EXHIBIT 4(b)(2)
[NW 1997 G]
Dated as of September 25, 1997
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,
SECURED CERTIFICATES COVERING
ONE BRITISH AEROSPACE AVRO 146-RJ85A AIRCRAFT
BEARING U.S. REGISTRATION ▇▇▇▇ N507XJ
TABLE OF CONTENTS
Page
GRANTING CLAUSE
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions ............................................... 6
ARTICLE II
THE SECURED CERTIFICATES
SECTION 2.01. Form of Secured Certificates ............................. 6
SECTION 2.02. Issuance and Terms of Secured Certificates ............... 12
SECTION 2.03. Payments from Trust Indenture Estate Only ................. 14
SECTION 2.04. Method of Payment ......................................... 16
SECTION 2.05. Application of Payments ................................... 18
SECTION 2.06. Termination of Interest in Trust Indenture Estate ......... 19
SECTION 2.07. Registration, Transfer and Exchange of Secured
Certificates ............................................ 19
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Secured Certificates . 20
SECTION 2.09. Payment of Expenses on Transfer; Cancellation ............. 21
SECTION 2.10. Mandatory Redemptions of Secured Certificates ............. 21
SECTION 2.11. Voluntary Redemptions of Secured Certificates ............. 22
SECTION 2.12. Redemptions; Notice of Redemption ........................ 22
SECTION 2.13. Assumption of Secured Certificates by Lessee ............. 23
SECTION 2.14. Option to Purchase Secured Certificates .................. 24
SECTION 2.15. Subordination ............................................. 25
SECTION 2.16. Establishment of Collateral Account ....................... 25
SECTION 2.17. Investment of Funds on Deposit in the Collateral Account .. 26
SECTION 2.18. Release of Debt Portion and Lien on the Collateral Account
and the Liquid Collateral on Delivery Date ............. 27
SECTION 2.19. Release of Collateral Account ............................ 27
SECTION 2.20. Reoptimization ........................................... 27
SECTION 2.21. No Make-Whole Amount ...................................... 28
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE TRUST
INDENTURE ESTATE
SECTION 3.01. Rent Distribution ........................................ 28
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SECTION 3.02. Event of Loss; Replacement; Voluntary Termination;
Refinancing ........................................... 29
SECTION 3.03. After Event of Default ................................... 30
SECTION 3.04. Certain Payments ........................................ 32
SECTION 3.05. Other Payments .......................................... 32
SECTION 3.06. Payments to Owner Trustee ............................... 33
SECTION 3.07. Application of Payments Under Guarantee ................. 33
ARTICLE IV
COVENANTS OF OWNER TRUSTEE; EVENTS OF DEFAULT; REMEDIES OF
INDENTURE TRUSTEE
SECTION 4.01. Covenants of Owner Trustee .............................. 33
SECTION 4.02. Event of Default ........................................ 34
SECTION 4.03. Certain Rights ......................................... 36
SECTION 4.04. Remedies ................................................ 37
SECTION 4.05. Return of Aircraft, Etc ................................. 40
SECTION 4.06. Remedies Cumulative .................................... 41
SECTION 4.07. Discontinuance of Proceedings .......................... 41
SECTION 4.08. Waiver of Past Defaults ................................. 41
SECTION 4.09. Appointment of Receiver .................................. 42
SECTION 4.10. Indenture Trustee Authorized to Execute Bills of
Sale, Etc .............................................. 42
SECTION 4.11. Rights of Certificate Holders to Receive Payment ......... 42
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default .............................. 42
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations ........................................... 43
SECTION 5.03. Indemnification ......................................... 45
SECTION 5.04. No Duties Except as Specified in Trust Indenture or
Instructions .......................................... 46
SECTION 5.05. No Action Except Under Lease, Trust Indenture or
Instructions .......................................... 46
SECTION 5.06. Replacement Airframes and Replacement Engines ........... 46
SECTION 5.07. Indenture Supplements for Replacements .................. 49
SECTION 5.08. Effect of Replacement .................................... 50
SECTION 5.09. Investment of Amounts Held by Indenture Trustee ......... 50
ARTICLE VI
THE OWNER TRUSTEE AND THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties ......................... 50
SECTION 6.02. Absence of Duties ....................................... 51
SECTION 6.03. No Representations or Warranties as to Aircraft or
Documents ............................................. 51
SECTION 6.04. No Segregation of Monies; No Interest ................... 52
SECTION 6.05. Reliance; Agreements; Advice of Counsel ................. 52
SECTION 6.06. Capacity in Which Acting ................................ 53
SECTION 6.07. Compensation ............................................ 53
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SECTION 6.08. Instructions from Certificate Holders ................... 53
ARTICLE VII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER TRUSTEE
SECTION 7.01. Scope of Indemnification ................................ 54
ARTICLE VIII
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 8.01. Notice of Successor Owner Trustee ....................... 54
SECTION 8.02. Resignation of Indenture Trustee; Appointment of
Successor ............................................. 55
SECTION 8.03. Appointment of Additional and Separate Trustees ......... 56
ARTICLE IX
SUPPLEMENT AND AMENDMENTS TO THIS TRUST INDENTURE AND OTHER
DOCUMENTS
SECTION 9.01. Instructions of Majority; Limitations ................... 58
SECTION 9.02. Trustees Protected ...................................... 60
SECTION 9.03. Documents Mailed to Certificate Holders ................. 60
SECTION 9.04. No Request Necessary for Lease Supplement or Trust
Agreement and Indenture Supplement .................... 60
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Termination of Trust Indenture ......................... 60
SECTION 10.02. No Legal Title to Trust Indenture Estate in Certificate
Holders .............................................. 61
SECTION 10.03. Sale of Aircraft by Indenture Trustee Is Binding ....... 61
SECTION 10.04. Trust Indenture for Benefit of Owner Trustee, Indenture
Trustee, Owner Participant, Lessee and Certificate
Holders .............................................. 61
SECTION 10.05. Notices ................................................ 61
SECTION 10.06. Severability ........................................... 62
SECTION 10.07. No Oral Modification or Continuing Waivers ............. 62
SECTION 10.08. Successors and Assigns ................................. 62
SECTION 10.09. Headings ............................................... 62
SECTION 10.10. Normal Commercial Relations ............................ 62
SECTION 10.11. Governing Law; Counterpart Form ........................ 62
SECTION 10.12. Voting by Certificate Holders .......................... 63
SECTION 10.13. Bankruptcy .............................................. 63
SECTION 10.14. No Action Contrary to Lessee's Rights Under the Lease .. 63
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EXHIBIT A Form of Trust Agreement and Indenture Supplement
SCHEDULE I Secured Certificates Amortization
SCHEDULE II Pass Through Trust Agreements
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TRUST INDENTURE AND SECURITY AGREEMENT
[NW 1997 G]
TRUST INDENTURE AND SECURITY AGREEMENT [NW 1997 G], dated as
of September 25, 1997 ("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 Initial 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
Initial 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 of the
Owner Trustee's right, title and interest in and to the Liquid Collateral and
after the Delivery Date 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
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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 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
▇▇▇▇ 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;
(5) the Collateral Account, the Liquid Collateral
and all other moneys and securities (including Cash
Equivalents) now or hereafter paid or deposited or
required to be
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paid or deposited to or with the Indenture Trustee by or
for the account of the Owner Trustee pursuant to any term
of any Operative Document, except the Tax Indemnity
Agreement, and held or required to be held by the
Indenture Trustee hereunder;
(6) 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;
(7) 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;
(8) 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
(9) 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 (9) 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
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Indenture Trustee or the Certificate Holders be required or obligated in any
manner to perform or fulfill any obligations of the Owner Trustee under or
pursuant to any of the Indenture Agreements to which it is a party, or,
except as herein expressly provided, to make any payment, or to make any
inquiry as to the nature or sufficiency of any payment received by it, or
present or 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 ▇▇▇▇
of sale and other instruments of transfer relating to the Airframe and
Engines, when purchased by such purchaser, and to perform all other necessary
or appropriate acts with respect to any such purchase, and in its discretion
to file any claim or take any other action or proceedings, either in its own
name or in the name of the Owner Trustee or otherwise, which the Indenture
Trustee may deem necessary or appropriate to protect and preserve the right,
title and interest of the Indenture Trustee in and to such Rents and other
sums and the security intended to be afforded hereby; provided, however, that
no action of the Indenture Trustee pursuant to this paragraph shall increase
the obligations or liabilities of the Owner Trustee to any Person beyond
those obligations and liabilities specifically set forth in this Trust
Indenture and in the other Operative Documents. Under the Lease, Lessee is
directed, so long as this Trust Indenture shall not have been fully
discharged, to make all payments of Rent (other than Excluded Payments) and
all other amounts which are required to be paid to or deposited with the
Owner Trustee pursuant to the Lease (other than Excluded Payments) directly
to, or as directed by, the Indenture Trustee at such address or addresses as
the Indenture Trustee shall specify, for application as provided in this
Trust Indenture. The Owner Trustee agrees that promptly upon receipt
thereof, it will transfer to the Indenture Trustee any and all monies from
time to time received by it constituting part of the Trust Indenture Estate,
for distribution by the Indenture Trustee pursuant to this Trust Indenture,
except that the Owner Trustee shall accept for distribution pursuant to the
Trust Agreement any amounts distributed to it by the Indenture Trustee under
this Trust Indenture.
