PARTICIPATION AGREEMENT [TN]
FINAL
|
CONFIDENTIAL:
Subject to Restrictions on Dissemination
Set
Forth in Section 8 of this
Agreement
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Dated
as
of [DD]
Among
CONTINENTAL
AIRLINES, INC.,
Lessee,
[OP],
Owner
Participant,
▇▇▇▇▇
FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
Not
in
its individual capacity
except
as
expressly provided herein,
but
solely as owner trustee,
Owner
Trustee and Lessor
WILMINGTON
TRUST COMPANY,
Not
in
its individual capacity
except
as
expressly provided herein,
but
solely as Mortgagee, Subordination Agent
under
the
Intercreditor Agreement, and Pass Through
Trustee
under the Pass Through Trust Agreement,
Mortgagee
and Loan Participant,
and
EMBRAER-EMPRESA
BRASILEIRA DE AERONÁUTICA S.A.
Airframe
Manufacturer
One
Embraer Model EMB-145 XR Aircraft
Bearing
Manufacturer’s Serial No. [MSN]
and
U.S.
Registration No. N[REG]
with
Two
▇▇▇▇▇▇▇ Model AE3007A1E Engines
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ANNEX,
SCHEDULES AND EXHIBITS
EXHIBIT
A - Opinion
of special counsel to Lessee
EXHIBIT
B - Opinion
of corporate counsel to Lessee
EXHIBIT
C-1 - Opinion
of corporate counsel to Airframe Manufacturer
EXHIBIT
C-2 - Opinion
of special counsel to Airframe Manufacturer
EXHIBIT
D - Opinion
of special counsel to Owner Trustee
EXHIBIT
E - Opinion
of special counsel to Mortgagee
EXHIBIT
F - Opinion
of special counsel to Owner Participant
EXHIBIT
G - Opinion
of special counsel in Oklahoma City, Oklahoma
EXHIBIT
H - Opinion
of special counsel to Seller
PARTICIPATION
AGREEMENT [TN], dated as of [DD] (this “Agreement”), among (a) CONTINENTAL
AIRLINES, INC., a Delaware corporation (“Lessee”), (b) [OP], a corporation
organized under the laws of the OP Jurisdiction (“Owner Participant”),
(c) ▇▇▇▇▇ FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity, except as expressly provided
herein, but solely as Owner Trustee (this and all other capitalized terms
used
but not defined herein shall have the respective meanings ascribed thereto
in
Section 1) (in its capacity as Owner Trustee, “Owner Trustee” or “Lessor”,
and in its individual capacity, “▇▇▇▇▇ Fargo”), (d) WILMINGTON TRUST
COMPANY, a Delaware banking corporation, not in its individual capacity,
except
as expressly provided herein, but solely as Mortgagee (in its capacity as
Mortgagee, “Mortgagee” and in its individual capacity, “WTC”),
(e) WILMINGTON TRUST COMPANY, not in its individual capacity, except as
expressly provided herein, but solely as Pass Through Trustee under the Pass
Through Trust Agreement (“Pass Through Trustee”), (f) WILMINGTON TRUST COMPANY,
not in its individual capacity, except as expressly provided herein, but
solely
as Subordination Agent under the Intercreditor Agreement (“Subordination
Agent”), and (g) EMBRAER-EMPRESA BRASILEIRA DE AERONÁUTICA S.A., a company
organized under the laws of Brazil (“Airframe Manufacturer”).
RECITALS
A.
Express
and Airframe Manufacturer have entered into the Purchase Agreement, pursuant
to
which, among other things, Airframe Manufacturer has agreed to manufacture
and
sell to Express and Express has agreed to purchase from Airframe Manufacturer
certain aircraft, including the Aircraft.
[B.
Prior
to
the date hereof, in connection with the interim financing of the Aircraft,
(i) certain of Express’ rights under the Purchase Agreement with respect to
the Aircraft were assigned to Lessor and (ii) the Aircraft was purchased by
Lessor, leased to Lessee pursuant to the Existing Lease and subleased to
Express
pursuant to the Existing Sublease.]1
[B.
On
the
Delivery Date, Express and Seller will enter into the Initial Purchase Agreement
Assignment and Seller and Owner Trustee will enter into the Purchase Agreement
Assignment, pursuant to which, among other things, Express’ right to purchase
the Aircraft from Airframe Manufacturer will be assigned to Seller and
reassigned to the Owner Trustee upon and subject to the terms and conditions
set
forth in the Purchase Agreement, the Initial Purchase Agreement Assignment
and
the Purchase Agreement Assignment.]2
C.
In
order
to effectuate the long-term financing of the Aircraft, the parties hereto
intend
that (i) the Owner Trustee issue, on a non-recourse basis, pursuant to the
Trust Indenture the Equipment Notes to the Pass Through Trustee, [(ii) the
Existing Lease be terminated and
1.
Delete for New Aircraft.
2.
Insert for New Aircraft.
replaced
with the Lease, and the Aircraft continue to be leased to Lessee and subleased
to Express]3 [(ii)
the
Owner Trustee will purchase the Aircraft from the Airframe Manufacturer
utilizing the Commitments and lease it to Lessee pursuant to the Lease and
the
Lessee will sublease the Aircraft to Express]4 and
(iii)
Owner Trustee grant a security interest to Mortgagee in the Aircraft and
the
Lease for the benefit of the Note Holders.
D.
The
parties hereto wish to set forth in this Agreement the terms and conditions
upon
and subject to which the aforesaid transactions shall be effected.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION
1. DEFINITIONS
AND CONSTRUCTION
Capitalized
terms used but not defined herein shall have the respective meanings set
forth
or incorporated by reference, and shall be construed and interpreted in the
manner described, in Annex A.
[SECTION
2. ISSUANCE
OF EQUIPMENT NOTES; TERMINATION OF OBLIGATION TO
PARTICIPATE
2.1 Issuance
of Equipment Notes
Subject
to the terms and conditions of this Agreement, on the Closing Date, the Pass
Through Trustee shall make a non-recourse secured loan to Owner Trustee to
finance, in part, the Owner Trustee’s payment of Lessor’s Cost in the amount in
Dollars equal to the Pass Through Trustee’s PTT Percentage multiplied by
Lessor’s Cost, such loan to be evidenced by one or more Equipment Notes, dated
the Closing Date, issued to the Subordination Agent as the registered holder
on
behalf of the Pass Through Trustee for the Pass Through Trust by Owner Trustee
in accordance with this Agreement and the Trust Indenture, in an aggregate
principal amount equal to the Commitment of the Pass Through
Trustee.
2.2
Termination
of Obligation to Participate
Notwithstanding
any other provision of this Agreement, if the Closing does not occur on or
before the Commitment Termination Date, the Commitment of the Loan Participant
and its obligation to participate in the payment of Lessor’s Cost shall expire
and be of no further force and effect; provided,
that
the liability of the Loan Participant that has defaulted in the payment of
its
Commitment shall not be released.]5
3.
Delete for New Aircraft.
4.
Insert for New Aircraft.
5.
Delete for New Aircraft.
[SECTION
3. TERMINATION
OF EXISTING FINANCING AGREEMENTS; COMMITMENT TO LEASE
AIRCRAFT
3.1
Termination
of Existing Financing Agreements
(a) The
Existing Lease and Existing Sublease for the Aircraft shall be terminated
in
order to be replaced by the Lease and the Express Sublease, and each of Lessor
and Lessee shall take such action to evidence such termination as Owner Trustee
or Mortgagee shall reasonably request, including execution and delivery of
a
termination agreement for the Existing Lease and Existing Sublease in form
and
substance reasonably acceptable to Owner Trustee and satisfactory for filing
with the FAA, and UCC-3 termination statements with respect to the termination
of the Existing Lease and Existing Sublease.
(b) The
Existing Participation Agreement shall be terminated, effective as of the
Closing, and the parties thereto shall have no further obligation thereunder
except for Sections 7, 10 and 11 thereof and for any breach of such Agreement
arising prior to the Closing.
(c) Lessor
shall refund to Lessee “Basic Rent” (as defined in the Existing Lease) paid in
advance by Lessee attributable to periods on and after the Closing Date
determined by multiplying such Basic Rent by a fraction, the numerator of
which
shall be the number of days remaining in the month in which the Closing Date
occurs (from and including the Closing Date) and the denominator of which
shall
be the total number of days in such month.
(d) Airframe
Manufacturer shall pay and discharge all applicable sales, use or similar
Taxes,
duties or fees assessed or levied by any federal, state, provincial or local
taxing authority as a result of the replacement of the existing financing
agreements with the Operative Agreements and the Express Sublease or issuance
of
the Equipment Notes contemplated by this Agreement. Owner Trustee and Lessee
will cooperate in order to minimize Taxes applicable to the termination of
the
existing financing agreements or issuance of the Equipment Notes contemplated
by
this Agreement.
3.2
Commitment
to Lease
Subject
to the terms and conditions of this Agreement, concurrently with the issuance
of
the Equipment Notes, Owner Trustee shall continue the lease of the Aircraft
to
Lessee, and Lessee shall continue the lease of the Aircraft from Owner Trustee,
under the Lease.]6
[SECTION
4. CLOSING;
PROCEDURE FOR PAYMENT; POSTPONEMENT OF SCHEDULED CLOSING
DATE
4.1
Closing
The
Closing shall occur at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other place as the
parties
shall agree, at the time specified pursuant to notice given in accordance
with
Section 1 of the Note Purchase Agreement.
6.
Delete for New Aircraft.
4.2
Payment
of Proceeds
(a) The
Loan
Participant agrees, subject to the terms and conditions of this Agreement,
to
make the Dollar amount of its Commitment available, by wire transfer of
immediately available funds to the account of WTC, ABA No. ▇▇▇▇▇▇▇▇▇, Account
No. [ ],
reference Continental Lease [TN], at or before 12:00 Noon, New York City
time,
on the Scheduled Closing Date. All such funds made available by the Loan
Participant to WTC shall, until payment thereof to Owner Trustee as provided
in
Section 4.2(c) or return thereof to the Loan Participant as provided in
Section 4.3, be held by WTC in trust for the benefit of the Loan
Participant, as the sole and exclusive property of the Loan Participant and
not
as part of the Trust Estate or the Trust Indenture Estate.
(b) Subject
to the satisfaction or waiver by the applicable party of the conditions
precedent set forth in Section 5, and simultaneously with the receipt by
the parties hereto of all amounts to be paid to them on the Closing Date
pursuant to this Section 4.2, Owner Trustee shall:
(i) execute
the Trust Indenture and the initial Trust Indenture Supplement and issue
the
Equipment Notes to the Subordination Agent in accordance with
Section 2.1(b);
(ii) lease
the
Aircraft to Lessee pursuant to the Lease; and
(iii) take
such
other action as may be required to be taken by the Owner Trustee on the Closing
Date by the terms of any Operative Agreement.
(c) Subject
to the satisfaction or waiver by the applicable party of the conditions
precedent set forth in Section 5, WTC shall pay to the Owner Trustee the
amounts
received from the Loan Participants pursuant to Section 4.2(a).
4.3
Postponement
of Scheduled Closing Date
If
for
any reason whatsoever the Closing is not consummated on the Scheduled Closing
Date, Airframe Manufacturer may by telephonic notice, given by 5:00 p.m.,
New
York City time (such telephonic notice to be promptly confirmed in writing
by
personal delivery or facsimile), on the Scheduled Closing Date to Lessee,
the
Loan Participant, Owner Trustee and Mortgagee, designate a Delayed Closing
Date,
in which case any funds made available by the Loan Participant shall be returned
on such Scheduled Closing Date and the Loan Participant shall comply with
its
obligations under Section 2.02(b) of the Trust Supplement.]7
7.
Delete for New Aircraft.
[SECTION
2. PARTICIPATION
IN LESSOR’S COST; ISSUANCE OF EQUIPMENT NOTES; TERMINATION OF OBLIGATION
TO
PARTICIPATE
2.1
Participation
in Lessor’s Cost
Subject
to the terms and conditions of this Agreement, on the Closing Date, Owner
Participant and the Pass Through Trustee shall participate in the payment
of
Lessor’s Cost as follows:
(a) Owner
Participant shall participate in the payment of Lessor’s Cost for the Aircraft
by making an equity investment in the beneficial ownership of the Aircraft
in
the amount in Dollars equal to Owner Participant’s Percentage multiplied by
Lessor’s Cost; and
(b) The
Pass
Through Trustee shall make a non-recourse secured loan to Owner Trustee to
finance, in part, the Owner Trustee’s payment of Lessor’s Cost in the amount in
Dollars equal to the Pass Through Trustee’s PTT Percentage multiplied by
Lessor’s Cost, such loan to be evidenced by one or more Equipment Notes, dated
the Closing Date, issued to the Subordination Agent as the registered holder
on
behalf of each Pass Through Trustee for the Pass Through Trust by Owner Trustee
in accordance with this Agreement and the Trust Indenture, in an aggregate
principal amount equal to the Commitment of the Pass Through
Trustee.
2.2
Nature
of Obligations of Participants
The
obligations hereunder of each Participant are several, and not joint, and
a
Participant shall have no obligation to make available to Owner Trustee any
portion of any amount not paid hereunder by any other Participant. The failure
by either Participant to perform its obligations hereunder shall not affect
the
obligations of Lessee toward the other Participant, except to the extent
provided in Section 5.4.
2.3
Termination
of Obligation to Participate
Notwithstanding
any other provision of this Agreement, if the Closing does not occur on or
before the Commitment Termination Date, the Commitment of each Participant
and
its obligation to participate in the payment of Lessor’s Cost shall expire and
be of no further force and effect; provided, that the liability of any
Participant that has defaulted in the payment of its Commitment shall not
be
released.]8
[SECTION
3. COMMITMENT
TO LEASE AIRCRAFT
Subject
to the terms and conditions of this Agreement, concurrently with the issuance
of
the Equipment Notes, Owner Trustee shall purchase and accept delivery of
the
Aircraft under and pursuant to the Purchase Agreement and the Purchase Agreement
Assignment, and
8.
Insert for New Aircraft.
thereupon
Owner Trustee shall lease the Aircraft to Lessee, and Lessee shall lease
the
Aircraft from Owner Trustee, under the Lease.]9
[SECTION
4. PROCEDURE
FOR PARTICIPATION IN PAYMENT OF LESSOR’S COST; POSTPONEMENT OF SCHEDULED
DELIVERY DATE
4.1
Closing
The
Closing shall occur at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other place as the parties
shall
agree at the time specified pursuant to notice given in accordance with Section
1 of the Note Purchase Agreement.
4.2
Payment
of Lessor’s Cost
(a) Each
Participant agrees, subject to the terms and conditions of this Agreement,
to
make the Dollar amount of its respective Commitment available, by wire transfer
of immediately available funds to the account of WTC, ABA No. ▇▇▇▇▇▇▇▇▇,
Account
No. [ ],
reference Continental Lease [TN], at or before 12:00 Noon, New York City
time,
on the Scheduled Closing Date. All such funds made available by each Participant
to WTC shall, until payment thereof to Airframe Manufacturer as provided
in
Section 4.2(b)(ii) or return thereof to the respective Participant as provided
in Section 4.3.2, be held by WTC in trust for the benefit of the respective
Participant, as the sole and exclusive property of the respective Participant
and not as part of the Trust Estate or the Trust Indenture Estate.
(b) Subject
to the satisfaction or waiver by the applicable party of the conditions
precedent set forth in Section 5, and simultaneously with the receipt by
the
parties hereto of all amounts to be paid to them on the Closing Date pursuant
to
this Section 4.2, Owner Trustee shall:
(i) purchase,
take title to, and accept delivery of, the Aircraft;
(ii) in
consideration of the transfer of title to the Aircraft to Owner Trustee,
direct
WTC to pay Lessor’s Cost, from the funds made available to WTC hereunder by the
Participants, to Airframe Manufacturer, by wire transfer of immediately
available funds to Airframe Manufacturer’s account set forth in Schedule
1;
(iii) execute
an application for registration of the Aircraft with the FAA and Lease
Supplement No. 1, in each case with respect to the Aircraft;
(iv) execute
the Trust Indenture and the initial Trust Indenture Supplement and issue
the
Equipment Notes to the Subordination Agent in accordance with Section
2.1(b);
(v) lease
the
Aircraft to Lessee, pursuant to the Lease; and
9.
Insert for New Aircraft.
(vi) take
such
other action as may be required to be taken by the Owner Trustee on the Closing
Date by the terms of any Operative Agreement.
4.3
Postponement
of Scheduled Closing Date
4.3.1
Postponement
If
for
any reason whatsoever the Closing is not consummated on the Scheduled Closing
Date, Airframe Manufacturer may, by telephonic notice, given by 5:00 p.m.,
New
York City time (such telephonic notice to be promptly confirmed in writing
by
personal delivery or facsimile), on the Scheduled Closing Date to Lessee,
each
Participant, Owner Trustee and Mortgagee, designate a Delayed Closing Date,
in
which case the Owner Participant will make its funds available to WTC on
the
Delayed Closing Date in accordance with Section 4.2(a), and the Loan
Participant shall comply with its obligations under Section [2.02(b)] of
the
Trust Supplement.
4.3.2
Return
of Funds
WTC
shall
promptly return to each Participant that makes funds available to it in
accordance with Section 4.2(a) such funds, if the Closing fails to occur
on the
Scheduled Delivery Date.]10
SECTION
5. CONDITIONS
PRECEDENT
5.1
Conditions
Precedent to Obligations of Participants
The
obligation of [each]11
[the
Loan]12 Participant
to make the Dollar amount of its Commitment available for payment as directed
by
the Owner Trustee on the Closing Date and of each Participant to take the
other
actions required by this Agreement to be taken by it at the Closing is subject
to satisfaction or waiver by each such Participant, at or prior to the Closing,
of the conditions precedent set forth below in this Section 5.1;
provided,
that it
shall not be a condition precedent to the obligation of any Participant that
any
document be produced or action taken that is to be produced or taken by such
Participant or by a Person within such Participant’s control; provided,
further,
that
Section 5.1.2(iii) [and (xv)]13
shall
not be conditions precedent to the obligation of Loan Participant, and
Section 5.1.5 shall not be a condition precedent to the obligation of Owner
Participant.
10.
Insert for New Aircraft.
11.
Insert for New Aircraft.
12.
Delete for New Aircraft.
13.
Delete for New Aircraft.
5.1.1
Notice
Such
Participant shall have received the notice described in Section 4.1 or, in
the case of a Delayed Closing Date, 4.3, when and as required thereby, or
shall
have waived such notice.
5.1.2
Delivery
of Documents
Such
Participant shall, except as noted below, have received executed counterparts
of
the following agreements, instruments, certificates or documents, and each
of
such counterparts (a) shall have been duly authorized, executed and
delivered by the respective party or parties thereto, (b) shall be
reasonably satisfactory in form and substance to such Participant and
(c) shall be in full force and effect:
(i) the
Lease; provided,
that
only Mortgagee shall receive the sole executed chattel paper original
thereof;
(ii) Lease
Supplement No. 1; provided,
that
only Mortgagee shall receive the sole executed chattel paper original
thereof;
(iii) the
Tax
Indemnity Agreement; provided,
that
only Owner Participant and Lessee shall receive copies of the Tax Indemnity
Agreement;
(iv) the
Trust
Agreement;
(v) the
Trust
Indenture;
(vi) the
initial Trust Indenture Supplement;
(vii) [the
Initial Purchase Agreement Assignment and]14 the
Purchase Agreement Assignment;
(viii) the
Consent and Agreement;
(ix) the
Equipment Notes dated the Closing Date; provided,
that
only the Subordination Agent shall receive the authenticated Equipment
Notes;
(x) an
excerpted copy of the Purchase Agreement to the extent relating to Airframe
Manufacturer’s warranties or related obligations or any right in the Purchase
Agreement assigned to Owner Trustee pursuant to the Purchase Agreement
Assignment; provided,
that
only Owner Trustee and Mortgagee shall receive copies of such agreements
(copies
of which may be inspected by Participants and their respective special counsel
on the Closing Date, but after the Closing Date such copies shall be retained
by
Owner Trustee and Mortgagee and may be inspected and reviewed by Owner
Participant or Loan Participant or their respective counsel if and only if
there
shall have occurred and be continuing a Lease Default or Lease Event of
Default);
14.
Insert for New Aircraft.
[(xi) the
OP
Guaranty;]15
(xii) the
Express Sublease;
(xiii) the
broker’s report and insurance certificates required by Section 11 of the
Lease;
[(xiv) termination
agreements with respect to the Existing Lease and the Existing Sublease and,
in
the case of Owner Participant and Lessee, the Existing Participation Agreement
and the “Tax Indemnity Agreement” as defined in the Existing Lease;]16
[(xv) the
Satisfaction and Discharge Agreement, dated as of the date of the Participation
Agreement, among the Airframe Manufacturer, Seller, Owner Participant and
Owner
Trustee;]17
[(xiv) the
Bills
of Sale;]18
[(xv) an
invoice from Seller to Owner Trustee in respect of the Aircraft;]19
(xvi) (A) a
copy of the Certificate of Incorporation and By-Laws of Lessee and resolutions
of the board of directors of Lessee and/or the executive committee thereof,
in
each case certified as of the Closing Date, by the Secretary or an Assistant
Secretary of Lessee, duly authorizing the execution, delivery and performance
by
Lessee of the Lessee Operative Agreements required to be executed and delivered
by Lessee on or prior to the Closing Date in accordance with the provisions
hereof and thereof; (B) an incumbency certificate of Lessee, Airframe
Manufacturer, Owner Participant, ▇▇▇▇▇ Fargo and WTC as to the person or
persons
authorized to execute and deliver the relevant Operative Agreements on behalf
of
such party; and (C) a copy of the Certificate of Incorporation or Articles
of Incorporation and By-Laws and general authorizing resolutions of the boards
of directors (or executive committees) or other satisfactory evidence of
authorization of Airframe Manufacturer, Owner Participant, ▇▇▇▇▇ Fargo and
WTC,
certified as of the Closing Date by the Secretary or an Assistant or Attesting
Secretary of Airframe Manufacturer, Owner Participant, ▇▇▇▇▇ Fargo and WTC,
respectively, which authorize the execution, delivery and performance by
Airframe Manufacturer, Owner Participant, ▇▇▇▇▇ Fargo and WTC, respectively,
of
each of the Operative Agreements to which it is a party, together with such
other documents and evidence with respect to it as Lessee or any Participant
may
reasonably request in order to establish the consummation of the
15.
Include if the OP is an Affiliate of Airframe Manufacturer.
16.
Delete for New Aircraft.
17.
Delete for New Aircraft.
18.
Insert for New Aircraft.
19.
