EXHIBIT 4(d)(1)
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PARTICIPATION AGREEMENT
(N3731T)
Dated as of September 17, 2001
among
DELTA AIR LINES, INC.,
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Pass Through Trustee under each of the
Pass Through Trust Agreements
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Subordination Agent
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Loan Trustee
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
in its individual capacity as set forth herein
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One Boeing 737-832 Aircraft
U.S. Registration No. N3731T
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions...................................................
Section 1.02 Other Definitional Provisions.................................
ARTICLE 2
THE LOANS
Section 2.01 The Loans.....................................................
Section 2.02 Issuance of Equipment Notes...................................
Section 2.03 The Closing...................................................
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.01 Conditions Precedent to Obligations of the Pass Through
Trustees.....................................................
Section 3.02 Conditions Precedent to Obligations of the Company............
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF THE COMPANY
Section 4.01 Representations and Warranties of the Company.................
Section 4.02 General Indemnity.............................................
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF STATE STREET
Section 5.01 Representations, Warranties and Covenants of State Street.....
ARTICLE 6
OTHER COVENANTS AND AGREEMENTS
Section 6.01 Other Agreements..............................................
Section 6.02 Certain Covenants of the Company..............................
ARTICLE 7
MISCELLANEOUS
Section 7.01 Notices.......................................................
Section 7.02 Survival of Representations, Warranties, Indemnities,
Covenants and Agreements.....................................
Section 7.03 Governing Law.................................................
Section 7.04 Severability..................................................
Section 7.05 No Oral Modifications or Continuing Waivers; Consents.........
Section 7.06 Effect of Headings and Table of Contents......................
Section 7.07 Successors and Assigns........................................
Section 7.08 Benefits of Agreement.........................................
Section 7.09 Counterparts..................................................
Section 7.10 Submission to Jurisdiction....................................
Schedule I - Equipment Notes, Purchasers and Original Principal
Amounts
Schedule II - Trust Supplements
Exhibit A-1 - Form of Opinion of Counsel for the Company
Exhibit A-2 - Form of Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
special counsel for the Company
Exhibit A-3 - Form ofss. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇, special counsel for the Company
Exhibit B - Form of Opinion of Special Counsel for the Loan
Trustee, the Subordination Agent and State Street
Exhibit C - Form of Opinion of Special FAA Counsel
Exhibit D-1 - Form of Opinion of Special Counsel for the
Liquidity Provider
Exhibit D-2 - Form of Opinion of German In-House Counsel for the
Liquidity Provider
Exhibit E - Form of Manufacturer's Consent
Exhibit F - Form of Opinion of Special Counsel for the Pass
Through Trustees
Annex A - Definitions
PARTICIPATION AGREEMENT
(N3731T)
This PARTICIPATION AGREEMENT (N3731T), dated as of September 17,
2001, is made by and among DELTA AIR LINES, INC., a Delaware corporation
(together with its successors and permitted assigns, the "Company"), STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national
banking association (in its individual capacity, together with its successors
and permitted assigns, "State Street"), not in its individual capacity except as
otherwise expressly provided in any of the Operative Documents or the Pass
Through Documents, but solely as trustee (in such capacity together with any
successor or other trustee in such capacity, the "Pass Through Trustee") under
each of the Pass Through Trust Agreements (such term and other capitalized terms
used herein without definition being defined as provided in Section 1.01), STATE
STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national
banking association, as subordination agent and trustee (in such capacity,
together with any successor trustee in such capacity, the "Subordination Agent")
under the Intercreditor Agreement, and STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, as loan trustee (in such capacity, together
with any successor trustee in such capacity, the "Loan Trustee") under the
Indenture.
W I T N E S S E T H:
WHEREAS, the Company is the owner of that certain Boeing Model
737-832 aircraft more particularly described in the Indenture Supplement
originally executed and delivered under the Indenture;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company and the Loan Trustee are entering into the Indenture,
pursuant to which, among other things, the Company will issue five series of
Equipment Notes, which Equipment Notes are to be secured by a security interest
in all right, title and interest of the Company in and to the Aircraft and
certain other property described in the Indenture;
WHEREAS, pursuant to the Basic Pass Through Trust Agreement and each
of the Trust Supplements set forth in Schedule II hereto, concurrently with the
execution and delivery of this Agreement, separate Pass Through Trusts are being
created to facilitate certain of the transactions contemplated hereby,
including, without limitation, the issuance and sale of Pass Through
Certificates;
WHEREAS, pursuant to the Intercreditor Agreement, the Subordination
Agent will hold the Equipment Notes on behalf of the Pass Through Trusts;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements herein contained, and of other good and valuable consideration
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions. For the purposes of this Agreement, unless
the context otherwise requires, capitalized terms used but not defined herein
shall have the respective meanings set forth or incorporated by reference in
Annex A.
Section 1.02 Other Definitional Provisions. (a) The definitions
stated herein and in Annex A apply equally to both the singular and the plural
forms of the terms defined.
(b) All references in this Agreement to designated "Articles",
"Sections", "Subsections", "Schedules", "Exhibits", "Annexes" and other
subdivisions are to the designated Article, Section, Subsection, Schedule,
Exhibit, Annex or other subdivision of this Agreement, unless otherwise
specifically stated.
(c) The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Subsection, Schedule, Exhibit, Annex or other subdivision.
(d) All references in this Agreement to a "government" are to such
government and any instrumentality or agency thereof.
(e) Unless the context otherwise requires, whenever the words
"including", "include" or "includes" are used herein, they shall be deemed to be
followed by the phrase "without limitation".
ARTICLE 2
THE LOANS
Section 2.01 The Loans. Subject to the terms and conditions of this
Agreement and the Indenture, on the Closing Date the Pass Through Trustee for
each Pass Through Trust shall make a loan to the Company by paying to the
Company the aggregate original principal amounts of the Equipment Notes being
issued to such Pass Through Trust as set forth on Schedule I opposite the name
of such Pass Through Trust. The Pass Through Trustees, on behalf of the Pass
Through Trusts, shall make such loans to the Company no later than 11:00 a.m.
(New York City time) on the Closing Date by transferring such amount in
immediately available funds to the Company at its account at Citibank, N.A., ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, Account No. ▇▇▇▇▇▇▇▇, ABA Number ▇▇▇▇▇▇▇▇▇,
with the request that the bank advise the Company by telephone at (▇▇▇) ▇▇▇-▇▇▇▇
upon transfer of the funds.
Section 2.02 Issuance of Equipment Notes. Upon the occurrence of the
above payments by the Pass Through Trustee for each Pass Through Trust to the
Company, the Company shall issue, pursuant to and in accordance with Article II
of the Indenture, to the Subordination Agent as agent and trustee for the Pass
Through Trustee for each Pass Through Trust, one or more Equipment Notes of the
maturity and aggregate principal amount and bearing the interest rate set forth
in Schedule I opposite the name of such Pass Through Trust. Each such Equipment
Note shall be duly authenticated by the Loan Trustee pursuant to the Indenture,
registered in the name of the Subordination Agent and dated the Closing Date and
shall be delivered by the Loan Trustee to the Subordination Agent.
Section 2.03 The Closing. The closing (the "Closing") of the
transactions contemplated hereby shall take place at the offices of Cadwalader,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 9:30 a.m. (New York
City time) on September 17, 2001, or at such other time or place as the parties
shall agree.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.01 Conditions Precedent to Obligations of the Pass Through
Trustees. The obligation of each Pass Through Trustee to make the loan
contemplated by Article II is subject to the fulfillment (or the waiver by such
Pass Through Trustee) prior to or on the Closing Date of the following
conditions precedent:
(a) The Company shall have tendered the Equipment Notes to the Loan
Trustee for authentication, and the Loan Trustee shall have authenticated such
Equipment Notes and shall have tendered the Equipment Notes to the Subordination
Agent on behalf of the applicable Pass Through Trustee in accordance with
Section 2.02.
(b) No change shall have occurred after the date of this Agreement
in applicable law or regulations thereunder or interpretations thereof by
appropriate regulatory authorities or any court that would make it a violation
of law or governmental regulations for the Pass Through Trustees to make the
loans contemplated by Section 2.01 or to acquire the Equipment Notes.
(c) This Agreement and the following documents shall have been duly
authorized, executed and delivered by the respective party or parties thereto
(other than the Pass Through Trustees or the Loan Trustee), shall be in full
force and effect and executed counterparts (or copies thereof where indicated)
thereof shall have been delivered to each Pass Through Trustee:
(i) the Intercreditor Agreement;
(ii) the Liquidity Facilities;
(iii) the Pass Through Trust Agreements;
(iv) the Indenture and the Indenture Supplement covering the
Aircraft and dated the Closing Date;
(v) the Manufacturer's Consent;
(vi) a copy of the FAA ▇▇▇▇ of Sale; and
(vii) a copy of the Warranty ▇▇▇▇ of Sale.
(d) A Uniform Commercial Code financing statement or statements
covering the security interest created by the Indenture shall have been executed
and delivered by the Company, as debtor, and by the Loan Trustee, as secured
party, and such financing statement or statements shall have been duly filed in
all places necessary or desirable within the State of Delaware.
(e) Each Pass Through Trustee shall have received the following:
(i) a certificate dated the Closing Date of the Secretary or an
Assistant Secretary of the Company, certifying as to (A) a copy of the
resolutions of the Board of Directors of the Company or the executive
committee thereof duly authorizing the transactions contemplated hereby
and the execution, delivery and performance by the Company of this
Agreement and the Indenture and each other document required to be
executed and delivered by the Company in accordance with the provisions
hereof or thereof and (B) a copy of the certificate of incorporation and
by-laws of the Company, as in effect on the Closing Date;
(ii) a certificate or other evidence from the Secretary of State of
the State of Delaware, dated as of a date reasonably near the Closing
Date, as to the due incorporation and good standing of the Company in such
state;
(iii) an incumbency certificate of the Company as to the person or
persons authorized to execute and deliver this Agreement, the Indenture
and each other document to be executed by the Company in connection with
the transactions contemplated hereby and thereby, and the specimen
signatures of such person or persons; and
(iv) one or more certificates of the Loan Trustee and the
Subordination Agent certifying to the reasonable satisfaction of the Pass
Through Trustees as to the due authorization, execution, delivery and
performance by the Loan Trustee and the Subordination Agent of each of the
Operative Documents to which the Loan Trustee or the Subordination Agent
is or will be a party and any other documents to be executed by or on
behalf of the Loan Trustee or Subordination Agent in connection with the
transactions contemplated hereby or thereby.
(f) On the Closing Date, the following statements shall be correct:
(i) the representations and warranties herein of the Company are correct in all
material respects as though made on and as of such date, except to the extent
that such representations and warranties relate solely to an earlier date (in
which case such representations and warranties are correct on and as of such
earlier date) and (ii) no event has occurred and is continuing that constitutes
an Event of Default or an Event of Loss or would constitute an Event of Default
or Event of Loss but for the requirement that notice be given or time elapse or
both.
