the instruments subjecting such Replacement Airframe or
Replacement Engine to the Lease and to the Lien of this Trust Indenture, as the
case may be, have been duly filed for recordation pursuant to the Federal
Aviation Act or any other law then applicable to the registration of the
Aircraft, and no further action, filing or recording of any document is
necessary or advisable in order to establish and perfect the right, title,
estate and interest of the Owner Trustee to and the lien of this Trust Indenture
on such Replacement Aircraft or Replacement Engine.
SECTION 5.07. Indenture Supplements for Replacements.
If a Replacement Airframe or Replacement Engine is being substituted
as contemplated by Section 10 of the Lease, the Owner Trustee and the Indenture
Trustee agree for the benefit of the Certificate Holders and Lessee, subject to
fulfillment of the conditions precedent and compliance by Lessee with its
obligations set forth in Section 10 of the Lease and the requirements of Section
5.06 hereof with respect to such Replacement Airframe or Replacement Engine, to
execute and deliver a Lease Supplement and a Trust Agreement and Indenture
Supplement, as applicable, as contemplated by Section 10 of the Lease.
SECTION 5.08. Effect of Replacement.
In the event of the substitution of an Airframe or of a Replacement
Engine pursuant to Section 10 of the Lease, (a) all provisions of this Trust
Indenture relating to the Airframe or Engine or Engines being replaced shall be
applicable to such Replacement Airframe or Replacement Engine or Engines with
the same force and effect as if such Replacement Airframe or Replacement Engine
or Engines were the same airframe or engine or engines, as the case may be, as
the Airframe or Engine or Engines being replaced but for the Event of Loss with
respect to the Airframe or Engine or Engines being replaced, and (b) the
provisions of this Trust Indenture shall no longer be applicable to the Airframe
or Engine or Engines being replaced, which shall be released from the Lien of
this Indenture.
SECTION 5.09. Investment of Amounts Held by Indenture Trustee.
Any amounts held by the Indenture Trustee as assignee of the Owner
Trustee's rights to hold monies for security pursuant to Section 22(a) of the
Lease shall be held in accordance with the terms of such Section and the
Indenture Trustee agrees, for the benefit of Lessee, to perform the duties of
the Owner Trustee under such Section. Any amounts held by the Indenture Trustee
pursuant to the proviso to the first sentence of Section 3.01, pursuant to
Section 3.02, or pursuant to any provision of any other Operative Document
providing for amounts to be held by the Indenture Trustee which are not
distributed pursuant to the other provisions of Article III hereof shall be
invested by the Indenture Trustee from time to time in
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Cash Equivalents as directed by Lessee so long as the Indenture Trustee may
acquire the same using its best efforts. Unless otherwise expressly provided in
this Trust Indenture, any income realized as a result of any such investment,
net of the Indenture Trustee's reasonable fees and expenses in making such
investment, shall be held and applied by the Indenture Trustee in the same
manner as the principal amount of such investment is to be applied and any
losses, net of earnings and such reasonable fees and expenses, shall be charged
against the principal amount invested. The Indenture Trustee shall not be liable
for any loss resulting from any investment required to be made by it under this
Trust Indenture other than by reason of its willful misconduct or gross
negligence, and any such investment may be sold (without regard to its maturity)
by the Indenture Trustee without instructions whenever such sale is necessary to
make a distribution required by this Trust Indenture.
ARTICLE VI
THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties.
The Indenture Trustee accepts the duties hereby created and
applicable to it and agrees to perform the same but only upon the terms of this
Trust Indenture and agrees to receive and disburse all monies constituting part
of the Trust Indenture Estate in accordance with the terms hereof. The Owner
Trustee, in its individual capacity, and the Indenture Trustee, in its
individual capacity, shall not be answerable or accountable under any
circumstances, except (i) for their own willful misconduct or gross negligence
(other than for the handling of funds, for which the standard of accountability
shall be willful misconduct or negligence), (ii) in the case of the Indenture
Trustee, as provided in the fourth sentence of Section 2.04(a) hereof and the
last sentence of Section 5.04 hereof, and (iii) for liabilities that may result,
in the case of the Owner Trustee, from the inaccuracy of any representation or
warranty of the Owner Trustee expressly made in its individual capacity in the
Participation Agreement or in Section 4.01(b) or 6.03 hereof (or in any
certificate furnished to the Indenture Trustee or any Certificate Holder in
connection with the transactions contemplated by the Operative Documents) or, in
the case of the Indenture Trustee (in its individual capacity), from the
inaccuracy of any representation or warranty of the Indenture Trustee (in its
individual capacity) in the Participation Agreement or expressly made hereunder.
Neither the Owner Trustee nor the Indenture Trustee shall be liable for any
action or inaction of the other or of the Owner Participant.
SECTION 6.02. Absence of Duties.
In the case of the Indenture Trustee, except in accordance with
written instructions furnished pursuant to Section 5.01 or 5.02 hereof, and
except as provided in, and without limiting the generality of, Sections 5.03 and
5.04 hereof and, in the case of the Owner Trustee, except as provided in Section
4.01(b) hereof, the Owner Trustee and the Indenture Trustee shall have no duty
(i) to see to any registration of the Aircraft or any recording or filing of the
Lease or of this Trust Indenture or any other document, or to see to the
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maintenance of any such registration, recording or filing, (ii) to see to any
insurance on the Aircraft or to effect or maintain any such insurance, whether
or not Lessee shall be in default with respect thereto, (iii) to see to the
payment or discharge of any lien or encumbrance of any kind against any part of
the Trust Estate or the Trust Indenture Estate, (iv) to confirm, verify or
inquire into the failure to receive any financial statements from Lessee, or (v)
to inspect the Aircraft at any time or ascertain or inquire as to the
performance or observance of any of Lessee's covenants under the Lease with
respect to the Aircraft. The Owner Participant shall not have any duty or
responsibility hereunder, including, without limitation, any of the duties
mentioned in clauses (i) through (v) above; provided, that nothing contained in
this sentence shall limit any obligations of the Owner Participant under the
Participation Agreement or relieve the Owner Participant from any restriction
under Section 4.03 hereof.