Insert for New Aircraft.
transactions
contemplated by this Agreement and the taking of all corporate proceedings
in
connection therewith;
(xvii) an
Officer’s Certificate of Lessee, dated as of the Closing Date, stating that its
representations and warranties set forth in this Agreement are true and correct
as of the Closing Date (or, to the extent that any such representation and
warranty expressly relates to an earlier date, true and correct as of such
earlier date);
(xviii) an
Officer’s Certificate of ▇▇▇▇▇ Fargo, dated as of the Closing Date, stating that
its representations and warranties, in its individual capacity and as Owner
Trustee, set forth in this Agreement are true and correct as of the Closing
Date
(or, to the extent that any such representation and warranty expressly relates
to an earlier date, true and correct as of such earlier date);
(xix) an
Officer’s Certificate of Owner Participant, dated as of the Closing Date,
stating that its representations and warranties set forth in this Agreement
are
true and correct as of the Closing Date (or, to the extent that any such
representation and warranty expressly relates to an earlier date, true and
correct as of such earlier date);
(xx) an
Officer’s Certificate of WTC, dated as of the Closing Date, stating that its
representations and warranties in its individual capacity or as Mortgagee,
Pass
Through Trustee or Subordination Agent, as the case may be, set forth in
this
Agreement are true and correct as of the Closing Date (or, to the extent
that
any such representation and warranty expressly relates to an earlier date,
true
and correct as of such earlier date);
(xxi) an
Officer’s Certificate of Airframe Manufacturer, dated as of the Closing Date,
stating that its representations and warranties set forth in this Agreement
are
true and correct as of the Closing Date (or, to the extent that any such
representation and warranty expressly relates to an earlier date, true and
correct as of such earlier date);
[(xxii) an
appointment of authorized representatives by Owner Trustee, and an acceptance
thereof by such representatives;]20
(xxiii) a
copy of
the application for registration of the Aircraft with the FAA in the name
of
Owner Trustee;
(xxiv) the
Financing Statements;
(xxv) the
following opinions of counsel, in each case dated the Closing Date:
(A) an
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel to Lessee,
substantially in the form of Exhibit A;
(B) an
opinion of Lessee’s Legal Department, substantially in the form of
Exhibit B;
20.
Insert for New Lease.
(C) an
opinion of (x) corporate counsel to Airframe Manufacturer, substantially
in the
form of Exhibit C-1, and (y) ▇▇▇▇▇▇ ▇▇▇▇▇▇ Rosenman, special counsel
to Airframe Manufacturer, substantially in the form of
Exhibit C-2;
(D) an
opinion of Ray, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel to Owner Trustee,
substantially in the form of Exhibit D;
(E) an
opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special counsel to Mortgagee and
Loan Participant, substantially in the form of Exhibit E;
(F) an
opinion of special counsel to Owner Participant, substantially in the form
of
Exhibit F;
(G) an
opinion of ▇▇▇▇▇ ▇▇▇▇▇; & ▇▇▇▇▇▇, special counsel in Oklahoma City,
Oklahoma, substantially in the form of Exhibit G;
(H) an
opinion of Walkers, special counsel to Seller, substantially in the form
of
Exhibit H;
(xxvi) a
copy of
a current, valid Standard Certificate of Airworthiness for the Aircraft duly
issued by the FAA;
(xxvii) the
Participants and their respective counsel shall have received copies of such
documents and papers as such Participants may reasonably request, other than
(A) in the case of Loan Participant, copies of the Purchase Agreement,
provided that special counsel for Loan Participant may inspect the Purchase
Agreement in connection with the transactions contemplated hereby or as a
basis
for such counsel’s closing opinion, and (B) in the case of parties other
than Owner Participant and its special counsel, the Tax Indemnity
Agreement.
5.1.3
Other
Commitments
[Each
other]21
[The
Loan]22 Participant
shall have made available the Dollar amount of its Commitment in accordance
with
Section 4.
5.1.4
Violation
of Law
No
change
shall have occurred after the date of this Agreement in any applicable Law
that
makes it a violation of Law for (a) Lessee, any Participant, Subordination
Agent, Owner Trustee or Mortgagee to execute, deliver and perform the Operative
Agreements to which any of them is a party or (b) [any]23
[the
Loan]24 Participant
to make the Dollar amount of its
21.
Insert for New Aircraft.
22.
Delete for New Aircraft.
23.
Insert for New Aircraft.
Commitment
available or to acquire an Equipment Note or to realize the benefits of the
security afforded by the Trust Indenture.
5.1.5
Perfected
Security Interest
On
the
Closing Date, after giving effect to the filing of the FAA Filed Documents
and
the Financing Statements, Mortgagee shall have received a duly perfected
first
priority security interest in all of Owner Trustee’s right, title and interest
in the Aircraft and the Lease, subject only to Permitted Liens.
5.1.6
Representations,
Warranties and Covenants
The
representations and warranties of each other party to this Agreement made,
in
each case, in this Agreement and in any other Operative Agreement to which
it is
a party, shall be true and accurate in all material respects as of the Closing
Date (unless any such representation and warranty shall have been made with
reference to a specified date, in which case such representation and warranty
shall be true and accurate as of such specified date) and each other party
to
this Agreement shall have performed and observed, in all material respects,
all
of its covenants, obligations and agreements in this Agreement and in any
other
Operative Agreement to which it is a party to be observed or performed by
it as
of the Closing Date.
5.1.7
No
Event of Default
On
the
Closing Date, no event shall have occurred and be continuing, or would result
from the mortgage or lease of the Aircraft, which constitutes a Lease Default
or
Lease Event of Default, or an Indenture Default or Indenture Event of
Default.
5.1.8
No
Event of Loss
On
the
Closing Date, no Event of Loss with respect to the Airframe or any Engine
shall
have occurred and no circumstance, condition, act or event that, with the
giving
of notice or lapse of time or both, would give rise to or constitute an Event
of
Loss with respect to the Airframe or any Engine shall have
occurred.
5.1.9
Title
Owner
Trustee shall have good title to the Aircraft [(subject to filing and
recordation of the FAA ▇▇▇▇ of Sale with the FAA)]25,
free
and clear of Liens, except (a) the rights of Lessee under the Lease and
Lease Supplement No. 1, (b) the Lien created by the Trust Indenture and the
initial Trust Indenture Supplement and (c) other Permitted
Liens.
24.
Delete for New Aircraft.
25.
Insert for New Aircraft.
5.1.10
Certification
The
Aircraft shall have been duly certificated by the FAA as to type, and an
export
certificate of airworthiness shall have been issued by the Brazilian aviation
authority.
5.1.11
Section
1110
Owner
Trustee, as lessor under the Lease (and Mortgagee, as assignee of Owner Trustee
under the Trust Indenture), shall be entitled to the benefits of
Section 1110 (as currently in effect) with respect to the right to take
possession of the Airframe and Engines and to enforce any of its other rights
or
remedies as provided in the Lease in the event of a case under Chapter 11
of the Bankruptcy Code in which Lessee is a debtor.
5.1.12
Filing
On
the
Closing Date (a) the FAA Filed Documents shall have been duly filed for
recordation (or shall be in the process of being so duly filed for recordation)
with the FAA in accordance with the Act and (b) each Financing Statement
shall have been duly filed (or shall be in the process of being so duly filed)
in the appropriate jurisdiction.
5.1.13
No
Proceedings
No
action
or proceeding shall have been instituted, nor shall any action be threatened
in
writing, before any Government Entity, nor shall any order, judgment or decree
have been issued or proposed to be issued by any Government Entity, to set
aside, restrain, enjoin or prevent the completion and consummation of this
Agreement or any other Operative Agreement or the transactions contemplated
hereby or thereby.
5.1.14
Governmental
Action
All
appropriate action required to have been taken prior to the Closing Date
by the
FAA, or any governmental or political agency, subdivision or instrumentality
of
the United States, in connection with the transactions contemplated by this
Agreement shall have been taken, and all orders, permits, waivers,
authorizations, exemptions and approvals of such entities required to be
in
effect on the Closing Date in connection with the transactions contemplated
by
this Agreement shall have been issued.
5.2
Conditions
Precedent to Obligations of Owner Trustee
The
obligation of Owner Trustee to execute and deliver the Equipment Notes on
the
Closing Date is subject to satisfaction or waiver by Owner Trustee, at or
prior
to the Closing, of the conditions precedent set forth below in this Section
5.2.
5.2.1
Notice
Owner
Trustee shall have received the notice described in Section 4.1 or, in the
case of a Delayed Closing Date, 4.3, when and as required thereby, or shall
have
waived such notice.
5.2.2
Documents
Executed
originals of the agreements, instruments, certificates or documents described
in
Section 5.1.2 shall have been received by Owner Trustee, except as
specifically provided therein, unless the failure to receive any such agreement,
instrument, certificate or document is the result of any action or inaction
by
Owner Trustee.
5.2.3
Other
Conditions Precedent
Each
of
the conditions set forth in Sections 5.1.4, 5.1.6, 5.1.7 and 5.1.11 shall
have been satisfied unless the failure of any such condition to be satisfied
is
the result of any action or inaction by Owner Trustee.
5.3
Conditions
Precedent to Obligations of Mortgagee
The
obligation of Mortgagee to authenticate the Equipment Notes on the Closing
Date
is subject to the satisfaction or waiver by Mortgagee, at or prior to the
Closing, of the conditions precedent set forth below in this Section
5.3.
5.3.1
Notice
Mortgagee
shall have received the notice described in Section 4.1 or, in the case of
a Delayed Closing Date, 4.3, when and as required thereby, or shall have
waived
such notice.
5.3.2
Documents
Executed
originals of the agreements, instruments, certificates or documents described
in
Section 5.1.2 shall have been received by Mortgagee, except as specifically
provided therein, unless the failure to receive any such agreement, instrument,
certificate or document is the result of any action or inaction by
Mortgagee.
5.3.3
Other
Conditions Precedent
Each
of
the conditions set forth in Sections 5.1.4, 5.1.6, 5.1.7 and 5.1.11 shall
have been satisfied unless the failure of any such condition to be satisfied
is
the result of any action or inaction by Mortgagee.
5.4
Conditions
Precedent to Obligations of Lessee
The
obligation of Lessee to lease the Aircraft on the Closing Date and to take
the
other actions required by this Agreement to be taken by it at the Closing
is
subject to the satisfaction or waiver by Lessee, at or prior to the Closing,
of
the conditions precedent set forth below in this Section 5.4.
5.4.1
Documents
Executed
originals of the agreements, instruments, certificates or documents described
in
Section 5.1.2 shall have been received by Lessee, except as specifically
provided therein, and
shall
be
satisfactory to Lessee, unless the failure to receive any such agreement,
instrument, certificate or document is the result of any action or inaction
by
Lessee.
5.4.2
Sales
Tax
Lessee
shall be satisfied that no sales, use, value added, goods and services or
like
tax, and no stamp tax duty, is payable with respect to the transactions to
occur
at the Closing pursuant to this Agreement to the extent that Lessee has
liability therefor under Section 9.3.
5.4.3
Other
Conditions Precedent
Each
of
the conditions set forth in Sections 5.1.3, 5.1.4, 5.1.6, 5.1.7 (as to
Indenture Defaults or Indenture Events of Default not constituting Lease
Defaults or Lease Events of Default, respectively), 5.1.8, 5.1.9, 5.1.10,
5.1.11, 5.1.12, 5.1.13 and 5.1.14 shall have been satisfied or waived by
Lessee,
unless the failure of any such condition to be satisfied is the result of
any
action or inaction by Lessee.
5.5
Post-Registration
Opinion
Promptly
upon the registration of the Aircraft and the recordation of the FAA Filed
Documents pursuant to the Act, Airframe Manufacturer will cause ▇▇▇▇▇ ▇▇▇▇▇;
& ▇▇▇▇▇▇, special counsel in Oklahoma City, Oklahoma, to deliver to Lessee,
each Participant, Owner Trustee and Mortgagee a favorable opinion or opinions
addressed to each of them with respect to such registration and
recordation.
SECTION
6. REPRESENTATIONS
AND WARRANTIES
6.1
Lessee’s
Representations and Warranties
Lessee
represents and warrants to each Participant, Airframe Manufacturer,
Subordination Agent, Owner Trustee and Mortgagee that:
6.1.1
Organization;
Qualification
Lessee
is
a corporation duly incorporated, validly existing and in good standing under
the
Laws of the State of Delaware and has the corporate power and authority to
conduct the business in which it is currently engaged and to own or hold
under
lease its properties and to enter into and perform its obligations under
the
Lessee Operative Agreements. Lessee is duly qualified to do business as a
foreign corporation in good standing in each jurisdiction in which the nature
and extent of the business conducted by it, or the ownership of its properties,
requires such qualification, except where the failure to be so qualified
would
not give rise to a Material Adverse Change to Lessee.
6.1.2
Corporate
Authorization
Lessee
has taken, or caused to be taken, all necessary corporate action (including,
without limitation, the obtaining of any consent or approval of stockholders
required by its Certificate of
Incorporation
or By-Laws) to authorize the execution and delivery of each of the Lessee
Operative Agreements, and the performance of its obligations
thereunder.
6.1.3
No
Violation
The
execution and delivery by Lessee of the Lessee Operative Agreements, the
performance by Lessee of its obligations thereunder and the consummation
by
Lessee on the Closing Date of the transactions contemplated thereby, do not
and
will not (a) violate any provision of the Certificate of Incorporation or
By-Laws of Lessee, (b) violate any Law applicable to or binding on Lessee
or (c) violate or constitute any default under (other than any violation or
default that would not result in a Material Adverse Change to Lessee), or
result
in the creation of any Lien (other than as permitted under the Lease) upon
the
Aircraft under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, lease, loan or other material agreement, instrument
or document to which Lessee is a party or by which Lessee or any of its
properties is bound.
6.1.4
Approvals
The
execution and delivery by Lessee of the Lessee Operative Agreements, the
performance by Lessee of its obligations thereunder and the consummation
by
Lessee on the Closing Date of the transactions contemplated thereby do not
and
will not require the consent or approval of, or the giving of notice to,
or the
registration with, or the recording or filing of any documents with, or the
taking of any other action in respect of, (a) any trustee or other holder
of any Debt of Lessee and (b) any Government Entity, other than the filing
of (x) the FAA Filed Documents and the Financing Statements (and
continuation statements periodically) and (y) filings, recordings, notices
or other ministerial actions pursuant to any routine recording, contractual
or
regulatory requirements applicable to it.
6.1.5
Valid
and Binding Agreements
The
Lessee Operative Agreements have been duly authorized, executed and delivered
by
Lessee and, assuming the due authorization, execution and delivery thereof
by
the other party or parties thereto, constitute the legal, valid and binding
obligations of Lessee and are enforceable against Lessee in accordance with
the
respective terms thereof, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar Laws affecting the rights of creditors generally and general principles
of equity, whether considered in a proceeding at law or in equity.
6.1.6
Litigation
Except
as
set forth in Lessee’s most recent Annual Report on Form 10-K, as amended,
filed by Lessee with the SEC on or prior to the Closing Date, or in any
Quarterly Report on Form 10-Q or Current Report on Form 8-K (or any
amendment thereof) filed by Lessee with the SEC subsequent to such Form 10-K
and
on or prior to the Closing Date, no action, claim or proceeding is now pending
or, to the Actual Knowledge of Lessee, threatened, against Lessee, before
any
court, governmental body, arbitration board, tribunal or administrative agency,
which is reasonably likely to be determined adversely to Lessee and if
determined adversely to Lessee would result in a Material Adverse
Change.
6.1.7
Financial
Condition
The
audited consolidated balance sheet of Lessee with respect to Lessee’s most
recent fiscal year included in Lessee’s most recent Annual Report on
Form 10-K, as amended, filed by Lessee with the SEC, and the related
consolidated statements of operations and cash flows for the period then
ended
have been prepared in accordance with GAAP and fairly present in all material
respects the financial condition of Lessee and its consolidated subsidiaries
as
of such date and the results of its operations and cash flows for such period,
and since the date of such balance sheet, there has been no material adverse
change in such financial condition or operations of Lessee, except for matters
disclosed in (a) the financial statements referred to above or (b) any
subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K (or
any
amendment thereof) filed by Lessee with the SEC on or prior to the date
hereof.
6.1.8
Registration
and Recordation
Except
for (a) the registration of the Aircraft with the FAA pursuant to the Act
in the name of Owner Trustee, (b) the filing for recordation (and
recordation) of the FAA Filed Documents, (c) the filing of the Financing
Statements (and continuation statements relating thereto at periodic intervals),
(d) the taking of possession and retention by Mortgagee of the original
counterparts of the Lease and Lease Supplement No. 1 and (e) the affixation
of the nameplates referred to in Section 7.1.3 of the Lease, no further
action, including any filing or recording of any document (including any
financing statement in respect thereof under Article 9 of the UCC) is necessary
in order to establish and perfect the right, title or interest of Owner Trustee,
and the Mortgagee’s security interest, in the Aircraft and the Lease, as against
Lessee and any other Person, in each case, in any applicable jurisdiction
in the
United States.
6.1.9
Location
Lessee’s
location (as such term is used in Section 9-307 of the UCC) is
Delaware.
6.1.10
No
Default
No
event
which, if the Aircraft were subject to the Lease, constitutes a Lease Event
of
Default has occurred and is continuing.
6.1.11
No
Event of Loss
No
Event
of Loss has occurred with respect to the Airframe or any Engine, and, to
the
Actual Knowledge of Lessee, no circumstance, condition, act or event has
occurred that, with the giving of notice or lapse of time or both gives rise
to
or constitutes an Event of Loss with respect to the Airframe or any
Engine.
6.1.12
Compliance
With Laws
(a) Lessee
is
a Citizen of the United States and a U.S. Air Carrier.
(b) Lessee
holds all licenses, permits and franchises from the appropriate Government
Entities necessary to authorize Lessee to lawfully engage in air transportation
and to
carry
on
scheduled commercial passenger service as currently conducted, except where
the
failure to so hold any such license, permit or franchise would not give rise
to
a Material Adverse Change to Lessee.
(c) Lessee
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.
6.1.13
Securities
Laws
Neither
Lessee nor any person authorized to act on its behalf has directly or indirectly
offered any beneficial interest or Security relating to the ownership of
the
Aircraft or the Lease or any interest in the Trust Estate and Trust Agreement,
or any of the Equipment Notes or any other interest in or Security under
the
Trust Indenture, for sale to, or solicited any offer to acquire any such
interest or Security from, or has sold any such interest or Security to,
any
person in violation of the Securities Act.
6.1.14
Broker’s
Fees
No
Person
acting on behalf of Lessee is or will be entitled to any broker’s fee,
commission or finder’s fee in connection with the Transactions.
6.1.15
Section
1110
Owner
Trustee, as lessor under the Lease (and Mortgagee, as assignee under the
Trust
Indenture), is entitled to the benefits of Section 1110 (as currently in
effect)
with respect to the right to take possession of the Airframe and Engines
and to
enforce any of its other rights or remedies as provided in the Lease in the
event of a case under Chapter 11 of the Bankruptcy Code in which Lessee is
a
debtor.
6.2
Owner
Participant’s Representations and Warranties
Owner
Participant represents and warrants to Lessee, Loan Participant, Airframe
Manufacturer, Subordination Agent, Owner Trustee and Mortgagee
that:
6.2.1
Organization,
Etc.
Owner
Participant is a corporation duly incorporated, validly existing and in good
standing under the Laws of the OP Jurisdiction and has the corporate power
and
authority to conduct the business in which it is currently engaged and to
own or
hold under lease its properties and to enter into, and perform its obligations
under the Owner Participant Agreements.
6.2.2
Corporate
Authorization
Owner
Participant has taken, or caused to be taken, all necessary corporate action
(including, without limitation, the obtaining of any consent or approval
of
stockholders required by its Certificate of Incorporation or By-Laws) to
authorize the execution and delivery of each of the Owner Participant
Agreements, and the performance of its obligations thereunder.
6.2.3
No
Violation
The
execution and delivery by Owner Participant of the Owner Participant Agreements,
the performance by Owner Participant of its obligations thereunder and the
consummation by Owner Participant on the Closing Date of the transactions
contemplated thereby, do not and will not (a) violate any provision of the
Certificate of Incorporation or By-Laws of Owner Participant, (b) violate
any Law applicable to or binding on Owner Participant or (c) violate or
constitute any default under (other than any violation or default that would
not
result in a Material Adverse Change to Owner Participant), or result in the
creation of any Lien (other than as provided for or otherwise permitted in
the
Operative Agreements) upon the Trust Estate under, any indenture, mortgage,
chattel mortgage, deed of trust, conditional sales contract, lease, loan
or
other material agreement, instrument or document to which Owner Participant
is a
party or by which Owner Participant or any of its properties is
bound.
6.2.4
Approvals
The
execution and delivery by Owner Participant of the Owner Participant Agreements,
the performance by Owner Participant of its obligations thereunder and the
consummation by Owner Participant on the Closing Date of the transactions
contemplated thereby do not and will not require the consent or approval
of, or
the giving of notice to, or the registration with, or the recording or filing
of
any documents with, or the taking of any other action in respect of,
(a) any trustee or other holder of any Debt of Owner Participant and
(b) any Government Entity, other than the filing of the FAA Filed Documents
and the Financing Statements.
6.2.5
Valid
and Binding Agreements
The
Owner
Participant Agreements have been duly authorized, executed and delivered
by
Owner Participant and, assuming the due authorization, execution and delivery
by
the other party or parties thereto, constitute the legal, valid and binding
obligations of Owner Participant and are enforceable against Owner Participant
in accordance with the respective terms thereof, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium and other similar Laws affecting the rights of creditors generally
and general principles of equity, whether considered in a proceeding at law
or
in equity.
6.2.6
Citizenship
On
the
Closing Date, Owner Participant is not a Citizen of the United States, but
holds
an interest in the Trust Estate such that the Aircraft can be registered
in the
United States (without giving consideration to Section 47.9 of the FAA
Regulations or any other provision that could restrict Lessee’s use or operation
of the Aircraft).
6.2.7
No
Liens
On
the
Closing Date, there are no Lessor Liens attributable to Owner Participant
in
respect of all or any part of the Trust Estate.
6.2.8
Investment
by Owner Participant
Owner
Participant’s beneficial interest in the Trust Estate has been acquired by it
for its own account, for investment and not with a view to any resale or
distribution thereof, except that, subject to the restrictions on transfer
set
forth in Section 10, the disposition by Owner Participant of its beneficial
interest in the Trust Estate shall at all times be within its control.
6.2.9
ERISA
No
part
of the funds used by Owner Participant to acquire or hold its interests in
the
Trust Estate directly or indirectly constitutes assets of a Plan.
6.2.10
Litigation
There
are
no pending or, to the Actual Knowledge of Owner Participant, threatened actions
or proceedings against Owner Participant before any court, governmental body,
arbitration board, administrative agency or tribunal which, if determined
adversely to Owner Participant, would materially adversely affect the ability
of
Owner Participant to perform its obligations under, or affect the validity
or
enforceability of, the Owner Participant Agreements.