(g) Each Pass Through Trustee and the Loan Trustee shall have
received (i) an opinion addressed to it from the General Counsel or an Associate
General Counsel of the Company (or such other internal counsel to the Company as
shall be reasonably satisfactory to the Pass Through Trustees) substantially in
the form set forth in Exhibit A-1 and (ii) opinions addressed to it from
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ substantially in the forms set forth in Exhibits
A-2 and A-3.
(h) Each Pass Through Trustee and the Loan Trustee shall have
received an opinion addressed to it from ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for
State Street, the Loan Trustee and the Subordination Agent, substantially in the
form set forth in Exhibit B.
(i) Each Pass Through Trustee and the Loan Trustee shall have
received an opinion addressed to it from Daugherty, Fowler, Peregrin & ▇▇▇▇▇▇, A
Professional Corporation, special FAA counsel in Oklahoma City, Oklahoma,
substantially in the form set forth in Exhibit C.
(j) Each Pass Through Trustee and the Loan Trustee shall have
received a certificate or certificates signed by the chief financial or
accounting officer, any Senior Vice President, the Treasurer, any Vice President
or any Assistant Treasurer (or any other Responsible Officer) of the Company,
dated the Closing Date, certifying as to the correctness of each of the matters
stated in Section 3.01(f).
(k) Each Pass Through Trustee shall have received a certificate from
State Street in its individual capacity and as Loan Trustee and Subordination
Agent, as applicable, dated the Closing Date, signed by an authorized officer of
State Street in its individual capacity and as Loan Trustee and Subordination
Agent, as applicable, certifying for each such entity that no Loan Trustee Liens
or Other Party Liens attributable to it, as applicable, exist, and further
certifying as to the correctness of each of the matters stated in Section 5.01.
(l) Each Pass Through Trustee shall have received opinions addressed
to it from Pillsbury Winthrop LLC, special counsel for the Liquidity Provider,
substantially in the form set forth in Exhibit D-1, and from German in-house
counsel for the Liquidity Provider, substantially in the form set forth in
Exhibit D-2.
(m) The Loan Trustee shall have received an insurance report of an
independent insurance broker and the related certificates of insurance, each in
form and substance reasonably satisfactory to the Loan Trustee, as to the
compliance with the terms of Section 7.06 of the Indenture relating to insurance
with respect to the Aircraft.
(n) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental agency, nor
shall any order, judgment or decree have been issued or proposed to be issued by
any court or governmental agency at the time of the Closing to set aside,
restrain, enjoin or prevent the completion and consummation of this Agreement or
the transactions contemplated hereby.
(o) The Company shall have entered into the Underwriting Agreement,
the Pass Through Certificates shall have been issued and sold pursuant to the
Underwriting Agreement and the Underwriters shall have transferred to the Pass
Through Trustees in immediately available funds an amount at least equal to the
aggregate purchase price of the Equipment Notes to be purchased from the
Company.
(p) The Loan Trustee shall have received an executed copy of the
Manufacturer's Consent substantially in the form set forth in Exhibit E.
Promptly upon the recording of the Indenture (with the Indenture
Supplement attached) pursuant to the Transportation Code, the Company will cause
Daugherty, Fowler, Peregrin & ▇▇▇▇▇▇, A Professional Corporation, special FAA
counsel in Oklahoma City, Oklahoma to deliver to the Subordination Agent on
behalf of the Pass Through Trustees, to the Loan Trustee and to the Company an
opinion as to the due recording of such instrument and the lack of filing of any
intervening documents with respect to the Aircraft.
Section 3.02 Conditions Precedent to Obligations of the Company. The
obligation of the Company to issue and sell the Equipment Notes is subject to
the fulfillment (or waiver by the Company) prior to or on the Closing Date of
the following conditions precedent:
(a) No change shall have occurred after the date of this Agreement
in applicable law or regulations thereunder or interpretations thereof by
appropriate regulatory authorities or any court that would make it a violation
of law or governmental regulations for the Company to enter into any transaction
contemplated by the Operative Documents or the Pass Through Trust Agreements.
(b) The documents referred to in Section 3.01(c) shall have been
duly authorized, executed and delivered by the respective party or parties
thereto (other than the Company), shall be in full force and effect and executed
counterparts (or copies thereof where indicated) thereof shall have been
delivered to the Company, and the Company shall have received such documents and
evidence with respect to State Street, the Liquidity Provider, the Loan Trustee,
the Subordination Agent and each Pass Through Trustee as the Company may
reasonably request in order to establish the consummation of the transactions
contemplated by this Agreement, the taking of all corporate and other
proceedings in connection therewith and compliance with the conditions herein
set forth.
(c) The Indenture (with the Indenture Supplement covering the
Aircraft attached) shall have been duly filed for recordation (or shall be in
the process of being so duly filed for recordation) with the FAA pursuant to the
Transportation Code.
(d) On the Closing Date, the representations and warranties herein
of State Street, the Loan Trustee, the Subordination Agent and the Pass Through
Trustees shall be correct as though made on and as of such date, except to the
extent that such representations and warranties relate solely to an earlier date
(in which case such representations and warranties shall have been correct on
and as of such earlier date), and, insofar as such representations and
warranties concern State Street, the Loan Trustee, the Subordination Agent or
any Pass Through Trustee, such party shall have so certified to the Company.
(e) The Company shall have received each opinion referred to in
Subsections 3.01(h), 3.01(i) and 3.01(l), each such opinion (other than 3.01(l))
addressed to the Company or accompanied by a letter from the counsel rendering
such opinion authorizing the Company to rely on such opinion as if it were
addressed to the Company, and the certificates referred to in Subsections
3.01(e)(iv) and 3.01(k).
(f) The Company shall have received an opinion addressed to it from
▇▇▇▇▇▇▇ ▇▇▇▇ LLP, special counsel for the Pass Through Trustees, substantially
in the form set forth in Exhibit F.
(g) No action or proceeding shall have been instituted nor shall
governmental action be threatened before any court or governmental agency, nor
shall any order, judgment or decree have been issued or proposed to be issued by
any court or governmental agency at the time of the Closing to set aside,
restrain, enjoin or prevent the completion and consummation of this Agreement or
the transactions contemplated hereby.
(h) The Company shall have received a certificate from State Street
dated the Closing Date, signed by an authorized officer of State Street,
certifying for each Pass Through Trustee that no Other Party Liens attributable
to it exist and further certifying as to the correctness of each of the matters
stated in Section 5.01.
(i) The Company shall have been paid by the Pass Through Trustee for
each Pass Through Trust the aggregate original principal amount of the Equipment
Notes being issued to such Pass Through Trust as set forth on Schedule I
opposite the name of such Pass Through Trust.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND INDEMNITIES OF THE COMPANY
Section 4.01 Representations and Warranties of the Company. The
Company represents and warrants that:
(a) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware, is a
Certificated Air Carrier, is a Citizen of the United States, has the corporate
power and authority to own or hold under lease its properties and to enter into
and perform its obligations under the Operative Documents to which it is a party
and is duly qualified to do business as a foreign corporation in good standing
in each other jurisdiction in which the failure to so qualify would have a
material adverse effect on the consolidated financial condition of the Company
and its subsidiaries, considered as a whole, and its jurisdiction of
organization (as such term is used in Article 9 of the Uniform Commercial Code
as in effect in the State of Georgia) is Delaware.
(b) The execution, delivery and performance by the Company of this
Agreement and the other Operative Documents to which the Company is a party have
been duly authorized by all necessary corporate action on the part of the
Company, do not require any stockholder approval or approval or consent of any
trustee or holder of any indebtedness or obligations of the Company, except such
as have been duly obtained and are in full force and effect, and do not
contravene any law, governmental rule, regulation, judgment or order binding on
the Company or the certificate of incorporation or by-laws of the Company or
contravene or result in a breach of, or constitute a default under, or result in
the creation of any Lien (other than as permitted under the Indenture) upon the
property of the Company under, any material indenture, mortgage, contract or
other agreement to which the Company is a party or by which it or any of its
properties may be bound or affected.
(c) Neither the execution and delivery by the Company of this
Agreement and the other Operative Documents to which it is a party, nor the
consummation by the Company of any of the transactions contemplated hereby or
thereby, requires the authorization, consent or approval of, the giving of
notice to, the filing or registration with or the taking of any other action in
respect of, the Department of Transportation, the FAA or any other federal or
state governmental authority or agency, except for (i) the registration of the
Pass Through Certificates (other than the Class D Pass Through Certificates)
under the Securities Act of 1933, as amended, and under the securities laws of
any state in which the Pass Through Certificates may be offered for sale if the
laws of such state require such action, (ii) the qualification of the Pass
Through Trust Agreements under the Trust Indenture Act of 1939, as amended,
(iii) the orders, permits, waivers, exemptions, authorizations and approvals of
the regulatory authorities having jurisdiction over the operation of the
Aircraft by the Company required to be obtained on or prior to the Closing Date,
which orders, permits, waivers, exemptions, authorizations and approvals have
been duly obtained and are, or on the Closing Date will be, in full force and
effect, (iv) the filings referred to in Section 4.01(e) and (v) consents,
approvals, notices, registrations and other actions required to be obtained,
given, made or taken only after the date hereof.
(d) This Agreement and each other Operative Document to which the
Company is a party have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as the same may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the rights of creditors generally and by general principles of
equity and except, in the case of the Indenture, as limited by applicable laws
that may affect the remedies provided in the Indenture.
(e) Except for (i) the filing for recordation pursuant to the
Transportation Code of the Indenture (with the Indenture Supplement covering the
Aircraft attached) and (ii) with respect to the security interests created by
such documents, the filing of financing statements (and continuation statements
at periodic intervals) under the Uniform Commercial Code of Georgia, no further
filing or recording of any document is necessary under the laws of the United
States or any state thereof as of the Closing Date in order to establish and
perfect the security interest in the Aircraft created under the Indenture in
favor of the Loan Trustee as against the Company and any third parties in any
applicable jurisdiction in the United States.
(f) The Company is not an investment company or a company controlled
by an investment company within the meaning of the Investment Company Act of
1940, as amended.
(g) As of the Closing Date, (i) the Company has good title to the
Aircraft, free and clear of Liens other than Permitted Liens, (ii) the Aircraft
has been duly certificated by the FAA as to type and airworthiness in accordance
with the terms of the Indenture, (iii) the Indenture (with the Indenture
Supplement covering the Aircraft attached) has been duly filed for recordation
(or shall be in the process of being so duly filed for recordation) with the FAA
pursuant to the Transportation Code and (iv) the Aircraft is duly registered
with the FAA in the name of the Company.
Section 4.02 General Indemnity.