SECTION 6.03. No Representations or Warranties as to Aircraft or
Documents.
NEITHER THE INDENTURE TRUSTEE IN ITS INDIVIDUAL OR TRUST CAPACITY
NOR THE OWNER TRUSTEE IN ITS INDIVIDUAL CAPACITY OR AS OWNER TRUSTEE UNDER THE
TRUST AGREEMENT, NOR THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE
AND EACH HEREBY EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO THE TITLE, AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS,
CONDITION, DESIGN, QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS
FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE
ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE
ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE
ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, except the Owner Trustee in its
individual capacity warrants that (i) the Owner Trustee has received on the
Delivery Date whatever title was conveyed to it by Lessee, and (ii) the Aircraft
is free and clear of Lessor Liens (including for this purpose Liens which would
be Lessor Liens but for the proviso in the definition of Lessor Liens)
attributable to the Owner Trustee in its individual capacity. Neither the Owner
Trustee, in its individual capacity or as Owner Trustee under the Trust
Agreement, nor the Indenture Trustee, in its individual or trust capacities,
makes or shall be deemed to have made any representation or warranty as to the
validity, legality or enforceability of this Trust Indenture, the Trust
Agreement, the Participation Agreement, the Secured Certificates, the Lease, the
Purchase Agreement, the Purchase Agreement Assignment, the Consent and Agreement
or the Guarantee, or as to the correctness of any statement contained in any
thereof, except for the representations and warranties of the Owner Trustee made
in its individual capacity and the representations and warranties of the
Indenture Trustee, in each case expressly made in this Trust Indenture or in the
Participation Agreement. The Loan Participants, the Certificate Holders and the
Owner Participant make no representation or warranty hereunder whatsoever.
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SECTION 6.04. No Segregation of Monies; No Interest.
Any monies paid to or retained by the Indenture Trustee pursuant to
any provision hereof and not then required to be distributed to the Certificate
Holders, Lessee or the Owner Trustee as provided in Article III hereof need not
be segregated in any manner except to the extent required by Law or Section
10(f) or 11(g) of the Lease and Section 5.09 hereof, and may be deposited under
such general conditions as may be prescribed by Law, and the Indenture Trustee
shall not be liable for any interest thereon (except that the Indenture Trustee
shall invest all monies held as directed by Lessee so long as no Lease Event of
Default or Lease Default has occurred and is continuing (or in the absence of
such direction, by the Majority In Interest of Certificate Holders) in Cash
Equivalents; provided, however, that any payments received, or applied
hereunder, by the Indenture Trustee shall be accounted for by the Indenture
Trustee so that any portion thereof paid or applied pursuant hereto shall be
identifiable as to the source thereof.
SECTION 6.05. Reliance; Agreements; Advice of Counsel.
Neither the Owner Trustee nor the Indenture Trustee shall incur any
liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee and the Indenture Trustee may
accept a copy of a resolution of the Board of Directors (or, in the case of the
Owner Participant which originally executed the Participation Agreement,
evidence of the approval by the Executive Committee thereof) of any party to the
Participation Agreement, certified by the Secretary or an Assistant Secretary
thereof as duly adopted and in full force and effect, as conclusive evidence
that such resolution has been duly adopted and that the same is in full force
and effect. As to the aggregate unpaid Principal Amount of Secured Certificates
outstanding as of any date, the Owner Trustee may for all purposes hereof rely
on a certificate signed by any Vice President or other authorized corporate
trust officer of the Indenture Trustee. As to any fact or matter relating to
Lessee the manner of ascertainment of which is not specifically described
herein, the Owner Trustee and the Indenture Trustee may for all purposes hereof
rely on a certificate, signed by a duly authorized officer of Lessee, as to such
fact or matter, and such certificate shall constitute full protection to the
Owner Trustee and the Indenture Trustee for any action taken or omitted to be
taken by them in good faith in reliance thereon. The Indenture Trustee shall
assume, and shall be fully protected in assuming, that the Owner Trustee is
authorized by the Trust Agreement to enter into this Trust Indenture and to take
all action to be taken by it pursuant to the provisions hereof, and shall not
inquire into the authorization of the Owner Trustee with respect thereto. In the
administration of the trusts hereunder, the Owner Trustee and the Indenture
Trustee each may execute any of the trusts or powers hereof and perform its
powers and duties hereunder directly or through agents or attorneys and may at
the expense of the Trust Indenture Estate, consult with counsel, accountants and
other skilled persons to be selected and retained by it, and the Owner Trustee
and the Indenture Trustee shall not be liable for anything done, suffered or
omitted in good faith by them in accordance with the written advice or written
opinion of any such counsel, accountants or other skilled persons.
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SECTION 6.06. Capacity in Which Acting.
The Owner Trustee acts hereunder solely as trustee as herein and in
the Trust Agreement provided, and not in its individual capacity, except as
otherwise expressly provided herein, in the Trust Agreement and in the
Participation Agreement.
SECTION 6.07. Compensation.
The Indenture Trustee shall be entitled to reasonable compensation,
including expenses and disbursements (including the reasonable fees and expenses
of counsel), for all services rendered hereunder and shall, on and subsequent to
an Event of Default hereunder, have a priority claim on the Trust Indenture
Estate for the payment of such compensation, to the extent that such
compensation shall not be paid by Lessee, and shall have the right, on and
subsequent to an Event of Default hereunder, to use or apply any monies held by
it hereunder in the Trust Indenture Estate toward such payments. The Indenture
Trustee agrees that it shall have no right against the Loan Participants, the
Certificate Holders, the Owner Trustee or the Owner Participant for any fee as
compensation for its services as trustee under this Trust Indenture.
SECTION 6.08. Instructions from Certificate Holders.