6.2.11
Securities
Laws
Neither
Owner Participant nor any person Owner Participant has authorized to act
on its
behalf has directly or indirectly offered any beneficial interest in or Security
relating to the ownership of the Aircraft or any interest in the Trust Estate,
or any of the Equipment Notes or any other interest in or Security under
the
Trust Indenture for sale to, or solicited any offer to acquire any of the
same
from, any Person in violation of the registration provisions of the Securities
Act or applicable state securities Laws.
6.2.12
Broker’s
Fees
No
Person
acting on behalf of Owner Participant is or will be entitled to any broker’s
fee, commission or finder’s fee in connection with the
Transactions.
6.3
▇▇▇▇▇
Fargo’s Representations and Warranties
▇▇▇▇▇
Fargo represents and warrants (in the case of Section 6.3.13, solely in its
capacity as Owner Trustee) to Lessee, Owner Participant, Airframe Manufacturer,
Loan Participants, Subordination Agent and Mortgagee that:
6.3.1
Organization,
Etc.
▇▇▇▇▇
Fargo is a national banking association duly organized, validly existing
and in
good standing under the Laws of the United States, holding a valid certificate
to do business as a national banking association with banking authority to
execute and deliver, and perform its obligations under, the Owner Trustee
Agreements.
6.3.2
Corporate
Authorization
▇▇▇▇▇
Fargo has taken, or caused to be taken, all necessary corporate action
(including, without limitation, the obtaining of any consent or approval
of
stockholders required by Law or by its Articles of Association or By-Laws)
to
authorize the execution and delivery by ▇▇▇▇▇ Fargo, in its individual capacity
and as Owner Trustee, of each of the Owner Trustee Agreements, and the
performance of its obligations thereunder.
6.3.3
No
Violation
The
execution and delivery by ▇▇▇▇▇ Fargo, in its individual capacity and as
Owner
Trustee, of the Owner Trustee Agreements, the performance by ▇▇▇▇▇ Fargo,
in its
individual capacity and as Owner Trustee, of its obligations thereunder and
the
consummation by ▇▇▇▇▇ Fargo in its individual capacity and as Owner Trustee
on
the Closing Date of the transactions contemplated thereby, do not and will
not
(a) violate any provision of the Articles of Association or By-Laws of
▇▇▇▇▇ Fargo, (b) violate any Law of the State of Utah or federal banking
Law applicable to or binding on Owner Trustee or ▇▇▇▇▇ Fargo or (c) violate
or constitute any default under (other than any violation or default that
would
not result in a Material Adverse Change to ▇▇▇▇▇ Fargo, in its individual
capacity or as Owner Trustee), or result in the creation of any Lien (other
than
the lien of the Trust Indenture) upon any property of ▇▇▇▇▇ Fargo, in its
individual capacity and as Owner Trustee, or any of its subsidiaries under,
any
indenture, mortgage, chattel mortgage, deed of trust, conditional sales
contract, lease, loan or other material agreement, instrument or document
to
which ▇▇▇▇▇ Fargo, in its individual capacity or as Owner Trustee, is a party
or
by which ▇▇▇▇▇ Fargo, in its individual capacity or as Owner Trustee, or
any of
its properties is or may be bound or affected.
6.3.4
Approvals
The
execution and delivery by ▇▇▇▇▇ Fargo, in its individual capacity and as
Owner
Trustee, of the Owner Trustee Agreements, the performance by ▇▇▇▇▇ Fargo,
in its
individual capacity and as Owner Trustee, of its obligations thereunder and
the
consummation by ▇▇▇▇▇ Fargo, in its individual capacity and as Owner Trustee,
on
the Closing Date of the transactions contemplated thereby do not and will
not
require the consent, approval or authorization of, or the giving of notice
to,
or the registration with, or the recording or filing of any documents with,
or
the taking of any other action in respect of, (a) any trustee or other
holder of any Debt of ▇▇▇▇▇ Fargo or (b) any Government Entity governing
banking and trust powers, other than the filing of the FAA Filed Documents
and
the Financing Statements.
6.3.5
Valid
and Binding Agreements
The
Owner
Trustee Agreements have been duly authorized, executed and delivered by ▇▇▇▇▇
Fargo, in its individual capacity or as Owner Trustee, as the case may be,
and
constitute the legal, valid and binding obligations of ▇▇▇▇▇ Fargo, in its
individual capacity and as Owner Trustee, and, assuming the due authorization,
execution and delivery thereof by the other party or parties thereto, are
enforceable against ▇▇▇▇▇ Fargo, in its individual capacity and as Owner
Trustee, in accordance with the respective terms thereof, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium and other similar
Laws
affecting the rights of creditors generally and general principles of equity,
whether considered in a proceeding at law or in equity.
6.3.6
Citizenship
On
the
Closing Date, ▇▇▇▇▇ Fargo is a Citizen of the United States.
6.3.7
Location
The
Owner
Trustee’s location (as such term is used in Section 9-307 of the UCC) is
Utah.
6.3.8
Title
On
the
Delivery Date, Owner Trustee received whatever title to the Aircraft as was
conveyed to it by Seller.
6.3.9
No
Liens; Financing Statements
On
the
Closing Date, there are no Lessor Liens attributable to ▇▇▇▇▇ Fargo or Owner
Trustee in respect of all or any part of the Aircraft, Trust Estate or the
Trust
Indenture Estate. Except for the Financing Statements and the one or more
UCC-1
financing statements covering the Aircraft and filed for precautionary purposes
by the Owner Trustee in connection with the delivery of the Aircraft to Lessee
under the Existing Lease on the Delivery Date, it has not, either in its
individual capacity or as Owner Trustee, executed any UCC financing statements
relating to the Aircraft or the Lease.
6.3.10
Litigation
There
are
no pending or, to the Actual Knowledge of ▇▇▇▇▇ Fargo, threatened actions
or
proceedings against ▇▇▇▇▇ Fargo or Owner Trustee before any court, governmental
body, arbitration board, administrative agency or tribunal which, if determined
adversely to ▇▇▇▇▇ Fargo or Owner Trustee, would materially adversely affect
the
ability of ▇▇▇▇▇ Fargo or Owner Trustee to perform its obligations under,
or
affect the validity or enforceability of, the Owner Trustee
Agreements.
6.3.11
Securities
Laws
Neither
▇▇▇▇▇ Fargo, nor any person authorized to act on its behalf, has directly
or
indirectly offered any beneficial interest or Security relating to the ownership
of the Aircraft or any interest in the Trust Estate or any of the Equipment
Notes or any other interest in or Security under the Trust Indenture for
sale
to, or solicited any offer to acquire any such interest or Security from,
or has
sold any such interest or Security to, any person other than the Participants,
except for the offering and sale of the Pass Through Certificates.
6.3.12
Expenses
and Taxes
There
are
no Expenses or Taxes that may be imposed on or asserted against the Trust,
the
Trust Estate or any part thereof or any interest therein, the Trust Indenture
Estate, Lessee, Owner
Participant,
Pass Through Trustee, Subordination Agent, Owner Trustee or Mortgagee (except
as
to Owner Trustee, Taxes imposed on the fees payable to Owner Trustee) under
the
laws of Utah in connection with the execution, delivery or performance of
any
Operative Agreement by Owner Trustee or in connection with the issuance of
the
Equipment Notes, which Expenses or Taxes would not have been imposed if Owner
Trustee had not (x) had its principal place of business in,
(y) performed (in its individual capacity or as Owner Trustee) any or all
of its duties under the Operative Agreements in or (z) engaged in any
activities unrelated to the transactions contemplated by the Operative
Agreements in, the State of Utah.
[6.3.13
Prior
Activities
Owner
Trustee has not engaged in any activities except holding title to the Aircraft
and leasing the Aircraft pursuant to the terms of the “Trust Agreement” (as
defined in the Existing Lease) and the Existing Lease, respectively, and
Owner
Trustee has not incurred any debt or other financial obligation, except as
expressly provided in the “Trust Agreement” (as defined in the Existing Lease)
and the Existing Lease or such other debt that shall have been satisfied
or
discharged in full contemporaneously with the Closing.]26
6.4
WTC’s
Representations and Warranties
WTC
represents and warrants (with respect to Section 6.4.10, solely in its
capacity as Subordination Agent) to Lessee, Owner Participant, Airframe
Manufacturer, and Owner Trustee that:
6.4.1
Organization,
Etc.
WTC
is a
Delaware banking corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware, holding a valid certificate
to
do business as a Delaware banking corporation with banking authority to execute
and deliver, and perform its obligations under, the Mortgagee Agreements,
the
Pass Through Trustee Agreements and the Subordination Agent
Agreements.
6.4.2
Corporate
Authorization
WTC
has
taken, or caused to be taken, all necessary corporate action (including,
without
limitation, the obtaining of any consent or approval of stockholders required
by
Law or by its Certificate of Incorporation or By-Laws) to authorize the
execution and delivery by WTC, in its individual capacity or as Mortgagee,
Pass
Through Trustee or Subordination Agent, as the case may be, of the Mortgagee
Agreements, the Pass Through Trustee Agreements and the Subordination Agent
Agreements and the performance of its obligations thereunder.
6.4.3
No
Violation
The
execution and delivery by WTC, in its individual capacity or as Mortgagee,
Pass
Through Trustee or Subordination Agent, as the case may be, of the Mortgagee
Agreements, the
26.
Delete for New Aircraft.
Pass
Through Trustee Agreements and the Subordination Agent Agreements, the
performance by WTC, in its individual capacity or as Mortgagee, Pass Through
Trustee or Subordination Agent, as the case may be, of its obligations
thereunder and the consummation on the Closing Date of the transactions
contemplated thereby, do not and will not (a) violate any provision of the
Certificate of Incorporation or By-Laws of WTC, (b) violate any Law
applicable to or binding on WTC, in its individual capacity or (except in
the
case of any Law relating to any Plan) as Mortgagee, Pass Through Trustee
or
Subordination Agent, or (c) violate or constitute any default under (other
than any violation or default that would not result in a Material Adverse
Change
to WTC, in its individual capacity or as Mortgagee, Pass Through Trustee
or
Subordination Agent), or result in the creation of any Lien (other than the
lien
of the Trust Indenture) upon any property of WTC, in its individual capacity
or
as Mortgagee, Pass Through Trustee or Subordination Agent, or any of WTC’s
subsidiaries under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, lease, loan or other agreement, instrument or
document to which WTC, in its individual capacity or as Mortgagee, Pass Through
Trustee or Subordination Agent, is a party or by which WTC, in its individual
capacity or as Mortgagee, Pass Through Trustee or Subordination Agent, or
any of
their respective properties is bound.
6.4.4
Approvals
The
execution and delivery by WTC, in its individual capacity or as Mortgagee,
Pass
Through Trustee or Subordination Agent, as the case may be, of the Mortgagee
Agreements, the Pass Through Trustee Agreements and the Subordination Agent
Agreements, the performance by WTC, in its individual capacity or as Mortgagee,
Pass Through Trustee or Subordination Agent, as the case may be, of its
obligations thereunder and the consummation on the Closing Date by WTC, in
its
individual capacity or as Mortgagee, Pass Through Trustee or Subordination
Agent, as the case may be, of the transactions contemplated thereby do not
and
will not require the consent, approval or authorization of, or the giving
of
notice to, or the registration with, or the recording or filing of any documents
with, or the taking of any other action in respect of, (a) any trustee or
other holder of any Debt of WTC or (b) any Government Entity, other than
the filing of the FAA Filed Documents and the Financing Statements.
6.4.5
Valid
and Binding Agreements
The
Mortgagee Agreements, the Pass Through Trustee Agreements and the Subordination
Agent Agreements have been duly authorized, executed and delivered by WTC
and,
assuming the due authorization, execution and delivery by the other party
or
parties thereto, constitute the legal, valid and binding obligations of WTC,
in
its individual capacity or as Mortgagee, Pass Through Trustee or Subordination
Agent, as the case may be, and are enforceable against WTC, in its individual
capacity or as Mortgagee, Pass Through Trustee or Subordination Agent, as
the
case may be, in accordance with the respective terms thereof, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar Laws affecting the rights of creditors
generally and general principles of equity, whether considered in a proceeding
at law or in equity.
6.4.6
Citizenship
WTC
is a
Citizen of the United States.
6.4.7
No
Liens
On
the
Closing Date, there are no Lessor Liens attributable to WTC in respect of
all or
any part of the Trust Estate or the Trust Indenture Estate.
6.4.8
Litigation
There
are
no pending or, to the Actual Knowledge of WTC, threatened actions or proceedings
against WTC, in its individual capacity or as Mortgagee, Pass Through Trustee
or
Subordination Agent, before any court, administrative agency or tribunal
which,
if determined adversely to WTC, in its individual capacity or as Mortgagee,
Pass
Through Trustee or Subordination Agent, as the case may be, would materially
adversely affect the ability of WTC, in its individual capacity or as Mortgagee,
Pass Through Trustee or Subordination Agent, as the case may be, to perform
its
obligations under, or affect the validity or enforceability of, any of the
Mortgagee Agreements, the Pass Through Trustee Agreements or the Subordination
Agent Agreements.
6.4.9
Securities
Laws
Neither
WTC nor any person authorized to act on its behalf has directly or indirectly
offered any beneficial interest or Security relating to the ownership of
the
Aircraft or any interest in the Trust Indenture Estate or any of the Equipment
Notes or any other interest in or Security under the Trust Indenture for
sale
to, or solicited any offer to acquire any such interest or Security from,
or has
sold any such interest or Security to, any Person other than the Participants,
except for the offering and sale of the Pass Through Certificates.
6.4.10
Investment
The
Equipment Notes to be acquired by the Subordination Agent are being acquired
by
it for the account of the Pass Through Trustee, for investment and not with
a
view to any resale or distribution thereof, except that, subject to the
restrictions on transfer set forth in Section 10.1.3, the disposition by it
of its Equipment Notes shall at all times be within its control.
6.4.11
Taxes
There
are
no Taxes payable by the Pass Through Trustee or WTC, as the case may be,
imposed
by the State of Delaware or any political subdivision or taxing authority
thereof in connection with the execution, delivery and performance by the
Pass
Through Trustee or WTC, as the case may be, of this Agreement or any of the
Pass
Through Trustee Agreements (other than franchise or other taxes based on
or
measured by any fees or compensation received by any the Pass Through Trustee
or
WTC, as the case may be, for services rendered in connection with the
transactions contemplated by the Pass Through Trust Agreement), and there
are no
Taxes payable by the Pass Through Trustee or WTC, as the case may be, imposed
by
the State of Delaware or any political subdivision thereof in connection
with
the acquisition, possession or ownership by the 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 the Pass Through Trustee or WTC, as
the
case may be, for services rendered in connection with the transactions
contemplated by the Pass Through Trust Agreement), and, assuming that the
trust
created by the
Pass
Through Trust Agreement will not be taxable as a corporation, but, rather,
will
be characterized as a grantor trust under subpart E, Part I of Subchapter
J of
the Code or as a partnership under Subchapter K of the Code, such trust will
not
be subject to any Taxes imposed by the State of Delaware or any political
subdivision thereof.
6.4.12
Control
WTC
is
not an Affiliate of the Owner Participant or the Owner Trustee.
6.4.13
Broker’s
Fees
No
Person
acting on behalf of WTC, in its individual capacity or as Mortgagee, Pass
Through Trustee or Subordination Agent, is or will be entitled to any broker’s
fee, commission or finder’s fee in connection with the
Transactions.
6.5
Airframe
Manufacturer’s Representations and Warranties
Airframe
Manufacturer represents and warrants to Lessee, each Participant, Subordination
Agent, Owner Trustee and Mortgagee that:
6.5.1
Organization,
Etc.
Airframe
Manufacturer is a corporation duly incorporated, validly existing and in
good
standing under the Laws of Brazil, and has the corporate power and authority
to
conduct the business in which it is currently engaged and to own or hold
under
lease its properties and to enter into, and perform its obligations under
the
Airframe Manufacturer Agreements. [OP Guarantor has a tangible net worth
(exclusive of goodwill) greater than $25,000,000.]27
6.5.2
Corporate
Authorization
Airframe
Manufacturer has taken, or caused to be taken, all necessary corporate action
(including, without limitation, the obtaining of any consent or approval
of
stockholders required by its constitutional documents) to authorize the
execution and delivery of each of the Airframe Manufacturer Agreements, and
the
performance of its obligations thereunder.
6.5.3
No
Violation
The
execution and delivery by Airframe Manufacturer of the Airframe Manufacturer
Agreements, the performance by Airframe Manufacturer of its obligations
thereunder and the consummation by Airframe Manufacturer on the Closing Date
of
the transactions contemplated thereby, do not and will not (a) violate any
provision of the constitutional documents of Airframe Manufacturer,
(b) violate any Law applicable to or binding on Airframe Manufacturer or
(c) violate or constitute any default under (other than any violation or
default that would not result in a Material Adverse Change to Airframe
Manufacturer), or result in the creation of any Lien (other than as provided
for
or otherwise permitted in the Operative Agreements) upon the
27.
Insert if OP is an Affiliate of Airframe Manufacturer.
Trust
Estate under, any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, lease, loan or other material agreement, instrument
or document to which Airframe Manufacturer is a party or by which Airframe
Manufacturer or any of its properties is bound.
6.5.4
Approvals
The
execution and delivery by Airframe Manufacturer of the Airframe Manufacturer
Agreements, the performance by Airframe Manufacturer of its obligations
thereunder and the consummation by Airframe Manufacturer on the Closing Date
of
the transactions contemplated thereby do not and will not require the consent
or
approval of, or the giving of notice to, or the registration with, or the
recording or filing of any documents with, or the taking of any other action
in
respect of, (a) any trustee or other holder of any Debt of Airframe
Manufacturer and (b) any Government Entity, other than the filing of the
FAA Filed Documents and the Financing Statements.
6.5.5
Valid
and Binding Agreements
The
Airframe Manufacturer Agreements have been duly authorized, executed and
delivered by Airframe Manufacturer and, assuming the due authorization,
execution and delivery by the other party or parties thereto, constitute
the
legal, valid and binding obligations of Airframe Manufacturer and are
enforceable against Airframe Manufacturer in accordance with the respective
terms thereof, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium and other similar Laws
affecting the rights of creditors generally and general principles of equity,
whether considered in a proceeding at law or in equity.
6.5.6
Title
On
the
Closing Date, Lessor shall have good and marketable title to the Aircraft,
free
and clear of all claims, Liens and encumbrances of any nature, except Permitted
Liens.
6.5.7
Taxes
Lessor
has filed or will cause to be filed all Federal and all material state, local
and foreign tax returns which are required to be filed by it and have paid
or
will cause to be paid all Taxes which are due and payable in connection with
the
Aircraft.
6.5.8
Litigation
There
are
no pending or, to the Actual Knowledge of Airframe Manufacturer, threatened
actions or proceedings against Airframe Manufacturer before any court,
governmental body, arbitration board, administrative agency or tribunal which,
if determined adversely to Airframe Manufacturer, would materially adversely
affect the ability of Airframe Manufacturer to perform its obligations under,
or
affect the validity or enforceability of, the Airframe Manufacturer
Agreements.
6.5.9
Securities
Laws
Neither
Airframe Manufacturer nor any person Airframe Manufacturer has authorized
to act
on its behalf has directly or indirectly offered any beneficial interest
in or
Security relating to the ownership of the Aircraft or any interest in the
Trust
Estate, or any of the Equipment Notes or any other interest in or Security
under
the Trust Indenture for sale to, or solicited any offer to acquire any of
the
same from, any Person in violation of the Securities Act or applicable state
securities Laws.
6.5.10
Broker’s
Fees
No
Person
acting on behalf of Airframe Manufacturer is or will be entitled to any broker’s
fee, commission or finder’s fee in connection with the Transactions, except for
the placement agent’s fees and commissions payable with respect to the offering
of the Pass Through Certificates and the fees and expenses of Equity Advisor,
which are the sole responsibility of Airframe Manufacturer.
SECTION
7. COVENANTS,
UNDERTAKINGS AND AGREEMENTS
7.1
Covenants
of Lessee
Lessee
covenants and agrees with Owner Participant, Loan Participant, Owner Trustee
and
Mortgagee as follows:
7.1.1
Corporate
Existence; U.S. Air Carrier
Lessee
shall at all times maintain its corporate existence, except as permitted
by
Section 13.2 of the Lease, and shall at all times remain a U.S. Air
Carrier.
7.1.2
Notice
of Change of Chief Executive Office
Lessee
will give Owner Participant, Owner Trustee and Mortgagee timely written notice
(but in any event within 30 days prior to the expiration of the period of
time
specified under applicable Law to prevent lapse of perfection) of any change
of
its location (as such term is used in Section 9-307 of the UCC) from its
then
present location and will promptly take any action required by
Section 7.1.3(c) as a result of such relocation.
7.1.3
Certain
Assurances
(a) Lessee
shall duly execute, acknowledge and deliver, or shall cause to be executed,
acknowledged and delivered, all such further agreements, instruments,
certificates or documents, and shall do and cause to be done such further
acts
and things, in any case, as Owner Participant, Owner Trustee or Mortgagee
shall
reasonably request for accomplishing the purposes of this Agreement and the
other Operative Agreements, provided that
any
instrument or other document so executed by Lessee will not expand any
obligations or limit any rights of Lessee in respect of the transactions
contemplated by any Operative Agreement.
(b) Lessee
shall promptly take such action with respect to the recording, filing,
re-recording and re-filing of the Lease, the Trust Agreement and the Trust
Indenture and the respective supplements thereto, including, without limitation,
Lease Supplement No. 1 and the initial Trust Indenture Supplement, as shall
be necessary to establish, perfect and protect the interests and rights of
Owner
Trustee in and to the Aircraft and under the Lease and the perfection and
priority of the Lien created by the Trust Indenture, and Lessee shall pay
all
out-of-pocket costs and expenses thereof to the extent not paid by another
party
as Transaction Expenses. Lessee shall furnish to Owner Participant or Owner
Trustee such information (other than with respect to the citizenship of Owner
Participant and Owner Trustee) in Lessee’s possession or otherwise reasonably
available to Lessee as may be required to enable Owner Participant or Owner
Trustee to make application for registration of the Aircraft under the Act
(subject to Lessee’s rights under Section 7.1.2 of the Lease).
(c) Lessee
will cause the FAA Filed Documents, the Financing Statements and all
continuation statements (and any amendments necessitated by any combination,
consolidation or merger pursuant to Section 13.2 of the Lease, or any
change of its location (as such term is used in Section 9-307 of the UCC))
in
respect of the Financing Statements to be prepared and, subject only to the
execution and delivery thereof by Owner Trustee and Mortgagee, as applicable,
duly and timely filed and recorded, or filed for recordation, to the extent
permitted under the Act (with respect to the FAA Filed Documents) or the
UCC or
similar law of any other applicable jurisdiction (with respect to such other
documents). Lessee hereby authorizes Owner Trustee and/or Mortgagee to prepare
and file any UCC financing statements (including any amendments thereto)
and
continuation statements referred to in this Section 7.1.3(c).