(a) Claims Defined. For the purposes of this Section 4.02, "Claims"
shall mean any and all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, costs or expenses of whatsoever kind and nature (whether
or not on the basis of negligence, strict or absolute liability or liability in
tort) that may be imposed on, incurred by, suffered by or asserted against an
Indemnitee, as defined herein, and, except as otherwise expressly provided in
this Section 4.02, shall include all reasonable out-of-pocket costs,
disbursements and expenses (including reasonable out-of-pocket legal fees and
expenses) of an Indemnitee actually incurred in connection therewith or related
thereto.
(b) Indemnitee Defined. For the purposes of this Section 4.02,
"Indemnitee" means (i) State Street and the Loan Trustee, (ii) so long as it
holds any Equipment Notes as agent and trustee of any Pass Through Trustee, the
Subordination Agent, (iii) so long as it is the holder of any Equipment Notes,
each Pass Through Trustee, (iv) the Liquidity Provider and (v) each of their
respective successors and permitted assigns in such capacities, agents,
servants, officers, employees and directors (the respective agents, servants,
officers, employees and directors of each of the foregoing Indemnitees, as
applicable, together with such Indemnitee, being referred to herein collectively
as the "Related Indemnitee Group" of such Indemnitee); provided that such
Persons shall, to the extent they are not signatories to this Agreement, have
expressly agreed in writing to be bound by the terms of this Section 4.02 prior
to, or concurrently with, the making of a Claim hereunder. If an Indemnitee
fails to comply with any duty or obligation under this Section 4.02 with respect
to any Claim, such Indemnitee shall not, to the extent such failure was
prejudicial to the Company, be entitled to any indemnity with respect to such
Claim under this Section 4.02. No holder of a Pass Through Certificate in its
capacity as such holder shall be an Indemnitee for purposes hereof.
(c) Claims Indemnified. Subject to the exclusions stated in
Subsection 4.02(d), the Company agrees to indemnify, protect, defend and hold
harmless on an After-Tax Basis each Indemnitee against Claims resulting from or
arising out of the sale, purchase, acceptance, non-acceptance or rejection of
the Aircraft under the Purchase Agreement or the ownership, possession, use,
non-use, substitution, airworthiness, control, maintenance, repair, operation,
registration, re-registration, condition, sale, lease, sublease, storage,
modification, alteration, return, transfer or other disposition of the Aircraft,
the Airframe, any Engine or any Part (including, without limitation, latent or
other defects, whether or not discoverable, and any claim for patent, trademark
or copyright infringement) by the Company, any Permitted Lessee or any other
Person. Without limiting the foregoing and subject to, and without duplication
of, the provisions of Section 6.01(a), the Company agrees to pay the reasonable
ongoing fees, and the reasonable out-of-pocket costs and expenses actually
incurred (including, without limitation, reasonable attorney's fees and
disbursements actually incurred and, to the extent payable as provided in the
Indenture, reasonable compensation and expenses of the Loan Trustee's agents
actually incurred), of the Loan Trustee in connection with the transactions
contemplated hereby.
(d) Claims Excluded. The following are excluded from the Company's
agreement to indemnify an Indemnitee under this Section 4.02:
(i) any Claim to the extent such Claim is attributable to acts or
events occurring after (x) the Equipment Notes have been paid in full or
(y) the transfer of possession of the Aircraft pursuant to Article IV of
the Indenture except to the extent that such Claim is attributable to acts
occurring in connection with the exercise of remedies pursuant to Section
4.02 of the Indenture following the occurrence and continuance of an Event
of Default;
(ii) any Claim to the extent such Claim is, or is attributable to, a
Tax;
(iii) any Claim to the extent such Claim is attributable to the
negligence or willful misconduct of such Indemnitee or such Indemnitee's
Related Indemnitee Group;
(iv) any Claim to the extent such Claim is attributable to the
noncompliance by such Indemnitee or such Indemnitee's Related Indemnitee
Group with any of the terms of, or any misrepresentation by an Indemnitee
or its Related Indemnitee Group contained in, this Agreement, any other
Operative Document or any Pass Through Document to which such Indemnitee
or any of such Related Indemnitee Group is a party or any agreement
relating hereto or thereto;
(v) any Claim to the extent such Claim constitutes a Permitted Lien
attributable to such Indemnitee;
(vi) any Claim to the extent such Claim is attributable to the
offer, sale, assignment, transfer, participation or other disposition
(whether voluntary or involuntary) by or on behalf of such Indemnitee or
its Related Indemnitee Group other than during the occurrence and
continuance of an Event of Default (provided that any such offer, sale,
assignment, transfer, participation or other disposition during the
occurrence and continuation of an Event of Default shall not be subject to
indemnification unless it is made in accordance with the Indenture and
applicable law) of any Equipment Note or Pass Through Certificate, all or
any part of such Indemnitee's interest in the Operative Documents or the
Pass Through Documents or any interest in the Collateral or any similar
security;
(vii) any Claim to the extent such Claim is attributable to (A) a
failure on the part of the Loan Trustee to distribute in accordance with
this Agreement or the Indenture any amounts received and distributable by
it hereunder or thereunder, (B) a failure on the part of the Subordination
Agent to distribute in accordance with the Intercreditor Agreement any
amounts received and distributable by it thereunder or (C) a failure on
the part of any Pass Through Trustee to distribute in accordance with the
Pass Through Trust Agreement to which it is a party any amounts received
and distributable by it thereunder;
(viii) any Claim to the extent such Claim is attributable to the
authorization or giving or withholding of any future amendments,
supplements, waivers or consents with respect to any Operative Document or
any Pass Through Document, other than such as have been requested by the
Company or that occur as the result of an Event of Default, or such as are
expressly required or contemplated by the provisions of the Operative
Documents or the Pass Through Documents;
(ix) any Claim to the extent such Claim is payable or borne by (a)
the Company pursuant to any indemnification, compensation or reimbursement
provision of any other Operative Document or any Pass Through Document or
(b) a Person other than the Company pursuant to any provision of any
Operative Document or any Pass Through Document;
(x) any Claim to the extent such Claim is an ordinary and usual
operating or overhead expense or not an out-of-pocket expense actually
incurred;
(xi) any Claim to the extent such Claim is incurred by or asserted
as a result of any "prohibited transaction" within the meaning of Section
406 of ERISA or Section 4975 of the Code;
(xii) any Claim to the extent such Claim is attributable to one or
more of the other aircraft financed through the offering of Pass Through
Certificates (in the event of doubt, any Claim shall be allocated between
the Aircraft and such other aircraft in the same proportion that the then
outstanding Equipment Notes bear to the then outstanding equipment notes
issued with respect to the other aircraft and held by the Pass Through
Trustees); and
(xiii) any Claim by an Indemnitee related to the status of such
Indemnitee as a passenger or shipper on any of the Company's aircraft.
(e) Insured Claims. In the case of any Claim indemnified by the
Company hereunder that is covered by a policy of insurance maintained by the
Company, each Indemnitee agrees to cooperate, at the Company's expense, with the
insurers in the exercise of their rights to investigate, defend or compromise
such Claim.
(f) Claims Procedure. An Indemnitee shall promptly notify the
Company of any Claim as to which indemnification is sought; provided that the
failure to provide such prompt notice shall not release the Company from any of
its obligations to indemnify hereunder, except to the extent that the Company is
prejudiced by such failure or the Company's indemnification obligations are
increased as a result of such failure. Such Indemnitee shall promptly submit to
the Company all additional information in such Indemnitee's possession to
substantiate such request for payment to the Company as the Company reasonably
requests. Subject to the rights of insurers under policies of insurance
maintained by the Company, the Company shall have the right, at its sole cost
and expense, to investigate, and the right in its sole discretion to defend or
compromise, any Claim for which indemnification is sought under this Section
4.02, and, at the Company's expense, the Indemnitee shall cooperate with all
reasonable requests of the Company in connection therewith. Such Indemnitee
shall not enter into a settlement or other compromise with respect to any Claim
without the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed, unless such Indemnitee waives its right to be
indemnified with respect to such Claim under this Section 4.02. Where the
Company or the insurers under a policy of insurance maintained by the Company
undertake the defense of an Indemnitee with respect to a Claim, no additional
legal fees or expenses of such Indemnitee in connection with the defense of such
Claim shall be indemnified hereunder unless such fees or expenses were incurred
at the written request of the Company or such insurers. Subject to the
requirements of any policy of insurance, an Indemnitee may participate at its
own expense in any judicial proceeding controlled by the Company pursuant to the
preceding provisions; provided that such party's participation does not, in the
opinion of the counsel appointed by the Company or its insurers to conduct such
proceedings, interfere with such control; and such participation shall not
constitute a waiver of the indemnification provided in this Section 4.02.
Notwithstanding anything to the contrary contained herein, the Company shall not
under any circumstances be liable for the fees and expenses of more than one
counsel for all Indemnitees.
(g) Subrogation. To the extent that a Claim indemnified by the
Company under this Section 4.02 is in fact paid in full by the Company or an
insurer under a policy of insurance maintained by the Company, the Company or
such insurer, as the case may be, shall, without any further action, be
subrogated to the rights and remedies of the Indemnitee on whose behalf such
Claim was paid with respect to the transaction or event giving rise to such
Claim. Such Indemnitee shall give such further assurances or agreements and
shall cooperate with the Company or such insurer, as the case may be, to permit
the Company or such insurer to pursue such rights and remedies, if any, to the
extent reasonably requested by the Company. So long as no Event of Default shall
have occurred and be continuing, if an Indemnitee receives any payment from any
party other than the Company or its insurers, in whole or in part, with respect
to any Claim paid by the Company or its insurers hereunder, it shall promptly
pay over to the Company the amount received (but not an amount in excess of the
amount the Company or any of its insurers has paid in respect of such Claim).
Any amount referred to in the preceding sentence that is payable to the Company
shall not be paid to the Company, or, if it has been previously paid directly to
the Company, shall not be retained by the Company, if at the time of such
payment an Event of Default shall have occurred and be continuing, but shall be
paid to and held by the Loan Trustee as security for the obligations of the
Company under this Agreement, the Indenture and the other Operative Documents,
and, if the Company agrees, shall be applied against the Company's obligations
hereunder and thereunder when and as they become due and payable and, at such
time as there shall not be continuing any such Event of Default, such amount, to
the extent not previously so applied against the Company's obligations, shall be
paid to the Company; provided that if any such amount has been so held by the
Loan Trustee as security for more than 90 days after any such Event of Default
shall have occurred, during which period (i) the Loan Trustee shall not have
been limited by operation of law or otherwise from exercising remedies under the
Indenture and (ii) the Loan Trustee shall not have exercised any remedy
available to it under Section 4.02 of the Indenture, then such amount, to the
extent not previously so applied against the Company's payment obligations,
shall be paid to the Company.
(h) No Guaranty. Nothing set forth in this Section 4.02 shall
constitute a guarantee by the Company that the Aircraft shall at any time have
any particular value, useful life or residual value.