In the administration of the trusts created hereunder, the Indenture
Trustee shall have the right to seek instructions from a Majority in Interest of
Certificate Holders should any provision of this Trust Indenture appear to
conflict with any other provision herein or should the Indenture Trustee's
duties or obligations hereunder be unclear, and the Indenture Trustee shall
incur no liability in refraining from acting until it receives such
instructions. The Indenture Trustee shall be fully protected for acting in
accordance with any instructions received under this Section 6.08.
ARTICLE VII
INDEMNIFICATION OF THE INDENTURE TRUSTEE BY THE OWNER TRUSTEE
SECTION 7.01. Scope of Indemnification.
The Owner Trustee, not in its individual capacity, but solely as
Owner Trustee, hereby agrees, except as otherwise provided in Section 2.03
hereof, to assume liability for, and does hereby indemnify, protect, save and
keep harmless the Indenture Trustee (in its individual and trust capacities),
and its successors, assigns, agents and servants, from and against any and all
liabilities, obligations, losses, damages, penalties, taxes (excluding any taxes
payable by the Indenture Trustee on or measured by any compensation received by
the Indenture Trustee for its services under this Trust Indenture), claims,
actions, suits, costs, expenses or disbursements (including reasonable legal
fees and expenses) of any kind and nature whatsoever, which may be imposed on,
incurred by or asserted against the Indenture Trustee (whether or not also
indemnified against by any other Person under any other document) in any way
relating to or arising out of this Trust Indenture or any other Operative
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Document to which it is a party or the enforcement of any of the terms of any
thereof, or in any way relating to or arising out of the manufacture, purchase,
acceptance, non-acceptance, rejection, ownership, delivery, lease, possession,
use, operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent or other defects, whether or
not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the administration of
the Trust Indenture Estate or the action or inaction of the Indenture Trustee
hereunder, to the extent not reimbursed by Lessee. Without limiting the
foregoing, the Indenture Trustee agrees that, prior to seeking indemnification
from the Trust Indenture Estate, it will demand, and take such action as it may
in its discretion determine to be reasonable to pursue, indemnification
available to the Indenture Trustee under the Lease or the Participation
Agreement. Notwithstanding the foregoing, the Indenture Trustee shall not be
entitled to any indemnification for any Taxes or Expenses to the extent relating
to or arising from the willful misconduct or gross negligence (or negligence in
the case of handling funds) of the Indenture Trustee in the performance of its
duties hereunder or resulting from the inaccuracy of any representation or
warranty of the Indenture Trustee (in its individual capacity) referred to in
Section 6.03 hereof, or as provided in Section 6.01 hereof or in the last
sentence of Section 5.04 hereof, or as otherwise excluded by the terms of
Sections 7(b) and 7(c) of the Participation Agreement from Lessee's indemnities
under such Sections. In addition, if necessary, the Indenture Trustee shall be
entitled to indemnification from the Trust Indenture Estate for any liability,
obligation, loss, damage, penalty, claim, action, suit, cost, expense or
disbursement indemnified against pursuant to this Section 7.01 to the extent not
reimbursed by Lessee or others, but without releasing any of them from their
respective agreements of reimbursement; and to secure the same the Indenture
Trustee shall have a prior Lien on the Trust Indenture Estate.
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustee.
In the case of any appointment of a successor to the Owner Trustee
pursuant to the Trust Agreement including upon any merger, conversion,
consolidation or sale of substantially all of the corporate trust business of
the Owner Trustee pursuant to the Trust Agreement, the successor Owner Trustee
shall give prompt written notice thereof to the Indenture Trustee, Lessee and
the Certificate Holders.
SECTION 8.02. Resignation of Indenture Trustee; Appointment of
Successor.
(a) The Indenture Trustee or any successor thereto may resign at any
time without cause by giving at least 30 days' prior written notice to Lessee,
the Owner Trustee, the Owner Participant and each Certificate Holder, such
resignation to be effective upon the acceptance of the trusteeship by a
successor Indenture Trustee. In addition, a Majority in
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Interest of Certificate Holders may at any time (but only with the consent of
Lessee, which consent shall not be unreasonably withheld, except that such
consent shall not be necessary if a Lease Event of Default is continuing) remove
the Indenture Trustee without cause by an instrument in writing delivered to the
Owner Trustee, Lessee, the Owner Participant and the Indenture Trustee, and the
Indenture Trustee shall promptly notify each Certificate Holder thereof in
writing, such removal to be effective upon the acceptance of the trusteeship by
a successor Indenture Trustee. In the case of the resignation or removal of the
Indenture Trustee, a Majority in Interest of Certificate Holders may appoint a
successor Indenture Trustee by an instrument signed by such holders, which
successor, so long as no Lease Event of Default shall have occurred and be
continuing, shall be subject to Lessee's reasonable approval. If a successor
Indenture Trustee shall not have been appointed within 30 days after such notice
of resignation or removal, the Indenture Trustee, the Owner Trustee, the Owner
Participant or any Certificate Holder may apply to any court of competent
jurisdiction to appoint a successor Indenture Trustee to act until such time, if
any, as a successor shall have been appointed as above provided. The successor
Indenture Trustee so appointed by such court shall immediately and without
further act be superseded by any successor Indenture Trustee appointed as above
provided.