(d) If
the
Aircraft has been registered in a country other than the United States pursuant
to Section 7.1.2 of the Lease, Lessee will furnish to Owner Trustee,
Mortgagee and each Participant annually after such registration, commencing
with
the calendar year after such registration is effected, an opinion of special
counsel reasonably satisfactory to Owner Trustee and Mortgagee stating that,
in
the opinion of such counsel, either that (i) such action has been taken
with respect to the recording, filing, re-recording and re-filing of the
Operative Agreements and any supplements and amendments thereto as is necessary
to establish, perfect and protect Owner Trustee’s and Mortgagee’s respective
right, title and interest in and to the Aircraft and the Operative Agreements,
reciting the details of such actions, or (ii) no such action is necessary
to maintain the perfection of such right, title and interest.
7.1.4
Securities
Laws
Neither
Lessee nor any person authorized to act on its behalf will directly or
indirectly offer any beneficial interest or Security relating to the ownership
of the Aircraft or the Lease or any interest in the Trust Estate and Trust
Agreement or any of the Equipment Notes or any other interest in or Security
under the Trust Indenture, for sale to, or solicit any offer to acquire any
such
interest or Security from, or sell any such interest or Security to, any
person
in violation of the Securities Act or applicable state or foreign securities
Laws.
7.2
Covenants
of Owner Participant
Owner
Participant covenants and agrees with Lessee, and except with respect to
Section
7.2.4, Loan Participant, Owner Trustee and Mortgagee as follows:
7.2.1
Liens
Owner
Participant (a) will not directly or indirectly create, incur, assume or
suffer
to exist any Lessor Lien attributable to it on or with respect to all or
any
part of the Trust Estate, the Trust Indenture Estate or the Aircraft, (b)
will,
at its own cost and expense, take such action as may be necessary to discharge
any Lessor Lien attributable to Owner Participant on all or any part of the
Trust Estate, the Trust Indenture Estate or the Aircraft. Owner Participant
will
hold harmless and indemnify Lessee, Owner Trustee, each Note Holder, Mortgagee,
each of their respective Affiliates, successors and permitted assigns, the
Trust
Estate and the Trust Indenture Estate from and against (i) any and all Expenses,
(ii) any reduction in the amount payable out of the Trust Estate or the Trust
Indenture Estate and (iii) any interference with the possession, operation
or
other use of all or any part of the Aircraft, in each case imposed on, incurred
by or asserted against any of the foregoing as a consequence of any such
Lessor
Lien.
7.2.2
Revocation
of Trust Agreement
(a) Owner
Participant will comply with the provisions of the Trust Agreement applicable
to
it, and will not terminate or revoke the Trust Agreement or the trusts created
thereunder without the prior written consent of Lessee and Mortgagee and
will
not amend, modify or supplement the Trust Agreement, or waive any of the
provisions thereof, if such amendment, modification, supplement or waiver
would
have a material adverse effect on Lessee, without the consent of Lessee,
or on
Mortgagee or any Note Holder, without the consent of Mortgagee.
(b) Notwithstanding
Section 7.2.2(a), Owner Participant may at any time remove Owner Trustee
pursuant to Section 9.1 of the Trust Agreement or terminate the Trust
Agreement pursuant to Section 11.2 of the Trust Agreement.
7.2.3
Change
of Situs of Owner Trust
If,
at
any time, any Tax Indemnitee or the Trust Estate becomes subject to any Taxes
for which it is indemnified pursuant to Section 9.3 of this Agreement and
if, as a consequence thereof, Lessee should request that the situs of the
Trust
be moved to another state in the United States from the state in which it
is
then located, the situs of the Trust may be moved with the written consent
of
Owner Participant (which consent shall not be unreasonably withheld) and
Owner
Participant will take whatever action may be reasonably necessary to accomplish
such removal; provided,
that,
in any event, (a) Lessee shall provide such additional tax indemnification
as Owner Participant and the Note Holders or the Pass Through Trustee may
reasonably request to cover any additional unindemnified Taxes or loss of
Tax
benefits described in the assumptions in the Tax Indemnity Agreement resulting
from such change in the situs of the Trust (it being agreed that if a Lease
Event of Default shall have occurred and is then continuing, it shall not
be
unreasonable for Owner Participant to withhold its consent to moving the
situs
of the Trust, notwithstanding the provision by Lessee of such additional
tax
indemnification,
unless a Section 1110 Event shall have occurred and is then continuing),
(b) the rights and obligations under the Operative Agreements of Owner
Participant, the Note Holders, Pass Through Trustee and Mortgagee shall not
be
adversely affected as a result of the taking of such action, (c) the Lien
of the Trust Indenture on the Trust Indenture Estate shall not be adversely
affected by such action, and Lessee and Owner Trustee shall execute and deliver
such documents as may be necessary or as may reasonably be requested by
Mortgagee to protect and maintain the perfection and priority of such Lien,
(d) Owner Participant, Pass Through Trustee and Mortgagee shall have
received an opinion or opinions of counsel (which counsel is reasonably
satisfactory to Owner Participant, Pass Through Trustee and Mortgagee) in
scope,
form and substance reasonably satisfactory to Owner Participant, Pass Through
Trustee and Mortgagee to the effect that (i) the Trust, as thus removed,
shall remain a validly established trust, (ii) any amendments to the Trust
Agreement necessitated by such removal shall have been duly authorized, executed
and delivered by the parties thereto and shall constitute the valid and binding
obligations of such parties, enforceable in accordance with their terms,
(iii) covering such other matters as Owner Participant, Pass Through
Trustee or Mortgagee may reasonably request, (e) if such removal involves
the replacement of Owner Trustee, then Owner Participant, Pass Through Trustee
and Mortgagee shall have received an opinion of counsel to such successor
Owner
Trustee in form and substance reasonably satisfactory to Owner Participant,
Pass
Through Trustee and Mortgagee covering the matters described in the opinion
delivered pursuant to Section 5.1.2(xxv)(D) and (f) Lessee shall
indemnify and hold harmless Owner Participant, Note Holders, Pass Through
Trustee and ▇▇▇▇▇ Fargo, in its individual capacity and as Owner Trustee,
on a
net after-tax basis against any and all reasonable out-of-pocket costs and
expenses including attorneys’ fees and disbursements, fees and expenses of any
new owner trustee, registration, recording or filing fees and taxes incurred
by
Owner Participant, Note Holders, Pass Through Trustee or Owner Trustee in
connection with such change of situs. Owner Participant agrees with Lessee
that
it will not consent to or direct a change in the situs of the Trust Estate
without the prior written consent of Lessee, except that if a Lease Event
of
Default shall have occurred and is then continuing, except during a Section
1110
Period, such consent shall not be required.
7.2.4
Compliance
with Lease Provisions
Owner
Participant will, solely for the benefit of Lessee, comply with the express
provisions applicable to it contained in the Lease.
7.2.5
Securities
Act
Owner
Participant will not directly or indirectly offer any beneficial interest
or
Security relating to the ownership of the Aircraft or any interest in the
Trust
Estate or any of the Equipment Notes or any other interest in or Security
under
the Trust Indenture for sale to, or solicit any offer to acquire any such
interest or Security from, or sell any such interest or Security to, any
Person
in violation of the registration provisions of the Securities Act or applicable
state or foreign Securities Laws, provided that the foregoing shall not be
deemed to impose on Owner Participant any responsibility with respect to
any
such offer, sale or solicitation by any other party hereto.
7.2.6
Regarding
the Owner Trustee
Owner
Participant will instruct Owner Trustee to perform its obligations under
each
Owner Trustee Agreement.
7.3
Covenants
of ▇▇▇▇▇ Fargo and Owner Trustee
▇▇▇▇▇
Fargo, in its individual capacity and/or as Owner Trustee, as provided below,
covenants and agrees with Lessee, Owner Participant, each Note Holder and
Mortgagee as follows:
7.3.1
Liens
▇▇▇▇▇
Fargo (a) will not directly or indirectly create, incur, assume or suffer
to
exist any Lessor Lien attributable to it or Owner Trustee with respect to
all or
any part of the Trust Estate, the Trust Indenture Estate or the Aircraft,
(b)
will, at its own cost and expense, take such action as may be necessary to
discharge any Lessor Lien attributable to ▇▇▇▇▇ Fargo or Owner Trustee on
all or
any part of the Trust Estate, the Trust Indenture Estate or the Aircraft.
▇▇▇▇▇
Fargo will in its individual capacity hold harmless and indemnify Lessee,
Owner
Participant, each Note Holder, Mortgagee, each of their respective Affiliates,
successors and permitted assigns, the Trust Estate and the Trust Indenture
Estate from and against (i) any and all Expenses, (ii) any reduction in the
amount payable out of the Trust Estate or the Trust Indenture Estate and
(iii)
any interference with the possession, operation or other use of all or any
part
of the Aircraft, in each case imposed on, incurred by or asserted against
any of
the foregoing as a consequence of any such Lessor Lien.
7.3.2
Other
Business
Owner
Trustee will not enter into any business or other activity except as
contemplated by the Operative Agreements.
7.3.3
Notice
of Change of Location
▇▇▇▇▇
Fargo, in its individual capacity and as Owner Trustee, will give Lessee,
each
Participant and Mortgagee 30 days’ prior written notice of any change of its
location (as such term is used in Section 9-307 of the UCC) from its then
present location and will promptly take any action required by
Section 7.3.8 as a result of such relocation.
7.3.4
Securities
Act
▇▇▇▇▇
Fargo, in its individual capacity and as Owner Trustee, will not directly
or
indirectly offer any beneficial interest or Security relating to the ownership
of the Aircraft or any interest in the Trust Estate or any of the Equipment
Notes or any other interest in or Security under the Trust Indenture for
sale
to, or solicit any offer to acquire any such interest or Security from, or
sell
any such interest or Security to, any Person in violation of the registration
provisions of the Securities Act or applicable state or foreign securities
Laws,
provided that the foregoing shall not be deemed to impose on ▇▇▇▇▇ Fargo
in its
individual capacity or as Owner
Trustee,
any responsibility with respect to any such offer, sale or solicitation by
any
other party hereto.
7.3.5
Performance
of Agreements
Owner
Trustee shall perform its obligations under the Owner Trustee Agreements
in
accordance with the terms thereof.
7.3.6
Release
of Lien of Trust Indenture
Owner
Trustee, in each instance referred to in the Lease in which a transfer of
any
property is required to be made by Owner Trustee to Lessee or any other Person
(other than Mortgagee or Owner Participant), shall, at Lessee’s request and
expense, use its reasonable efforts to procure from Mortgagee the prompt
release
of the Lien of the Trust Indenture with respect to such property.
7.3.7
Notices;
Documents
In
the
event any claim with respect to any liabilities is filed against the Owner
Trustee in its capacity as such and Owner Trustee shall have Actual Knowledge
thereof, the Owner Trustee shall promptly notify Lessee and Mortgagee in
writing
thereof. Owner Trustee further agrees to provide to Lessee promptly any
documents (including the certificate of aircraft registration) that it receives
from the FAA with respect to the Aircraft.
7.3.8
Filings
After
the
Closing Date, Owner Trustee shall duly execute and deliver to Lessee all
filings
and recordings (including, without limitation, all filings and UCC financing
statements under the Act and the UCC and any amendments to UCC financing
statements necessitated by any change of its location (as such term is used
in
Section 9-307 of the UCC)), prepared and delivered to it by Lessee required
to
perfect Owner Trustee’s title to the Aircraft and the liens of and security
interests granted by the Trust Indenture (or to maintain such perfection)
and to
make such title, liens and security interests valid and enforceable. Owner
Trustee hereby authorizes the Mortgagee to prepare and file any UCC financing
statements (including any amendments thereto) and continuation statements
referred to in this Section 7.3.8.
7.3.9
Trust
Agreement
Each
of
▇▇▇▇▇ Fargo and Owner Trustee hereby (i) agrees with Lessee, Loan
Participant and Mortgagee not to amend, supplement, terminate or otherwise
modify any provision of the Trust Agreement in such a manner as to adversely
affect the rights of any such party without the prior written consent of
such
party and (ii) agrees with Lessee, Loan Participant and Mortgagee not to
revoke the trust created by the Trust Agreement so long as the Trust Indenture
remains undischarged or if such revocation would have an adverse effect on
the
Lessee. Nothing contained in this Agreement shall impair any right under
the
Trust Agreement of ▇▇▇▇▇ Fargo to resign as Owner Trustee in accordance with
the
provisions of the Trust Agreement.
7.4
Covenants
of WTC
WTC
in
its individual capacity or as Mortgagee, Pass Through Trustee or Subordination
Agent, as the case may be, covenants and agrees with Lessee, Owner Participant
and Owner Trustee as follows:
7.4.1
Liens
WTC
(a)
will not directly or indirectly create, incur, assume or suffer to exist
any
Lessor Lien attributable to it on or with respect to all or any part of the
Trust Estate, the Trust Indenture Estate or the Aircraft, (b) will, at its
own
cost and expense, promptly take such action as may be necessary to discharge
any
Lessor Lien attributable to WTC on all or any part of the Trust Estate, the
Trust Indenture Estate or the Aircraft and (c) will in its individual capacity
hold harmless and indemnify Lessee, Owner Participant, each Note Holder,
Owner
Trustee, each of their respective Affiliates, successors and permitted assigns,
the Trust Estate and the Trust Indenture Estate from and against (i) any
and all
Expenses, (ii) any reduction in the amount payable out of the Trust Estate
or
the Trust Indenture Estate and (iii) any interference with the possession,
operation or other use of all or any part of the Aircraft, in each case imposed
on, incurred by or asserted against any of the foregoing as a consequence
of any
such Lessor Lien.
7.4.2
Securities
Act
WTC
in
its individual capacity or as Mortgagee, Pass Through Trustee or Subordination
Agent, will not offer any beneficial interest or Security relating to the
ownership of the Aircraft or any interest in the Trust Indenture Estate,
or any
of the Equipment Notes or any other interest in or Security under the Trust
Indenture for sale to, or solicit any offer to acquire any such interest
or
Security from, or sell any such interest or Security to, any Person in violation
of the Securities Act or applicable state or foreign securities Laws, provided
that the foregoing shall not be deemed to impose on WTC any responsibility
with
respect to any such offer, sale or solicitation by any other party
hereto.
7.4.3
Performance
of Agreements
WTC,
in
its individual capacity and as Mortgagee, Pass Through Trustee or Subordination
Agent, as the case may be, shall perform its obligations under the Mortgagee
Agreements, the Pass Through Trustee Agreements and the Subordination Agent
Agreements in accordance with the terms thereof.
7.4.4
Withholding
Taxes
WTC
shall
indemnify (on an after-tax basis) and hold harmless Lessee, Lessor and Owner
Participant against any United States withholding taxes (and related interest,
penalties and additions to tax) as a result of the failure by WTC to withhold
on
payments to any Note Holder if such Note Holder failed to provide to Mortgagee
necessary certificates or forms to substantiate the right to exemption from
such
withholding tax.
7.5
Covenants
of Note Holders
Each
Note
Holder (including Subordination Agent) as to itself only covenants and agrees
with Lessee, Owner Participant, Owner Trustee and Mortgagee as
follows:
7.5.1
Withholding
Taxes
Such
Note
Holder (if it is a Non-U.S. Person) agrees to indemnify (on an after-tax
basis)
and hold harmless Lessee, Lessor, Owner Participant and Mortgagee against
any
United States withholding taxes (and related interest, penalties and additions
to tax) as a result of the inaccuracy or invalidity of any certificate or
form
provided by such Note Holder to Mortgagee in connection with such withholding
taxes. Any amount payable hereunder shall be paid within 30 days after receipt
by a Note Holder of a written demand therefor.
7.5.2
Transfer;
Compliance
(a) Such
Note
Holder will (i) not transfer any Equipment Note or interest therein in violation
of the Securities Act or applicable state or foreign securities Law;
provided,
that
the foregoing provisions of this section shall not be deemed to impose on
such
Note Holder any responsibility with respect to any such offer, sale or
solicitation by any other party hereto, and (ii) perform and comply with
the
obligations specified to be imposed on it (as a Note Holder) under each of
the
Trust Indenture and the form of Equipment Note set forth in the Trust
Indenture.
(b) Except
as
otherwise required by the terms of Section 2.13 of the Trust Indenture, each
Note Holder will not sell, assign, convey, exchange or otherwise transfer
any
Equipment Note or any interest in, or represented by, any Equipment Note
(it
being understood that this provision is not applicable to the Pass Through
Certificates) unless the proposed transferee thereof first provides Lessee
and
Owner Participant with both of the following:
(i) a
written
representation and covenant that either (a) no portion of the funds it uses
to
purchase, acquire and hold such Equipment Note or interest directly or
indirectly constitutes, or may be deemed under the Code or ERISA or any rulings,
regulations or court decisions thereunder to constitute, the assets of any
Plan
or (b) the transfer, and subsequent holding, of such Equipment Note or interest
shall not involve or give rise to a transaction that constitutes a prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975(c)(1)
of
the Code involving Lessee, Owner Participant, Pass Through Trustee, the
Subordination Agent or the proposed transferee (other than a transaction
that is
exempted from the prohibitions of such sections by applicable provisions
of
ERISA or the Code or administrative exemptions or regulations issued
thereunder); and
(ii) a
written
covenant that it will not transfer any Equipment Note or any interest in,
or
represented by, any Equipment Note unless the subsequent transferee also
makes
the representation described in clause (i) above and agrees to comply with
this
clause (ii) and the other covenants of the Note Holders contained in the
Operative Agreements.
7.6
Agreements
7.6.1
Owner
Trustee Is Owner for All Purposes
Lessee,
the Owner Participant and Owner Trustee agree that for all purposes, after
the
Closing, Owner Trustee will be the owner of the Aircraft (except that Owner
Participant will be the owner for income tax purposes) and Lessee will be
the
lessee thereof. No transfer, by operation of Law or otherwise, of the beneficial
interest of Owner Participant in and to the Trust Estate shall operate to
transfer legal title to any part of the Trust Estate to any transferee
thereof.
7.6.2
Commencement
of Bankruptcy Proceedings
Lessee,
each Participant, each Note Holder, ▇▇▇▇▇ Fargo, Owner Trustee, WTC and
Mortgagee agree for the benefit of each of the others that it will not commence
or join in any proceeding under the Bankruptcy Code to commence a case under
Section 303 of the Bankruptcy Code against the Trust Estate. Nothing
contained herein shall be deemed to preclude any Participant, any Note Holder,
▇▇▇▇▇ Fargo, Owner Trustee, WTC or Mortgagee from filing any claim against
the
Trust Estate in any case commenced against the Trust Estate or preclude the
exercise of remedies pursuant to, or limit the rights of Mortgagee under,
the
Trust Indenture.
7.6.3
Certain
Bankruptcy Matters
If
(a) all or any part of the Trust Estate becomes the property of, or Owner
Trustee or Owner Participant becomes, a debtor subject to the reorganization
provisions of the Bankruptcy Code, (b) pursuant to such reorganization
provisions, including Section 1111(b) of the Bankruptcy Code, ▇▇▇▇▇ Fargo
or Owner Participant is required, by reason of ▇▇▇▇▇ Fargo or Owner Participant
being held to have recourse liability to any Note Holder or Mortgagee directly
or indirectly (other than the recourse liability of ▇▇▇▇▇ Fargo or Owner
Participant under this Agreement, the Trust Indenture or by separate agreement),
to make payment on account of any amount payable as principal, Make-Whole
Amount, if any, interest or other amounts on the Equipment Notes, and
(c) any Note Holder or Mortgagee actually receives any Excess Amount, as
defined below, which reflects any payment by ▇▇▇▇▇ Fargo or Owner Participant
on
account of (b) above, then such Note Holder or Mortgagee, as the case may
be,
shall promptly refund to ▇▇▇▇▇ Fargo or Owner Participant (whichever shall
have
made such payment) such Excess Amount.
For
purposes of this Section 7.6.3, “Excess Amount” means the amount by which such
payment exceeds the amount that would have been received by a Note Holder
or
Mortgagee if ▇▇▇▇▇ Fargo or Owner Participant had not become subject to the
recourse liability referred to in clause (b) above, and such Note Holder
or
Mortgagee receives written notice that such amount is an Excess Amount prior
to
its distribution thereof. Nothing contained in this Section 7.6.3 shall
prevent a Note Holder or Mortgagee from enforcing any personal recourse
obligation (and retaining the proceeds thereof) of ▇▇▇▇▇ Fargo or Owner
Participant under this Agreement (other than as referred to in clause (b)
above) or the Trust Indenture (and any exhibits or annexes thereto) or from
retaining any amount paid by Owner Participant under Sections 2.13 or 4.03
of the Trust Indenture.
7.6.4
Quiet
Enjoyment; Sale by Owner Trustee Binding
(a) Owner
Participant, Pass Through Trustee, Subordination Agent, each Note Holder,
Owner
Trustee and Mortgagee agrees as to itself with Lessee that, so long as no
Lease
Event of Default shall have occurred and be continuing, such Person shall
not
(and shall not permit any Affiliate or other Person claiming by, through
or
under it to) interfere with Lessee’s rights in accordance with the Lease to the
quiet enjoyment, possession and use of the Aircraft during the Term.
(b) Any
assignment, sale, transfer or other conveyance of the Aircraft by Owner Trustee
made pursuant to the terms of this Agreement or the Lease shall bind Owner
Participant and shall be effective to transfer or convey all right, title
and
interest of Owner Trustee and Owner Participant in and to the Aircraft. No
purchaser or other grantee shall be required to inquire as to the authorization,
necessity, expediency or regularity of such assignment, sale, transfer or
conveyance, or as to the application of any sale or other proceeds with respect
thereto by Owner Trustee, as regards Owner Participant.
7.6.5
Release
of Lien of Trust Indenture
Each
of
Lessee, Lessor and Mortgagee agrees that in each instance referred to in
the
Lease in which a transfer of any property is required to be made by Lessor
to
Lessee or any other Person (other than Mortgagee), Mortgagee shall, upon
request
of Lessor and compliance with the applicable provisions of the Lease and
Trust
Indenture, promptly execute (at Lessee’s cost and expense) such instruments as
Lessor or Lessee may reasonably request to evidence the release of the Lien
of
the Trust Indenture with respect to such property.
7.6.6
Non-Recourse
Loan
Participant and Mortgagee agree that (a) obligations of Owner Trustee under
the
Trust Indenture or any other Operative Agreement and with respect to the
Equipment Notes shall be non-recourse to Owner Participant and to ▇▇▇▇▇ Fargo
and (b) they will look solely to the income and proceeds from the Trust
Estate and the Trust Indenture Estate to the extent available for distribution
to Note Holder or Mortgagee as provided in the Trust Indenture and that neither
Owner Participant nor ▇▇▇▇▇ Fargo will be personally liable to Loan Participant
or Mortgagee for any amounts payable by Owner Trustee under the Trust Indenture
or any other Operative Agreement; provided,
however,
that
the foregoing is not intended nor shall it be construed to limit any recourse
liability of Owner Participant or ▇▇▇▇▇ Fargo to the extent that such liability
is expressly set forth in this Agreement or in any of the Operative Agreements
or arises by reason of the breach of any representation or warranty or covenant
given by such Person (in the case of ▇▇▇▇▇ Fargo, in its individual
capacity).