(i) Payments; Interest. Any amount payable to any Indemnitee
pursuant to this Section 4.02 shall be paid within 30 days after receipt of a
written demand therefor from such Indemnitee accompanied by a written statement
describing in reasonable detail the Claims that are the subject of and basis for
such indemnity and the computation of the amount payable. Any payments made
pursuant to this Section 4.02 directly to an Indemnitee or to the Company, as
the case may be, shall be made in immediately available funds at such bank or to
such account as is specified by the payee in written directions to the payor or,
if no such directions shall have been given, by check of the payor payable to
the order of the payee and mailed to the payee by certified mail, return receipt
requested, postage prepaid to its address referred to in Section 7.01. To the
extent permitted by applicable law, interest at the Past Due Rate shall be paid,
on demand, on any amount or indemnity not paid when due pursuant to this Section
4.02 until the same shall be paid. Such interest shall be paid in the same
manner as the unpaid amount in respect of which such interest is due.
(j) Tax deduction or credit. If, by reason of any Claim payment made
to or for the account of an Indemnitee by the Company pursuant to this Section
4.02, such Indemnitee subsequently realizes a tax deduction or credit (including
foreign tax credit and any reduction in Taxes) not previously taken into account
in computing such payment, such Indemnitee shall promptly pay to the Company,
but only if the Company has made all payments then due and owing to such
Indemnitee under the Operative Documents, an amount equal to the sum of (I) the
actual reduction in Taxes realized by such Indemnitee which is attributable to
such deduction or credit, and (II) the actual reduction in Taxes realized by
such Indemnitee as a result of any payment made by such Indemnitee pursuant to
this sentence.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS OF STATE STREET
Section 5.01 Representations, Warranties and Covenants of State
Street. State Street, generally, and each of the Loan Trustee, the Subordination
Agent and the Pass Through Trustee as it relates to it, represents, warrants and
covenants that:
(a) State Street is a national banking association duly organized
and validly existing in good standing under the laws of the United States, is
eligible to be the Loan Trustee under Section 8.01(a) of the Indenture, will
promptly comply with Section 8.01(a) of the Indenture and has full power,
authority and legal right to enter into and perform its obligations under each
of the Operative Documents and the Pass Through Documents to which State Street,
the Loan Trustee, the Subordination Agent or any Pass Through Trustee is a party
and, in its capacity as Loan Trustee and Pass Through Trustee, respectively, to
authenticate the Equipment Notes and the Pass Through Certificates,
respectively. State Street is qualified to act as Loan Trustee under Section
8.01(c) of the Indenture.
(b) The execution, delivery and performance by State Street,
individually or in its capacity as Loan Trustee, Subordination Agent or Pass
Through Trustee, as the case may be, of this Agreement, each of the other
Operative Documents and each of the Pass Through Documents to which State
Street, the Loan Trustee, the Subordination Agent or any Pass Through Trustee is
a party, and the authentication of the Equipment Notes and the Pass Through
Certificates, respectively, to be delivered on the Closing Date, have been duly
authorized by all necessary action on the part of State Street, the Loan
Trustee, the Subordination Agent and each Pass Through Trustee, as the case may
be, and do not violate any law or regulation of the United States or of the
state of the United States in which State Street is located and which governs
the banking and trust powers of State Street or any order, writ, judgment or
decree of any court, arbitrator or governmental authority applicable to State
Street, the Loan Trustee, the Subordination Agent or any Pass Through Trustee or
any of their assets, will not violate any provision of the articles of
association or by-laws of State Street and will not violate any provision of, or
constitute a default under, any mortgage, indenture, contract, agreement or
undertaking to which any of State Street, the Loan Trustee, the Subordination
Agent or any Pass Through Trustee is a party or by which any of them or their
respective properties may be bound or affected.
(c) Neither the execution and delivery by State Street, individually
or in its capacity as Loan Trustee, Subordination Agent or Pass Through Trustee,
as the case may be, of this Agreement, any other Operative Document or any Pass
Through Document to which State Street, the Loan Trustee, the Subordination
Agent or any Pass Through Trustee is a party, nor the consummation by State
Street, the Loan Trustee, the Subordination Agent or any Pass Through Trustee of
any of the transactions contemplated hereby or thereby, requires the
authorization, consent or approval of, the giving of notice to, the filing or
registration with, or the taking of any other action in respect of, any
governmental authority or agency of the United States or the state of the United
States where State Street is located and regulating the banking and trust powers
of State Street.
(d) This Agreement, each other Operative Document and each Pass
Through Document to which State Street, the Loan Trustee, the Subordination
Agent or any Pass Through Trustee is a party have been duly executed and
delivered by State Street, individually and in its capacity as Loan Trustee,
Subordination Agent or Pass Through Trustee, as the case may be, and constitute
the legal, valid and binding obligations of State Street, the Loan Trustee, the
Subordination Agent and such Pass Through Trustee, as it shall be a party
thereto, enforceable against it in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the rights of creditors generally and by general
principles of equity.
(e) It unconditionally agrees with and for the benefit of the
parties to this Agreement that it will not directly or indirectly create, incur,
assume or suffer to exist any Loan Trustee Lien or Other Party Lien attributable
to it, and it agrees that it will, at its own cost and expense, promptly take
such action as may be necessary to discharge and satisfy in full any such Lien;
and it shall indemnify, protect, defend and hold harmless each Indemnitee and
the Company against Claims in any way resulting from or arising out of a breach
by it of its obligations under this Section 5.01(e).
(f) The Equipment Notes to be issued to the Subordination Agent
pursuant hereto are being acquired by it to be held under the Intercreditor
Agreement.
(g) Each of State Street, the Loan Trustee, the Subordination Agent
and each Pass Through Trustee agrees that it will not impose any lifting charge,
cable charge, remittance charge or any other charge or fee on any transfer by
the Company of funds to, through or by State Street, the Loan Trustee, the
Subordination Agent or such Pass Through Trustee pursuant to this Agreement, any
other Operative Document or any Pass Through Document, except as may be
otherwise agreed to in writing by the Company.
(h) Each of State Street, the Loan Trustee, the Subordination Agent
and any Pass Through Trustee agrees to be bound by the terms of Section 10.16 of
the Indenture.
(i) There are no Taxes payable by State Street, the Loan Trustee,
the Subordination Agent or any Pass Through Trustee imposed by the State of
Connecticut or any political subdivision or taxing authority thereof in
connection with the execution, delivery or performance by State Street, the Loan
Trustee, the Subordination Agent or any Pass Through Trustee of any Operative
Document or any Pass Through Document (other than franchise or other taxes based
on or measured by any fees or compensation received by any such Person for
services rendered in connection with the transactions contemplated by the
Operative Documents or the Pass Through Documents), and there are no Taxes
payable by any Pass Through Trustee imposed by the State of Connecticut or any
political subdivision thereof in connection with the acquisition, possession or
ownership by such Pass Through Trustee of any of the Equipment Notes (other than
franchise or other taxes based on or measured by any fees or compensation
received by such Pass Through Trustee for services rendered in connection with
the transactions contemplated by the Operative Documents or the Pass Through
Documents) and, assuming that the Pass Through Trusts will not be taxable for
Federal income tax purposes as corporations, but, rather, will be characterized
for such purposes as grantor trusts or partnerships, the Pass Through Trusts
will not be subject to any Taxes imposed by the State of Connecticut or any
political subdivision thereof.
(j) Except with the consent of the Company, which shall not be
unreasonably withheld, State Street will act as Pass Through Trustee solely
through its offices within the State of Connecticut, except for such services
that may be performed for it by various agents, but not directly by it, in other
states.
(k) There are no pending or, to its knowledge, threatened actions or
proceedings against State Street, the Loan Trustee, the Subordination Agent or
any Pass Through Trustee before any court or administrative agency which
individually or in the aggregate, if determined adversely to it, would
materially adversely affect the ability of State Street, the Loan Trustee, the
Subordination Agent or any Pass Through Trustee to perform its obligations under
any Operative Document or any Pass Through Document.
(l) The representations and warranties contained in Section 7.15 of
each Pass Through Trust Agreement are true, complete and correct as of the
Closing Date.
ARTICLE 6
OTHER COVENANTS AND AGREEMENTS
Section 6.01 Other Agreements. (a) The Company agrees promptly to
pay (without duplication of any other obligation the Company may have to pay
such amounts) (A) the initial and annual fees and (to the extent the Loan
Trustee is entitled to be reimbursed for its reasonable expenses) the reasonable
expenses of the Loan Trustee in connection with the transactions contemplated
hereby and (B) the following expenses incurred by the Loan Trustee, the
Subordination Agent and the Pass Through Trustees in connection with the
negotiation, preparation, execution and delivery of this Agreement, the other
Operative Documents and the other documents or instruments referred to herein or
therein:
(i) the reasonable fees, expenses and disbursements of (x) ▇▇▇▇▇▇▇
▇▇▇▇ LLP, special counsel for the Loan Trustee, the Subordination Agent
and the Pass Through Trustees and (y) Daugherty, Fowler, Peregrin &
▇▇▇▇▇▇, A Professional Corporation, special FAA counsel in Oklahoma City,
Oklahoma, in each case to the extent actually incurred; and
(ii) all reasonable expenses incurred in connection with printing
and document production or reproduction expenses, and in connection with
the filing of Uniform Commercial Code financing statements.
(b) The Loan Trustee, the Noteholders, the Subordination Agent and
each Pass Through Trustee agree to execute and deliver, at the Company's
expense, all such documents as the Company reasonably requests for the purpose
of continuing the registration of the Aircraft at the FAA in the Company's name.
In addition, each of the Loan Trustee, the Subordination Agent, each Pass
Through Trustee and any other Noteholder agrees, for the benefit of the Company,
to cooperate with the Company in effecting any foreign registration of the
Aircraft pursuant to Section 7.02(e) of the Indenture; provided that prior to
any such change in the country of registry of the Aircraft the conditions set
forth in Section 7.02(e) of the Indenture are met to the reasonable satisfaction
of, or waived by, the Loan Trustee.
(c) Each of State Street, the Loan Trustee, the Subordination Agent,
each Pass Through Trustee and any other Noteholder agrees that, unless an Event
of Default shall have occurred and be continuing, it shall not take any action
contrary to, or otherwise in any way interfere with or disturb (and then only in
accordance with the Indenture), the quiet enjoyment of the use and possession of
the Aircraft, the Airframe, any Engine or any Part by the Company or any
transferee of any interest in any thereof permitted under the Indenture.
(d) Each Noteholder, including, without limitation, the
Subordination Agent and each Pass Through Trustee, unconditionally agrees with
and for the benefit of the parties to this Agreement that it will not directly
or indirectly create, incur, assume or suffer to exist any Noteholder Liens, and
such Noteholder agrees that it will, at its own cost and expense, promptly take
such action as may be necessary to discharge and satisfy in full any such
Noteholder Lien; and each Noteholder hereby agrees to indemnify, protect, defend
and hold harmless each Indemnitee and the Company against Claims in any way
resulting from or arising out of a breach by it of its obligations under this
Section 6.01(d).