The Owner Trustee agrees that at any time and from time to time, upon
the written request of the Indenture Trustee, the Owner Trustee will promptly
and duly execute and deliver or cause to be duly executed and delivered any
and all such further instruments and documents as
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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 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
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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. Unless the context otherwise requires,
capitalized terms utilized herein shall have the meanings set forth in Annex
A hereto for all purposes of this Trust Indenture.
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 1997 G] DATED AS OF SEPTEMBER 25, 1997.
SERIES [___] NON-RECOURSE SECURED CERTIFICATE DUE [___] ISSUED IN CONNECTION
WITH THE BRITISH AEROSPACE AVRO 146-RJ85A AIRCRAFT BEARING UNITED STATES
REGISTRATION NUMBER N507XJ.
No. ____ Date: [______, __]
$__________________
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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 1997 G], dated as of
September 25, 1997, 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 January 2,
1998, and thereafter on July 2 and January 2 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 1997 G], dated as of September 25, 1997,
between the Owner Trustee and State Street Bank and Trust Company (the
"Indenture Trustee"), as the same may be amended or supplemented from time to
time. All other capitalized terms used in this Secured Certificate and not
defined herein shall have the respective meanings assigned in the Trust
Indenture.
This Secured Certificate shall bear interest, payable on demand, at the
Past Due Rate (calculated on the basis of a year of 360 days comprised of
twelve 30-day months) on any overdue Principal Amount, any overdue Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest and any other amounts payable hereunder which are overdue, in each
case for the period the same is overdue. Amounts shall be overdue if not
paid when due (whether at stated maturity, by acceleration or otherwise).
All payments of Principal Amount, interest, Make-Whole Amount, if any,
and other amounts, if any, to be made by the Owner Trustee hereunder and
under the Trust Indenture 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
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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
by the Indenture Trustee to the Owner Trustee for cancellation.
The holder hereof, by its acceptance of this Secured Certificate, agrees
that, except as provided in the Trust Indenture, each payment received by it
hereunder shall be applied, first, to the payment of accrued interest on this
Secured Certificate (as well as any interest on any overdue Principal Amount,
any overdue Make-Whole Amount, if any, or, to the extent permitted by Law,
any overdue interest and other amounts hereunder) to the date of such
payment, second to the payment of the Principal Amount of this Secured
Certificate then due, third, to the payment of Make-Whole Amount, if any, and
any other amount due hereunder or under the Trust Indenture, and fourth, the
balance, if any, remaining thereafter, to the payment of Principal Amount of
this Secured Certificate remaining unpaid in the inverse order of their
normal maturity.
This Secured Certificate is one of the Secured Certificates referred to
in the Trust Indenture which have been or are to be issued by the Owner
Trustee pursuant to the terms of the Trust Indenture. The Trust Indenture
Estate is held by the Indenture Trustee as security, in part, for the Secured
Certificates. The provisions of this Secured Certificate are subject to the
Trust
-8-
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]
[Series A and Series B Secured Certificates](1), and this Secured Certificate
is issued subject to such provisions. The Certificate Holder of this Secured
Certificate, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Indenture Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Trust Indenture and (c) appoints the Indenture
Trustee his attorney-in-fact for such purpose.]*(*)
-------------------------
(1) To be inserted in the case of a Series C Secured Certificate.
To be inserted for each Secured Certificate other than any Series A
Secured Certificate.
-9-
The Owner Trustee shall have the right, on the Reoptimization Date, to
modify Schedule I attached hereto subject to the terms and conditions set
forth in Section 1(c)(ii) of the Participation Agreement. To give effect to
the foregoing the Indenture Trustee shall execute an amendment to this Trust
Indenture which shall set forth the new schedule of principal payments and
Schedule I attached hereto shall be amended accordingly. The Indenture
Trustee shall deliver such amendments to the Subordination Agent on behalf of
the Pass Through Trustee for each of the Pass Through Trusts. To the extent
that such amendment of this Trust Indenture occurs later than the Delivery
Date, this Trust Indenture, as amended, shall, if required, be duly filed for
recordation with the FAA.
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.
* * *
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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
Payment Date Percentage of
Principal Amount
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 January 2, 1998, and on each July 2 and January 2
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 shall be made on the
next succeeding Business Day and if such
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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) the 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, and (ii) interest on Interest Drawings, Final Drawings and
Applied Downgrade Advances (as defined in the Liquidity Facilities) under any
Liquidity Facility except to the extent included in Net Interest and Related
Charges, 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 and/or Applied Downgrade 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 or Applied Downgrade 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 which becomes a Final Drawing) which remains in a Cash
Collateral Account, Designated 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
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after the Closing Date: Cash Collateral Account, 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, 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
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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 ▇▇▇ 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 ▇▇▇ 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
▇▇▇ 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 ▇▇▇ the Owner Trustee in its individual
capacity for any breach by it of any representations, warranties or covenants
of the Owner Trustee made in its individual capacity in the Operative
Documents.
(b) If (i) all or any part of the Trust Estate becomes the property of,
or the Owner Trustee or Owner Participant becomes, a debtor subject to the
reorganization provisions of the Bankruptcy Code, (ii) pursuant to such
reorganization provisions, including Section 1111(b) of the Bankruptcy Code,
the Owner Trustee (in its individual capacity) or the Owner Participant is
required, by reason of the Owner Trustee (in its individual capacity) or the
Owner Participant being held to have recourse liability to any Certificate
Holder or the Indenture Trustee, directly or indirectly (other than the
recourse liability of the Owner Trustee (in its individual capacity), to make
payment on account of any amount payable as principal, Make-Whole Amount, if
any, interest or other amounts on the Secured Certificates or under this
Indenture and (iii) any Certificate Holder or the Indenture Trustee actually
receives any Excess
-15-
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 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
-16-
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 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
-17-
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.
SECTION 2.05. Application of Payments. In the case of each Secured
Certificate, each payment of Principal Amount, Make-Whole Amount, if any, and
interest or other amounts due thereon shall be applied:
First: to the payment of accrued interest on such Secured Certificate
(as well as any interest on any overdue Principal Amount, any overdue
Make-Whole Amount, if any, and to the extent permitted by Law, any overdue
interest and any other overdue amounts thereunder) to the date of such
payment;
Second: to the payment of the Principal Amount of such Secured
Certificate (or a portion thereof) then due thereunder;
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.
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SECTION 2.07. Registration, Transfer and Exchange of Secured
Certificates. The Indenture Trustee shall keep a register (the "Secured
Certificate Register") in which the Indenture Trustee shall provide for the
registration of Secured Certificates and the registration of transfers of
Secured Certificates. No such transfer shall be given effect unless and
until registration hereunder shall have occurred. The Secured Certificate
Register shall be kept at the Corporate Trust Office of the Indenture
Trustee. The Indenture Trustee is hereby appointed "Secured Certificate
Registrar" for the purpose of registering Secured Certificates and transfers
of Secured Certificates as herein provided. A holder of any Secured
Certificate intending to exchange such Secured Certificate shall surrender
such Secured Certificate to the Indenture Trustee at the Corporate Trust
Office, together with a written request from the registered holder thereof
for the issuance of a new Secured Certificate, specifying, in the case of a
surrender for transfer, the name and address of the new holder or holders.
Upon surrender for registration of transfer of any Secured Certificate, the
Owner Trustee shall execute, and the Indenture Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Secured Certificates of a like aggregate Principal Amount and of the same
series. At the option of the Certificate Holder, Secured Certificates may be
exchanged for other Secured Certificates of any authorized denominations of a
like aggregate Principal Amount, upon surrender of the Secured Certificates
to be exchanged to the Indenture Trustee at the Corporate Trust Office.
Whenever any Secured Certificates are so surrendered for exchange, the Owner
Trustee shall execute, and the Indenture Trustee shall authenticate and
deliver, the Secured Certificates which the Certificate Holder making the
exchange is entitled to receive. All Secured Certificates issued upon any
registration of transfer or exchange of Secured Certificates (whether under
this Section 2.07 or under Section 2.08 hereof or otherwise under this Trust
Indenture) shall be the valid obligations of the Owner Trustee evidencing the
same respective obligations, and entitled to the same security and benefits
under this Trust Indenture, as the 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
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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), 10, 13(b), 13(c), 15(b) and 15(c), and
shall be deemed to have represented and warranted (except as provided above),
and covenanted, to the parties to the Participation Agreement as to the
matters represented, warranted and covenanted by the Purchasers in the
Participation Agreement. Subject to compliance by the Certificate Holder and
its transferee (if any) of the requirements set forth in this Section 2.07,
the Indenture Trustee and the Owner Trustee shall use all reasonable efforts
to issue new Secured Certificates upon transfer or exchange within 10
Business Days of the date a Secured Certificate is surrendered for transfer
or exchange.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Secured
Certificates. If any Secured Certificate shall become mutilated, destroyed,
lost or stolen, the Owner Trustee shall, upon the written request of the
holder of such Secured Certificate, execute and the Indenture Trustee shall
authenticate and deliver in replacement thereof a new Secured Certificate,
payable in the same Principal Amount dated the same date and captioned as
issued in connection with the Aircraft. If the Secured Certificate being
replaced has become mutilated, such Secured Certificate shall be surrendered
to the Indenture Trustee and a photocopy thereof shall be furnished to the
Owner Trustee. If the Secured Certificate being replaced has been destroyed,
lost or stolen, the holder of such Secured Certificate shall furnish to the
Owner Trustee, the Owner Participant and the Indenture Trustee such security
or indemnity as may be required by them to save the Owner Trustee, the Owner
Participant and the Indenture Trustee harmless and evidence satisfactory to
the Owner Trustee, the Owner Participant and the Indenture Trustee of the
destruction, loss or theft of such Secured Certificate and of the 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.