(b) Any successor Indenture Trustee, however appointed, shall
execute and deliver to the Owner Trustee, the predecessor Indenture Trustee and
Lessee an instrument accepting such appointment and assuming the obligations of
the Indenture Trustee under the Participation Agreement arising from and after
the time of such appointment, and thereupon such successor Indenture Trustee,
without further act, shall become vested with all the estates, properties,
rights, powers and duties of the predecessor Indenture Trustee hereunder in the
trust hereunder applicable to it with like effect as if originally named the
Indenture Trustee herein; but nevertheless upon the written request of such
successor Indenture Trustee, such predecessor Indenture Trustee shall execute
and deliver an instrument transferring to such successor Indenture Trustee, upon
the trusts herein expressed applicable to it, all the estates, properties,
rights and powers of such predecessor Indenture Trustee, and such predecessor
Indenture Trustee shall duly assign, transfer, deliver and pay over to such
successor Indenture Trustee all monies or other property then held by such
predecessor Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed, shall be a
bank or trust company having its principal place of business in the Borough of
Manhattan, City and State of New York; Minneapolis, Minnesota; Chicago,
Illinois; Hartford, Connecticut; Wilmington, Delaware; or Boston, Massachusetts
and having (or whose obligations under the Operative Documents are guaranteed by
an affiliated entity having) a combined capital and surplus of at least
$100,000,000, if there be such an institution willing, able and legally
qualified to perform the duties of the Indenture Trustee hereunder upon
reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Indenture Trustee
shall be a party, or any
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corporation to which substantially all the corporate trust business of the
Indenture Trustee may be transferred, shall, subject to the terms of paragraph
(c) of this Section 8.02, be a successor Indenture Trustee and the Indenture
Trustee under this Trust Indenture without further act.
SECTION 8.03. Appointment of Additional and Separate Trustees.
(a) Whenever (i) the Indenture Trustee shall deem it necessary or
desirable in order to conform to any law of any jurisdiction in which all or any
part of the Trust Indenture Estate shall be situated or to make any claim or
bring any suit with respect to or in connection with the Trust Indenture Estate,
this Trust Indenture, any other Indenture Agreement, the Secured Certificates or
any of the transactions contemplated by the Participation Agreement, (ii) the
Indenture Trustee shall be advised by counsel satisfactory to it that it is so
necessary or prudent in the interests of the Certificate Holders (and the
Indenture Trustee shall so advise the Owner Trustee and Lessee), or (iii) the
Indenture Trustee shall have been requested to do so by a Majority in Interest
of Certificate Holders, then in any such case, the Indenture Trustee and, upon
the written request of the Indenture Trustee, the Owner Trustee, shall execute
and deliver an indenture supplemental hereto and such other instruments as may
from time to time be necessary or advisable either (1) to constitute one or more
bank or trust companies or one or more persons approved by the Indenture
Trustee, either to act jointly with the Indenture Trustee as additional trustee
or trustees of all or any part of the Trust Indenture Estate, or to act as
separate trustee or trustees of all or any part of the Trust Indenture Estate,
in each case with such rights, powers, duties and obligations consistent with
this Trust Indenture as may be provided in such supplemental indenture or other
instruments as the Indenture Trustee or a Majority in Interest of Certificate
Holders may deem necessary or advisable, or (2) to clarify, add to or subtract
from the rights, powers, duties and obligations theretofore granted any such
additional and separate trustee, subject in each case to the remaining
provisions of this Section 8.03. If the Owner Trustee shall not have taken any
action requested of it under this Section 8.03(a) that is permitted or required
by its terms within 15 days after the receipt of a written request from the
Indenture Trustee so to do, or if an Event of Default shall have occurred and be
continuing, the Indenture Trustee may act under the foregoing provisions of this
Section 8.03(a) without the concurrence of the Owner Trustee; and the Owner
Trustee hereby irrevocably appoints (which appointment is coupled with an
interest) the Indenture Trustee, its agent and attorney-in-fact to act for it
under the foregoing provisions of this Section 8.03(a) in either of such
contingencies. The Indenture Trustee may, in such capacity, execute, deliver and
perform any such supplemental indenture, or any such instrument, as may be
required for the appointment of any such additional or separate trustee or for
the clarification of, addition to or subtraction from the rights, powers, duties
or obligations theretofore granted to any such additional or separate trustee.
In case any additional or separate trustee appointed under this Section 8.03(a)
shall die, become incapable of acting, resign or be removed, all the assets,
property, rights, powers, trusts, duties and obligations of such additional or
separate trustee shall revert to the Indenture Trustee until a successor
additional or separate trustee is appointed as provided in this Section 8.03(a).
(b) No additional or separate trustee shall be entitled to exercise
any of the rights, powers, duties and obligations conferred upon the Indenture
Trustee in respect of the
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custody, investment and payment of monies and all monies received by any such
additional or separate trustee from or constituting part of the Trust Indenture
Estate or otherwise payable under any Operative Document to the Indenture
Trustee shall be promptly paid over by it to the Indenture Trustee. All other
rights, powers, duties and obligations conferred or imposed upon any additional
or separate trustee shall be exercised or performed by the Indenture Trustee and
such additional or separate trustee jointly except to the extent that applicable
Law of any jurisdiction in which any particular act is to be performed renders
the Indenture Trustee incompetent or unqualified to perform such act, in which
event such rights, powers, duties and obligations (including the holding of
title to all or part of the Trust Indenture Estate in any such jurisdiction)
shall be exercised and performed by such additional or separate trustee. No
additional or separate trustee shall take any discretionary action except on the
instructions of the Indenture Trustee or a Majority in Interest of Certificate
Holders. No trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder, except that the Indenture Trustee shall
be liable for the consequences of its lack of reasonable care in selecting, and
Indenture Trustee's own actions in acting with, any additional or separate
trustee. Each additional or separate trustee appointed pursuant to this Section
8.03 shall be subject to, and shall have the benefit of Articles IV through VIII
and Article X hereof insofar as they apply to the Indenture Trustee. The powers
of any additional or separate trustee appointed pursuant to this Section 8.03
shall not in any case exceed those of the Indenture Trustee hereunder.
(c) If at any time the Indenture Trustee shall deem it no longer
necessary or desirable in order to conform to any such law or take any such
action or shall be advised by such counsel that it is no longer so necessary or
desirable in the interest of the Certificate Holders, or in the event that the
Indenture Trustee shall have been requested to do so in writing by a Majority in
Interest of Certificate Holders, the Indenture Trustee and, upon the written
request of the Indenture Trustee, the Owner Trustee, shall execute and deliver
an indenture supplemental hereto and all other instruments and agreements
necessary or proper to remove any additional or separate trustee. The Indenture
Trustee may act on behalf of the Owner Trustee under this Section 8.03(c) when
and to the extent it could so act under Section 8.03(a) hereof.