(e) By its acceptance of its Equipment Notes, each Noteholder (i)
unconditionally agrees for the benefit of the Company and the Loan Trustee to be
bound by and to perform and comply with all of the terms of such Equipment
Notes, the Indenture and this Agreement applicable to such Noteholder and (ii)
agrees that it will not transfer any Equipment Note (or any part thereof) to any
entity unless such entity makes (or is deemed to have made) a representation and
warranty as of the date of transfer that either no part of the funds to be used
by it for the purchase and holding of such Equipment Note (or any part thereof)
constitutes assets of any "employee benefit plan" or that such purchase and
holding will not result in a non-exempt prohibited transaction under Section
4975 of the Code and Section 406 of ERISA.
Section 6.02 Certain Covenants of the Company. The Company covenants
and agrees with the Loan Trustee as follows: (a) On and after the Closing, the
Company will cause to be done, executed, acknowledged and delivered such further
acts, conveyances and assurances as the Loan Trustee reasonably requests for
accomplishing the purposes of this Agreement and the other Operative Documents;
provided that any instrument or other document so executed by the Company will
not expand any obligations or limit any rights of the Company in respect of the
transactions contemplated by the Operative Documents.
(b) The Company will cause the Indenture (with the Indenture
Supplement covering the Aircraft attached) to be promptly filed and recorded, or
filed for recording, with the FAA to the extent permitted under the
Transportation Code and the rules and regulations of the FAA thereunder.
(c) The Company, at its expense, will take, or cause to be taken,
such action with respect to the recording, filing, re-recording and refiling of
the Indenture and any financing statements or other instruments as are necessary
to maintain, so long as the Indenture is in effect, the perfection of the
security interests created by the Indenture or will furnish the Loan Trustee
timely notice of the necessity of such action, together with such instruments,
in execution form, and such other information as may be required to enable the
Loan Trustee to take such action. In addition, the Company will pay any and all
recording, stamp and other similar taxes payable in the United States, and in
any other jurisdiction where the Aircraft is registered, in connection with the
execution, delivery, recording, filing, re-recording and refiling of the
Indenture or any such financing statements or other instruments. The Company
will notify the Loan Trustee of any change in its jurisdiction of organization
(as such term is used in Article 9 of the Uniform Commercial Code as in effect
in the State of Georgia) promptly after making such change or in any event
within the period of time necessary under applicable law to prevent the lapse of
perfection (absent refiling) of financing statements filed under the Operative
Documents.
(d) The Company shall at all times maintain its corporate existence
except as permitted by Section 6.02(e).
(e) The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease substantially all of its assets as an
entirety to any Person, unless:
(i) the successor or transferee entity shall, if and to the extent
required under Section 1110 in order that the Loan Trustee shall continue
to be entitled to any benefits of Section 1110 with respect to the
Aircraft, be a Citizen of the United States and a Certificated Air Carrier
and shall execute and deliver to the Loan Trustee an agreement containing
the express assumption by such successor or transferee entity of the due
and punctual performance and observance of each covenant and condition of
the Operative Documents to which the Company is a party to be performed or
observed by the Company;
(ii) immediately after giving effect to such transaction, no Event
of Default shall have occurred and be continuing; and
(iii) the Company shall have delivered to the Loan Trustee a
certificate signed by a Responsible Officer of the Company, and an opinion
of counsel (which may be internal counsel to the Company), each stating
that such consolidation, merger, conveyance, transfer or lease and the
assumption agreement mentioned in clause (i) above comply with this
Section 6.02(e) and that all conditions precedent herein provided relating
to such transaction have been complied with (except that such opinion need
not cover the matters referred to in clause (ii) above and may rely, as to
factual matters, on a certificate of an officer of the Company) and, in
the case of such opinion, that such assumption agreement has been duly
authorized, executed and delivered by such successor Person and is
enforceable against such successor Person in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally and by general principles of equity.
Upon any consolidation or merger, or any conveyance, transfer or
lease of substantially all of the assets of the Company as an entirety in
accordance with this Section 6.02(e), the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Agreement and the
other Operative Documents with the same effect as if such successor Person had
been named as the Company herein.
(f) The Company shall remain a Certificated Air Carrier for as long
as and to the extent required under Section 1110 in order that the Loan Trustee
shall be entitled to any of the benefits of Section 1110 with respect to the
Aircraft.
ARTICLE 7
MISCELLANEOUS
Section 7.01 Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices required or permitted under the terms
and provisions of this Agreement shall be in English and in writing, and any
such notice may be given by registered or certified United States mail, courier
service or facsimile or any other customary means of communication, and any such
notice shall be effective when delivered (or, if delivered by facsimile, upon
completion of transmission and confirmation by the sender (by a telephone call
to a representative of the recipient or by machine confirmation) that such
transmission was received) addressed as follows:
if to the Company, addressed to:
Delta Air Lines, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Director - Corporate Finance, Dept. 856
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to the General Counsel at the same address, but Dept. 971
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to State Street, the Loan Trustee, the Subordination Agent or any Pass
Through Trustee, addressed to:
State Street Bank And Trust Company of Connecticut,
National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or if to any subsequent Noteholder, addressed to such Noteholder at its address
set forth in the Equipment Note Register maintained pursuant to Section 2.07 of
the Indenture.
Any party, by notice to the other parties hereto, may designate
additional or different addresses for subsequent notices or communications.
Whenever the words "notice" or "notify" or similar words are used herein, they
mean the provision of formal notice as set forth in this Section 7.01. Section
7.02 Survival of Representations, Warranties, Indemnities, Covenants
and Agreements. Except as otherwise provided for herein, the representations,
warranties, indemnities, covenants and agreements of the Company, State Street,
the Loan Trustee, the Subordination Agent, each Pass Through Trustee and the
Noteholders provided for in this Agreement, and each of their obligations
hereunder, shall survive the making of the loans and the expiration or
termination (to the extent arising out of acts or events occurring prior to such
expiration) of any Operative Documents.
SECTION 7.03 GOVERNING LAW. THIS AGREEMENT HAS BEEN DELIVERED IN THE
STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 7.04 Severability. Any provision of this Agreement 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, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Section
7.05 No Oral Modifications or Continuing Waivers; Consents. Subject
to Section 9.03 of the Indenture, no terms or provisions of this Agreement may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which the enforcement of the change,
waiver, discharge or termination is sought; provided that no such change,
waiver, discharge or termination shall be effective unless a signed copy thereof
is delivered to the Loan Trustee. Each Pass Through Trustee and, by its
acceptance of an Equipment Note, each subsequent Noteholder covenants and agrees
that it shall not unreasonably withhold its consent to any consent of the Loan
Trustee requested by the Company under the terms of the Indenture.
Section 7.06 Effect of Headings and Table of Contents. The headings
of the various Articles and Sections herein and in the Table of Contents are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
Section 7.07 Successors and Assigns. All covenants, agreements,
representations and warranties in this Agreement by the Company, by State
Street, individually or as Loan Trustee, Subordination Agent or Pass Through
Trustee, or by any Noteholder, shall bind and inure to the benefit of and be
enforceable by the Company, and subject to the terms of Section 6.02(e), its
successors and permitted assigns, each Pass Through Trustee and any successor or
other trustee under the Pass Through Trust Agreement to which it is a party, the
Subordination Agent and its successor under the Intercreditor Agreement and the
Loan Trustee and its successor under the Indenture, whether so expressed or not.
Section 7.08 Benefits of Agreement. Nothing in this Agreement,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder, any benefit or any legal or equitable right, remedy
or claim under this Agreement, except as provided expressly herein. Section
7.09 Counterparts. This Agreement may be executed in any number of
counterparts (and each of the parties hereto shall not be required to execute
the same counterpart). Each counterpart of this Agreement including a signature
page or pages executed by each of the parties hereto shall be an original
counterpart of this Agreement, but all of such counterparts shall together
constitute one instrument.
Section 7.10 Submission to Jurisdiction. Each of the parties hereto,
to the extent it may do so under applicable law, for purposes hereof and of all
other Operative Documents hereby (a) irrevocably submits itself to the
non-exclusive jurisdiction of the courts of the State of New York sitting in the
City of New York and to the non-exclusive jurisdiction of the United States
District Court for the Southern District of New York, for the purposes of any
suit, action or other proceeding arising out of this Agreement, the subject
matter hereof or any of the transactions contemplated hereby brought by any
party or parties hereto, or their successors or permitted assigns and (b)
waives, and agrees not to assert, by way of motion, as a defense, or otherwise,
in any such suit, action or proceeding, that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that this Agreement or the subject matter hereof or
any of the transactions contemplated hereby may not be enforced in or by such
courts.
IN WITNESS WHEREOF, the parties hereto have caused this
Participation Agreement to be duly executed by their respective officers
thereunto duly authorized as of the date first above written.
DELTA AIR LINES, INC.
By:____________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Director - Treasury
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, as
Pass Through Trustee under each of the
Pass Through Trust Agreements
By:____________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
as Subordination Agent
By:____________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
as Loan Trustee
By:____________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
in its individual capacity as set
forth herein
By:____________________________________
Name:
Title:
SCHEDULE I to
PARTICIPATION AGREEMENT
EQUIPMENT NOTES,
PURCHASERS AND ORIGINAL PRINCIPAL AMOUNTS
ORIGINAL
DESCRIPTION OF INTEREST PRINCIPAL
PURCHASER EQUIPMENT NOTES MATURITY RATE AMOUNT
--------------------- ------------------- ------------------ -------- --------------
Delta Air Lines Series 2001-1A-1 March 18, 2011 6.619% $6,590,608.67
Pass Through Equipment Note
Trust ▇▇▇▇-▇▇-▇ ▇▇-▇▇▇-▇▇▇
▇▇▇▇▇ Air Lines Series 2001-1A-2 September 18, 2011 7.111% $13,427,058.00
Pass Through Equipment Note
Trust ▇▇▇▇-▇▇-▇ ▇▇-▇▇▇-▇▇▇
▇▇▇▇▇ Air Lines Series 2001-1B September 18, 2011 7.711% $4,758,156.18
Pass Through Equipment Note
Trust ▇▇▇▇-▇▇ ▇▇-▇▇-▇▇▇
▇▇▇▇▇ Air Lines Series 2001-1C September 18, 2006 7.299% $3,901,334.19
Pass Through Equipment Note
Trust 2001-1C EN-1C-001
Delta Air Lines Series 2001-1D September 18, 2006 6.950% $3,446,773.66
Pass Through Equipment Note
Trust 2001-1D EN-1D-001
SCHEDULE II to
PARTICIPATION AGREEMENT
TRUST SUPPLEMENTS
Trust Supplement No. 2001-1A-1, dated as of September 17, 2001,
between the Company and the Pass Through Trustee in respect of Delta Air Lines
Pass Through Trust 2001-1A-1.