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SECTION 2.10. Mandatory Redemptions of Secured Certificates. (a) On
the date on which Lessee is required pursuant to Section 10(a)(i) of the
Lease to make payment for an Event of Loss with respect to the Aircraft, all
of the Secured Certificates shall be redeemed in whole at a redemption price
equal to 100% of the unpaid Principal Amount thereof, together with all
accrued interest thereon to the date of redemption and all other amounts
payable hereunder or under the Participation Agreement to the Certificate
Holders but without Make-Whole Amount.
(b) If the Lease is terminated with respect to the Aircraft by Lessee
pursuant to Section 9 or Section 19(d) thereof and Lessee shall not have
assumed all of the obligations of the Owner Trustee hereunder pursuant to
Section 2.13 and to Section 8(x) of the Participation Agreement, on the date
the Lease is so terminated all the Secured Certificates shall be redeemed in
whole at a redemption price equal to 100% of the unpaid Principal Amount
thereof, together with accrued interest thereon to the date of redemption and
all other amounts payable hereunder or under the Participation Agreement to
the Certificate Holders plus Make-Whole Amount, if any.
(c) If the Manufacturer Delivery has not occurred on or prior to the
Prepayment Date, all of the Secured Certificates shall be redeemed in whole
at a redemption price equal to 100% of the unpaid Principal Amount thereof,
together with all accrued interest thereon to the date of redemption and all
other amounts payable hereunder or under the Participation Agreement to the
Certificate Holders but without Make-Whole Amount, as contemplated by Section
2.19 and Section 18(c) of the Participation Agreement.
(d) If (i) the Manufacturer Delivery shall have occurred, (ii) the
Delivery Date shall not have occurred on or prior to the Cut-Off Date and
(iii) Lessee shall not have assumed the Secured Certificates by the
Determination Date, all of the Secured Certificates shall be redeemed in
whole at a redemption price equal to 100% of the unpaid Principal Amount
thereof, together with all accrued interest thereon to the date of redemption
and all other amounts payable hereunder or under the Participation Agreement
to the Certificate Holders but without Make-Whole Amount, as contemplated by
Section 2.19 and Section 18(d) of the Participation Agreement.
(e) If (i) a Triggering Event shall have occurred on or prior to the
Prepayment Date, (ii) the Delivery Date shall not have occurred and (iii)
Lessee shall not have assumed the Secured Certificates, all of the Secured
Certificates shall be redeemed in whole at a redemption price equal to 100%
of the unpaid Principal Amount thereof, together with all accrued interest
thereon to the date of redemption and all other amounts payable hereunder or
under the Participation Agreement to the Certificate Holders but without
Make-Whole Amount, as contemplated by Section 2.19 and Section 18(e) of the
Participation Agreement.
(f) With respect to Series C Secured Certificates only, the Series C
Secured Certificates shall be redeemed in part at a redemption price equal to
100% of the unpaid Principal Amount thereof, together with all accrued
interest thereon to the date of redemption and all other amounts payable
hereunder or under the Participation Agreement to the Certificate Holders but
without Make-Whole Amount, as provided in Section 1(c)(ii) of the
Participation Agreement.
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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. In the case of a
redemption of the Secured Certificates pursuant to Section 2.10(c) above, the
Secured Certificates shall be redeemed on the 15th day following the
Prepayment Date. In the case of a redemption of the Secured Certificates
pursuant to Section 2.10(d) above, the Secured Certificates shall be redeemed
on the 15th day following the Determination Date. In the case of a
redemption of the Secured Certificates pursuant to Section 2.10(e) above, the
Secured Certificates shall be redeemed on the 15th day following the date of
occurrence of the applicable Triggering Event. In the case of a redemption
of the Series C Secured Certificates pursuant to Section 2.10(f) above, the
amount of such Series C Secured Certificates to be redeemed shall be redeemed
on the Reoptimization Date.
(b) Notice of redemption or purchase with respect to the Secured
Certificates shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed not less than 15 nor more than 60 days prior to the
applicable redemption date, to each Certificate Holder of such Secured
Certificates to be redeemed or purchased, at such Certificate Holder's
address appearing in the Secured Certificate Register; provided that, in the
case of a redemption to be made pursuant to Section 2.10(b) or Section 2.11,
such notice shall be revocable and shall be deemed revoked in the event that
the Lease does not in fact terminate on the specified termination date or if
notice of such redemption shall have been given in connection with a
refinancing of Secured Certificates and the Indenture Trustee receives
written notice of such revocation from Lessee or the Owner Trustee not later
than three days prior to the redemption date. All notices of redemption
shall state: (1) the redemption date, (2) the applicable basis for
determining the redemption price, (3) that on the redemption date, the
redemption price will become due and payable upon each such Secured
Certificate, and that, if any such Secured Certificates are then outstanding,
interest on such Secured Certificates shall cease to accrue on and after such
redemption date, and (4) the place or places where such Secured Certificates
are to be surrendered for payment of the redemption price.
(c) On or before the redemption date, the Owner Trustee (or any person
on behalf of the Owner Trustee) shall, to the extent an amount equal to the
redemption price for the Secured Certificates to be redeemed or purchased on
the redemption date shall not then be held in the Trust Indenture Estate,
deposit or cause to be deposited with the Indenture Trustee by
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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 1(e)(i) or Section 8(x) of the Participation
Agreement and subject to the provisions of Section 8(o) thereof, Lessee shall
assume (on a full recourse basis) all of the obligations of the Owner Trustee
hereunder, under the Secured Certificates and all other Operative Documents
by supplemental indenture satisfactory to the Indenture Trustee (which shall
contain (i) the provisions substantially similar to Sections 6, 7, 8, 10, 11
and 12 of the Lease and (ii) other provisions necessary or advisable to
effectuate such assumption), then upon delivery of such supplemental
indenture, payment by Lessee of all expenses (including reasonable fees and
expenses of counsel) for the Owner Trustee and the Owner Participant,
delivery by the Guarantor of a guarantee of the Secured Certificates and
other amounts owing to the Certificate Holders substantially in the form of
the Guarantee, and delivery of an opinion of counsel for Lessee that such
assumption has been duly and validly effected, the Owner Trustee shall be
released and discharged from any further obligations hereunder and under the
Secured Certificates and all other Operative Documents and the Owner
Participant shall be released and discharged from any further obligations
under the Participation Agreement and any other Operative Document to which
it is a party, except with respect to any such obligations that accrued prior
thereto.
SECTION 2.14. Option to Purchase Secured Certificates. Either the
Owner Trustee or the Owner Participant may, upon the events and subject to
the terms and conditions and for the price set forth in this Section 2.14,
purchase all but not less than all of the Secured Certificates outstanding
hereunder, and each Certificate Holder agrees that it will, upon such events
and subject to such terms and conditions and upon receipt of such price,
sell, assign, transfer and convey to such purchaser or its nominee (without
recourse or warranty of any kind except as to its title to the Secured
Certificates and except against Liens on such Secured Certificates arising
by, through or under such holder), all of the right, title and interest of
such Certificate Holder in and to the Trust Indenture Estate, this Trust
Indenture and the Secured Certificates held by it, and such purchaser or its
nominee shall assume all of such holder's obligations under the Participation
Agreement and hereunder.
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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.
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.
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(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.
SECTION 2.16. Establishment of Collateral Account. (a) The Indenture
Trustee shall, pursuant to the Collateral Account Control Agreement,
establish, or cause to be established, with, State Street Bank and Trust
Company, who shall represent and warrant that it is a financial intermediary
(as defined in Section 8-313(4) of the Massachusetts Uniform Commercial
Code), in its name as secured party hereunder an Eligible Deposit Account
entitled "State Street Bank and Trust Company, as secured party under the
Trust Indenture and Security Agreement [NW 1997 G] dated as of September 25,
1997, with the Owner Trustee referred to therein".
(b) If at any time the Collateral Account ceases to be an Eligible
Deposit Account, the Indenture Trustee shall within two (2) Business Days,
establish a new Collateral Account meeting the conditions specified in the
definition of Eligible Deposit Account, and shall transfer any cash or any
investments in the Collateral Account to such new Collateral Account.
(c) The Indenture Trustee shall have exclusive dominion and control of
the Collateral Account and all funds therein, and shall make withdrawals from
the Collateral Account only in accordance with this Trust Indenture.