ARTICLE IX
SUPPLEMENT AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 9.01. Instructions of Majority; Limitations.
(a) Except as provided in Section 5.02 hereof, and except with
respect to Excluded Payments, the Owner Trustee agrees it shall not enter into
any amendment of or supplement to the Lease, the Purchase Agreement, the
Purchase Agreement Assignment, the Consent and Agreement or the Guarantee, or
execute and deliver any written waiver or modification of, or consent under, the
terms of the Lease, the Purchase Agreement, the Purchase Agreement Assignment,
the Consent and Agreement or the Guarantee, unless such
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supplement, amendment, waiver, modification or consent is consented to in
writing by the Indenture Trustee and a Majority in Interest of Certificate
Holders. Anything to the contrary contained herein notwithstanding, without the
necessity of the consent of any of the Certificate Holders or the Indenture
Trustee, (i) any Excluded Payments payable to the Owner Participant may be
modified, amended, changed or waived in such manner as shall be agreed to by the
Owner Participant and Lessee and (ii) the Owner Trustee and Lessee may enter
into amendments of or additions to the Lease to modify Section 5 (except to the
extent that such amendment would affect the rights or exercise of remedies under
Section 15 of the Lease), Section 9 or Section 19 of the Lease so long as such
amendments, modifications and changes do not and would not affect the time of,
or reduce the amount of, Rent payments until after the payment in full of all
Secured Obligations or otherwise adversely affect the Certificate Holders.
(b) Without limiting the provisions of Section 9.01(a) hereof and
subject to Section 5.02(a)(2)(i) hereof, the Indenture Trustee agrees with the
Certificate Holders that it shall not enter into any amendment, waiver or
modification of, supplement or consent to this Trust Indenture, the Lease, the
Purchase Agreement, the Purchase Agreement Assignment, the Consent and
Agreement, the Guarantee or the Participation Agreement, or any other agreement
included in the Trust Indenture Estate, unless such supplement, amendment,
waiver, modification or consent is consented to in writing by a Majority in
Interest of Certificate Holders, or does not adversely affect the Certificate
Holders, but upon the written request of a Majority in Interest of Certificate
Holders, the Indenture Trustee shall from time to time enter into any such
supplement or amendment, or execute and deliver any such waiver, modification or
consent, as may be specified in such request and as may be (in the case of any
such amendment, supplement or modification), to the extent such agreement is
required, agreed to by the Owner Trustee and Lessee or, as may be appropriate,
the Manufacturer; provided, however, that, without the consent of each holder of
an affected Secured Certificate then outstanding, no such amendment of or
supplement to this Trust Indenture, the Lease, the Purchase Agreement, the
Purchase Agreement Assignment, the Consent and Agreement, the Guarantee or the
Participation Agreement or waiver or modification of the terms of, or consent
under, any thereof, shall (i) modify any of the provisions of this Section 9.01,
or of Sections 2.02, 2.10, 2.11, 2.15, 4.02, 4.04(c), 4.04(d), 5.02 or 5.06
hereof, Section 14 (except to add an Event of Default) of the Lease, the
definitions of "Event of Default", "Default", "Lease Event of Default", "Lease
Default", "Majority in Interest of Certificate Holders", "Make-Whole Amount" or
"Certificate Holder", or the percentage of Certificate Holders required to take
or approve any action hereunder, (ii) reduce the amount, or change the time of
payment or method of calculation of any amount, of Principal Amount, Make-Whole
Amount, if any, or interest with respect to any Secured Certificate, or alter or
modify the provisions of Article III hereof with respect to the order of
priorities in which distribution thereunder shall be made as among the
Certificate Holders, the Owner Trustee and Lessee, (iii) reduce, modify or amend
any indemnities in favor of the Certificate Holders, (iv) consent to any change
in the Trust Indenture or the Lease which would permit redemption of Secured
Certificates earlier than permitted under Section 2.10 or 2.11 hereof or the
purchase of the Secured Certificates other than as permitted by Section 2.14
hereof, (v) modify any of the provisions of Section 3(d)(v) of the Lease, or
modify, amend or supplement the Lease or
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consent to any assignment of the Lease, in either case releasing Lessee from its
obligations in respect of the payment of Basic Rent, Stipulated Loss Value or
Termination Value for the Aircraft or altering the absolute and unconditional
character of the obligations of Lessee to pay Rent as set forth in Sections 3
and 18 of the Lease or (vi) permit the creation of any Lien on the Trust
Indenture Estate or any part thereof other than Permitted Liens or deprive any
Certificate Holder of the benefit of the Lien of this Trust Indenture on the
Trust Indenture Estate, except as provided in connection with the exercise of
remedies under Article IV hereof. So long as no Lease Event of Default has
occurred and is continuing, without the consent of Lessee no amendment or
supplement to this Trust Indenture or waiver or modification of the terms hereof
shall adversely affect Lessee.