7.6.7
Other
Documents; Amendment
(a) Each
of
the Owner Participant and the Owner Trustee hereby agrees with Lessee, the
Loan
Participant, and the Mortgagee not to amend, supplement or otherwise modify
any
provision of the Trust Agreement in a manner that could materially adversely
affect such party without the prior written consent of such party (including
without limitation in the case of such agreement with Lessee, Section 4.2.5
of
the Trust Agreement). Notwithstanding the foregoing,
so
long
as the Lease has not been terminated or expired, each Participant, the Mortgagee
and the Owner Trustee hereby agree for the benefit of Lessee that without
the
consent of Lessee they will not amend, supplement or otherwise modify
(i) Article III, Article IX or Sections 2.02 (third
paragraph), 2.05 or 3.06 (second sentence) of the Trust Indenture, (ii) any
provision of any Operative Agreement that will affect the stated principal
amount of or premium or interest on the Equipment Notes or (iii) any other
provision of the Trust Indenture or Equipment Notes in a manner that could
materially adversely affect Lessee. Mortgagee and Owner Trustee agree promptly
to furnish to Lessee copies of any supplement, amendment, waiver or modification
of any of the Operative Agreements to which Lessee is not a party. Loan
Participant agrees that it will not take any action in respect of the Trust
Indenture Estate except through the Mortgagee pursuant to the Trust Indenture
or
as otherwise permitted by the Trust Indenture.
(b) Owner
Trustee agrees to join with Lessee to the extent that action on its part
is
necessary or appropriate (i) to cause the following to be duly accomplished
in accordance with applicable United States federal Law by the time the Aircraft
is delivered under this Agreement and the Lease: (A) the application for
registration of the Aircraft in the name of Owner Trustee and (B) all
related action necessary in order for Lessee to have temporary or permanent
authority to operate the Aircraft as contemplated by the Lease and
(ii) forthwith upon delivery of the Aircraft under this Agreement and the
Lease, to cause all necessary documents to be duly filed for recording in
accordance with applicable United States federal Law.
7.6.8
Consents
Owner
Participant, Pass Through Trustee, Subordination Agent, Owner Trustee and
Mortgagee each covenants and agrees, for the benefit of Lessee, that it shall
not unreasonably withhold its consent to any consent or approval requested
of it
or of Owner Trustee or Mortgagee under the terms of any of the Operative
Agreements which by its terms is not to be unreasonably withheld.
7.6.9
Insurance
Each
of
Owner Participant, the Pass Through Trustee, the Subordination Agent and
the
Owner Trustee agrees not to obtain or maintain insurance for its own account
as
permitted by Section 11.2 of the Lease if such insurance would limit or
otherwise materially adversely affect the coverage of any insurance required
to
be obtained or maintained by Lessee pursuant to Section 11 and Annex D
of the Lease.
7.6.10 Extent
of Interest of Note Holders
A
Note
Holder shall not, as such, have any further interest in, or other right with
respect to, the Trust Estate or the Trust Indenture Estate when and if the
principal and Make-Whole Amount, if any, of and interest on the Equipment
Note
held by such Holder, and all other sums, then due and payable to such Holder
hereunder and under any other Operative Agreement, shall have been paid in
full.
7.6.11
Foreign
Registration
Each
Participant, Owner Trustee and Mortgagee hereby agree, for the benefit of
Lessee
but subject to the provisions of Section 7.1.2 of the Lease:
(a) that
Lessee shall be entitled to register the Aircraft or cause the Aircraft to
be
registered in a country other than the United States subject to compliance
with
the following:
(i) each
of
the following requirements is satisfied:
(A) such
registration shall be made only after the Tax Attribute Period, unless
Lessee
prepays on a lump sum basis calculated pursuant to Section 5(f) of the
Tax
Indemnity Agreement any liability due under the Tax Indemnity Agreement
as a
result of such registration based upon the assumption that such registration
would continue for the remainder of the term of the Permitted Sublease
described
in clause (C) below, provided, that notwithstanding the foregoing, such
registration may be made during the taxable year in which the seventh
anniversary of the Delivery Date occurs so long as the Aircraft is not
“used
predominantly outside the United States” within the meaning of
Section 168(g) of the Code during such taxable year;
(B) no
Lease
Event of Default shall have occurred and be continuing at the time of
such
registration;
(C) such
proposed change of registration is made in connection with a Permitted
Sublease
to a Permitted Air Carrier; and
(D) such
country is a Permitted Country with which the United States then maintains
normal diplomatic relations.
(ii) the
Owner
Trustee, Owner Participant and Mortgagee shall have received an opinion,
in form
and substance reasonably satisfactory to the Owner Participant (subject
to
customary exceptions), of counsel reasonably satisfactory to the Owner
Participant and Mortgagee addressed to each such party to the effect
that:
(A)
such country would recognize the Owner Trustee’s title to, ownership interest in
and right to possession of, the Aircraft;
(B)
the
obligations of Lessee, and the rights and remedies of Owner Trustee, under
the
Lease are valid, binding and enforceable under the laws of such country (or
the
laws of the country to which the laws of such country would refer as the
applicable governing law);
(C)
after
giving effect to such change in registration, the Lien of the Trust Indenture
on
the Owner Trustee’s right, title and interest in and to the Aircraft and the
Lease shall continue as a valid and duly
perfected
first priority security interest and all filing, recording or other action
necessary to protect the same shall have been accomplished (or, if such opinion
cannot be given at the time of such proposed change in registration because
such
change in registration is not yet effective, (1) the opinion shall detail
what filing, recording or other action is necessary and (2) Owner Trustee
and the Mortgagee shall have received a certificate from Lessee that all
possible preparations to accomplish such filing, recording and other action
shall have been done, and such filing, recording and other action shall be
accomplished and a supplemental opinion to that effect shall be delivered
to
Owner Trustee and the Mortgagee on or prior to the effective date of such
change
in registration;
(D)
it
is not necessary, solely as a consequence of such change in registration
and
without giving effect to any other activity of Owner Trustee, the Owner
Participant or the Mortgagee (or any Affiliate thereof), as the case may
be, for
Owner Trustee, the Owner Participant or the Mortgagee to qualify to do business
in such country as a result of such reregistration;
(E) there
is
no tort liability of the owner or lessor or mortgagee of an aircraft not
in
possession thereof under the laws of such country (it being agreed that,
in the
event such latter opinion cannot be given in a form satisfactory to the Owner
Participant and Mortgagee, such opinion shall be waived if insurance reasonably
satisfactory to the Owner Participant and Mortgagee is provided to cover
such
risk); and
(F)
unless Lessee shall have agreed to provide insurance reasonably satisfactory
to
Owner Participant and Mortgagee covering the risk of requisition of use of
the
Aircraft by the government of such country (so long as the Aircraft is
registered under the laws of such country), the laws of such country require
fair compensation by the government of such country payable in currency freely
convertible into Dollars and freely removable from such country (without
license
or permit, unless Lessee prior to such proposed reregistration has obtained
such
license or permit) for the taking or requisition by such government of such
use.
(b) In
addition, as a condition precedent to any change in registration Lessee
shall
have given to Lessor and Mortgagee assurances reasonably satisfactory to
each of
them:
(i) to
the
effect that the provisions of Section 11 of the Lease have been complied
with after giving effect to such change of registration; and
(ii) of
the
payment by Lessee of all reasonable out-of-pocket expenses at no after-tax
cost
to any Participant of Lessor, each Participant and Mortgagee in connection
with
such change of registry, including, without limitation (1) the reasonable
fees and disbursements of counsel to Lessee, Lessor and Mortgagee, (2) any
filing or recording fees, Taxes or similar payments incurred in connection
with
the change of registration of the Aircraft and the creation and perfection
of
the security interest therein in favor of Mortgagee for the benefit of Note
Holders, (3) all costs and expenses incurred in connection with any filings
necessary to continue in the United States the perfection of the security
interest in the Aircraft and the Lease in favor of Mortgagee for the benefit
of
Note Holders and (4) costs in connection with the calculation of the lump
sum
payment described in clause (i)(A) of this Section 7.6.11.
7.6.12
Other
Commercial Relations Unaffected
Notwithstanding
anything to the contrary set forth in any Operative Agreement:
(a) Except
as
set forth in the Purchase Agreement Assignment, nothing contained in the
Operative Agreements shall constitute or be deemed to be a waiver by Lessee
of
any rights, remedies or claims it may have against Airframe Manufacturer
or
Engine Manufacturer or any subcontractor or supplier of either; and the
Operative Agreements do not and shall not be construed or deemed to create
any
rights, waivers, immunities or indemnities in favor of Airframe Manufacturer,
Engine Manufacturer or any subcontractor or supplier of either with respect
to
any such rights, remedies or claims of Lessee; and
(b) The
Airframe Manufacturer, by its execution and delivery of the Consent and
Agreement, shall not be deemed to have waived any rights, remedies or claims
which Airframe Manufacturer (or any subcontractor or supplier of Airframe
Manufacturer) may have against Lessee; and the Operative Agreements do not
and
shall not be construed or deemed to create any rights, waivers, immunities
or
indemnities in favor of Lessee with respect to any such rights, remedies
or
claims of Airframe Manufacturer (or any subcontractor or supplier of Airframe
Manufacturer).
7.6.13
Interest
in Certain Engines
Each
Participant, Owner Trustee, and Mortgagee agree, for the benefit of each
of the
lessor, conditional seller, mortgagee or secured party of any airframe or
engine
leased to, or purchased by, Lessee or any Permitted Sublessee subject to
a
lease, conditional sale, trust indenture or other security agreement that
it
will not acquire or claim, as against such lessor, conditional seller, mortgagee
or secured party, any right, title or interest in any engine as the result
of
such engine being installed on the Airframe at any time while such engine
is
subject to such lease, conditional sale, trust indenture or other security
agreement and owned by such lessor or conditional seller or subject to a
trust
indenture or security interest in favor of such mortgagee or secured
party.
SECTION
8. CONFIDENTIALITY
Lessee,
Owner Participant, Note Holders, Owner Trustee, Mortgagee and Airframe
Manufacturer shall keep Annexes B, C and D and Schedules 1, 2, 3 and 4
to the Lease, the Purchase Agreement Assignment and the Tax Indemnity Agreement
confidential and shall not disclose, or cause to be disclosed, the same to
any
other Person, except (A) to prospective and permitted transferees of Lessee’s,
Owner Participant’s, a Note Holder’s, a Liquidity Provider’s, Owner Trustee’s,
Mortgagee’s or other Indenture Indemnitee’s interest or their respective counsel
or special counsel, independent insurance brokers, auditors, or other agents
who
agree to hold such information confidential, (B) to Lessee’s, Owner
Participant’s, a Note Holder’s, a Liquidity Provider’s, Pass Through Trustee’s,
Owner Trustee’s, Mortgagee’s or other Indenture Indemnitee’s counsel or special
counsel, independent insurance brokers, auditors, or other agents, Affiliates
or
investors who agree to hold such information confidential, (C) as may be
required by any statute, court or administrative order or decree, legal process
or governmental ruling or regulation, including those of any applicable
insurance regulatory bodies (including, without limitation, the National
Association of Insurance Commissioners), federal or state banking examiners,
Internal Revenue Service and state and local income tax auditors or any stock
exchange, (D) with respect to Lessee and Owner Participant, by mutual agreement
of such parties, (E) with respect to a Note Holder or Pass Through Trustee,
to a
nationally recognized rating agency for the purpose of obtaining a rating
on the
Equipment Notes or the Pass Through Certificates or to support an NAIC rating
for the Equipment Notes or the Pass Through Certificates or (F) such other
Persons as are reasonably deemed necessary by the disclosing party in order
to
protect the interests of such party or for the purposes of enforcing such
documents by such party; provided,
that
any and all disclosures permitted by clauses (C), (D), (E) or (F) above
shall be made only to the extent necessary to meet the specific requirements
or
needs of the Persons making such disclosures.
SECTION
9. INDEMNIFICATION
AND EXPENSES
9.1
General
Indemnity
9.1.1
Indemnity
If
the
Closing occurs, Lessee shall indemnify, protect, defend and hold harmless
each
Indemnitee from, against and in respect of, and shall pay on a net after-tax
basis, any and all Expenses of any kind or nature whatsoever that may be
imposed
on, incurred by or asserted against any Indemnitee, relating to, resulting
from,
or arising out of or in connection with, any one or more of the
following:
(a) The
Operative Agreements, the Pass Through Agreements, or the enforcement of
any of
the terms of any of the Operative Agreements or the Pass Through
Agreements;
(b) The
Aircraft, the Airframe, any Engine or any Part, including, without limitation,
with respect thereto, (i) the manufacture, design, purchase, acceptance,
nonacceptance or rejection, ownership, registration, reregistration,
deregistration, delivery, nondelivery, lease, sublease, assignment, possession,
use or non-use, operation, maintenance, testing, repair, overhaul, condition,
alteration, modification, addition, improvement, storage,
airworthiness,
replacement,
repair, sale, substitution, return, abandonment, redelivery or other disposition
of the Aircraft, any Engine or any Part, (ii) any claim or penalty arising
out
of violations of applicable Laws by Lessee (or any Permitted Sublessee),
(iii)
tort liability, whether or not arising out of the negligence of any Indemnitee
(whether active, passive or imputed), (iv) death or property damage of
passengers, shippers or others, (v) environmental control, noise or pollution
and (vi) any Liens in respect of the Aircraft, any Engine or any
Part;
(c) The
offer, sale, or delivery of any Equipment Notes, Pass Through Certificates
or
any interest therein or represented thereby; and
(d) Any
breach of or failure to perform or observe, or any other noncompliance with,
any
covenant or agreement or other obligation to be performed by Lessee under
any
Lessee Operative Agreement or any Pass Through Agreement or the falsity of
any
representation or warranty of Lessee in any Lessee Operative Agreement or
any
Pass Through Agreement other than in the Tax Indemnity Agreement.
9.1.2
Exceptions
Notwithstanding
anything contained in Section 9.1.1, Lessee shall not be required to
indemnify, protect, defend and hold harmless any Indemnitee pursuant to
Section 9.1.1 in respect of any Expense of such Indemnitee:
(a) For
any
Taxes or a loss of Tax benefit, whether or not Lessee is required to indemnify
therefor pursuant to Section 9.3 or the Tax Indemnity Agreement;
provided,
however,
this
Section 9.1.1(a) shall not apply to any taxes taken into account in making
any
payment on a net after tax basis;
(b) Except
to
the extent attributable to acts or events occurring prior thereto, acts or
events (other than acts or events related to the performance or failure to
perform by Lessee of its obligations pursuant to the terms of the Lessee
Operative Agreements) that occur after the earlier of: (i) with respect to
the Airframe, any Engine or any Part, the return of possession (it being
understood that the date of the placement of the Aircraft in storage as provided
in Section 5 of the Lease constitutes the date of return of the Aircraft
under
the Lease) of such Airframe, Engine or Part pursuant to the terms of and
in
compliance with the Lease (other than pursuant to Section 15 thereof, in
which
case Lessee’s liability under this Section 9.1 shall survive for so long as
Lessor or Mortgagee shall be entitled to exercise remedies under such
Section 15) or (ii) the termination of the Term in accordance with the
Lease;
(c) To
the
extent attributable to any Transfer (voluntary or involuntary) by or on behalf
of such Indemnitee of any Equipment Note or interest therein, except (i)
for
out-of-pocket costs and expenses incurred as a result of any such Transfer
pursuant to the exercise of remedies under any Operative Agreement resulting
from a Lease Event of Default and (ii) as otherwise required by the terms
of
Section 2.13 of the Trust Indenture;
(d) To
the
extent attributable to any Transfer (voluntary or involuntary) by or on behalf
of Owner Participant of any interest in the Aircraft, or the Trust Estate
except
for costs and expenses incurred as a result of such Transfer, if such Transfer
arises directly from a Lease Event of Default that shall have occurred and
be
continuing;
(e) To
the
extent attributable to the gross negligence or willful misconduct of such
Indemnitee or any related Indemnitee (as defined below) (other than gross
negligence or willful misconduct imputed to such person by reason of its
interest in the Aircraft or any Operative Agreement);
(f) In
the
case of ▇▇▇▇▇ Fargo, to the extent attributable to matters enumerated in
the
proviso to Section 14;
(g) To
the
extent attributable to the incorrectness or breach of any representation
or
warranty of such Indemnitee or any related Indemnitee contained in or made
pursuant to any Operative Agreement or any Pass Through Agreement;
(h) To
the
extent attributable to the failure by such Indemnitee or any related Indemnitee
to perform or observe any agreement, covenant or condition on its part to
be
performed or observed in any Operative Agreement or any Pass Through Agreement;
(i) To
the
extent attributable to the offer or sale by such Indemnitee or any related
Indemnitee of any interest in the Aircraft, the Equipment Notes, the Pass
Through Certificates, the Trust Estate or the Trust Agreement or any similar
interest, in violation of the Securities Act or other applicable federal,
state
or foreign securities Laws (other than any offer or sale thereof caused by
the
acts or omissions of Lessee);
(j) (i) With
respect to any Indemnitee (other than Mortgagee), to the extent attributable
to
the failure of the Mortgagee to distribute funds received and distributable
by
it in accordance with the Trust Indenture, (ii) with respect to any
Indemnitee (other than the Owner Trustee), to the extent attributable to
the
failure of the Owner Trustee to distribute funds received and distributable
by
it in accordance with the Trust Agreement, (iii) with respect to any
Indemnitee (other than the Subordination Agent), to the extent attributable
to
the failure of the Subordination Agent to distribute funds received and
distributable by it in accordance with the Intercreditor Agreement,
(iv) with respect to any Indemnitee (other than the Pass Through Trustee),
to the extent attributable to the failure of the Pass Through Trustee to
distribute funds received and distributable by it in accordance with the
Pass
Through Trust Agreement, (v) with respect to any Indemnitee (other than the
Escrow Agent), to the extent attributable to the failure of the Escrow Agent
to
pay funds received and payable by it in accordance with any Escrow Agreement,
(vi) with respect to any Indemnitee (other than the Paying Agent), to the
extent attributable to the failure of the Paying Agent to distribute funds
received and distributable by it in accordance with any Escrow Agreement,
(vii) to the extent attributable to the failure of the Depositary to pay
funds payable by it in accordance with any Deposit Agreement, (viii) with
respect to Mortgagee, to the extent attributable to the negligence or willful
misconduct of Mortgagee in the distribution of funds received and distributable
by it in accordance with the Trust Indenture, (ix) with respect to Owner
Trustee, to the extent attributable to the negligence or willful misconduct
of
Owner Trustee in the distribution of funds received and distributable by
it in
accordance with the Trust Agreement, (x) with respect to the Subordination
Agent, to the extent attributable to the negligence or willful misconduct
of the
Subordination Agent in the distribution of funds received and distributable
by
it in accordance with the Intercreditor Agreement, (xi) with respect to the
Pass Through Trustee, to the extent attributable to the negligence or willful
misconduct of the Pass Through Trustee in the distribution of funds
received
and distributable by it in accordance with the Pass Through Trust Agreement,
(xii) with respect to the Escrow Agent, to the extent attributable to the
negligence or willful misconduct of the Escrow Agent in the payment of funds
received and payable by it in accordance with any Escrow Agreement, and
(xiii) with respect to the Paying Agent, to the extent attributable to the
negligence or willful misconduct of the Paying Agent in the distribution
of
funds received and distributable by it in accordance with any Escrow
Agreement.
(k) Other
than during the continuation of a Lease Event of Default, to the extent
attributable to the authorization or giving or withholding of any future
amendments, supplements, waivers or consents with respect to any Operative
Agreement or Pass Through Agreement other than such as have been requested
by
Lessee or as are required by or made pursuant to the terms of the Operative
Agreements or Pass Through Agreements (unless such requirement results from
the
actions of an Indemnitee not required by or made pursuant to the Operative
Agreements or the Pass Through Agreements);
(l) To
the
extent attributable to any amount which any Indemnitee expressly agrees to
pay
or such Indemnitee expressly agrees shall not be paid by or be reimbursed
by
Lessee;
(m) To
the
extent that it is an ordinary and usual operating or overhead
expense;
(n) With
respect to the Owner Participant or the Owner Trustee, or any related
Indemnitee, to the extent attributable to the deregistration of the Aircraft
under the Act as a result of Owner Participant’s or Owner Trustee’s (or any
related Indemnitee of either) not being a Citizen of the United States as
a
result of any act (other than reregistration of the Aircraft pursuant to
Section 7.1.2 of the Lease) of Owner Participant or Owner Trustee, or any
related Indemnitee of either of the foregoing (not taken at the request of
the
Lessee);
(o) For
any
Lessor Lien attributable to such Indemnitee or any related
Indemnitee;
(p) If
another provision of an Operative Agreement or a Pass Through Agreement
specifies the extent of Lessee’s responsibility or obligation with respect to
such Expense, to the extent arising from other than failure of Lessee to
comply
with such specified responsibility or obligation;
(q) To
the
extent it is a Transaction Expense;
(r) To
the
extent constituting principal, Make-Whole Amount or interest on the Equipment
Notes attributable solely to an Event of Default not constituting a Lease
Event
of Default; or
(s) To
the
extent incurred by or asserted against an Indemnitee as a result of any
“prohibited transaction”, within the meaning of Section 406 of ERISA or Section
4975(c)(1) of the Code; or
(t) To
the
extent not included in the definition of Supplemental Rent as a result of
the
provisions of clause (e) of such definition.
For
purposes of this Section 9.1, a Person shall be considered a “related”
Indemnitee with respect to an Indemnitee if such Person is an Affiliate or
employer of such Indemnitee, a director, officer, employee, agent, or servant
of
such Indemnitee or any such Affiliate or a successor or permitted assignee
of
any of the foregoing.
9.1.3
Separate
Agreement
This
Agreement constitutes a separate agreement with respect to each Indemnitee
and
is enforceable directly by each such Indemnitee.
9.1.4
Notice
If
a
claim for any Expense that an Indemnitee shall be indemnified against under
this
Section 9.1 is made, such Indemnitee shall give prompt written notice
thereof to Lessee. Notwithstanding the foregoing, the failure of any Indemnitee
to notify Lessee as provided in this Section 9.1.4, or in Section 9.1.5,
shall not release Lessee from any of its obligations to indemnify such
Indemnitee hereunder, except to the extent that such failure results in an
additional Expense to Lessee (in which event Lessee shall not be responsible
for
such additional Expense) or materially impairs Lessee’s ability to contest such
claim.