(d) The Collateral Account Control Agreement shall require State Street
Bank and Trust Company to send confirmation to the Indenture Trustee and
Lessee that it has credited the Cash Equivalents to the Collateral Account
and to make appropriate entries on its books identifying the Cash Equivalents
as pledged to the Indenture Trustee.
SECTION 2.17. Investment of Funds on Deposit in the Collateral Account.
(a) Funds deposited in the Collateral Account shall be invested and
reinvested by the Indenture Trustee, subject to Section 18 of the
Participation Agreement, at the risk of the Owner Trustee, in Cash
Equivalents selected by Lessee and approved by the Indenture Trustee for the
account of the Owner Trustee in accordance with Section 2.17(b) below;
provided, however, that if Cash Equivalents meeting the requirements of
Section 2.17(b) are not available on any day on which funds are to be
invested as contemplated by the preceding provisions of this Section 2.17(a),
the Indenture Trustee may leave such funds in the Collateral Account
uninvested until the earliest of (i) the date on which an appropriate Cash
Equivalent becomes available, (ii) the Delivery Date, (iii) the date of
assumption by Lessee of the Secured Certificates and (iv) the date of
redemption of the Secured Certificates pursuant to Section 2.10(c), (d) or
(e) hereof. The Indenture Trustee shall maintain possession of the
negotiable instruments or securities, if any, evidencing such Cash
Equivalents and, in the case of any Cash Equivalents in book-entry form, such
Cash Equivalents shall be credited to an account of the Indenture Trustee or
a financial intermediary with the applicable Federal Reserve Bank; provided,
however, if the account is credited to the financial intermediary, the
financial intermediary shall make written confirmation thereof to the
Indenture Trustee and make an appropriate entry on its books identifying the
Cash Equivalents as
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pledged to the Indenture Trustee. All proceeds of and any income, interest
and other payments and distributions on or with respect to any Cash
Equivalents shall be deposited in or credited to the Collateral Account and
thereafter shall be held, invested and applied by the Indenture Trustee in
accordance with this Trust Indenture. The Indenture Trustee shall promptly
notify the Owner Trustee and Lessee of any Losses.
(b) On the Certificate Closing Date, the Indenture Trustee shall invest
the amount deposited in the Collateral Account pursuant to Section 1(a) of
the Participation Agreement in Cash Equivalents selected by Lessee and
approved by the Indenture Trustee for the account of the Owner Trustee which
mature on or prior to May 31, 1998. If the Delivery Date is postponed
pursuant to Section 1(d)(ii)) or Section 1(e) of the Participation Agreement,
the proceeds of the Cash Equivalents referred to in the preceding sentence
may be invested in Cash Equivalents which mature on the rescheduled Delivery
Date. If no Delivery Date occurs, then any Cash Equivalent shall mature no
later than the 15th day after the Cut-Off Date.
(c) If for any reason the Indenture Trustee shall be required to make
any distributions of the Liquid Collateral prior to the maturity date of any
Cash Equivalent, the Indenture Trustee shall cause the same to be sold in
accordance with standard commercial practices, and Lessee, for the account of
the Owner Trustee, shall forthwith compensate the Indenture Trustee for any
Losses as provided in Section 18(a) of the Participation Agreement.
(d) Pursuant to Section 18(b) of the Participation Agreement, interest
payable on the Certificates during the period in which funds are on deposit
in the Collateral Account shall be paid by Lessee.
SECTION 2.18. Release of Debt Portion and Lien on the Collateral
Account and the Liquid Collateral on Delivery Date. (a) Subject to the
satisfaction or waiver of the conditions precedent to the Indenture Trustee's
obligations set forth in Section 5(a) of the Participation Agreement, on the
Delivery Date, the Indenture Trustee shall release from the Collateral
Account an amount of Liquid Collateral, equal to the lesser of (A) the Debt
Portion and (B) the amount actually in the Collateral Account on the Delivery
Date. Such amount so released shall be used to finance a portion of Lessor's
Cost as contemplated by Section 1(d)(i) of the Participation Agreement. Any
amount remaining in the Collateral Account after such release (net of any
uncompensated Losses) shall be remitted by the Indenture Trustee to Lessee
pursuant to Section 18(f) of the Participation Agreement.
(b) The Lien of this Trust Indenture on the Collateral Account and the
Liquid Collateral shall terminate (i) on the Delivery Date following the
transfer of amounts described in Section 1(d)(i) of the Participation
Agreement, (ii) on the date of assumption by Lessee of the Secured
Certificates or (iii) on the date of redemption of the Secured Certificates
pursuant to Section 2.10(c), 2.10(d) or 2.10(e) hereof.
SECTION 2.19. Release of Collateral Account. In the case of a
redemption under Section 2.10(c), 2.10(d) or Section 2.10(e) hereof, the
Indenture Trustee shall release from the Collateral Account all amounts held
in the Collateral Account on such date. Such amount so released, together
with the amount of any Losses received from Lessee pursuant to
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Sections 18(a), 18(c), 18(d) and 18(e) of the Participation Agreement, shall
be applied to pay amounts due under Section 2.12(a) hereof on the 15th day
following the Prepayment Date (in the case of a redemption under Section
2.10(c)), on the 15th day after the Determination Date (in the case of a
redemption under Section 2.10(d)), or the 15th day following the date of
occurrence of a Triggering Event (in the case of a redemption under Section
2.10(e)), as the case may be, and any amount (net of any uncompensated
Losses) remaining after such release and application shall be remitted by the
Indenture Trustee to the Lessee. In the case of an assumption of the Secured
Certificates by Lessee pursuant to Section 1(e)(i) of the Participation
Agreement, the Indenture Trustee shall release from the Collateral Account
all amounts (net of any uncompensated Losses) held in the Collateral Account
on such date to Lessee.
SECTION 2.20. Reoptimization. The Owner Trustee shall have the right,
on the Reoptimization Date, to modify the schedule of principal payments of
the Certificates subject to the terms and conditions set forth in Section
1(c)(ii) of the Participation Agreement. To give effect to the foregoing the
Indenture Trustee shall execute an amendment to this Trust Indenture which
shall set forth the new schedule of principal payments and Schedule I to each
Secured Certificate shall be amended accordingly. The Indenture Trustee
shall deliver such amendments to the Subordination Agent on behalf of the
Pass Through Trustee for each of the Pass Through Trusts. To the extent that
such amendment of this Trust Indenture occurs later than the Delivery Date,
this Trust Indenture, as amended, shall, if required, be duly filed for
recordation with the FAA.
SECTION 2.21. No Make-Whole Amount. Notwithstanding the provisions of
Section 2.10(b), Section 2.11, Section 2.13 and any other provision of this
Trust Indenture, no Make-Whole Amount shall be payable in connection with the
redemption or purchase of the Secured Certificates of any Series if such
redemption or purchase occurs on or after the Make-Whole Termination Date for
such Series.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
SECTION 3.01. 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 and pursuant to Section
18(b) or 18(c) of the Participation Agreement 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
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such payment or payments 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.
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
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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.
SECTION 3.03. 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
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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
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
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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.
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.
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SECTION 3.05. Other Payments. Any payments received by the Indenture
Trustee for which no provision as to the application thereof is made in the
Lease, the Participation Agreement, elsewhere in this Trust Indenture or in
any other Operative Document shall be distributed by the Indenture Trustee to
the extent received or realized at any time (i) prior to the payment in full
of all Secured Obligations due the Certificate Holders, in the order of
priority specified in Section 3.01 hereof subject to the proviso thereto, and
(ii) after payment in full of all Secured Obligations due the Certificate
Holders, in the following order of priority:
First: to the extent payments or amounts described in clause "First"
of Section 3.03 hereof are otherwise obligations of Lessee under the
Operative Documents or for which Lessee is obligated to indemnify against
thereunder, in the manner provided in clause "First" of Section 3.03
hereof, and
Second: in the manner provided in clause "Fourth" of Section 3.03
hereof.
Further, and except as otherwise provided in Sections 3.02, 3.03 and 3.04
hereof, all payments received and amounts realized by the Indenture Trustee
under the Lease or otherwise with respect to the Aircraft (including, without
limitation, all amounts realized upon the sale or release of the Aircraft
after the termination of the Lease with respect thereto), to the extent
received or realized at any time after payment in full of all Secured
Obligations due the Certificate Holders, shall be distributed by the
Indenture Trustee in the order of priority specified in clause (ii) of the
immediately preceding sentence of this Section 3.05.