(c) At any time after the date hereof, the Owner Trustee and the
Indenture Trustee may enter into one or more agreements supplemental hereto
without the consent of any Certificate Holder for any of the following purposes:
(i) (a) to cure any defect or inconsistency herein or in the Secured
Certificates, or to make any change not inconsistent with the provisions hereof
(provided that such change does not adversely affect the interests of any
Certificate Holder in its capacity solely as Certificate Holder) or (b) to cure
any ambiguity or correct any mistake; (ii) to evidence the succession of another
party as the Owner Trustee in accordance with the terms of the Trust Agreement
or to evidence the succession of a new trustee hereunder pursuant hereto, the
removal of the trustee hereunder or the appointment of any co-trustee or
co-trustees or any separate or additional trustee or trustees; (iii) to convey,
transfer, assign, mortgage or pledge any property to or with the Indenture
Trustee or to make any other provisions with respect to matters or questions
arising hereunder so long as such action shall not adversely affect the
interests of the Certificate Holders in its capacity solely as Certificate
Holder; (iv) to correct or amplify the description of any property at any time
subject to the Lien of this Trust Indenture or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subject to the Lien of this Trust Indenture, the Airframe or Engines or any
Replacement Airframe or Replacement Engine; (v) to add to the covenants of the
Owner Trustee for the benefit of the Certificate Holders, or to surrender any
rights or power herein conferred upon the Owner Trustee, the Owner Participant
or Lessee; (vi) to add to the rights of the Certificate Holders; and (vii) to
include on the Secured Certificates any legend as may be required by law.
SECTION 9.02. Trustees Protected.
If, in the opinion of the institution acting as Owner Trustee under
the Trust Agreement or the institution acting as Indenture Trustee hereunder,
any document required to be executed by it pursuant to the terms of Section 9.01
hereof adversely affects any right, duty, immunity or indemnity with respect to
such institution under this Trust Indenture or the Lease, such institution may
in its discretion decline to execute such document.
SECTION 9.03. Documents Mailed to Certificate Holders.
Promptly after the execution by the Owner Trustee or the Indenture
Trustee of any document entered into pursuant to Section 9.01 hereof, the
Indenture Trustee shall mail,
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by first class mail, postage prepaid, a copy thereof to Lessee and to each
Certificate Holder at its address last set forth in the Secured Certificate
Register, but the failure of the Indenture Trustee to mail such copies shall not
impair or affect the validity of such document.
SECTION 9.04. No Request Necessary for Lease Supplement or Trust
Agreement and Indenture Supplement.
No written request or consent of the Indenture Trustee, the
Certificate Holders or the Owner Participant pursuant to Section 9.01 hereof
shall be required to enable the Owner Trustee to enter into any Lease Supplement
specifically required by the terms of the Lease or to execute and deliver a
Trust Agreement and Indenture Supplement specifically required by the terms
hereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Trust Indenture.
Upon (or at any time after) payment in full of the Principal Amount
of, Make-Whole Amount, if any, and interest on and all other amounts due under
all Secured Certificates and provided that there shall then be no other Secured
Obligations due to the Certificate Holders and the Indenture Trustee hereunder
or under the Participation Agreement, the Owner Trustee shall direct the
Indenture Trustee to execute and deliver to or as directed in writing by the
Owner Trustee an appropriate instrument releasing the Aircraft and the Engines
from the Lien of this Trust Indenture and releasing the Lease, the Guarantee,
the Purchase Agreement, and the Purchase Agreement Assignment with the Consent
and Agreement attached thereto from the assignment and pledge thereof hereunder
and the Indenture Trustee shall execute and deliver such instrument as aforesaid
and give written notice thereof to Lessee; provided, however, that this Trust
Indenture and the trusts created hereby shall earlier terminate and this Trust
Indenture shall be of no further force or effect upon any sale or other final
disposition by the Indenture Trustee of all property constituting part of the
Trust Indenture Estate and the final distribution by the Indenture Trustee of
all monies or other property or proceeds constituting part of the Trust
Indenture Estate in accordance with the terms hereof. Except as aforesaid
otherwise provided, this Trust Indenture and the trusts created hereby shall
continue in full force and effect in accordance with the terms hereof.
SECTION 10.02. No Legal Title to Trust Indenture Estate in
Certificate Holders.
No holder of a Secured Certificate shall have legal title to any
part of the Trust Indenture Estate. No transfer, by operation of law or
otherwise, of any Secured Certificate or other right, title and interest of any
Certificate Holder in and to the Trust Indenture Estate or hereunder shall
operate to terminate this Trust Indenture or entitle such holder or any
successor or transferee of such holder to an accounting or to the transfer to it
of any legal title to any part of the Trust Indenture Estate.
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SECTION 10.03. Sale of Aircraft by Indenture Trustee Is Binding.
Any sale or other conveyance of the Trust Indenture Estate, or any
part thereof (including any part thereof or interest therein), by the Indenture
Trustee made pursuant to the terms of this Trust Indenture shall bind the
Certificate Holders and shall be effective to transfer or convey all right,
title and interest of the Indenture Trustee, the Owner Trustee, the Owner
Participant and such holders in and to such Trust Indenture Estate or part
thereof. No purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such sale or conveyance or
as to the application of any sale or other proceeds with respect thereto by the
Indenture Trustee.
SECTION 10.04. Trust Indenture for Benefit of the Owner Trustee, the
Indenture Trustee, Owner Par. cipant, Lessee and Certificate Holders.
Nothing in this Trust Indenture, whether express or implied, shall
be construed to give any person other than the Owner Trustee, the Indenture
Trustee, the Owner Participant, Lessee and the Certificate Holders, any legal or
equitable right, remedy or claim under or in respect of this Trust Indenture.
SECTION 10.05. Notices.
Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, demands, authorizations, directions, consents,
waivers or documents provided or permitted by this Trust Indenture to be made,
given, furnished or filed shall be in writing, personally delivered or mailed by
certified mail, postage prepaid, or by facsimile or confirmed telex, and (i) if
to the Owner Trustee, addressed to it at its office at 00 Xxxxx Xxxx Xxxxxx,
Xxxx Xxxx Xxxx, Xxxx 00000, Attention: Corporate Trust Department (Telecopy No.