9.1.5
Notice
of Proceedings; Defense of Claims; Limitations
(a) In
case
any action, suit or proceeding shall be brought against any Indemnitee for
which
Lessee is responsible under this Section 9.1, such Indemnitee shall notify
Lessee of the commencement thereof and Lessee may, at its expense, participate
in and to the extent that it shall wish (subject to the provisions of the
following paragraph), assume and control the defense thereof and, subject
to
Section 9.1.5(c), settle or compromise the same.
(b) Lessee
or
its insurer(s) shall have the right, at its or their expense, to investigate
or,
if Lessee or its insurer(s) shall agree in writing not to dispute liability
to
the Indemnitee giving notice of such action, suit or proceeding under this
Section 9.1.5 for indemnification hereunder or under any insurance policies
pursuant to which coverage is sought, control the defense of, any action,
suit
or proceeding, relating to any Expense for which indemnification is sought
pursuant to this Section 9.1, and each Indemnitee shall cooperate with
Lessee or its insurer(s) with respect thereto; provided,
that
Lessee shall not be entitled to control the defense of any such action, suit,
or
proceeding or compromise any such Expense (i) during the continuance of any
Lease Event of Default arising under Section 14.1 of the Lease, (ii) if
such proceedings would entail a material risk of the sale, forfeiture or
loss of
the Aircraft or (iii) if such proceedings would entail a risk of criminal
liability or greater than de minimis risk of material civil penalties being
imposed on such Indemnitee. In connection with any such action, suit or
proceeding being controlled by Lessee, such Indemnitee shall have the right
to
participate therein, at its sole cost and expense, with counsel reasonably
satisfactory to Lessee; provided,
that
such Indemnitee’s participation does not, in the reasonable opinion of the
independent counsel appointed by the Lessee or its insurers to conduct such
proceedings, interfere with the defense of such case.
(c) In
no
event shall any Indemnitee enter into a settlement or other compromise with
respect to any Expense without the prior written consent of Lessee, which
consent shall not be
unreasonably
withheld or delayed, unless such Indemnitee waives its right to be indemnified
with respect to such Expense under this Section 9.1.
(d) In
the
case of any Expense indemnified by the Lessee hereunder which is covered
by a
policy of insurance maintained by Lessee pursuant to Section 11 of the Lease,
at
Lessee’s expense, each Indemnitee agrees to cooperate with the insurers in the
exercise of their rights to investigate, defend or compromise such Expense
as
may be required to retain the benefits of such insurance with respect to
such
Expense.
(e) If
an
Indemnitee is not a party to this Agreement, Lessee may require such Indemnitee
to agree in writing to the terms of this Section 9 and Section 15.8
prior to making any payment to such Indemnitee under this
Section 9.
(f) Nothing
herein shall be deemed to be an assumption by Lessee of obligations of Owner
Trustee with respect to, or a guarantee by Lessee of, any amounts payable
by
Owner Trustee upon Equipment Notes or a guarantee of any residual value of
the
Aircraft.
(g) Nothing
contained in this Section 9.1.5 shall be deemed to require an Indemnitee to
contest any Expense or to assume responsibility for or control of any judicial
proceeding with respect thereto.
9.1.6
Information
Lessee
will provide the relevant Indemnitee with such information not within the
control of such Indemnitee, as is in Lessee’s control or is reasonably available
to Lessee, which such Indemnitee may reasonably request and will otherwise
cooperate with such Indemnitee so as to enable such Indemnitee to fulfill
its
obligations under Section 9.1.5. The Indemnitee shall supply Lessee with
such information not within the control of Lessee, as is in such Indemnitee’s
control or is reasonably available to such Indemnitee, which Lessee may
reasonably request to control or participate in any proceeding to the extent
permitted by Section 9.1.5.
9.1.7
Effect
of Other Indemnities; Subrogation; Further Assurances
Upon
the
payment in full by Lessee of any indemnity provided for under this Agreement,
Lessee, without any further action and to the full extent permitted by Law,
will
be subrogated to all rights and remedies of the person indemnified (other
than
with respect to any of such Indemnitee’s insurance policies or in connection
with any indemnity claim such Indemnitee may have under Section 5.03 or
7.01 of the Trust Indenture or Section 5.3 or 7 of the Trust Agreement) in
respect of the matter as to which such indemnity was paid. Each Indemnitee
will
give such further assurances or agreements and cooperate with Lessee to permit
Lessee to pursue such claims, if any, to the extent reasonably requested
by
Lessee and at Lessee’s expense.
9.1.8
Refunds
If
an
Indemnitee receives any refund, in whole or in part, with respect to any
Expense
paid by Lessee hereunder, it will promptly pay the amount refunded (but not
an
amount in excess of the amount Lessee or any of its insurers has paid in
respect
of such Expense) over to Lessee
unless
a
Lease Event of Default shall have occurred and be continuing, in which case
such
amounts shall be paid over to Owner Trustee (or, so long as the Trust Indenture
shall not have been discharged, to Mortgagee) to hold as security for Lessee’s
obligations under the Lessee Operative Agreements or, if requested by Lessee,
applied to satisfy such obligations.
9.2
Expenses
9.2.1
Transaction
Expenses
Owner
Participant shall pay all Transaction Expenses (which shall exclude the ongoing
fees, disbursements and expenses of Mortgagee and the Owner Trustee), up
to an
aggregate amount equal to the Expense Limit. Airframe Manufacturer shall
pay all
Transaction Expenses in excess of the Expense Limit and the ongoing fees,
disbursements and expenses of Mortgagee and the Owner Trustee, provided that
if
Airframe Manufacturer shall fail to make any payment when due of the ongoing
fees, disbursements and expenses of Mortgagee or Owner Trustee, Lessee shall
make such payment if so requested by Mortgagee or Owner Trustee, as applicable,
in which case Airframe Manufacturer shall be obligated to immediately reimburse
Lessee for any payment made by Lessee pursuant to this sentence. Lessee shall
have no liability or obligation with respect to Transaction Expenses, except
as
provided in the preceding sentence.
9.2.2
Payment
of Other Expenses
Lessee
will be responsible for the fees and charges of its counsel incurred in
connection with the preparation, execution and delivery of the Operative
Agreements. All out-of-pocket costs and expenses of Lessee (including, without
limitation, reasonable attorney’s fees and charges) incurred in performance of
Sections 7.1.3(a), (b) and (c) (other than with respect to the first
parenthetical of Section 7.1.3(c)) to the extent constituting Transaction
Expenses, shall be paid pursuant to Section 9.2.1 and, otherwise, shall be
paid
by Airframe Manufacturer. Airframe Manufacturer shall pay all costs and expenses
incurred by it in connection with the Operative Agreements.
9.3
General
Tax Indemnity
9.3.1
General
Except
as
provided in Section 9.3.2, Lessee agrees that each payment of Rent paid by
Lessee pursuant to the Lease, and any other payment or indemnity paid by
Lessee
to a Tax Indemnitee under any Operative Agreement, shall be free of all
withholdings or deductions with respect to Taxes of any nature (other than
U.S.
federal withholding taxes on, based on or measured by gross or net income),
and
in the event that Lessee shall be required by applicable law to make any
such
withholding or deduction for any such payment (x) Lessee shall make all such
withholdings or deductions, (y) the amount payable by Lessee shall be increased
so that after making all required withholdings or deductions such Tax Indemnitee
receives (at no after-Tax cost to the Tax Indemnitee) the same amount that
it
would have received had no such withholdings or deductions been made, and
(z) Lessee shall pay the full amount withheld or deducted to the relevant
Taxing Authority in accordance with applicable law. Lessee further agrees
that,
in the event it is required to withhold from any payment of Basic Rent,
Termination Value, Stipulated Loss Value (and amounts determined by reference
thereto), or amounts
payable
upon exercise of Lessee’s purchase option pursuant to Section 17.3 of the Lease,
any Tax imposed upon Owner Participant or Owner Trustee (including any
withholding Tax based on income or receipts of Owner Participant or Owner
Trustee) and such Tax is excluded from indemnification pursuant to
Section 9.3.2, Lessee shall pay such additional amount, if any, required so
that the total amount paid by Lessee (after making all required withholdings)
is
equal to (assuming timely payment of the Equipment Notes prior to the relevant
Payment Date) the aggregate principal amount of scheduled installments due
on
the Equipment Notes outstanding on the relevant Payment Date, together with
accrued and unpaid interest, due on the Equipment Notes; Owner Participant
or
Owner Trustee, as the case may be, shall reimburse Lessee for any such
additional amounts within two Business Days after demand therefor. Except
as
provided in Section 9.3.2 and whether or not any of the transactions
contemplated hereby are consummated, Lessee shall pay, indemnify, protect,
defend and hold each Tax Indemnitee harmless from all Taxes imposed by any
Taxing Authority that may from time to time be imposed on or asserted against
any Tax Indemnitee or the Aircraft, the Airframe, any Engine or any Part
or any
interest in any of the foregoing (whether or not indemnified against by any
other Person), upon or with respect to the Operative Agreements or the
transactions or payments contemplated thereby, including but not limited
to any
Tax imposed upon or with respect to (x) the Aircraft, the Airframe, any
Engine, any Part, any Operative Agreement (including without limitation any
Equipment Notes) or any data or any other thing delivered or to be delivered
under an Operative Agreement, (y) the purchase, manufacture, acceptance,
rejection, sale, transfer of title, return, ownership, mortgaging, delivery,
transport, charter, rental, lease, re-lease, sublease, assignment, possession,
repossession, presence, use, condition, storage, preparation, maintenance,
modification, alteration, improvement, operation, registration, transfer
or
change of registration, reregistration, repair, replacement, overhaul, location,
control, the imposition of any Lien (other than a Lessor Lien), financing,
refinancing requested by the Lessee, abandonment or other disposition of
the
Aircraft, the Airframe, any Engine, any Part, any data or any other thing
delivered or to be delivered under an Operative Agreement, or (z) rent,
interest, fees or any other income, proceeds, receipts or earnings, whether
actual or deemed, arising upon, in connection with, or in respect of, any
of the
Operative Agreements (including the property or income or other proceeds
with
respect to property held as part of the Trust Estate) or the transactions
contemplated thereby.
9.3.2
Certain
Exceptions
The
provisions of Section 9.3.1 shall not apply to, and Lessee shall have no
liability hereunder for, Taxes:
(a) imposed
on a Tax Indemnitee by the federal government of the United States or any
Taxing
Authority of any jurisdiction within the United States in which such Tax
Indemnitee is incorporated or maintains its principal place of business or
is
otherwise subject to Taxes of such type as a result of transactions or
activities by such Tax Indemnitee or its Affiliates that are independent
of the
transactions and activities contemplated by the Operative Agreements (i)
on,
based on, or measured by, gross or net income or gross or net receipts,
including capital gains taxes, excess profits taxes, minimum taxes from tax
preferences, alternative minimum taxes, branch profits taxes, accumulated
earnings taxes, personal holding company taxes, succession taxes and estate
taxes, and any withholding taxes on, based on or measured by gross or net
income
or receipts or (ii) on, or with respect to, or measured by, capital or net
worth
or in the
nature
of a franchise tax or a tax for the privilege of doing business (other than,
in
the case of clause (i) or (ii), sales, use, license or property Taxes, Taxes
in
the nature of sales or use taxes, value added taxes imposed in lieu of any
of
the foregoing, airport excise taxes or any excise taxes imposed in the nature
of
or in lieu of any of the foregoing and other than, in the case of clause
(ii),
any doing business taxes imposed by a taxing authority in any jurisdiction
(other than the jurisdiction within which such Tax Indemnitee is incorporated
or
maintains its principal place of business) if such doing business taxes
attributable to the transactions contemplated by the Operative Agreements
were
subject to indemnity pursuant to the provisions of this clause 9.3.2(a) (without
regard to this parenthetical) solely as a result of the usage or location
of the
Aircraft in such jurisdiction by a Lessee Person when such Tax Indemnitee
was
not incorporated or doing business or otherwise subject to Taxes of such
type in
such jurisdiction, if in a subsequent taxable period such Indemnitee becomes
subject to Taxes of such type as a result of activities or transactions other
than those contemplated by the Operative Agreements, to the extent that such
taxes (and in an amount no more than the amount of such Taxes that) would
have
continued to be imposed solely as a result of the usage or location of the
Aircraft by a Lessee Person in such jurisdiction in the absence of any
additional nexus between such Tax Indemnitee and such
jurisdiction);
(b) imposed
as a result of the replacement of the existing financing agreements with
the
Operative Agreements and the Express Sublease or the issuance of the Equipment
Notes;
(c) on,
or
with respect to, or measured by, any trustee fees, commissions or compensation
received by Owner Trustee, Pass Through Trustee, Subordination Agent or
Mortgagee;
(d) on
the
Trust or the Trust Estate that result from treatment of the Trust or the
Trust
Estate as an entity, such as a corporation, separate and apart from the Owner
Participant;
(e) that
are
being contested as provided in Section 9.3.4 hereof, for so long as such
contest
is continuing;
(f) imposed
on any Tax Indemnitee to the extent that such Taxes result from the gross
negligence or willful misconduct of such Tax Indemnitee, a related Tax
Indemnitee or any Affiliate thereof;
(g) imposed
on or with respect to a Tax Indemnitee (including the transferee in those
cases
in which the Tax on transfer is imposed on, or is collected from, the
transferee) as a result of a transfer or other disposition (including a deemed
transfer or disposition) by such Tax Indemnitee or a related Tax Indemnitee
(or,
in the case of the Owner Participant, by Owner Trustee (unless requested
by the
Lessee), or, in the case of Taxes imposed on a transferee, by the transferor)
of
any interest in the Aircraft, the Airframe, any Engine or any Part, the Rent
(other than the assignment of Rent to the Mortgagee pursuant to the Trust
Indenture), the Trust, the Trust Estate, the Trust Indenture Estate, the
Lease
or any interest arising under the Operative Agreements or any Equipment Note
or
a transfer or disposition (including a deemed transfer or disposition) of
any
interest in a Tax Indemnitee (other than (A) a substitution or replacement
of
the Aircraft, the Airframe, any Engine or any Part by a Lessee Person that
is
treated for Tax purposes as a transfer or disposition, (B) a transfer pursuant
to an exercise of remedies upon a
Lease
Event of Default that shall have occurred and have been continuing, or
(C) a transfer to Lessee pursuant to Section 17.3 of the
Lease);
(h) except
with respect to gross-ups, imposed subsequent to (and not in respect of)
a
transfer or other disposition described in paragraph (g) above and not described
in the last parenthetical of such paragraph (g) and in excess of those that
would have been imposed had there not been a transfer or other disposition
by or
to such Tax Indemnitee or a related Tax Indemnitee described in
paragraph (g) above;
(i) imposed
on the Owner Participant and indemnified by Lessee pursuant to the Tax Indemnity
Agreement;
(j) imposed
with respect to any period after the expiration or earlier termination of
the
Term and, if required pursuant to the terms of the Lease, the return of
possession of the Aircraft to Lessor or placement in storage at the request
of
Lessor in accordance with the Lease (provided that this exclusion (j) shall
not apply to Taxes imposed after such period arising as a result of events
occurring prior to such expiration or earlier termination);
(k) consisting
of any interest, penalties or additions to tax imposed on a Tax Indemnitee
resulting from a failure of such Tax Indemnitee or a related Tax Indemnitee
to
file any return properly and timely, unless such failure shall be caused
by the
failure of Lessee to fulfill its obligations, if any, under Section 9.3.6
with respect to such return, provided
that if
any such return is required to be filed in a jurisdiction outside the United
States, which return would not have been required to be filed in the absence
of
the transactions contemplated under the Operative Agreements or Lessee’s
transactions or activities in such jurisdiction, this exclusion shall not
apply
if (A) Lessee has not informed the Tax Indemnitee in writing of the need
to file
such return at least 30 days prior to the due date thereof (or such shorter
period as would reasonably allow the Tax Indemnitee to file such return if,
under the circumstances, the Lessee could not have reasonably informed the
Tax
Indemnitee of the need to file at least 30 days prior to the due date thereof),
or (B) the Tax Indemnitee had determined in good faith that such filing would
subject it or any Affiliate to adverse consequences in such jurisdiction
for
which it had not been (and would not have been) indemnified;
(l) resulting
from, or that would not have been imposed but for, any Lessor Liens arising
as a
result of claims against, or acts or omissions of, or otherwise attributable
to
such Tax Indemnitee or a related Tax Indemnitee;
(m) imposed
on any Tax Indemnitee as a result of the breach by such Tax Indemnitee or
a
related Tax Indemnitee of any covenant of such Tax Indemnitee or any Affiliate
thereof contained in any Operative Agreement or the inaccuracy of any
representation or warranty by such Tax Indemnitee or any Affiliate thereof
in
any Operative Agreement;
(n) in
the
nature of an intangible or similar Tax (i) upon or with respect to the value
or
principal amount of the interest of Loan Participant or any Note Holder in
any
Equipment Note or the loan evidenced thereby or (ii) upon or with respect
to the
value of the interest of the Owner Participant in the Trust Estate or the
Trust,
in each case only if such Taxes are in the nature of franchise Taxes or result
from the Tax Indemnitee doing business in the taxing
jurisdiction
and are imposed because of the place of incorporation or the activities
unrelated to the transactions contemplated by the Operative Agreements in
the
taxing jurisdiction of such Tax Indemnitee;
(o) that
are
included in Lessor’s Cost and paid to the appropriate Taxing Authority;
(p) imposed
on a Tax Indemnitee by a Taxing Authority of a jurisdiction outside the United
States within which such Tax Indemnitee is incorporated or maintains its
principal place of business or to the extent that such Taxes would not have
been
imposed but for a connection between the Tax Indemnitee or a related Tax
Indemnitee and such jurisdiction imposing such Tax unrelated to the transactions
contemplated by the Operative Agreements; or
(q) Taxes
relating to ERISA or Section 4975 of the Code.
For
purposes hereof, a Tax Indemnitee and any other Tax Indemnitees that are
successors, assigns, agents, servants or Affiliates of such Tax Indemnitee
shall
be related Tax Indemnitees.
9.3.3
Payment
(a) Lessee’s
indemnity obligation to a Tax Indemnitee under this Section 9.3 shall equal
the
amount which, after taking into account any Tax imposed upon the receipt
or
accrual of the amounts payable under this Section 9.3 and any tax benefits
actually recognized by such Tax Indemnitee as a result of the indemnifiable
Tax
(including, without limitation, any benefits recognized as a result of an
indemnifiable Tax being utilized by such Tax Indemnitee as a credit against
Taxes not indemnifiable under this Section 9.3), shall equal the amount of
the
Tax indemnifiable under this Section 9.3. The loss, disallowance or recapture
of
such tax benefits taken into account by such Tax Indemnitee shall be treated
as
a Tax subject to indemnity under this Section 9.3.1 without regard to the
provisions of Section 9.3.2 (other than Section 9.3.2(f)).
(b) At
Lessee’s request, the computation of the amount of any indemnity payment owed by
Lessee or any amount owed by a Tax Indemnitee to Lessee pursuant to this
Section
9.3 shall be verified and certified by an independent public accounting firm
selected by such Tax Indemnitee and reasonably satisfactory to Lessee. Such
verification shall be binding. The costs of such verification (including
the fee
of such public accounting firm) shall be borne by Lessee unless such
verification shall result in an adjustment in Lessee’s favor of 5% or more of
the net present value (computed using a discount rate equal to the Debt Rate,
compounded monthly) of the payment as computed by such Tax Indemnitee, in
which
case the costs shall be paid by such Tax Indemnitee.
(c) Each
Tax
Indemnitee shall provide Lessee with such certifications, information and
documentation as shall be in such Tax Indemnitee’s possession and as shall be
reasonably requested by Lessee to minimize any indemnity payment pursuant
to
this Section 9.3; provided, that notwithstanding anything to the contrary
contained herein, no Tax Indemnitee shall be required to provide Lessee with
any
Tax returns.
(d) Each
Tax
Indemnitee shall promptly forward to Lessee any written notice, ▇▇▇▇ or advice
received by it from any Taxing Authority concerning any Tax for which it
seeks
indemnification
under this Section 9.3. Lessee shall pay any amount for which it is liable
pursuant to this Section 9.3 directly to the appropriate Taxing Authority
if
legally permissible or upon demand of a Tax Indemnitee, to such Tax Indemnitee
within 30 days of such demand (or, if a contest occurs in accordance with
Section 9.3.4, within 30 days after a Final Determination (as defined below)),
but in no event more than two Business Days prior to the date the Tax to
which
such amount payable hereunder relates is due. If requested by a Tax Indemnitee
in writing, Lessee shall furnish to the appropriate Tax Indemnitee the original
or a certified copy of a receipt for Lessee’s payment of any Tax paid by Lessee
or such other evidence of payment of such Tax as is acceptable to such Tax
Indemnitee. Lessee shall also furnish promptly upon written request such
data as
any Tax Indemnitee may reasonably require to enable such Tax Indemnitee to
comply with the requirements of any taxing jurisdiction unless such data
is not
reasonably available to Lessee or, unless such data is specifically requested
by
a Taxing Authority, is not customarily furnished by domestic air carriers
under
similar circumstances. For purposes of this Section 9.3, a “Final Determination”
shall mean (i) a decision, judgment, decree or other order by any court of
competent jurisdiction that occurs pursuant to the provisions of Section
9.3.4,
which decision, judgment, decree or other order has become final and
unappealable (by law or by Lessee hereunder), (ii) a closing agreement or
settlement agreement entered into in accordance with Section 9.3.4 that has
become binding and is not subject to further review or appeal (absent fraud,
misrepresentation, etc.), or (iii) the termination of administrative proceedings
and the expiration of the time for instituting a claim in a court
proceeding.
(e) If
any
Tax Indemnitee shall actually realize a tax savings by reason of any Tax
paid or
indemnified by Lessee pursuant to this Section 9.3 (whether such tax savings
shall be by means of a foreign tax credit, depreciation or cost recovery
deduction or otherwise) and such savings is not otherwise taken into account
in
computing such payment or indemnity, such Tax Indemnitee shall pay to Lessee
(within 30 days after the realization of such tax savings) an amount equal
to
the lesser of (i) the amount of such tax savings, plus any additional tax
savings recognized as the result of any payment made pursuant to this sentence,
when, as, if, and to the extent, realized or (ii) the amount of all payments
(other than in respect of contest costs) pursuant to this Section 9.3 by
Lessee
to such Tax Indemnitee (less any payments previously made by such Tax Indemnitee
to Lessee pursuant to this Section 9.3.3 (e)) (and the excess, if any, of
the
amount described in clause (i) over the amount described in clause (ii) shall
be
carried forward and applied to reduce pro tanto any subsequent obligations
of
Lessee to make payments to such Tax Indemnitee pursuant to this Section 9.3);
provided, that such Tax Indemnitee shall not be required to make any payment
pursuant to this sentence so long as a Lease Event of Default of a monetary
nature has occurred and is continuing. If a tax benefit is later disallowed
or
denied, the disallowance or denial shall be treated as a Tax indemnifiable
under
Section 9.3.1 without regard to the provisions of Section 9.3.2 (other than
Section 9.3.2 (f)). Each such Tax Indemnitee shall in good faith use reasonable
efforts in filing its tax returns and in dealing with Taxing Authorities
to seek
and claim any such tax benefit.