SECTION 3.06. Payments to 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 OWNER TRUSTEE; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Covenants of Owner Trustee. The Owner Trustee hereby
covenants and agrees (the covenants and agreements only in clause (b) below
being made by the Owner Trustee in its individual capacity) as follows:
(a) the Owner Trustee will duly and punctually pay the Principal
Amount of, Make-Whole Amount, if any, and interest on and other amounts due
under the Secured Certificates and hereunder in accordance with the terms
of the Secured Certificates and this Trust Indenture and all amounts, if
any, payable by it to the Certificate Holders under the Participation
Agreement;
(b) the Owner Trustee in its individual capacity covenants and agrees
that it shall not, directly or indirectly, cause or permit to exist a
Lessor Lien attributable to it in its individual capacity with respect to
the Aircraft or any other portion of the Trust Estate; that it will
promptly, at its own expense, take such action as may be necessary to duly
discharge such Lessor Lien attributable to it in its individual capacity;
and that it will make restitution to the Trust Estate for any actual
diminution of the assets of the Trust Estate resulting from such Lessor
Liens attributable to it in its individual capacity;
(c) in the event the Owner Trustee shall have Actual Knowledge of an
Event of Default, a Default or an Event of Loss, the Owner Trustee will
give prompt written notice of such Event of Default, Default or Event of
Loss to the Indenture Trustee, each Certificate Holder, Lessee and the
Owner Participant;
(d) the Owner Trustee will furnish to the Indenture Trustee, promptly
upon receipt thereof, duplicates or copies of all reports, notices,
requests, demands, certificates and other instruments furnished to the
Owner Trustee under the Lease, including, without limitation, a copy of any
Termination Notice and a copy of each report or notice received pursuant to
Section 9(a) and 11(c) of the Lease to the extent that the same shall not
have been furnished to the Indenture Trustee pursuant to the Lease;
(e) except pursuant to the Operative Documents or with the consent of
the Indenture Trustee (acting pursuant to instructions given in accordance
with Section 9.01 hereof), the Owner Trustee will not contract for, create,
incur, assume or suffer to exist any Debt, and will not guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing, or
otherwise), endorse or otherwise be 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
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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
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 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 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
certificate furnished by the Owner Participant or the Owner Trustee to the
Indenture Trustee or any Certificate Holder in connection with the
transactions contemplated by the Operative Documents shall prove to have
been false or incorrect when made in any material respect and continues to
be material; and if such misrepresentation is capable of being corrected
and if such correction is being sought diligently, such misrepresentation
shall not have been corrected within 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 60 days) following
notice thereof from the Indenture Trustee or any Certificate Holder to the
Owner Trustee or the Owner Participant, as the case may be; or
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(e) other than as provided in (c) above or (f) below, any failure by
the Owner Trustee or Owner Participant to observe or perform any other
covenant or obligation of the Owner Trustee or Owner Participant, as the
case may be, for the benefit of the Indenture Trustee or the Certificate
Holders contained in the Participation Agreement, Section 4.01(a) of the
Trust Agreement, the Secured Certificates or this Trust Indenture which is
not remedied within a period of 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 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 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 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 90 consecutive days; or (ii) the commencement by the Owner
Participant, the Owner Trustee or the Trust Estate of a voluntary case or
proceeding under the federal bankruptcy Laws, as now constituted or
hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or other similar Law in the United States, or the consent by the
Owner Participant, the Owner Trustee or the Trust Estate to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of the Owner
Participant, the Owner Trustee or the Trust Estate or for all or
substantially all of its property, or the making by the Owner Participant,
the Owner Trustee or the Trust Estate of any assignment for the benefit of
creditors or the Owner Participant or the Owner Trustee shall take any
action to authorize any of the foregoing; provided, however, that an event
referred to in this Section 4.02(g) with respect to the Owner Participant
shall not constitute an Event of Default if within 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
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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 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 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 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
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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 days' prior written notice of its intention to sell
the Aircraft. 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
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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
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).
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(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 Trust to fail to qualify as a "grantor
trust" for federal income tax purposes.
SECTION 4.05. Return of Aircraft, Etc. (a) If an Event of Default
shall have occurred and be continuing, subject to Sections 4.03 and 4.04
hereof, at the request of the Indenture Trustee, the Owner Trustee shall
promptly execute and deliver to the Indenture Trustee such instruments of
title and other documents as the Indenture Trustee may deem necessary or
advisable to enable the Indenture Trustee or an agent or representative
designated by the Indenture Trustee, at such time or times and place or
places as the Indenture Trustee may specify, to obtain possession of all or
any part of the Mortgaged Property included in the Trust Indenture Estate to
which the Indenture Trustee shall at the time be entitled hereunder. If the
Owner Trustee shall for any reason fail to execute and deliver such
instruments and documents after such request by the Indenture Trustee, the
Indenture Trustee may (i) obtain a judgment conferring on the Indenture
Trustee the right to immediate possession and requiring the Owner Trustee to
execute and deliver such instruments and documents to the Indenture Trustee,
to the entry of which judgment the Owner Trustee hereby specifically consents
to the fullest extent permitted by applicable law, and (ii) pursue all or
part of such Mortgaged Property wherever it may be found and, in the event
that a Lease Event of Default has occurred and is continuing, may enter any
of the premises of Lessee wherever such Mortgaged Property may be or be
supposed to be and search for such Mortgaged Property and take possession of
and remove such Mortgaged Property. All expenses of obtaining such judgment
or of pursuing, searching for and taking such property shall, until paid, be
secured by the Lien of this Trust Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may,
from time to time, at the expense of the Mortgaged Property, make all such
expenditures for maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, modifications or alterations to and of the
Mortgaged Property, as it may deem proper. In each such case, the Indenture
Trustee shall have the right to maintain, use, operate, store, insure, lease,
control, manage, dispose of, modify or alter the Mortgaged Property and to
carry on the business and to exercise all rights and powers of the Owner
Participant and the Owner Trustee relating to the Mortgaged Property, as the
Indenture Trustee shall deem best, including the right to enter 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,
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products and profits of the Mortgaged Property and every part thereof, except
Excluded Payments, without prejudice, however, to the right of the Indenture
Trustee under any provision of this Trust Indenture to collect and receive
all cash held by, or required to be deposited with, the Indenture Trustee
hereunder. Such tolls, rents (including Rent), revenues, issues, income,
products and profits shall be applied to pay the expenses of the maintenance,
use, operation, storage, insurance, leasing, control, management,
disposition, improvement, modification or alteration of the Mortgaged
Property and of conducting the business thereof, and to make all payments
which the Indenture Trustee may be required or may elect to make, if any, for
taxes, assessments, insurance or other proper charges upon the Mortgaged
Property or any part thereof (including the employment of engineers and
accountants to examine, inspect and make reports upon the properties and
books and records of the Owner Trustee), and all other payments which the
Indenture Trustee may be required or authorized to make under any provision
of this Trust Indenture, as well as just and reasonable compensation for the
services of the Indenture Trustee, and of all persons properly engaged and
employed by the Indenture Trustee with respect hereto.
SECTION 4.06. Remedies Cumulative. Each and every right, power and
remedy given to the Indenture Trustee specifically or otherwise in this Trust
Indenture shall be cumulative and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at
law, in equity or by statute, and each and every right, power and remedy
whether specifically herein given or otherwise existing may be exercised from
time to time and as often and in such order as may be deemed expedient by the
Indenture Trustee, and the exercise or the beginning of the exercise of any
power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy. No
delay or omission by the Indenture Trustee in the exercise of any right,
remedy or power or in the pursuance of any remedy shall impair any such
right, power or remedy or be construed to be a waiver of any default on the
part of the Owner Trustee or Lessee or to be an acquiescence therein.
SECTION 4.07. Discontinuance of Proceedings. In case the Indenture
Trustee shall have instituted any proceeding to enforce any right, power or
remedy under this Trust Indenture by foreclosure, entry or otherwise, and
such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Indenture Trustee, then and in
every such case the Owner Trustee, the Indenture Trustee and Lessee shall,
subject to any determination in such proceedings, be restored to their former
positions and rights hereunder with respect to the Mortgaged Property, and
all rights, remedies and powers of the Owner Trustee, the Indenture Trustee
or Lessee shall continue as if no such proceedings had been instituted.
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
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Secured Certificate then outstanding, or (ii) in respect of a covenant or
provision hereof which, under Article IX hereof, cannot be modified or
amended without the consent of each Certificate Holder.
SECTION 4.09. Appointment of Receiver. The Indenture Trustee shall, as
a matter of right, be entitled to the appointment of a receiver (who may be
the Indenture Trustee or any successor or nominee thereof) for all or any
part of the Mortgaged Property, whether such receivership be incidental to a
proposed sale of the Mortgaged Property or the taking of possession thereof
or otherwise, and the Owner Trustee hereby consents to the appointment of
such a receiver and will not oppose any such appointment. Any receiver
appointed for all or any part of the Mortgaged Property shall be entitled to
exercise all the rights and powers of the Indenture Trustee with respect to
the Mortgaged Property.
SECTION 4.10. Indenture Trustee Authorized to Execute Bills of Sale,
Etc. The Owner Trustee irrevocably appoints the Indenture Trustee the true
and lawful attorney-in-fact of the Owner Trustee in its name and stead and on
its behalf, for the purpose 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 20 days
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after mailing notice of such Event of Default to the Certificate Holders, the
Indenture Trustee may, subject to instructions thereafter received pursuant
to the preceding provisions of this Section 5.01, take such action, or
refrain from taking such action, but shall be under no duty to take or
refrain from taking any action, with respect to such Event of Default or
Default as it shall determine advisable in the best interests of the
Certificate Holders. 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 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, ▇▇▇ for or otherwise
obtain all amounts included in Excluded Payments from Lessee or the
Guarantor, exercise any election or option or make any decision or
determination or to give or receive any notice, consent, waiver or approval
in respect of any Excluded Payment and seek legal or equitable remedies to
require Lessee or the Guarantor to maintain the insurance coverage referred
to in Section 11 of the Lease; provided that the rights referred to in this
clause (1) shall not be deemed to include the exercise of any remedies
provided for in Section 15 of the Lease other than the right to proceed by
appropriate court action, either at law or in equity, to enforce payment by
Lessee or the Guarantor of such amounts included in Excluded Payments or
performance by Lessee or the Guarantor of such insurance covenant, or to
recover damages for the breach thereof or for specific performance of any
covenant of Lessee or the Guarantor;
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(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 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
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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.