(000) 000-0000), with a copy to the Owner Participant addressed as provided in
clause (iii) below, (ii) if to the Indenture Trustee, addressed to it at its
office at Two Xxxxxxxxxxxxx Xxxxx, 0xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Corporate Trust Department (Telecopy No. (000) 000-0000), (iii) if to
any Participant, Lessee or any Certificate Holder, addressed to such party at
such address as such party shall have furnished by notice to the Owner Trustee
and the Indenture Trustee, or, until an address is so furnished, addressed to
the address of such party (if any) set forth on the signature pages to the
Participation Agreement or in the Secured Certificate Register. Whenever any
notice in writing is required to be given by the Owner Trustee, any Participant
or the Indenture Trustee or any Certificate Holder or Lessee to any of the other
of them, such notice shall be deemed given and such requirement satisfied when
such notice is received, or if such notice is mailed by certified mail, postage
prepaid, three Business Days after being mailed, addressed as provided above.
Any party hereto may change the address to which notices to such party will be
sent by giving notice of such change to the other parties to this Trust
Indenture.
SECTION 10.06. Severability.
Any provision of this Trust Indenture which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or
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unenforceability without invalidating the remaining provisions hereof. Any such
prohibition or unenforceability in any particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.07. No Oral Modification or Continuing Waivers.
No term or provision of this Trust Indenture or the Secured
Certificates may be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the Owner Trustee and the Indenture
Trustee, in compliance with Section 9.01 hereof. Any waiver of the terms hereof
or of any Secured Certificate shall be effective only in the specific instance
and for the specific purpose given.
SECTION 10.08. Successors and Assigns.
All covenants and agreements contained herein shall be binding upon,
and inure to the benefit of, each of the parties hereto and the permitted
successors and assigns of each, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by any Certificate
Holder shall bind the successors and assigns of such holder. This Trust
Indenture and the Trust Indenture Estate shall not be affected by any amendment
or supplement to the Trust Agreement or by any other action taken under or in
respect of the Trust Agreement, except that each reference in this Trust
Indenture to the Trust Agreement shall mean the Trust Agreement as amended and
supplemented from time to time to the extent permitted hereby, thereby and by
the Participation Agreement. Each Certificate Holder by its acceptance of a
Secured Certificate agrees to be bound by this Trust Indenture and all
provisions of the Participation Agreement applicable to a Loan Participant or a
Certificate Holder.
SECTION 10.09. Headings.
The headings of the various Articles and sections herein and in the
table of contents hereto are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
SECTION 10.10. Normal Commercial Relations.
Anything contained in this Trust Indenture to the contrary
notwithstanding, the Owner Trustee, the Indenture Trustee, any Participant or
any bank or other Affiliate of such Participant may conduct any banking or other
financial transactions, and have banking or other commercial relationships, with
Lessee, fully to the same extent as if this Trust Indenture were not in effect,
including without limitation the making of loans or other extensions of credit
to Lessee for any purpose whatsoever, whether related to any of the transactions
contemplated hereby or otherwise.
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SECTION 10.11. Governing Law; Counterpart Form.
THIS TRUST INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS TRUST
INDENTURE IS BEING DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture may
be executed by the parties hereto in separate counterparts (or upon separate
signature pages bound together into one or more counterparts), each of which
when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 10.12. Voting By Certificate Holders.
All votes of the Certificate Holders shall be governed by a vote of
a Majority in Interest of Certificate Holders, except as otherwise provided
herein.
SECTION 10.13. Bankruptcy.
It is the intention of the parties that the Owner Trustee, as lessor
under the Lease (and the Indenture Trustee as assignee of the Owner Trustee
hereunder), shall be entitled to the benefits of Section 1110 with respect to
the right to take possession of the Aircraft, Airframe, Engines and Parts as
provided in the Lease in the event of a case under Chapter 11 of the Bankruptcy
Code in which Lessee is a debtor, and in any instance where more than one
construction is possible of the terms and conditions hereof or any other
pertinent Operative Document, each such party agrees that a construction which
would preserve such benefits shall control over any construction which would not
preserve such benefits.
SECTION 10.14 No Action Contrary to Lessee's Rights Under the Lease.
Notwithstanding any of the provisions of this Trust Indenture or the
Trust Agreement to the contrary, neither the Indenture Trustee nor the Owner
Trustee will take any action contrary to Lessee's rights under the Lease,
including the right to possession and use of, and the quiet enjoyment of, the
Aircraft, except in accordance with provisions of the Lease.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Indenture to be duly executed by their respective officers thereof duly
authorized as of the day and year first above written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not in its individual
capacity, except as expressly provided herein, but
solely as Owner Trustee,
Owner Trustee
By: _______________________________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, not in its individual capacity, except
as expressly provided herein, but solely as
Indenture Trustee,
Indenture Trustee
By: _______________________________________________
Name:
Title:
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-----------------------------
EXHIBIT A
TO
TRUST INDENTURE
AND SECURITY AGREEMENT
-----------------------------
TRUST INDENTURE SUPPLEMENT
[NW 1999 _]
This TRUST INDENTURE SUPPLEMENT [NW 1999 _], dated [_____________]
(herein called this "Trust Indenture Supplement") of FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not in its individual capacity, but solely as Owner
Trustee (herein called the "Owner Trustee") under that certain Trust Agreement
[NW 1999 _] dated as of [_______________] (the "Trust Agreement"), between the
Owner Trustee and the Owner Participant named therein.
W I T N E S S E T H:
WHEREAS, the TRUST INDENTURE AND SECURITY AGREEMENT [NW 1999 _],
dated as of [_______________] (as amended and supplemented to the date hereof,
the "Trust Indenture") between the Owner Trustee and STATE STREET BANK AND TRUST
COMPANY, as Indenture Trustee (the "Indenture Trustee"), provides for the
execution and delivery of a supplement thereto substantially in the form hereof,
which shall particularly describe the Aircraft, and shall specifically mortgage
such Aircraft to the Indenture Trustee; and
WHEREAS, the Trust Indenture relates to the Airframe and Engines
described below, and a counterpart of the Trust Indenture is attached hereto and
made a part hereof and this Trust Indenture Supplement, together with such
counterpart of the Trust Indenture, is being filed for recordation on the date
hereof with the FAA as one document;
NOW, THEREFORE, this Trust Indenture Supplement witnesseth that the
Owner Trustee hereby confirms that the Lien of the Trust Indenture on the Trust
Indenture Estate covers all of the Owner Trustee's right, title and interest in
and to the following described property:
EXHIBIT A-1
AIRFRAME
One airframe identified as follows:
FAA
Registration Manufacturer's
Manufacturer Model Number Serial Number
------------ ----- ------------ -------------
together with all of the Owner Trustee's right, title and interest in and to all
Parts of whatever nature, whether now owned or hereinafter acquired and which
are from time to time incorporated or installed in or attached to said airframe.