Trust Supplement No. 2001-1A-2, dated as of September 17, 2001,
between the Company and the Pass Through Trustee in respect of Delta Air Lines
Pass Through Trust 2001-1A-2.
Trust Supplement No. 2001-1B, dated as of September 17, 2001,
between the Company and the Pass Through Trustee in respect of Delta Air Lines
Pass Through Trust 2001-1B.
Trust Supplement No. 2001-1C, dated as of September 17, 2001,
between the Company and the Pass Through Trustee in respect of Delta Air Lines
Pass Through Trust 2001-1C.
Trust Supplement No. 2001-1D, dated as of September 17, 2001,
between the Company and the Pass Through Trustee in respect of Delta Air Lines
Pass Through Trust 2001-1D.
EXHIBIT A-1 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
COUNSEL FOR THE COMPANY
[Intentionally Omitted]
EXHIBIT A-2 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL COUNSEL FOR THE COMPANY
[Intentionally Omitted]
EXHIBIT A-3 to
PARTICIPATION AGREEMENT
FORM OF ss. 1110 OPINION OF
SPECIAL COUNSEL FOR THE COMPANY
[Intentionally Omitted]
EXHIBIT B to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL COUNSEL FOR THE LOAN TRUSTEE,
THE SUBORDINATION AGENT AND STATE STREET
[Intentionally Omitted]
EXHIBIT C to
PARTICIPATION AGREEMENT
FORM OF OPINION OF
SPECIAL FAA COUNSEL
[Intentionally Omitted]
EXHIBIT D-1to
PARTICIPATION AGREEMENT
FORM OF OPINION OF SPECIAL
COUNSEL FOR THE LIQUIDITY PROVIDER
[Intentionally Omitted]
EXHIBIT D-2 to
PARTICIPATION AGREEMENT
FORM OF OPINION OF GERMAN IN-HOUSE
COUNSEL FOR THE LIQUIDITY PROVIDER
[Intentionally Omitted]
EXHIBIT E to
PARTICIPATION AGREEMENT
FORM OF MANUFACTURER'S CONSENT
[Intentionally Omitted]
EXHIBIT F TO
PARTICIPATION AGREEMENT
FORM OF OPINION
SPECIAL COUNSEL FOR THE PASS THROUGH TRUSTEES
[Intentionally Omitted]
Annex A to
Participation Agreement and
Indenture and Security Agreement
(N3731T)
DEFINITIONS
(N3731T)
"Additional Insureds" has the meaning specified in Section 7.06(a)
of the Indenture.
"After-Tax Basis" means that indemnity and compensation payments
required to be made on such basis will be supplemented by the Person paying the
base amount by that amount which, when added to such base amount, and after
deduction of all Federal, state, local and foreign Taxes required to be paid by
or on behalf of the payee with respect of the receipt or realization of any such
amounts, and after consideration of any current tax savings of such payee
resulting by way of any deduction, credit or other tax benefit attributable to
such base amount or Tax, shall net such payee the full amount of such base
amount.
"Agreement" and "Participation Agreement" mean that certain
Participation Agreement (N3731T), dated as of September 17, 2001, among the
Company, State Street, the Pass Through Trustee under each Pass Through Trust
Agreement, the Subordination Agent and the Loan Trustee, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its Terms.
"Aircraft" means the Airframe (or any Replacement Airframe
substituted therefor pursuant to Section 7.05 of the Indenture) together with
the two Engines described in the Indenture Supplement originally executed and
delivered under the Indenture (or any Replacement Engine that may from time to
time be substituted for any of such Engines pursuant to Section 7.04 or Section
7.05 of the Indenture), whether or not any of such initial or substituted
Engines is from time to time installed on such Airframe or installed on any
other airframe or on any other aircraft. The term "Aircraft" includes any
Replacement Aircraft.
"Airframe" means (a) the Boeing 737-832 aircraft (except (i) the
Engines or engines from time to time installed thereon and any and all Parts
related to such Engine or engines and (ii) items installed or incorporated in or
attached to such Boeing 737-832 aircraft from time to time that are excluded
from the definition of Parts (except Engines or engines)) specified in the
Indenture Supplement originally executed and delivered under the Indenture and
(b) any and all related Parts. The term "Airframe" includes any Replacement
Airframe that is substituted for the Airframe pursuant to Section 7.05 of the
Indenture. At such time as any Replacement Airframe is so substituted and the
Airframe for which such substitution is made is released from the Lien of the
Indenture, such replaced Airframe shall cease to be an Airframe under the
Indenture.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United
States Codess.ss.101 et seq., as amended, or any successor statutes thereto.
"Basic Pass Through Trust Agreement" means that certain Pass Through
Trust Agreement, dated as of November 16, 2000, between the Company and State
Street, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms (but does not include any Trust
Supplement).
"Bills of Sale" means the FAA ▇▇▇▇ of Sale and the Warranty ▇▇▇▇ of
Sale.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which commercial banks are required or authorized to close in New York,
New York, Atlanta, Georgia or the city and state in which the Loan Trustee
maintains its Corporate Trust Office or receives and disburses funds.
"Certificated Air Carrier" means a Citizen of the United States
holding an air carrier operating certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49 of the United States Code for
aircraft capable of carrying ten or more individuals or 6,000 pounds or more of
cargo or that otherwise is certified or registered to the extent required to
fall within the purview of Section 1110.
"Citizen of the United States" has the meaning specified for such
term in Section 40102(a)(15) of Title 49 of the United States Code or any
similar legislation of the United States enacted in substitution or replacement
therefor.
"Claim" has the meaning specified in Section 4.02(a) of the
Participation Agreement.
"Class D Pass Through Trust" means the Delta Air Lines Pass Through
Trust 2001-1D created pursuant to the Basic Pass Through Trust Agreement, as
supplemented by Trust Supplement No. 2001-1D, dated as of September 17, 2001
between the Company and State Street.
"Class D Pass Through Certificates" means the Pass Through
Certificates issued by the Class D Pass Through Trust.
"Class D Trustee" means the Pass Through Trustee under the Basic
Pass Through Trust Agreement, as supplemented by Trust Supplement No. 2001-1D,
dated as of September 17, 2001 between the Company and State Street.
"Closing" has the meaning specified in Section 2.03 of the
Participation Agreement.
"Closing Date" means the date of the closing of the transaction
contemplated by the Operative Documents.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning specified in the granting clause of the
Indenture.
"Company" means Delta Air Lines, Inc., and its successors and
permitted assigns.
"Compulsory Acquisition" means requisition of title or other
compulsory acquisition, capture, seizure, deprivation, confiscation or detention
for any reason of the Aircraft by any government that results in the loss of
title or use of the Aircraft by the Company (or any Permitted Lessee) for a
period in excess of 180 days, but shall exclude requisition for use or hire not
involving requisition of title.
"Confidential Information" has the meaning specified in Section
10.16 of the Indenture.
"Controlling Party" has the meaning specified in Section 2.06 of the
Intercreditor Agreement.
"Corporate Trust Office" means the Corporate Trust Division of the
Loan Trustee located at State Street Bank and Trust Company of Connecticut,
National Association, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square, Hartford, Connecticut,
06103, Attention: Corporate Trust Division, or such other office at which the
Loan Trustee's corporate trust business is administered that the Loan Trustee
specifies by notice to the Company.
"CRAF Program" means the Civil Reserve Air Fleet Program authorized
under 10 U.S.C. Section 9511 et seq. or any similar or substitute program under
the laws of the United States.
"Debt Rate" means, with respect to any Series, the rate per annum
specified for such Series under the heading "Interest Rate" in Schedule I to the
Indenture.
"Department of Transportation" means the United States Department of
Transportation and any agency or instrumentality of the United States government
succeeding to its functions.
"Direction" has the meaning specified in Section 2.16 of the
Indenture.
"Dollars" and "$" mean the lawful currency of the United States.
"Downgrade Event" means, with respect to any Series other than the
Series D Equipment Notes, the occurrence of the first of any of the following
events: (i) the downgrade of the long-term unsecured debt rating or the
long-term corporate credit rating of the Company after September 6, 2001 by
▇▇▇▇▇'▇ or S&P; (ii) the public announcement after September 6, 2001 by ▇▇▇▇▇'▇
or S&P that it has on review for downgrade (in the case of ▇▇▇▇▇'▇) or has
placed on credit watch with negative implications (in the case of S&P), its
rating of the long-term unsecured debt or the long-term corporate credit rating
of the Company; or (iii) with respect to such Series, the downgrade of the Pass
Through Certificates numerically and alphabetically corresponding to the
numerical and alphabetical designation of such Series after September 6, 2001 by
▇▇▇▇▇'▇ or S&P.
"Engine" means (a) each of the two CFM International, Inc.
CFM56-7B26 engines listed by manufacturer's serial number in the Indenture
Supplement originally executed and delivered under the Indenture, whether or not
from time to time installed on the Airframe or installed on any other airframe
or on any other aircraft and (b) any Replacement Engine substituted for an
Engine pursuant to Section 7.04 or 7.05 of the Indenture; together in each case
with any and all related Parts. At such time as a Replacement Engine is so
substituted and the Engine for which substitution is made is released from the
Lien of the Indenture, such replaced Engine shall cease to be an Engine under
the Indenture.
"Equipment Note" means and includes any Equipment Note originally
issued pursuant to Section 2.02 of the Indenture and any Equipment Note issued
in exchange therefor or replacement thereof pursuant to Section 2.07 or 2.08 of
the Indenture.
"Equipment Note Register" has the meaning specified in Section 2.07
of the Indenture.
"Equipment Note Registrar" has the meaning specified in Section 2.07
of the Indenture.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA as in effect at the date of
the Participation Agreement and any subsequent provisions of ERISA amendatory
thereof, supplemental thereto or substituted therefor.
"Event of Default" has the meaning specified in Section 4.01 of the
Indenture.
"Event of Loss" means, with respect to the Aircraft, Airframe or any
Engine, any of the following events with respect to such property:
(a) the loss of such property or of the use thereof due to
destruction, damage beyond repair or rendition of such property permanently
unfit for normal use for any reason whatsoever;
(b) any damage to such property which results in an insurance
settlement with respect to such property on the basis of a total loss, a
compromised total loss or a constructive total loss;
(c) the theft or disappearance of such property for a period in
excess of 180 days;
(d) the requisition for use of such property by any government
(other than a requisition for use by a Government or the government of the
country of registry of the Aircraft) that results in the loss of possession of
such property by the Company (or any Permitted Lessee) for a period in excess of
12 consecutive months;
(e) the operation or location of the Aircraft, while under
requisition for use by any government, in any area excluded from coverage by any
insurance policy in effect with respect to the Aircraft required by the terms of
Section 7.06 of the Indenture, unless the Company shall have obtained indemnity
or insurance in lieu thereof from such government;
(f) any Compulsory Acquisition;
(g) as a result of any law, rule, regulation, order or other action
by the FAA or other government of the country of registry, the use of the
Aircraft or Airframe in the normal business of air transportation is prohibited
by virtue of a condition affecting all aircraft of the same type for a period of
18 consecutive months, unless the Company is diligently carrying forward all
steps that are necessary or desirable to permit the normal use of the Aircraft
or Airframe or, in any event, if such use is prohibited for a period of three
consecutive years; and
(h) with respect to an Engine only, any divestiture of title to or
interest in an Engine or any event with respect to an Engine that is deemed to
be an Event of Loss with respect to such Engine pursuant to Section 7.02(a)(vii)
of the Indenture.