(a) If any Lease Event of Default shall have occurred and be continuing
and the Owner Trustee shall not have cured fully such Lease Event of Default
under and in accordance with Section 4.03 hereof, on request of a Majority in
Interest of Certificate Holders, the Indenture Trustee shall declare the
Lease to be in default pursuant to Section 15 thereof and exercise those
remedies specified by such Certificate Holders. The Indenture Trustee agrees
to provide to the Certificate Holders, the Owner Trustee, the Owner
Participant and Lessee concurrently with such declaration by the Indenture
Trustee, notice of such declaration by the Indenture Trustee.
SECTION 5.03. Indemnification. The Indenture Trustee shall not be
under any obligation to take any action under this Trust Indenture and
nothing herein or therein shall require the Indenture Trustee to expend or
risk its own funds or otherwise incur the risk of any financial liability in
the performance of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it (the written
indemnity of any Certificate Holder who is a QIB, signed by an authorized
officer thereof, in favor of, delivered to and in form reasonably
satisfactory to Indenture Trustee shall be accepted as reasonable assurance
of adequate indemnity). The Indenture Trustee shall not be required to take
any action under Section 5.01 (other than the first sentence thereof) or 5.02
or Article IV hereof, nor shall any other provision
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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.
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, if no Lease
Event of Default is continuing, 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:
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(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 on the date of the Trust Agreement and Indenture
Supplement relating to the Replacement Airframe the Owner Trustee will be
the legal owner of such Replacement Airframe free and clear of all Liens
except as are permitted by Section 6 of the Lease, that such Replacement
Airframe will on such date be in good working order and condition, and that
such Replacement Airframe has been or, substantially concurrently with such
withdrawal, will be duly registered in the name of the Owner Trustee under
the Federal Aviation Act or under the law then applicable to the
registration of the Airframe and that an airworthiness certificate has been
duly issued under the Federal Aviation Act (or such other applicable law)
with respect to such Replacement Airframe, and that such registration and
certificate is in full force and effect, and that Lessee will have the full
right and authority to use such Replacement Airframe;
(iv) the existence of the insurance required by Section 11 of the
Lease with respect to such Replacement Airframe and the payment of all
premiums then due thereon;
(v) that the Replacement Airframe is of the same or an improved model
as the Airframe requested to be released from this Indenture;
(vi) the fair market value of the Replacement Airframe as of the date
of such certificate (which in the judgment of Lessee shall be not less than
the then fair market value of the Airframe requested to be released
(assuming such Airframe was in the condition and repair required to be
maintained under the Lease));
(vii) the fair market value of the Airframe immediately prior to
the date the Airframe suffered an Event of Loss (assuming such Airframe was
in the condition and repair required to be maintained under the Lease);
(viii) that no Lease Event of Default and no event which, with
lapse of time or notice, or both, would become a Lease Event of Default,
has occurred which has not been remedied or waived, and that Lessee will
not be in default, by the making and granting of the request for release
and the addition of a Replacement Airframe, in the performance of any of
the terms and covenants of the Lease; and
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(ix) that the release of the Airframe so to be released will not be in
contravention of any of the provisions of this Indenture; or
(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 on the date of the Trust Agreement and Indenture
Supplement relating to the Replacement Engine the Owner Trustee will be the
legal owner of such Replacement Engine free and clear of all Liens except
as are permitted by Section 6 of the Lease, that such Replacement Engine
will on such date be in good working order and condition and that such
Replacement Engine is substantially the same as the Engine to be released
(or an improved model);
(iv) the fair market value of the Replacement Engine as of the date of
such certificate (which value shall not be less than the then fair market
value of the Engine to be released (assuming such Engine was in the
condition and repair required to be maintained under the Lease));
(v) the fair market value of the Engine to be released (immediately
prior to any Event of Loss suffered by such Engine and assuming that such
Engine was in the condition and repair required to be maintained under the
Lease);
(vi) that each of the conditions specified in Section 10(b) of the
Lease with respect to such Replacement Engine have been satisfied and that
Lessee will not be in default, by the making and granting of the request
for release and the addition of the Replacement Engine, in the performance
of any of the terms and covenants of the Lease;
(vii) 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; and
(viii) that the release of the Engine so to be released will not be
in contravention of any of the provisions of this Indenture.
(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
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Replacement Airframe or Replacement Engine, and a Trust Agreement and
Indenture Supplement subjecting such Replacement Airframe or Replacement
Engine and any related warranty rights to the lien of this Indenture.
(b) With respect to the replacement of any Engine, such Uniform
Commercial Code financing statements covering the lien created by this
Indenture as deemed necessary or desirable by counsel for the Indenture
Trustee to protect the lien under the Indenture in the Replacement Engine.
(4) A certificate from either an aircraft engineer (who may be an
employee of Lessee) or a firm of independent aircraft appraisers selected by
Lessee confirming the accuracy of the information set forth in clause
(2)A(vi) of this Section 5.06.
(5) The opinion of in-house counsel to Lessee, or other counsel
satisfactory to the Indenture Trustee, stating that:
(i) the certificates, opinions and other instruments and/or property
which have been or are therewith delivered to and deposited with the
Indenture Trustee conform to the requirements of this Trust Indenture and
the Lease and, upon the basis of such application, the property so sold or
disposed of may be lawfully released from the lien of this Trust Indenture
and all conditions precedent herein provided relating to such release have
been complied with; and
(ii) 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
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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 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),
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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 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 will
receive on the Delivery Date whatever title is conveyed to it by Lessee, and
(ii) on the Delivery Date the Aircraft will be 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
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correctness of any statement contained in any thereof, except for the
representations and warranties of the Owner Trustee made in its individual
capacity and the representations and warranties of the Indenture Trustee, in
each case expressly made in this Trust Indenture or in the Participation
Agreement. The Loan Participants, the Certificate Holders and the Owner
Participant make no representation or warranty hereunder whatsoever.
SECTION 6.04. No Segregation of Monies; No Interest. Any monies paid
to or retained by the Indenture Trustee pursuant to any provision hereof and
not then required to be distributed to the Certificate Holders, Lessee or the
Owner Trustee as provided in Article III hereof need not be segregated in any
manner except to the extent required by Law or Section 10(f) or 11(g) of the
Lease and Section 5.09 hereof, and may be deposited under such general
conditions as may be prescribed by Law, and the Indenture Trustee shall not
be liable for any interest thereon (except that the Indenture Trustee shall
invest all monies held as directed by Lessee so long as no Lease Event of
Default or Lease Default has occurred and is continuing (or in the absence of
such direction, by the Majority In Interest of Certificate Holders) in Cash
Equivalents; provided, however, that any payments received, or applied
hereunder, by the Indenture Trustee shall be accounted for by the Indenture
Trustee so that any portion thereof paid or applied pursuant hereto shall be
identifiable as to the source thereof.
SECTION 6.05. Reliance; Agreements; Advice of Counsel. Neither the
Owner Trustee nor the Indenture Trustee shall incur any liability to anyone
in acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
believed by it to be genuine and believed by it to be signed by the proper
party or parties. The Owner Trustee and the Indenture Trustee may accept a
copy of a resolution of the Board of Directors (or, in the case of the Owner
Participant which originally executed the Participation Agreement, evidence
of the approval by the Executive Committee thereof) of any party to the
Participation Agreement, certified by the Secretary or an Assistant Secretary
thereof as duly adopted and in full force and effect, as conclusive evidence
that such resolution has been duly adopted and that the same is in full force
and effect. As to the aggregate unpaid Principal Amount of Secured
Certificates outstanding as of any date, the Owner Trustee may for all
purposes hereof rely on a certificate signed by any Vice President or other
authorized corporate trust officer of the Indenture Trustee. As to any fact
or matter relating to Lessee the manner of ascertainment of which is not
specifically described herein, the Owner Trustee and the Indenture Trustee
may for all purposes hereof rely on a certificate, signed by a duly
authorized officer of Lessee, as to such fact or matter, and such certificate
shall constitute full protection to the Owner Trustee and the Indenture
Trustee for any action taken or omitted to be taken by them in good faith in
reliance thereon. The Indenture Trustee shall assume, and shall be fully
protected in assuming, that the Owner Trustee is authorized by the Trust
Agreement to enter into this Trust Indenture and to take all action to be
taken by it pursuant to the provisions hereof, and shall not inquire into the
authorization of the Owner Trustee with respect thereto. In the
administration of the trusts hereunder, the Owner Trustee and the Indenture
Trustee each may execute any of the trusts or powers hereof and perform its
powers and duties hereunder directly or through agents or attorneys and may
at the 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
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in accordance with the written advice or written opinion of any such counsel,
accountants or other skilled persons.