AIRCRAFT ENGINES
Four aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
Manufacturer Manufacturer's Model Serial Number
------------ -------------------- -------------
together with all of the Owner Trustee's right, title and interest in and to all
Parts of whatever nature, whether now owned or hereafter acquired and which are
from time to time incorporated or installed in or attached to any of such
engines.
Together with all of the Owner Trustee's right, title and interest
in and to all Parts of whatever nature, which from time to time are included
within the definition of "Airframe" or "Engine", whether now owned or hereafter
acquired, including all substitutions, renewals and replacements of and
additions, improvements, accessions and accumulations to the Airframe and
Engines (other than additions, improvements, accessions and accumulations which
constitute appliances, parts, instruments, appurtenances, accessories,
furnishings or other equipment excluded from the definition of Parts).
As further security for the obligations referred to above and
secured by the Trust Indenture and hereby, the Owner Trustee has granted,
bargained, sold, assigned,
EXHIBIT A-2
transferred, conveyed, mortgaged, pledged and confirmed, and does hereby grant,
bargain, sell, assign, transfer, convey, mortgage, pledge and confirm, unto the
Indenture Trustee, its successors and assigns, for the security and benefit of
the Loan Participants and of the Certificate Holders, in the trust created by
the Trust Indenture, all of the right, title and interest of the Owner Trustee
in, to and under the Lease Supplement [of even date herewith] covering the
property described above.
Notwithstanding any provision hereof, no Excluded Payment shall
constitute security for any of the aforementioned obligations.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, in trust for the equal and
proportionate benefit and security of the Certificate Holders, except as
provided in Section 2.15 and Article III of the Trust Indenture without any
preference, distinction or priority of any one Secured Certificate over any
other by reason of priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses and
purposes and subject to the terms and provisions set forth in the Trust
Indenture.
This Trust Indenture Supplement shall be construed as supplemental
to the Trust Indenture and shall form a part thereof. The Trust Indenture is
each hereby incorporated by reference herein and is hereby ratified, approved
and confirmed.
This Trust Indenture Supplement is being delivered in the State of
New York.
AND, FURTHER, the Owner Trustee hereby acknowledges that the
Aircraft referred to in this Trust Indenture Supplement and the aforesaid Lease
Supplement has been delivered to the Owner Trustee and is included in the
property of the Owner Trustee covered by all the terms and conditions of the
Trust Agreement, subject to the pledge and mortgage thereof under the Trust
Indenture.
EXHIBIT A-3
IN WITNESS WHEREOF, the Owner Trustee has caused this Trust
Indenture Supplement to be duly executed by one of its officers, thereunto duly
authorized, on the day and year first above written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION,
not in its individual capacity, but solely as
Owner Trustee, Owner Trustee
By: _____________________________________________
Name:
Title:
EXHIBIT A-4
SCHEDULE I
Principal Amount Interest Rate
------------------- ----------------
Series A . . . . . . $[_________] [_________]%
Series B . . . . . . $[_________] [_________]%
Series C . . . . . . $[_________] [_________]%
SCHEDULE I-1
Secured Certificates Amortization
SERIES A
--------
Aircraft: N[_____]
Percentage of Principal
Payment Date Amount to be Paid
--------------------- ------------------------------
SCHEDULE I-2
SERIES B
Aircraft: N[_____]
Percentage of Principal
Payment Date Amount to be Paid
--------------------- ------------------------------
SCHEDULE I-3
SERIES C
Aircraft: N[_____]
Percentage of Principal
Payment Date Amount to be Paid
--------------------- ------------------------------
SCHEDULE I-4
SCHEDULE II
PASS THROUGH TRUST AGREEMENTS
1. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Holdings Corporation (formerly known as Northwest Airlines
Corporation, "Holdings"), Northwest Airlines, Inc., and State Street Bank
and Trust Company, as amended by the Supplemental Agreement, dated as of
November 20, 1998, among Northwest Airlines, Inc., Northwest Airlines
Corporation, Holdings and State Street Bank and Trust Company, as
supplemented by Trust Supplement No. 1999-1A, dated as of February 16,
1999 among Northwest Airlines, Inc., Northwest Airlines Corporation,
Holdings and State Street Bank and Trust Company.
2. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Holdings Corporation (formerly known as Northwest Airlines
Corporation, "Holdings"), Northwest Airlines, Inc., and State Street Bank
and Trust Company, as amended by the Supplemental Agreement, dated as of
November 20, 1998, among Northwest Airlines, Inc., Northwest Airlines
Corporation, Holdings and State Street Bank and Trust Company, as
supplemented by Trust Supplement No. 1999-1B, dated as of February 16,
1999 among Northwest Airlines, Inc., Northwest Airlines Corporation,
Holdings and State Street Bank and Trust Company.
3. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Holdings Corporation (formerly known as Northwest Airlines
Corporation, "Holdings"), Northwest Airlines, Inc., and State Street Bank
and Trust Company, as amended by the Supplemental Agreement, dated as of
November 20, 1998, among Northwest Airlines, Inc., Northwest Airlines
Corporation, Holdings and State Street Bank and Trust Company, as
supplemented by Trust Supplement No. 1999-1C, dated as of February 16,
1999 among Northwest Airlines, Inc., Northwest Airlines Corporation,
Holdings and State Street Bank and Trust Company.
SCHEDULE II-1