An Event of Loss with respect to the Aircraft shall be deemed to
have occurred if an Event of Loss occurs with respect to the Airframe unless the
Company elects to substitute a Replacement Airframe pursuant to Section
7.05(a)(i) of the Indenture.
"FAA" means the United States Federal Aviation Administration and
any agency or instrumentality of the United States government succeeding to its
functions.
"FAA ▇▇▇▇ of Sale" means the ▇▇▇▇ of sale for the Aircraft on AC
Form 8050-2 executed by the Manufacturer or an affiliate of the Manufacturer in
favor of the Company and recorded with the FAA.
"Federal Funds Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such rate
is not so published for any day that is a Business Day, the average of the
quotations for such day for such transactions received by State Street from
three Federal funds brokers of recognized standing selected by it.
"Government" means the government of any of Canada, France, Germany,
Japan, The Netherlands, Sweden, Switzerland, the United Kingdom or the United
States and any instrumentality or agency thereof.
"Indemnitee" has the meaning specified in Section 4.02(b) of the
Participation Agreement.
"Indenture" means that certain Indenture and Security Agreement
(N3731T), dated as of September 17, 2001, between the Company and the Loan
Trustee, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms, including supplementing by an
Indenture Supplement pursuant to the Indenture.
"Indenture Indemnitee" means (i) the Loan Trustee, (ii) State
Street, (iii) so long as it holds any Equipment Note as agent and trustee of any
Pass Through Trustee, the Subordination Agent, (iv) the Liquidity Provider and
(v) so long as it is the holder of any Equipment Notes, each Pass Through
Trustee and each of their respective directors, officers, employees, agents and
servants. No holder of a Pass Through Certificate in its capacity as such shall
be an Indenture Indemnitee.
"Indenture Supplement" means a supplement to the Indenture,
substantially in the form of Exhibit A to the Indenture, which particularly
describes the Aircraft, and any Replacement Airframe and or Replacement Engine
included in the property subject to the Lien of the Indenture.
"Intercreditor Agreement" means that certain Intercreditor
Agreement, dated as of the Closing Date, among the Pass Through Trustees, the
Liquidity Provider and the Subordination Agent, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Interests" has the meaning specified in Section 7.06(a) of the
Indenture.
"Lease" means any lease permitted by the terms of Section 7.02(a) of
the Indenture.
"Lien" means any mortgage, pledge, lien, encumbrance, lease,
sublease, sub-sublease or security interest.
"Liquidity Facilities" means the four Revolving Credit Agreements,
each dated as of the Closing Date, between the Subordination Agent, as borrower,
and the Liquidity Provider, and any replacements thereof, in each case as the
same may be amended or supplemented or otherwise modified from time to time in
accordance with its terms.
"Liquidity Provider" means Landesbank Hessen-Thuringen Girozentrale,
a public law banking institution organized under the laws of Germany, as
liquidity provider under each of the Liquidity Facilities, or any liquidity
provider under a replacement liquidity facility.
"Loan Amount" has the meaning specified in Section 7.06(b) of the
Indenture.
"Loan Trustee" has the meaning specified in the introductory
paragraph of the Indenture.
"Loan Trustee Liens" means any Lien attributable to State Street or
the Loan Trustee with respect to the Aircraft, any interest therein or any other
portion of the Collateral arising as a result of (i) claims against State Street
or the Loan Trustee not related to its interest in the Aircraft or the
administration of the Collateral pursuant to the Indenture, (ii) acts of State
Street or the Loan Trustee not permitted by, or the failure of State Street or
the Loan Trustee to take any action required by the Operative Documents or the
Pass Through Documents, (iii) claims against State Street or the Loan Trustee
relating to Taxes or Claims that are excluded from the indemnification provided
by Section 4.02 of the Participation Agreement pursuant to said Section 4.02 or
(iv) claims against State Street or the Loan Trustee arising out of the transfer
by any such party of all or any portion of its interest in the Aircraft, the
Collateral, the Operative Documents or the Pass Through Documents, except while
an Event of Default is continuing and prior to the time that the Loan Trustee
has received all amounts due to it pursuant to the Indenture.
"Loss Payment Date" has the meaning specified in Section 7.05(a) of
the Indenture.
"Majority in Interest of Noteholders" means, as of a particular date
of determination and subject to Section 2.16 of the Indenture, the holders of at
least a majority in aggregate unpaid principal amount of all Equipment Notes
outstanding as of such date (excluding any Equipment Notes held by the Company
or any affiliate thereof, it being understood that the Class D Trustee shall be
considered an affiliate of the Company as long as more than 50% in the aggregate
face amount of the Pass Through Certificates issued by the Class D Pass Through
Trust are held by an affiliate of the Company or the Class D Trustee is
otherwise under the control of such affiliate of the Company (unless all
Equipment Notes are held by the Company or any affiliate thereof)).
"Make-Whole Amount" means, with respect to any Equipment Note, the
amount (as determined by an independent investment banker selected by the
Company (and, following the occurrence and during the continuance of an Event of
Default, reasonably acceptable to the Loan Trustee)), if any, by which (i) the
present value of the remaining scheduled payments of principal and interest from
the redemption date to maturity of such Equipment Note computed by discounting
each such payment on a semiannual basis from its respective Payment Date
(assuming a 360-day year of twelve 30 day months) using a discount rate equal to
the Treasury Yield exceeds (ii) the outstanding principal amount of such
Equipment Note plus accrued but unpaid interest thereon. For purposes of
determining the Make-Whole Amount, "Treasury Yield" means, at the date of
determination, the interest rate (expressed as a semiannual equivalent and as a
decimal and, in the case of United States Treasury bills, converted to a bond
equivalent yield) determined to be the per annum rate equal to the semiannual
yield to maturity for United States Treasury securities maturing on the Average
Life Date and trading in the public securities market either as determined by
interpolation between the most recent weekly average yield to maturity for two
series of United States Treasury securities, trading in the public securities
markets, (A) one maturing as close as possible to, but earlier than, the Average
Life Date and (B) the other maturing as close as possible to, but later than,
the Average Life Date, in each case as published in the most recent H.15(519)
or, if a weekly average yield to maturity for United States Treasury securities
maturing on the Average Life Date is reported on the most recent H.15(519), such
weekly average yield to maturity as published in such H.15(519). "H.15(519)"
means the weekly statistical release designated as such, or any successor
publication, published by the Board of Governors of the Federal Reserve System.
The date of determination of a Make-Whole Amount shall be the third Business Day
prior to the applicable redemption date and the "most recent H.15(519)" means
the H.15(519) published prior to the close of business on the third Business Day
prior to the applicable redemption date. "Average Life Date" means, for each
Equipment Note to be redeemed, the date which follows the redemption date by a
period equal to the Remaining Weighted Average Life at the redemption date of
such Equipment Note. "Remaining Weighted Average Life" of an Equipment Note, at
the redemption date of such Equipment Note, means the number of days equal to
the quotient obtained by dividing: (i) the sum of the products obtained by
multiplying (A) the amount of each then remaining installment of principal,
including the payment due on the maturity date of such Equipment Note, by (B)
the number of days from and including the redemption date to but excluding the
scheduled payment date of such principal installment by (ii) the then unpaid
principal amount of such Equipment Note.
"Manufacturer" means The Boeing Company, a Delaware corporation, and
its successors and assigns.
"Manufacturer's Consent" means the Manufacturer's Consent and
Agreement to Assignment of Warranties, dated as of the Closing Date,
substantially in the form of Exhibit E to the Participation Agreement
"Noteholder" means any Person in whose name an Equipment Note is
registered on the Equipment Note Register (including, for so long as it is the
registered holder of any Equipment Notes, the Subordination Agent on behalf of
the Pass Through Trustees pursuant to the provisions of the Intercreditor
Agreement).
"Noteholder Liens" means any Lien attributable to any Noteholder on
or against the Aircraft, any interest herein or any portion of the Collateral,
arising out of any claim against such Noteholder that is not related to the
Operative Documents or Pass Through Documents, or out of any act or omission of
such Noteholder that is not related to the transactions contemplated by, or that
constitutes a breach by such Noteholder of its obligations under, the Operative
Documents or the Pass Through Documents.
"Operative Documents" means, collectively, the Participation
Agreement, the Indenture, each Indenture Supplement, the Manufacturer's Consent
and the Equipment Notes.
"Other Party Liens" means any Lien attributable to the Pass Through
Trustee (other than in its capacity as Noteholder), the Subordination Agent
(other than in its capacity as Noteholder) or the Liquidity Provider on or
against the Aircraft, any interest therein, or any portion of the Collateral
arising out of any claim against such party that is not related to the Operative
Documents or Pass Through Documents, or out of any act or omission of such party
that is not related to the transactions contemplated by, or that constitutes a
breach by such party of its obligations under, the Operative Documents or the
Pass Through Documents.
"Participation Agreement" has the meaning set forth under the
definition of "Agreement".
"Parts" means any and all appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment of whatever nature
(other than (a) complete Engines or engines, (b) any items leased by the Company
or any Permitted Lessee, (c) cargo containers, (d) components or systems
installed on or affixed to the Airframe that are used to provide individual
telecommunications or electronic entertainment to passengers aboard the
Aircraft, (e) medical and similar emergency equipment and (f) passenger service
items and equipment generally used in but not affixed to the Aircraft, such as
blankets, coffee pots, beverage and meal servicing carts, etc.), so long as the
same are incorporated or installed in or attached to the Airframe or any Engine
or so long as the same are subject to the Lien of the Indenture in accordance
with the terms of Section 7.04 thereof after removal from the Airframe or any
Engine.
"Pass Through Certificates" means the pass through certificates
issued by the Pass Through Trustees.
"Pass Through Documents" means the Pass Through Trust Agreements,
the Intercreditor Agreement and the Liquidity Facilities.
"Pass Through Trust" means each of the five separate grantor trusts
created pursuant to the Pass Through Trust Agreements to facilitate certain of
the transactions contemplated by the Operative Documents.
"Pass Through Trust Agreement" means each of the five separate Trust
Supplements together in each case with the Basic Pass Through Trust Agreement,
as the same may be amended, supplemented or otherwise modified from time to time
in accordance with its terms.