SECTION 6.06. Capacity in Which Acting. The Owner Trustee acts
hereunder solely as trustee as herein and in the Trust Agreement provided,
and not in its individual capacity, except as otherwise expressly provided
herein, in the Trust Agreement and in the Participation Agreement.
SECTION 6.07. Compensation. The Indenture Trustee shall be entitled to
reasonable compensation, including expenses and disbursements (including the
reasonable fees and expenses of counsel), for all services rendered hereunder
and shall, on and subsequent to an Event of Default hereunder, have a
priority claim on the Trust Indenture Estate for the payment of such
compensation, to the extent that such compensation shall not be paid by
Lessee, and shall have the right, on and subsequent to an Event of Default
hereunder, to use or apply any monies held by it hereunder in the Trust
Indenture Estate toward such payments. The Indenture Trustee agrees that it
shall have no right against the Loan Participants, the Certificate Holders,
the Owner Trustee or the Owner Participant for any fee as compensation for
its services as trustee under this Trust Indenture.
SECTION 6.08. Instructions from Certificate Holders. In the
administration of the trusts created hereunder, the Indenture Trustee shall
have the right to seek instructions from a Majority in Interest of
Certificate Holders should any provision of this Trust Indenture appear to
conflict with any other provision herein or should the Indenture Trustee's
duties or obligations hereunder be unclear, and the Indenture Trustee shall
incur no liability in refraining from acting until it receives such
instructions. The Indenture Trustee shall be fully protected for acting in
accordance with any instructions received under this Section 6.08.
ARTICLE VII
INDEMNIFICATION OF INDENTURE TRUSTEE BY 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 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,
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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 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 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,
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shall be subject to Lessee's reasonable approval. If a successor Indenture
Trustee shall not have been appointed within 30 days after such notice of
resignation or removal, the Indenture Trustee, the Owner Trustee, the Owner
Participant or any Certificate Holder may apply to any court of competent
jurisdiction to appoint a successor Indenture Trustee to act until such time,
if any, as a successor shall have been appointed as above provided. The
successor Indenture Trustee so appointed by such court shall immediately and
without further act be superseded by any successor Indenture Trustee
appointed as above provided.
(b) Any successor Indenture Trustee, however appointed, shall execute
and deliver to the Owner Trustee, the predecessor Indenture Trustee and
Lessee an instrument accepting such appointment and assuming the obligations
of the Indenture Trustee under the Participation Agreement arising from and
after the time of such appointment, and thereupon such successor Indenture
Trustee, without further act, shall become vested with all the estates,
properties, rights, powers and duties of the predecessor Indenture Trustee
hereunder in the trust hereunder applicable to it with like effect as if
originally named the Indenture Trustee herein; but nevertheless upon the
written request of such successor Indenture Trustee, such predecessor
Indenture Trustee shall execute and deliver an instrument transferring to
such successor Indenture Trustee, upon the trusts herein expressed applicable
to it, all the estates, properties, rights and powers of such predecessor
Indenture Trustee, and such predecessor Indenture Trustee shall duly assign,
transfer, deliver and pay over to such successor Indenture Trustee all monies
or other property then held by such predecessor Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed, shall be a bank
or trust company having its principal place of business in the Borough of
Manhattan, City and State of New York; Minneapolis, Minnesota; Chicago,
Illinois; Hartford, Connecticut; Wilmington, Delaware; or Boston,
Massachusetts and having (or whose obligations under the Operative Documents
are guaranteed by an affiliated entity having) a combined capital and surplus
of at least $100,000,000, if there be such an institution willing, able and
legally qualified to perform the duties of the Indenture Trustee hereunder
upon reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Indenture Trustee
shall be a party, or any corporation to which substantially all the corporate
trust business of the Indenture Trustee may be transferred, shall, subject to
the terms of paragraph (c) of this Section 8.02, be a successor Indenture
Trustee and the Indenture Trustee under this Trust Indenture without further
act.
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
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Certificate Holders, then in any such case, the Indenture Trustee and, upon
the written request of the Indenture Trustee, the Owner Trustee, shall
execute and deliver an indenture supplemental hereto and such other
instruments as may from time to time be necessary or advisable either (1) to
constitute one or more bank or trust companies or one or more persons
approved by the Indenture Trustee, either to act jointly with the Indenture
Trustee as additional trustee or trustees of all or any part of the Trust
Indenture Estate, or to act as separate trustee or trustees of all or any
part of the Trust Indenture Estate, in each case with such rights, powers,
duties and obligations consistent with this Trust Indenture as may be
provided in such supplemental indenture or other instruments as the Indenture
Trustee or a Majority in Interest of Certificate Holders may deem necessary
or advisable, or (2) to clarify, add to or subtract from the rights, powers,
duties and obligations theretofore granted any such additional and separate
trustee, subject in each case to the remaining provisions of this Section
8.03. If the Owner Trustee shall not have taken any action requested of it
under this Section 8.03(a) that is permitted or required by its terms within
15 days after the receipt of a written request from the Indenture Trustee so
to do, or if an Event of Default shall have occurred and be continuing, the
Indenture Trustee may act under the foregoing provisions of this Section
8.03(a) without the concurrence of the Owner Trustee; and the Owner Trustee
hereby irrevocably appoints (which appointment is coupled with an interest)
the Indenture Trustee, its agent and attorney-in-fact to act for it under the
foregoing provisions of this Section 8.03(a) in either of such contingencies.
The Indenture Trustee may, in such capacity, execute, deliver and perform
any such supplemental indenture, or any such instrument, as may be required
for the appointment of any such additional or separate trustee or for the
clarification of, addition to or subtraction from the rights, powers, duties
or obligations theretofore granted to any such additional or separate
trustee. In case any additional or separate trustee appointed under this
Section 8.03(a) shall die, become incapable of acting, resign or be removed,
all the assets, property, rights, powers, trusts, duties and obligations of
such additional or separate trustee shall revert to the Indenture Trustee
until a successor additional or separate trustee is appointed as provided in
this Section 8.03(a).
(b) No additional or separate trustee shall be entitled to exercise any
of the rights, powers, duties and obligations conferred upon the Indenture
Trustee in respect of the custody, investment and payment of monies and all
monies received by any such additional or separate trustee from or
constituting part of the Trust Indenture Estate or otherwise payable under
any Operative Document to the Indenture Trustee shall be promptly paid over
by it to the Indenture Trustee. All other rights, powers, duties and
obligations conferred or imposed upon any additional or separate trustee
shall be exercised or performed by the Indenture Trustee and such additional
or separate trustee jointly except to the extent that applicable Law of any
jurisdiction in which any particular act is to be performed renders the
Indenture Trustee 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
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additional or separate trustee appointed pursuant to this Section 8.03 shall
be subject to, and shall have the benefit of Articles IV through VIII and
Article X hereof insofar as they apply to the Indenture Trustee. The powers
of any additional or separate trustee appointed pursuant to this Section 8.03
shall not in any case exceed those of the Indenture Trustee hereunder.
(c) If at any time the Indenture Trustee shall deem it no longer
necessary or desirable in order to conform to any such law or take any such
action or shall be advised by such counsel that it is no longer so necessary
or desirable in the interest of the Certificate Holders, or in the event that
the Indenture Trustee shall have been requested to do so in writing by a
Majority in Interest of Certificate Holders, the Indenture Trustee and, upon
the written request of the Indenture Trustee, the Owner Trustee, shall
execute and deliver an indenture supplemental hereto and all other
instruments and agreements necessary or proper to remove any additional or
separate trustee. The Indenture Trustee may act on behalf of the Owner
Trustee under this Section 8.03(c) when and to the extent it could so act
under Section 8.03(a) hereof.
ARTICLE IX
SUPPLEMENT AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
SECTION 9.01. Instructions of Majority; Limitations. (a) Except as
provided in Section 5.02 hereof, and except with respect to Excluded
Payments, the Owner Trustee agrees it shall not enter into any amendment of
or supplement to the Lease, the Purchase Agreement, the Purchase Agreement
Assignment, the Consent and Agreement or the Guarantee, or execute and
deliver any written waiver or modification of, or consent under, the terms of
the Lease, the Purchase Agreement, the Purchase Agreement Assignment, the
Consent and Agreement or the Guarantee, unless such supplement, amendment,
waiver, modification or consent is consented to in writing by the Indenture
Trustee and a Majority in Interest of Certificate Holders. Anything to the
contrary contained herein notwithstanding, without the necessity of the
consent of any of the Certificate Holders (or the Indenture Trustee, in the
case of (i) or (ii) below), (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, (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 and (iii) the Owner
Trustee (when authorized by the Owner Participant) and the Indenture Trustee
may enter into an indenture or indentures supplemental hereto to effect the
amendments contemplated by Section 1(c) of the Participation Agreement,
subject to the limitations set forth therein.