(f) For
purposes of this Section 9.3, items of foreign Tax of any Tax Indemnitee
shall
be deemed to be utilized by such Tax Indemnitee as credits or deductions
for any
taxable year in accordance with the following priorities:
(x) First,
all utilizable foreign Taxes (taking into account the limitations of Section
904(d) of the Code) other than those described in clause (y) below;
(y) Second,
all utilizable foreign Taxes (taking into account the limitations of Section
904(d) of the Code) arising out of the transactions contemplated by the
Operative Agreements and other equipment leasing transactions to the extent
such
Tax Indemnitee is indemnified or held harmless for such Taxes by the Lessee
or a
lessee on a pari passu basis.
9.3.4
Contest
(a) If
a
written claim is made against a Tax Indemnitee for Taxes with respect to
which
Lessee could be liable for payment or indemnity hereunder, or if a Tax
Indemnitee makes a determination that a Tax is due for which Lessee could
have
an indemnity obligation hereunder, such Tax Indemnitee shall promptly give
Lessee notice in writing of such claim (provided, that failure to so notify
Lessee shall not relieve Lessee of its indemnity obligations hereunder unless
such failure to notify forecloses Lessee’s rights to require a contest of such
claim) and shall take no action with respect to such claim without the prior
written consent of Lessee for 30 days following the receipt of such notice
by
Lessee; provided, that, in the case of a claim made against a Tax Indemnitee,
if
such Tax Indemnitee shall be required by law to take action prior to the
end of
such 30-day period, such Tax Indemnitee shall, in such notice to Lessee,
so
inform Lessee, and such Tax Indemnitee shall take no action for as long as
it is
legally able to do so (it being understood that a Tax Indemnitee shall be
entitled to pay the Tax claimed and ▇▇▇ for a refund if (i)(A) the failure
to so pay the Tax would result in substantial penalties (unless immediately
reimbursed by Lessee) and the act of paying the Tax would not materially
prejudice the right to contest or (B) the failure to so pay would result
in
criminal penalties and (ii) such Tax Indemnitee shall take any action so
required in connection with so paying the Tax in a manner that, in its good
faith opinion, is the least prejudicial to the pursuit of the contest). In
addition, such Tax Indemnitee shall (provided, that Lessee shall have agreed
to
keep such information confidential other than to the extent necessary in
order
to contest the claim) furnish Lessee with copies of any requests for information
from any Taxing Authority relating to such Taxes with respect to which Lessee
may be required to indemnify hereunder. If requested by Lessee in writing
within
30 days after its receipt of such notice, such Tax Indemnitee shall, at the
expense of Lessee (including, without limitation, all reasonable costs, expenses
and reasonable attorneys’ and accountants’ fees and disbursements), in good
faith contest (or, if permitted by applicable law to be contested by the
Lessee
in its own name, allow Lessee to contest) through appropriate administrative
and
judicial proceedings the validity, applicability or amount of such Taxes
by (I)
resisting payment thereof, (II) not paying the same except under protest
if
protest is necessary and proper or (III) if the payment is made, using
reasonable efforts to obtain a refund thereof in an appropriate administrative
and/or judicial proceeding. If requested to do so by Lessee, the Tax Indemnitee
shall appeal any adverse administrative or judicial decision, except that
the
Tax Indemnitee shall not be required to pursue any appeals to the United
States
Supreme Court. If and to the extent the Tax Indemnitee is able to separate
the
contested issue or issues from other issues arising in the same administrative
or judicial proceeding that are unrelated to the transactions contemplated
by
the Operative Agreements without, in the good faith judgment of such Tax
Indemnitee, adversely affecting such Tax Indemnitee, such Tax Indemnitee
shall
permit Lessee to contest such matter in its own name, if permitted by applicable
law, and shall provide to Lessee (at Lessee’s cost and expense) such information
or data that is in such Tax Indemnitee’s control or possession that is
reasonably necessary to conduct such contest (other than such Tax Indemnitee’s
federal income tax returns), and Lessee shall keep such Tax Indemnitee
reasonably informed concerning the progress of such contest and shall provide
such
Tax
Indemnitee with copies of all submissions and judicial and administrative
proceedings. In the case of a contest controlled by a Tax Indemnitee, such
Tax
Indemnitee shall consult with Lessee in good faith regarding the manner of
contesting such claim and shall keep Lessee reasonably informed regarding
the
progress of such contest. A Tax Indemnitee shall not fail to take any action
expressly required by this Section 9.3.4 (including, without limitation,
any
action regarding any appeal of an adverse determination with respect to any
claim) or settle or compromise any claim without the prior written consent
of
the Lessee (except as contemplated by Section 9.3.4(b) or (c)).
(b) Notwithstanding
the foregoing, in no event shall a Tax Indemnitee be required to pursue any
contest (or to permit Lessee to pursue any contest) unless (i) Lessee shall
have
agreed to pay such Tax Indemnitee on demand all reasonable costs and expenses
incurred by such Tax Indemnitee in connection with contesting such Taxes,
including, without limitation, all reasonable out of pocket costs and expenses
and reasonable attorneys’ and accountants’ fees and disbursements, (ii) if such
contest shall involve the payment of the claim, Lessee shall advance the
amount
thereof (to the extent indemnified hereunder) plus interest, penalties and
additions to tax with respect thereto that are required to be paid prior
to the
commencement of such contest on an interest-free and after-Tax basis to such
Tax
Indemnitee (and such Tax Indemnitee shall promptly pay to the Lessee any
net
realized tax benefits resulting from such advance including any tax benefits
resulting from making such payment), (iii) such Tax Indemnitee shall have
reasonably determined that the action to be taken will not result in any
material risk of forfeiture, sale or loss of the Aircraft (unless Lessee
shall
have made provisions to protect the interests of any such Tax Indemnitee
and the
Owner Participant in a manner reasonably satisfactory to such Tax Indemnitee
and
the Owner Participant) (provided, that such Tax Indemnitee agrees to notify
Lessee in writing promptly after it becomes aware of any such risk), (iv)
no
Lease Event of Default shall have occurred and be continuing unless Lessee
has
provided adequate security for its obligations hereunder by advancing to
such
Tax Indemnitee before proceeding or continuing with such contest, the amount
of
the Tax being contested, plus any interest and penalties and an amount estimated
in good faith by such Tax Indemnitee for expenses, and (v) prior to commencing
any judicial action controlled by Lessee, Lessee shall have acknowledged
its
liability for such claim hereunder, provided that Lessee shall not be bound
by
its acknowledgment if the Final Determination articulates conclusions of
law and
fact that demonstrate that Lessee has no liability for the contested amounts
hereunder. Notwithstanding the foregoing, if any Tax Indemnitee shall release,
waive, compromise or settle any claim which may be indemnifiable by Lessee
pursuant to this Section 9.3 without the written permission of Lessee, Lessee’s
obligation to indemnify such Tax Indemnitee with respect to such claim (and
all
directly related claims and claims based on the outcome of such claim) shall
terminate, subject to Section 9.3.4(c), and subject to Section 9.3.4(c),
such
Tax Indemnitee shall repay to Lessee any amount previously paid or advanced
to
such Tax Indemnitee with respect to such claim (other then contest costs),
plus
interest at the rate that would have been payable by the relevant Taxing
Authority with respect to a refund of such Tax.
(c) Notwithstanding
anything contained in this Section 9.3, a Tax Indemnitee will not be required
to
contest the imposition of any Tax and shall be permitted to settle or compromise
any claim without Lessee’s consent if such Tax Indemnitee (i) shall waive its
right to indemnity under this Section 9.3 with respect to such Tax (and any
directly related claim and any claim the outcome of which is determined based
upon the outcome of such claim), (ii) shall pay to Lessee
any
amount previously paid or advanced by Lessee pursuant to this Section 9.3
(other
than contest costs) with respect to such Tax, plus interest at the rate that
would have been payable by the relevant Taxing Authority with respect to
a
refund of such Tax, and (iii) shall agree to discuss with Lessee the views
or
positions of any relevant Taxing Authority with respect to the imposition
of
such Tax.
9.3.5
Refund
If
any
Tax Indemnitee shall receive a refund of, or be entitled to a credit against
other liability for, all or any part of any Taxes paid, reimbursed or advanced
by Lessee, such Tax Indemnitee shall pay to Lessee within 30 days of such
receipt an amount equal to the lesser of (a) the amount of such refund or
credit
plus any net tax benefit (taking into account any Taxes incurred by such
Tax
Indemnitee by reason of the receipt of such refund or realization of such
credit) actually realized by such Tax Indemnitee as a result of any payment
by
such Tax Indemnitee made pursuant to this sentence (including this clause
(a))
and (b) such tax payment, reimbursement or advance by Lessee to such Tax
Indemnitee theretofore made pursuant to this Section 9.3 (and the excess,
if
any, of the amount described in clause (a) over the amount described in clause
(b) shall be carried forward and applied to reduce pro tanto any subsequent
obligation of Lessee to make payments to such Tax Indemnitee pursuant to
this
Section 9.3). If, in addition to such refund or credit, such Tax Indemnitee
shall receive (or be credited with) an amount representing interest on the
amount of such refund or credit, such Tax Indemnitee shall pay to Lessee
within
30 days of such receipt or realization of such credit that proportion of
such
interest that shall be fairly attributable to Taxes paid, reimbursed or advanced
by Lessee prior to the receipt of such refund or realization of such credit.
If
any such refund or credit or any interest thereon for which a Tax Indemnitee
shall have paid Lessee is later recaptured, denied, disallowed or reduced,
such
recapture, denial, disallowance or reduction shall be treated as a Tax
indemnifiable under Section 9.3.1 without regard to the provisions of Section
9.3.2 (other than Section 9.3.2(f)).
9.3.6
Tax
Filing
If
any
report, return or statement is required to be filed with respect to any Tax
which is subject to indemnification under this Section 9.3, Lessee shall
timely
file the same (except for any such report, return or statement which a Tax
Indemnitee has timely notified the Lessee in writing that such Tax Indemnitee
intends to file or which a Tax Indemnitee is required by law to file in its
own
name); provided, that the relevant Tax Indemnitee shall furnish Lessee with
any
information in such Tax Indemnitee’s possession or control that is reasonably
necessary to file any such return, report or statement and is reasonably
requested in writing by Lessee (it being understood that the Tax Indemnitee
shall not be required to furnish copies of its actual tax returns, although
it
may be required to furnish relevant information contained therein). Lessee
shall
either file such report, return or statement and send a copy of such report,
return or statement to such Tax Indemnitee, and Owner Trustee if the Tax
Indemnitee is not Owner Trustee, or, where Lessee is not permitted to file
such
report, return or statement, or if the same is required by law to be filed
in
the Tax Indemnitee’s own name, it shall notify such Tax Indemnitee in writing of
such requirement and prepare and deliver such report, return or statement
to
such Tax Indemnitee in a manner satisfactory to such Tax Indemnitee within
a
reasonable time prior to the time such report, return or statement is to
be
filed.
9.3.7
Forms
Each
Tax
Indemnitee agrees to furnish from time to time to Lessee or Mortgagee or
to such
other person as Lessee or Mortgagee may designate, at Lessee’s or Mortgagee’s
request, such duly executed and properly completed forms as may be necessary
or
appropriate in order to claim any reduction of or exemption from any withholding
or other Tax imposed by any Taxing Authority, if (x) such reduction or exemption
is available to such Tax Indemnitee, (y) Lessee has provided such Tax Indemnitee
with any information necessary to complete such form not otherwise reasonably
available to such Tax Indemnitee, and (z) if such return is required to be
filed
in a jurisdiction outside the United States, the Tax Indemnitee has not made
a
good faith determination that such filing would subject it or any Affiliate
to
any adverse consequences in such jurisdiction for which it has not been (and
would not have been) indemnified.
9.3.8
Non-Parties
If
a Tax
Indemnitee is not a party to this Agreement, Lessee may require the Tax
Indemnitee to agree in writing, in a form reasonably acceptable to Lessee,
to
the terms of this Section 9.3 and Section 15.8 prior to making any payment
to such Tax Indemnitee under this Section 9.3.
9.3.9
Subrogation
Upon
payment of any Tax by Lessee pursuant to this Section 9.3 to or on behalf
of a
Tax Indemnitee, Lessee, without any further action, shall be subrogated to
any
claims that such Tax Indemnitee may have relating thereto. Such Tax Indemnitee
shall cooperate with Lessee (to the extent such cooperation does not result
in
any unreimbursed cost, expense or liability to such Tax Indemnitee) to permit
Lessee to pursue such claims.
9.3.10
Foreign
Tax On Loan Payments
If
an
Owner Participant is incorporated or organized, or maintains a place of business
or conducts activities (other than any activities of the Owner Participant
resulting from its participation in the transactions contemplated by the
Operative Agreements or resulting from any activities of Lessee in such
jurisdiction) in a country other than the United States or in a territory,
possession or commonwealth of the United States (within the meaning of the
tax
law of that foreign jurisdiction) and if as a result thereof any foreign
Taxes
(including withholding Taxes) are imposed on Pass Through Trustee, Pass Through
Trust, or any Note Holder, then Owner Participant shall reimburse Lessee
for any
payments Lessee is required to make to or on behalf of Pass Through Trustee,
Pass Through Trust, or any Note Holder under this Section 9.3 as a result
of the
imposition of such Taxes. The amount payable by Owner Participant to Lessee
shall be an amount which, after taking into account any such Taxes, any Tax
imposed upon the receipt or accrual by Lessee of such payment by Owner
Participant and any tax benefits or tax savings realized by Lessee with respect
to the payment of such withholding Tax or the payment hereunder, shall equal
the
amount of Lessee’s payment to or on behalf of such Pass Through Trustee, Pass
Through Trust or Note Holder.
9.4
Payments
Any
payments made pursuant to Section 9.1 and Section 9.3 shall be due on the
60th day after demand is made to the indemnifying party therefor (other than
any
payments for which a different time is provided under Section 9.3.3 hereof)
and
shall be made directly to the relevant Indemnitee or Tax Indemnitee or to
Lessee, in immediately available funds at such bank or to such account as
specified by such Indemnitee or Tax Indemnitee or Lessee, as the case may
be, in
written directives to the payor, or, if no such direction shall have been
given,
by check of the payor payable to the order of, and mailed to, such Indemnitee
or
Tax Indemnitee or Lessee, as the case may be, by certified mail, postage
prepaid, at its address as set forth in this Agreement.
9.5
Interest
If
any
amount, payable by Lessee, any Indemnitee or any Tax Indemnitee under
Section 9.1 or 9.3 is not paid when due, the person obligated to make such
payment shall pay on demand, to the extent permitted by Law, to the person
entitled thereto, interest on any such amount for the period from and including
the due date for such amount to but excluding the date the same is paid,
at the
Payment Due Rate. Such interest shall be paid in the same manner as the unpaid
amount in respect of which such interest is due.
9.6
Benefit
of Indemnities
The
obligations of Lessee in respect of all indemnities, obligations, adjustments
and payments in Section 9.1 or 9.3 are expressly made for the benefit of,
and shall be enforceable by, the Indemnitee or Tax Indemnitee entitled thereto,
without declaring the Lease to be in default or taking other action thereunder,
and notwithstanding any provision of the Trust Indenture.
SECTION
10. ASSIGNMENT
OR TRANSFER OF INTERESTS
10.1
Participants,
Owner Trustee and Note Holders
10.1.1
Owner
Participant
(a) Owner
Participant shall not Transfer any or all of its right, title or interest
in the
Trust Estate or the Trust Agreement and to this Agreement unless:
(i) The
Transferee shall have full power, authority and legal right to execute and
deliver and to perform the obligations of Owner Participant under this Agreement
and the other Owner Participant Agreements and shall provide reasonably
satisfactory evidence of such power and authority to Lessee, Owner Trustee
and
Mortgagee;
(ii) The
Transferee shall enter into one or more legal, valid, binding and enforceable
agreements effective to confirm that such Transferee agrees to be bound by
all
the terms of, and to undertake all of the obligations arising after such
transfer of, the transferring Owner Participant contained in the Owner
Participant Agreements and in which it makes representations and warranties
substantially the same as those contained in Section 6.2 of this
Participation Agreement;
(iii) Lessee
shall not be obligated to pay any greater amount or incur any greater obligation
than that which it would have been obliged to pay or incur under the Lease
or
other Lessee Operative Agreement if no transfer or assignment had taken place,
and the terms and conditions of the Lease and the other Lessee Operative
Agreements insofar as they relate to the rights and obligations of Lessee
or the
Loan Participants shall not be altered;
(iv) Owner
Participant shall deliver to Lessee, Owner Trustee and Mortgagee an opinion
of
counsel reasonably satisfactory to each of them (which, if the Transferee
is an
Affiliate of the Owner Participant, may be in-house counsel to such Owner
Participant) to the effect that such agreement or agreements referred to
in
Section 10.1.1(a)(ii) and, if applicable, 10.1.1(a)(vi) are legal, binding
and enforceable in accordance with its or their terms and that such transfer
will not violate applicable securities laws, the Act or any other applicable
Law
and is in accordance with this Section 10.1.1;
(v) The
Transferee is a Citizen of the United States (it being understood that the
existence of any such requirement is to be determined without giving
consideration to Section 47.9 of the FAA Regulations or any other provision
that would restrict Lessee’s use or operation of the Aircraft), or shall use a
voting powers trust or similar arrangement in order to hold an interest in
the
Trust Estate such that the Aircraft can be registered in the United States
(without giving consideration to Section 47.9 of the FAA Regulations or any
other provision that would restrict Lessee’s use or operation of the
Aircraft);
(vi) The
Transferee shall be one person and shall be either (A) a Permitted
Institution or (B) any other person (other than, without Lessee’s consent, a
commercial air carrier, a commercial aircraft operator, a freight forwarder
or
an Affiliate of any of the foregoing) the obligations of which under the
Owner
Participant Agreements are guaranteed by a Permitted Institution in any case,
pursuant to a written guaranty, in form and substance reasonably satisfactory
to
Lessee, Owner Trustee and Mortgagee; and
(vii) The
Transferee shall be a “U.S. Person” as defined in Section 7701(a)(30) of the
Code (or any successor provision thereto).
(b) Owner
Participant shall give written notice to Lessee, Mortgagee and Owner Trustee
at
least 10 days prior to any such Transfer, specifying the name and address
of the
proposed Transferee, and providing financial statements of the proposed
Transferee evidencing satisfaction of the requirements described in
Section 10.1.1(a)(vi)(A) or (B) above.
(c) Any
fees,
charges and expenses, including the reasonable legal fees, charges and expenses
incurred by Lessee, Owner Participant, Mortgagee, any Note Holder or Owner
Trustee in connection with any Transfer by Owner Participant permitted by
this
Section 10.1.1, or by the Transferee in any such case, will be paid for by
Owner
Participant.
10.1.2
Owner
Trustee
Owner
Trustee may transfer its interests in the Trust Agreement pursuant to
Section 9 thereof.
10.1.3
Note
Holders
Subject
to Section 7.5.2 hereof and Section 2.07 of the Trust Indenture, any Note
Holder may, at any time and from time to time, Transfer or grant participations
in all or any portion of the Equipment Notes and/or all or any portion of
its
beneficial interest in its Equipment Notes and the Trust Indenture Estate
to any
person (it being understood that the sale or issuance of Pass Through
Certificates by the Pass Through Trustee shall not be considered a Transfer
or
participation); provided, that any participant in any such participations
shall
not have any direct rights under the Operative Agreements or any Lien on
all or
any part of the Aircraft or Trust Indenture Estate and neither Lessee, Lessor,
nor Owner Participant shall have any increased liability or obligations as
a
result of any such participation. In the case of any such Transfer, the
Transferee, by acceptance of Equipment Notes in connection with such Transfer,
shall be deemed to be bound by all of the covenants of Note Holders contained
in
the Operative Agreements.
10.2
Effect
of Transfer
Upon
any
Transfer in accordance with Section 10.1.1, 10.1.2 or 10.1.3 (other than
any Transfer by any Note Holder, to the extent it only grants participations
in
Equipment Notes or in its beneficial interest therein), Transferee shall
be
deemed an “Owner Participant,” “Owner Trustee” or a “Note Holder,” respectively,
for all purposes of this Agreement and the other Operative Agreements and,
in
the case of a Transferee of any Participant or Note Holder, shall be deemed
to
have paid its ratable portion of Lessor’s Cost previously made by Owner
Participant or Loan Participant, respectively, making such conveyance and
represented by the interest being conveyed, and each reference herein to
Owner
Participant, Owner Trustee or Note Holder, respectively, shall thereafter
be
deemed a reference to such Transferee for all purposes, and the transferring
Owner Participant, Owner Trustee, Loan Participant or Note Holder shall be
released (except, in the case of Owner Participant, to the extent of any
guaranty provided by it under Section 10.1.1(a)(vi)) from all of its
liabilities and obligations under this Agreement and any other Operative
Agreements to the extent such liabilities and obligations arise after such
Transfer and, in each case, to the extent such liabilities and obligations
are
assumed by the Transferee; provided,
that
such transferring Owner Participant, Owner Trustee or Note Holder (and its
respective Affiliates, successors, assigns, agents, servants, representatives,
directors and officers) will continue to have the benefit of any rights or
indemnities under any Operative Agreement vested or relating to circumstances,
conditions, acts or events prior to such Transfer.
SECTION
11. [RESERVED]
SECTION
12. SECTION
1110
It
is the
intention of each of Lessee, Owner Participant, Loan Participant, the Note
Holders (such intention being evidenced by each of their acceptance of an
Equipment Note), Owner Trustee and Mortgagee that Owner Trustee, as lessor
under
the Lease (and Mortgagee as assignee of Owner Trustee under the Trust
Indenture), shall be entitled to the benefits of Section 1110 in the event
of a case under Chapter 11 of the Bankruptcy Code in which Lessee is a debtor.
Lessee shall at all times be certificated and registered to the extent necessary
to entitle
Owner
Trustee to the rights afforded to lessors of aircraft equipment under
Section 1110 of the Bankruptcy Code.
SECTION
13. CHANGE
OF CITIZENSHIP
13.1
Generally
Without
prejudice to the representations, warranties or covenants regarding the status
of any party hereto as a Citizen of the United States:
(a) Each
of
Lessee, ▇▇▇▇▇ Fargo and WTC agrees that it will, immediately upon obtaining
knowledge of any facts that would cast doubt upon its continuing status as
a
Citizen of the United States and promptly upon public disclosure of negotiations
in respect of any transaction which would or might adversely affect such
status,
notify in writing all parties hereto of all relevant matters in connection
therewith; and
(b) Owner
Participant agrees that, in the event its status is to change or has changed
as
a Citizen of the United States, or it makes public disclosure of circumstances
as a result of which it believes that such status is likely to change, it
will
notify all the other parties to this Participation Agreement of (i) such
change in status promptly after obtaining Actual Knowledge thereof or
(ii) such belief as soon as practicable after such public disclosure but in
any event within ten Business Days after such public disclosure.