"Pass Through Trustee" has the meaning specified in the introductory
paragraph to the Participation Agreement.
"Pass Through Trustees" means, collectively, the Pass Through
Trustees under each Pass Through Trust Agreement.
"Past Due Rate" means, with respect to a particular Series, a rate
per annum equal to the applicable Debt Rate plus 1% and, in any case other than
with respect to a particular Series, the Debt Rate for the Series A-1 Equipment
Notes plus 1%.
"Payment Date" means, for any Equipment Note, each March 18 and
September 18, commencing with March 18, 2002.
"Payment Default" means the occurrence of an event that would give
rise to an Event of Default under Section 4.01(a) of the Indenture upon the
giving of notice or the passing of time or both.
"Permitted Investments" means each of (a) direct obligations of the
United States and agencies thereof; (b) obligations fully guaranteed by the
United States; (c) certificates of deposit issued by, or bankers' acceptances
of, or time deposits with, any bank, trust company or national banking
association incorporated or doing business under the laws of the United States
or one of the states thereof having combined capital and surplus and retained
earnings of at least $100,000,000 and having a rating of A, its equivalent or
better by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") or Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P") (or, if
neither such organization then rates such institutions, by any nationally
recognized rating organization in the United States); (d) commercial paper of
any holding company of a bank, trust company or national banking association
described in clause (c); (e) commercial paper of companies having a rating
assigned to such commercial paper by either Moody's or S&P (or, if neither such
organization then rates such commercial paper, by any nationally recognized
rating organization in the United States) equal to either of the two highest
ratings assigned by such organization; (f) Dollar-denominated certificates of
deposit issued by, or time deposits with, the European subsidiaries of (i) any
bank, trust company or national banking association described in clause (c), or
(ii) any other bank or financial institution described in clause (h) or (i)
below; (g) United States-issued Yankee certificates of deposit issued by, or
bankers' acceptances of, or commercial paper issued by, any bank having combined
capital and surplus and retained earnings of at least $100,000,000 and
headquartered in Canada, Japan, the United Kingdom, France, Germany, Switzerland
or The Netherlands and having a rating of A, its equivalent or better by Moody's
or S&P (or, if neither such organization then rates such institutions, by any
nationally recognized rating organization in the United States); (h)
Dollar-denominated time deposits with any Canadian bank having a combined
capital and surplus and retained earnings of at least $100,000,000 and having a
rating of A, its equivalent or better by Moody's or S&P (or, if neither such
organization then rates such institutions, by any nationally recognized rating
organization in the United States); (i) Canadian Treasury Bills fully hedged to
Dollars; (j) repurchase agreements with any financial institution having
combined capital and surplus and retained earnings of at least $100,000,000
collateralized by transfer of possession of any of the obligations described in
clauses (a) through (i) above; (k) bonds, notes or other obligations of any
state of the United States, or any political subdivision of any state, or any
agencies or other instrumentalities of any such state, including, but not
limited to, industrial development bonds, pollution control revenue bonds,
public power bonds, housing bonds, other revenue bonds or any general obligation
bonds, that, at the time of their purchase, such obligations are rated A, its
equivalent or better by Moody's or S&P (or, if neither such organization then
rates such obligations, by any nationally recognized rating organization in the
United States); (1) bonds or other debt instruments of any company, if such
bonds or other debt instruments, at the time of their purchase, are rated A, its
equivalent or better by Moody's or S&P (or, if neither such organization then
rates such obligations, by any nationally recognized rating organization in the
United States); (m) mortgage backed securities (i) guaranteed by the Federal
National Mortgage Association, the Federal Home Loan Mortgage Corporation or the
Government National Mortgage Association or rated AAA, its equivalent or better
by Moody's or S&P (or, if neither such organization then rates such obligations,
by any nationally recognized rating organization in the United States) or, if
unrated, deemed to be of a comparable quality by the Loan Trustee and (ii)
having an average life not to exceed 15 years as determined by standard industry
pricing practices presently in effect; (n) asset-backed securities rated A, its
equivalent or better by Moody's or S&P (or, if neither such organization then
rates such obligations, by any nationally recognized rating organization in the
United States) or, if unrated, deemed to be of a comparable quality by the Loan
Trustee; and (o) such other investments approved in writing by the Loan Trustee;
provided that, except in clause (m), the instruments described in the foregoing
clauses shall have a maturity of no more than six months from the date of
acquisition thereof. The bank acting as Pass Through Trustee or Loan Trustee is
hereby authorized, in making or disposing of any investment described herein, to
deal with itself (in its individual capacity) or with any one or more of its
affiliates, whether it or such affiliate is acting as an agent of the Pass
Through Trustee or the Loan Trustee or for any third person or dealing as
principal for its own account.
"Permitted Lessee" means any Person to whom the Company is permitted
to lease the Airframe or any Engine pursuant to Section 7.02(a) of the
Indenture.
"Permitted Lien" has the meaning specified in Section 7.01 of the
Indenture.
"Person" means any person, including any individual, corporation,
limited liability company, partnership, joint venture, association, joint-stock
company, trust, trustee, unincorporated organization or government or any agency
or political subdivision thereof.
"Purchase Agreement" means Purchase Agreement No. 2022, dated as of
October 21, 1997, which incorporates by reference the Aircraft General Terms
Agreement AGTA-DAL, dated as of October 21, 1997, between the Manufacturer and
the Company, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with its terms.
"Rating Agencies" has the meaning specified in the Intercreditor
Agreement.
"Related Indemnitee Group" has the meaning specified in Section
4.02(b) of the Participation Agreement.
"Replacement Aircraft" means the Aircraft of which a Replacement
Airframe is part.
"Replacement Airframe" means a Boeing 737-832 aircraft or a
comparable or improved model of the Manufacturer (except (a) Engines or engines
from time to time installed thereon and any and all Parts related to such Engine
or engines and (b) items excluded from the definition of Parts (except Engines
or engines)), that shall have been made subject to the Lien of the Indenture
pursuant to Section 7.05 thereof, together with all Parts relating to such
aircraft.
"Replacement Engine" means a CFM International, Inc. CFM56-7B26
engine (or an engine of the same or another manufacturer of a comparable or an
improved model and suitable for installation and use on the Airframe with the
other Engine (or any other Replacement Engine being substituted simultaneously
therewith)) that is made subject to the Lien of the Indenture pursuant to
Section 7.04 or Section 7.05 thereof, together with all Parts relating to such
engine.
"Responsible Officer" means, with respect to the Company, its
Chairman of the Board, its President, its Chief Operating Officer, any Executive
Vice President, any Senior Vice President, the Chief Financial Officer, any Vice
President, the Treasurer, the Controller or the Secretary.
"Section 1110" means Section 1110 of the Bankruptcy Code.
"Secured Obligations" has the meaning specified in Section 2.06 of
the Indenture.
"Series" means any series of Equipment Notes, including the Series
A-1 Equipment Notes, the Series A-2 Equipment Notes, the Series B Equipment
Notes, the Series C Equipment Notes or the Series D Equipment Notes.
"Series A-1 Equipment Notes" means Equipment Notes issued and
designated as "Series A-1 Equipment Notes" under the Indenture, in the original
principal amount and maturities and bearing interest as specified in Schedule I
to the Indenture under the heading "Series A-1 Equipment Notes."
"Series A-2 Equipment Notes" means Equipment Notes issued and
designated as "Series A-2 Equipment Notes" under the Indenture, in the original
principal amount and maturities and bearing interest as specified in Schedule I
to the Indenture under the heading "Series A-2 Equipment Notes."
"Series B Equipment Notes" means Equipment Notes issued and
designated as "Series B Equipment Notes" under the Indenture, in the original
principal amount and maturities and bearing interest as specified in Schedule I
to the Indenture under the heading "Series B Equipment Notes."
"Series C Equipment Notes" means Equipment Notes issued and
designated as "Series C Equipment Notes" under the Indenture, in the original
principal amount and maturities and bearing interest as specified in Schedule I
to the Indenture under the heading "Series C Equipment Notes."
"Series D Equipment Notes" means Equipment Notes issued and
designated as "Series D Equipment Notes" under the Indenture, in the original
principal amount and maturities and bearing interest as specified in Schedule I
to the Indenture under the heading "Series D Equipment Notes".
"State Street" has the meaning specified in the introductory
paragraph of the Participation Agreement.
"Subordination Agent" has the meaning specified in the introductory
paragraph of the Participation Agreement.
"Tax" and "Taxes" mean all governmental fees (including, without
limitation. license, filing and registration fees) and all taxes (including,
without limitation, franchise, excise, stamp, value added, income, gross
receipts, sales, use and property taxes), withholdings, assessments, levies,
imposts, duties or charges, of any nature whatsoever, together with any related
penalties, fines, additions to tax or interest thereon imposed, withheld, levied
or assessed by any country, taxing authority or governmental subdivision thereof
or therein or by any international authority, including any taxes imposed on any
Person as a result of such Person being required to collect and pay over
withholding taxes.
"Transportation Code" means that portion of Title 49 of the United
States Code comprising those provisions formerly referred to as the Federal
Aviation Act of 1958, as amended, or any subsequent legislation that amends,
supplements or supersedes such provisions.
"Trust Supplements" means those agreements supplemental to the Basic
Pass Through Trust Agreement referred to in Schedule II to the Participation
Agreement.
"Underwriters" means the several underwriters listed as such in the
Underwriting Agreement.
"Underwriting Agreement" means that certain Underwriting Agreement,
dated September 6, 2001, among the Company and the Underwriters.
"United States" means the United States of America.
"U.S. Government Obligations" means securities that are direct
obligations of the United States for the payment of which its full faith and
credit is pledged which are not callable or redeemable, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligations or a specific payment of interest on or
principal of any such U.S. Government Obligations held by such custodian for the
account of the holder of a depository receipt so long as such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligations or the specific payment of interest on or principal
of the U.S. Government Obligations evidenced by such depository receipt.
"Warranty ▇▇▇▇ of Sale" means the warranty (as to title) ▇▇▇▇ of
sale covering the Aircraft executed by the Manufacturer or an affiliate of the
Manufacturer in favor of the Company and specifically referring to each Engine,
as well as the Airframe, constituting a part of the Aircraft.
"Warranty Rights" means all right and interest of the Company in, to
and under Parts 1, 2, 3, 4 and 6 of the Product Assurance Document attached as
Exhibit C to the Aircraft General Terms Agreement AGTA-DAL, but only to the
extent the same relate to continuing rights of the Company in respect of any
warranty or indemnity, express or implied, pursuant to the Product Assurance
Document with respect to the Airframe, it being understood that the Warranty
Rights exclude any and all other right, title and interest of the Company in, to
and under the Purchase Agreement and that the Warranty Rights are subject to the
terms of the Manufacturer's Consent.