(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
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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 effect the
Certificate Holders, but upon the written request of a Majority in Interest
of Certificate Holders, the Indenture Trustee shall from time to time enter
into any such supplement or amendment, or execute and deliver any such
waiver, modification or consent, as may be specified in such request and as
may be (in the case of any such amendment, supplement or modification), to
the extent such agreement is required, agreed to by the Owner Trustee and
Lessee or, as may be appropriate, the Manufacturer; provided, however, that,
without the consent of each holder of an affected Secured Certificate then
outstanding, no such amendment of or supplement to this Trust Indenture, the
Lease, the Purchase Agreement, the Purchase Agreement Assignment, the Consent
and Agreement, the Guarantee or the Participation Agreement or waiver or
modification of the terms of, or consent under, any thereof, shall (i) modify
any of the provisions of this Section 9.01, or of Sections 2.02, 2.10, 2.11,
2.15, 4.02, 4.04(c), 4.04(d), 5.02 or 5.06 hereof, Section 14 (except to add
an Event of Default) of the Lease, the definitions of "Event of Default",
"Default", "Lease Event of Default", "Lease Default", "Majority in Interest
of Certificate Holders", "Make-Whole Amount" or "Certificate Holder", or the
percentage of Certificate Holders required to take or approve any action
hereunder, (ii) reduce the amount, or change the time of payment or method of
calculation of any amount, of Principal Amount, Make-Whole Amount, if any, or
interest with respect to any Secured Certificate, or alter or modify the
provisions of Article III hereof with respect to the order of priorities in
which distribution thereunder shall be made as among the Certificate Holders,
the Owner Trustee and Lessee, (iii) reduce, modify or amend any indemnities
in favor of the Certificate Holders, (iv) consent to any change in the Trust
Indenture or the Lease which would permit redemption of Secured Certificates
earlier than permitted under Section 2.10 or 2.11 hereof or the purchase of
the Secured Certificates other than as permitted by Section 2.14 hereof, (v)
modify any of the provisions of Section 3(d)(v) of the Lease, or modify,
amend or supplement the Lease or consent to any assignment of the Lease, in
either case releasing Lessee from its obligations in respect of the payment
of Basic Rent, Stipulated Loss Value or Termination Value for the Aircraft or
altering the absolute and unconditional character of the obligations of
Lessee to pay Rent as set forth in Sections 3 and 18 of the Lease or (vi)
permit the creation of any Lien on the Trust Indenture Estate or any part
thereof other than Permitted Liens or deprive any Certificate Holder of the
benefit of the Lien of this Trust Indenture on the Trust Indenture Estate,
except as provided in connection with the exercise of remedies under Article
IV hereof. So long as no Lease Event of Default has occurred and is
continuing, without the consent of Lessee no amendment or supplement to this
Trust Indenture or waiver or modification of the terms hereof shall adversely
affect Lessee.
(c) At any time after the date hereof, the Owner Trustee and the
Indenture Trustee may enter into one or more agreements supplemental hereto
without the consent of any Certificate Holder for any of the following
purposes: (i) (a) to cure any defect or inconsistency herein or in the
Secured Certificates, or to make any change not inconsistent with the
provisions hereof (provided that such change does not adversely affect the
interests of any Certificate 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
-57-
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; (vii) to include on the Secured
Certificates any legend as may be required by law, and (viii) to effect the
amendments and/or restatements contemplated by Section 1(c) of the
Participation Agreement, subject to the limitations set forth therein.
SECTION 9.02. Trustees Protected. If, in the opinion of the
institution acting as Owner Trustee under the Trust Agreement or the
institution acting as Indenture Trustee hereunder, any document required to
be executed by it pursuant to the terms of Section 9.01 hereof adversely
affects any right, duty, immunity or indemnity with respect to such
institution under this Trust Indenture or the Lease, such institution may in
its discretion decline to execute such document.
SECTION 9.03. Documents Mailed to Certificate Holders. Promptly after
the execution by the Owner Trustee or the Indenture Trustee of any document
entered into pursuant to Section 9.01 hereof, the Indenture Trustee shall
mail, by first class mail, postage prepaid, a copy thereof to Lessee and to
each Certificate Holder at its address last set forth in the Secured
Certificate Register, but the failure of the Indenture Trustee to mail such
copies shall not impair or affect the validity of such document.
SECTION 9.04. No Request Necessary for Lease Supplement or Trust
Agreement and Indenture Supplement. No written request or consent of the
Indenture Trustee, the Certificate Holders or the Owner Participant pursuant
to Section 9.01 hereof shall be required to enable the Owner Trustee to enter
into any Lease Supplement specifically required by the terms of the Lease or
to execute and deliver a Trust Agreement and Indenture Supplement
specifically required by the terms hereof.
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
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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.
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 Owner Trustee, Indenture
Trustee, Owner Participant, Lessee and Certificate Holders. Nothing in this
Trust Indenture, whether express or implied, shall be construed to give any
person other than the Owner Trustee, the Indenture Trustee, the Owner
Participant, Lessee and the Certificate Holders, any legal or equitable
right, remedy or claim under or in respect of this Trust Indenture.
SECTION 10.05. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands,
authorizations, directions, consents, waivers or documents provided or
permitted by this Trust Indenture to be made, given, furnished or filed shall
be in writing, personally delivered or mailed by certified mail, postage
prepaid, or by facsimile or confirmed telex, and (i) if to the Owner Trustee,
addressed to it at its office at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Department (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇),
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
International
-▇▇-
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Department (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), (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 Refunding
Agreement or in the Secured Certificate Register. Whenever any notice in
writing is required to be given by the Owner Trustee, any Participant or the
Indenture Trustee or any Certificate Holder or Lessee to any of the other of
them, such notice shall be deemed given and such requirement satisfied when
such notice is received, or if such notice is mailed by certified mail,
postage prepaid, three Business Days after being mailed, addressed as
provided above. Any party hereto may change the address to which notices to
such party will be sent by giving notice of such change to the other parties
to this Trust Indenture.
SECTION 10.06. Severability. Any provision of this Trust Indenture
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any
such prohibition or unenforceability in any particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.07. No Oral Modification or Continuing Waivers. No term or
provision of this Trust Indenture or the Secured Certificates may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the Owner Trustee and the Indenture Trustee, in compliance with
Section 9.01 hereof. Any waiver of the terms hereof or of any Secured
Certificate shall be effective only in the specific instance and for the
specific purpose given.
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
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financial transactions, and have banking or other commercial relationships,
with Lessee, fully to the same extent as if this Trust Indenture were not in
effect, including without limitation the making of loans or other extensions
of credit to Lessee for any purpose whatsoever, whether related to any of the
transactions contemplated hereby or otherwise.
SECTION 10.11. Governing Law; Counterpart Form. THIS TRUST INDENTURE
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS TRUST INDENTURE IS BEING
DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture may be executed by
the parties hereto in separate counterparts (or upon separate signature pages
bound together into one or more counterparts), each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.12. Voting by Certificate Holders. All votes of the
Certificate Holders shall be governed by a vote of a Majority in Interest of
Certificate Holders, except as otherwise provided herein.
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: s/▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity, except as
expressly provided herein, but solely as
Indenture Trustee, Indenture Trustee
By: s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
-62-
EXHIBIT A TO
TRUST INDENTURE
AND MORTGAGE
TRUST AGREEMENT AND INDENTURE SUPPLEMENT
[NW 1997 G]
This TRUST AGREEMENT AND INDENTURE SUPPLEMENT [NW 1997 G],
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 1997 G] dated as of September 25, 1997 (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 1997 G], dated
as of September 25, 1997 (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 Owner Trustee's right, title and
interest in and to the following described property:
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 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 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).
A-2
As further security for the obligations referred to above and secured by
the Trust Indenture and hereby, the Owner Trustee has granted, bargained,
sold, assigned, transferred, conveyed, mortgaged, pledged and confirmed, and
does hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge
and confirm, unto the Indenture Trustee, its successors and assigns, for the
security and benefit of the Loan Participants and of the Certificate Holders,
in the 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.
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, except as
expressly provided herein, but solely as
Owner Trustee, Owner Trustee
By:
--------------------------------------
Name:
Title:
A-4
SCHEDULE I
Principal Amount Interest Rate
---------------- -------------
Series A............ G $10,369,024.29 7.068%
[H 10,369,450.52
I 10,560,952.07
J 10,574,426.83
K 10,583,770.00
L 10,568,876.29]
Series B............ G $3,169,029.45 7.248%
[H 3,112,327.96
I 3,538,462.47
J 3,474,730.05
K 3,419,603.59
L 3,393,846.48]
Series C............ G $1,963,999.98 7.039%
[H 1,967,999.99
I 1,980,000.00
J 1,983,999.99
K 1,988,000.02
L 1,990,500.02]
Schedule I-1
Secured Certificates Amortization
SERIES A
Aircraft: N5__XJ
Percentage of Principal
Payment Date Amount to be Paid
------------ -----------------------
Schedule I-2
SERIES B
Aircraft: N5__XJ
Percentage of Principal
Payment Date Amount to be Paid
------------ -----------------------
Schedule I-3
SERIES C
Aircraft: N5__XJ
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 Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company, as supplemented by Trust Supplement No. 1997-1A, dated as of
September 25, 1997.
2. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company, as supplemented by Trust Supplement No. 1997-1B, dated as of
September 25, 1997.
3. Pass Through Trust Agreement, dated as of June 3, 1996, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank and
Trust Company, as supplemented by Trust Supplement No. 1997-1C, dated as of
September 25, 1997.
Schedule II-1