13.2
Owner
Participant
Owner
Participant agrees, solely for the benefit of Lessee and the Note Holders
that
if, during such time as the Aircraft is registered in the United States,
(a) it shall not be a Citizen of the United States and (b) the
Aircraft shall be, or would therefore become, ineligible for registration
in the
name of Owner Trustee under the Act and regulations then applicable thereunder
(without giving consideration to Section 47.9 of the FAA Regulations or any
other provision that may restrict Lessee’s use or operation of the Aircraft),
then Owner Participant shall as soon as is reasonably practicable, but in
any
event within 30 days after obtaining Actual Knowledge of such ineligibility
and
of such loss of citizenship, (y) effect voting trust or other similar
arrangements (in which case any provisions contained in the Operative Agreements
restricting Owner Participant’s or Owner Trustee’s ability to amend the Trust
Agreement shall not apply to the extent necessary to permit the use of such
a
voting trust or other similar arrangement) or take any other action as may
be
necessary to prevent any deregistration or maintain the United States
registration of the Aircraft or (z) transfer in accordance with the terms
of this Agreement all its right, title and interest in and to this Agreement,
the Trust Estate and the Trust Agreement in accordance with
Section 10.1.
13.3
Owner
Trustee
Upon
▇▇▇▇▇ Fargo giving any notice in accordance with Section 13.1(a), Owner
Trustee shall, subject to Section 9.1.1 of the Trust Agreement, resign as
Owner
Trustee. Upon its receipt of such notice, Owner Participant shall as promptly
as
practicable appoint a Citizen of the United States as successor Owner Trustee
pursuant to Section 9.1 of the Trust Agreement.
13.4
Mortgagee
Upon
WTC
giving any notice in accordance with Section 13.1(a), Mortgagee shall (if
and so long as such citizenship is necessary under the Act as in effect at
such
time or, if it is not necessary, if and so long as Mortgagee’s citizenship could
have any adverse effect on Lessee, any Participant or any Note Holder), subject
to Section 8.02 of the Trust Indenture, resign as Mortgagee promptly upon
its ceasing to be such a citizen.
SECTION
14. CONCERNING
OWNER TRUSTEE
It
is
understood and agreed that, except as otherwise expressly provided herein
or in
the Trust Agreement or the Trust Indenture, Owner Trustee is entering into
this
Agreement solely in its capacity as trustee as provided in the Trust Agreement
and not in its individual capacity and in no case whatsoever will it be liable
or accountable in its individual capacity for any of the statements,
representations, warranties, agreements or obligations of Owner Trustee
hereunder, or for any loss in respect thereof, as to all of which the parties
agree to look solely to the Trust Estate; provided,
that
nothing in this Section 14 shall be deemed to limit in scope or substance
the
personal liability of ▇▇▇▇▇ Fargo (a) to Owner Participant as expressly set
forth in the Trust Agreement, (b) in respect of the representations, warranties
and agreements of ▇▇▇▇▇ Fargo expressly made as such herein or in any other
Operative Agreement to which it is a party, and (c) for the consequences of
its own gross negligence, willful misconduct, and, in receiving, handling
or
remitting of funds only, its willful misconduct or simple negligence as a
trustee.
SECTION
15. MISCELLANEOUS
15.1
Amendments
No
provision of this Agreement may be amended, supplemented, waived, modified,
discharged, terminated or otherwise varied orally, but only by an instrument
in
writing that specifically identifies the provision of this Agreement that
it
purports to amend, supplement, waive, modify, discharge, terminate or otherwise
vary and is signed by the party against which the enforcement of the amendment,
supplement, waiver, modification, discharge, termination or variance is sought.
Each such amendment, supplement, waiver, modification, discharge, termination
or
variance shall be effective only in the specific instance and for the specific
purpose for which it is given. No provision of this Agreement shall be varied
or
contradicted by oral communication, course of dealing or performance or other
manner not set forth in an agreement, document or instrument in writing and
signed by the party against which enforcement of the same is
sought.
15.2
Severability
If
any
provision hereof shall be held invalid, illegal or unenforceable in any respect
in any jurisdiction, then, to the extent permitted by Law, (a) all other
provisions hereof shall remain in full force and effect in such jurisdiction
and
(b) such invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of such provision in any other
jurisdiction. If, however, any Law pursuant to which such provisions are
held
invalid, illegal or unenforceable may be waived, such Law is hereby waived
by
the parties hereto to the full extent permitted, to
the
end
that this Agreement shall be deemed to be a valid and binding agreement in
all
respects, enforceable in accordance with its terms.
15.3
Survival
The
indemnities set forth herein shall survive the delivery or return of the
Aircraft, the Transfer of any interest of Owner Participant in this Agreement,
the Trust Estate and the Trust Agreement, the Transfer of any interest by
any
Note Holder of its Equipment Note and the expiration or other termination
of
this Agreement or any other Operative Agreement.
15.4
Reproduction
of Documents
This
Agreement, all annexes, schedules and exhibits hereto and all agreements,
instruments and documents relating hereto, including, without limitation,
(a)
consents, waivers and modifications that may hereafter be executed and
(b) financial statements, certificates and other information previously or
hereafter furnished to any party hereto, may be reproduced by such party
by any
photographic, photostatic, microfilm, micro-card, miniature photographic
or
other similar process, and such party may destroy any original documents
so
reproduced. Any such reproduction shall be as admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or
not the
original is in existence and whether or not such reproduction was made by
such
party in the regular course of business) and any enlargement, facsimile or
further reproduction of such reproduction likewise is admissible in
evidence.
15.5
Counterparts
This
Agreement and any amendments, waivers, consents or supplements hereto may
be
executed in any number of counterparts (or upon separate signature pages
bound
together into one or more counterparts), each of which when so executed shall
be
deemed to be an original, and all of which counterparts, taken together,
shall
constitute one and the same instrument.
15.6
No
Waiver
No
failure on the part of any party hereto to exercise, and no delay by any
party
hereto in exercising, any of its respective rights, powers, remedies or
privileges under this Agreement or provided at Law, in equity or otherwise
shall
impair, prejudice or constitute a waiver of any such right, power, remedy
or
privilege or be construed as a waiver of any breach hereof or default hereunder
or as an acquiescence therein nor shall any single or partial exercise of
any
such right, power, remedy or privilege preclude any other or further exercise
thereof by it or the exercise of any other right, power, remedy or privilege
by
it. No notice to or demand on any party hereto in any case shall, unless
otherwise required under this Agreement, entitle such party to any other
or
further notice or demand in similar or other circumstances or constitute
a
waiver of the rights of any party hereto to any other or further action in
any
circumstances without notice or demand.
15.7
Notices
Unless
otherwise expressly permitted by the terms hereof, all notices, requests,
demands, authorizations, directions, consents, waivers and other communications
required or permitted to be made, given, furnished or filed hereunder shall
be
in writing (it being understood that the
PAGE
63
specification
of a writing in certain instances and not in others does not imply an intention
that a writing is not required as to the latter), shall refer specifically
to
this Agreement or other applicable Operative Agreement, and shall be personally
delivered, sent by facsimile or telecommunication transmission (which in
either
case provides written confirmation to the sender of its delivery), sent by
registered mail or certified mail, return receipt requested, postage prepaid,
or
sent by overnight courier service, in each case to the respective address,
or
facsimile number set forth for such party in Schedule 1, or to such other
address, facsimile or other number as each party hereto may hereafter specify
by
notice to the other parties hereto. Each such notice, request, demand,
authorization, direction, consent, waiver or other communication shall be
effective when received or, if made, given, furnished or filed (a) by facsimile
or telecommunication transmission, when confirmed, or (b) by registered or
certified mail, three Business Days after being deposited, properly addressed,
with the U.S. Postal Service.
15.8
GOVERNING
LAW; SUBMISSION TO JURISDICTION; VENUE
(a) THIS
AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS
AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.
(b) EACH
PARTY HERETO HEREBY IRREVOCABLY AGREES, ACCEPTS AND SUBMITS ITSELF TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN THE
CITY
AND COUNTY OF NEW YORK AND OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF NEW
YORK, IN CONNECTION WITH ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT
TO
ANY MATTER RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.
(c) EACH
PARTY HERETO HEREBY IRREVOCABLY CONSENTS AND AGREES TO THE SERVICE OF ANY
AND
ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY MAILING COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, AT THE ADDRESS
SET
FORTH PURSUANT TO SECTION 15.7. EACH PARTY HERETO HEREBY AGREES THAT
SERVICE UPON IT, OR ANY OF ITS AGENTS, IN EACH CASE IN ACCORDANCE WITH THIS
SECTION 15.8(c), SHALL CONSTITUTE VALID AND EFFECTIVE PERSONAL SERVICE UPON
SUCH
PARTY, AND EACH PARTY HERETO HEREBY AGREES THAT THE FAILURE OF ANY OF ITS
AGENTS
TO GIVE ANY NOTICE OF SUCH SERVICE TO ANY SUCH PARTY SHALL NOT IMPAIR OR
AFFECT
IN ANY WAY THE VALIDITY OF SUCH SERVICE ON SUCH PARTY OR ANY JUDGMENT RENDERED
IN ANY ACTION OR PROCEEDING BASED THEREON.
(d) TO
THE EXTENT THAT ANY PARTY HERETO HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM
JURISDICTION OF ANY OF THE ABOVE-NAMED COURTS OR FROM ANY LEGAL PROCESS THEREIN,
SUCH PARTY HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED
BY
APPLICABLE
LAW, SUCH IMMUNITY, AND EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, AND AGREES NOT TO ASSERT, BY WAY OF MOTION,
AS A DEFENSE, OR OTHERWISE, IN ANY LEGAL ACTION OR PROCEEDING BROUGHT HEREUNDER
IN ANY OF THE ABOVE-NAMED COURTS, (i) THE DEFENSE OF SOVEREIGN IMMUNITY,
(ii) THAT IT OR ANY OF ITS PROPERTY IS IMMUNE FROM THE ABOVE DESCRIBED
LEGAL PROCESS AND (iii) THAT SUCH ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM, THAT VENUE FOR THE ACTION OR PROCEEDING IS IMPROPER OR
THAT
THIS AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT MAY NOT BE ENFORCED IN OR
BY
SUCH COURTS.
(e) EACH
PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR
CAUSE OF ACTION IN ANY COURT IN ANY JURISDICTION BASED UPON OR ARISING OUT
OF OR
RELATING TO THIS AGREEMENT.
15.9
Third-Party
Beneficiary
This
Agreement is not intended to, and shall not, provide any person not a party
hereto (other than each Indemnitee, which is an intended third party beneficiary
with respect to the provisions of Section 9.1 as provided in Section 9.1.3,
and the other persons referred to in Section 7.6.13, who are intended third
party beneficiaries of such Section) with any rights of any nature whatsoever
against any of the parties hereto and no person not a party hereto (other
than
each Indemnitee, with respect to the provisions of Section 9.1 as provided
in Section 9.1.3, and the other persons referred to in Section 7.6.13, with
respect to such Section) shall have any right, power or privilege in respect
of
any party hereto, or have any benefit or interest, arising out of this
Agreement.
15.10
Entire
Agreement
This
Agreement, together with the other Operative Agreements, on and as of the
date
hereof, constitutes the entire agreement of the parties hereto with respect
to
the subject matter hereof, and all prior or contemporaneous understandings
or
agreements, whether written or oral, among any of the parties hereto with
respect to such subject matter are hereby superseded in their entireties
(except
that the Indemnity Agreement shall not be superseded).
15.11
Further
Assurances
Each
party hereto shall execute, acknowledge and deliver or shall cause to be
executed, acknowledged and delivered, all such further agreements, instruments,
certificates or documents, and shall do and cause to be done such further
acts
and things, in any case, as any other party hereto shall reasonably request
in
connection with the administration of, or to carry out more effectively the
purposes of, or to better assure and confirm into such other party the rights
and benefits to be provided under this Agreement and the other Operative
Agreements.
[This
space intentionally left blank]
IN
WITNESS WHEREOF, each of the parties has caused this Participation Agreement
to
be duly executed and delivered as of the day and year first above
written.
CONTINENTAL
AIRLINES, INC.,
Lessee
Lessee
By
__________________________________
Name:
Title:
[OP],
Owner
Participant
By
__________________________________
Name:
Title:
▇▇▇▇▇
FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION,
not
in
its individual capacity, except as expressly
provided
herein, but solely as Owner Trustee
By
__________________________________
Name:
Title:
WILMINGTON
TRUST COMPANY,
not
in
its individual capacity, except as expressly
provided
herein, but solely as Mortgagee
By
__________________________________
Name:
Title:
WILMINGTON
TRUST COMPANY,
not in its individual capacity, except as expressly
provided herein, but solely as Pass Through
Trustee under the Pass Through Trust Agreement
for the Continental Airlines Pass Through Trust,
2005-ERJ1
not in its individual capacity, except as expressly
provided herein, but solely as Pass Through
Trustee under the Pass Through Trust Agreement
for the Continental Airlines Pass Through Trust,
2005-ERJ1
By
__________________________________
Name:
Title:
WILMINGTON
TRUST COMPANY,
not
in
its individual capacity, except as expressly
provided
herein, but solely as Subordination
Agent
By
__________________________________
Name:
Title:
EMBRAER-EMPRESA
BRASILEIRA DE
AERONÁ;UTICA
S.A.,
Airframe
Manufacturer
By
__________________________________
Name:
Title:
FINAL
DEFINITIONS
GENERAL
PROVISIONS
(a) In
each
Operative Agreement, unless otherwise expressly provided, a reference
to:
(i) each
of
“Lessee,” “Lessor,” “Loan Participant,” “Owner Trustee,” “Owner Participant,”
“Mortgagee,” “Note Holder” or any other person includes, without prejudice to
the provisions of any Operative Agreement, any successor in interest
to it and
any permitted transferee, permitted purchaser or permitted assignee
of
it;
(ii) words
importing the plural include the singular and words importing the
singular
include the plural;
(iii) any
agreement, instrument or document, or any annex, schedule or exhibit
thereto, or
any other part thereof, includes, without prejudice to the provisions
of any
Operative Agreement, that agreement, instrument or document, or annex,
schedule
or exhibit, or part, respectively, as amended, modified or supplemented
from
time to time in accordance with its terms and in accordance with
the Operative
Agreements, and any agreement, instrument or document entered into
in
substitution or replacement therefor;
(iv) any
provision of any Law includes any such provision as amended, modified,
supplemented, substituted, reissued or reenacted prior to the Closing
Date, and
thereafter from time to time;
(v) the
words
“Agreement,” “this Agreement,” “hereby,” “herein,” “hereto,” “hereof” and
“hereunder” and words of similar import when used in any Operative Agreement
refer to such Operative Agreement as a whole and not to any particular
provision
of such Operative Agreement;
(vi) the
words
“including,” “including, without limitation,” “including, but not limited to,”
and terms or phrases of similar import when used in any Operative
Agreement,
with respect to any matter or thing, mean including, without limitation,
such
matter or thing; and
(vii) a
“Section,” an “Exhibit,” an “Annex” or a “Schedule” in any Operative Agreement,
or in any annex thereto, is a reference to a section of, or an exhibit,
an annex
or a schedule to, such Operative Agreement or such annex,
respectively.
(b) Each
exhibit, annex and schedule to each Operative Agreement is incorporated
in, and
shall be deemed to be a part of, such Operative Agreement.
(c) Unless
otherwise defined or specified in any Operative Agreement, all accounting
terms
therein shall be construed and all accounting determinations thereunder
shall be
made in accordance with GAAP.
(d) Headings
used in any Operative Agreement are for convenience only and shall
not in any
way affect the construction of, or be taken into consideration in
interpreting,
such Operative Agreement.
(e) For
purposes of each Operative Agreement, the occurrence and continuance
of a Lease
Default or Lease Event of Default referred to in Section 14.5 of
the Lease shall
not be deemed to prohibit the Lessee from taking any action or exercising
any
right that is conditioned on no Lease Event of Default, Bankruptcy
Default or
Lease Default having occurred and be continuing if a Section 1110
Event shall
have occurred and is then continuing.
DEFINED
TERMS
“Act”
means
part A of subtitle VII of title 49, United States Code.
“Actual
Knowledge”
means
(a) as it applies to Owner Trustee or Mortgagee, as the case may
be, actual
knowledge of a responsible officer in the Corporate Trust Department
(in the
case of Owner Trustee) or the Corporate Trust Office (in the case
of Mortgagee)
and (b) as it applies to Owner Participant, Airframe Manufacturer
or Lessee,
actual knowledge of a Vice President or more senior officer of Owner
Participant, Airframe Manufacturer or Lessee, respectively, or any
other officer
of Owner Participant, Airframe Manufacturer or Lessee, respectively,
having
responsibility for the transactions contemplated by the Operative
Agreements;
provided
that
each of Lessee, Owner Participant, Owner Trustee, Mortgagee and Airframe
Manufacturer shall be deemed to have “Actual Knowledge” of any matter as to
which it has received notice from Lessee, Owner Participant, any
Note Holder,
Owner Trustee or Mortgagee, such notice having been given pursuant
to Section
15.7 of the Participation Agreement.
“Additional
Insured”
is
defined in Section D of Annex D to the Lease.
“Affiliate”
means,
with respect to any person, any other person directly or indirectly
controlling,
controlled by or under common control with such person. For purposes
of this
definition, “control” means the power, directly or indirectly, to direct or
cause the direction of the management and policies of such person,
whether
through the ownership of voting securities or by contract or otherwise
and
“controlling,” “controlled by” and “under common control with” have correlative
meanings.
“Aircraft”
means,
collectively, the Airframe and Engines.
“Aircraft
▇▇▇▇ of Sale”
means
the full warranty ▇▇▇▇ of sale covering the Aircraft delivered by
Seller to
Owner Trustee on the Delivery Date.
“Aircraft
Documents”
means
all technical data, manuals and log books, and all inspection, modification
and
overhaul records and other service, repair, maintenance and technical
records
that are required by the FAA (or the relevant Aviation Authority)
to be
maintained with respect to the Aircraft, Airframe, Engines or Parts;
and such
term shall include
all
additions, renewals, revisions and replacements of any such materials
from time
to time made, or required to be made, by the FAA (or other Aviation
Authority)
regulations, and in each case in whatever form and by whatever means
or medium
(including, without limitation, microfiche, microfilm, paper or computer
disk)
such materials may be maintained or retained by or on behalf of Lessee
(provided, that
all
such materials shall be maintained in the English language).
“Airframe”
means
(a) the aircraft (excluding Engines or engines from time to time installed
thereon) manufactured by Airframe Manufacturer and identified by Airframe
Manufacturer’s model number, United States registration number and Airframe
Manufacturer’s serial number set forth in Lease Supplement No. 1 and any
Replacement Airframe and (b) any and all Parts incorporated or installed in
or attached or appurtenant to such airframe, and any and all Parts
removed from
such airframe, unless title to such Parts shall not be vested in Lessor
in
accordance with Section 8.1 and Annex C of the Lease. Upon substitution of
a Replacement Airframe under and in accordance with the Lease, such
Replacement
Airframe shall become subject to the Lease and shall be the “Airframe” for all
purposes of the Lease and the other Operative Agreements and thereupon
the
Airframe for which the substitution is made shall no longer be subject
to the
Lease, and such replaced Airframe shall cease to be the “Airframe.”
“Airframe
Manufacturer”
means
Embraer-Empresa Brasileira de Aeronáutica S.A., a Brazilian
corporation.
“Airframe
Manufacturer Agreements”
means,
collectively, the Participation Agreement, [the OP Guaranty,]1
the
Purchase Agreement and the Consent and Agreement.
“Amortization
Amount”
means,
with respect to any Equipment Note, as of any Payment Date, the amount
determined by multiplying the percentage set forth opposite such Date
on the
Amortization Schedule by the Original Amount of such Equipment
Note.
“Amortization
Schedule”
means,
with respect to each Equipment Note, the amortization schedule for
such
Equipment Note delivered pursuant to Section 2.02 of the Trust
Indenture.
“Appraiser”
means
a
firm of internationally recognized, independent aircraft
appraisers.
“Average
Life Date”
for
any
Equipment Note shall be the date which follows the time of determination
by a
period equal to the Remaining Weighted Average Life of such Equipment
Note.
“Remaining Weighted Average Life” on a given date with respect to any Equipment
Note shall be the number of days equal to the quotient obtained by
dividing (a)
the sum of each of the products obtained by multiplying (i) the amount
of each
then remaining scheduled payment of principal of such Equipment Note
by (ii) the
number of days from and including such
________________________
1. Delete
if
OP is not an Affiliate of Airframe Manufacturer.
determination
date to but excluding the date on which such payment of principal is
scheduled
to be made, by (b) the then outstanding principal amount of such Equipment
Note.
“Aviation
Authority”
means
the FAA or, if the Aircraft is permitted to be, and is, registered
with any
other Government Entity under and in accordance with Section 7.1.2 of the
Lease, such other Government Entity.
“Bankruptcy
Code”
means
the United States Bankruptcy Code, 11 U.S.C. § 101 et seq.
“Bankruptcy
Default”
means
a
Lease Event of Default under Section 14.5 of the Lease.
“Base
Lease Term”
means
the period beginning on and including the Closing Date and ending on
the
Scheduled Expiration Date, or such earlier date on which the Term terminates
in
accordance with the provisions of the Lease.
“Basic
Pass Through Trust Agreement”
means
the Pass Through Trust Agreement, dated September 25, 1997, between Lessee
and Pass Through Trustee, but does not include any Trust
Supplement.
“Basic
Rent”
means
the rent payable for the Aircraft pursuant to Section 3.2.1 of the
Lease.
“Beneficial
Owner”
when
used in relation to an Equipment Note means a Person that, by reason
of direct
ownership, contract, share ownership or otherwise, has the right to
receive or
participate in receiving, directly or indirectly, payments of principal,
interest or Make-Whole Amount in respect of such Equipment Note; provided
that a
Person shall not be deemed to be a Beneficial Owner of an Equipment
Note solely
because another Person in which such a Person owns common stock or
other equity
securities is a registered holder or Beneficial Owner of such Equipment
Note
unless such Person is an Affiliate of such other Person.
“Bills
of Sale”
means
the FAA ▇▇▇▇ of Sale and the Aircraft ▇▇▇▇ of Sale.
“Business
Day”
means
any day other than a Saturday, Sunday or other day on which commercial
banks are
authorized or required by law to close in New York, New York, Houston,
Texas,
Wilmington, Delaware, or Salt Lake City, Utah.
“Cash
Equivalents”
means
the following securities (which shall mature within 90 days of the
date of
purchase thereof): (a) direct obligations of the U.S. Government;
(b) obligations fully guaranteed by the U.S. Government;
(c) certificates of deposit issued by, or bankers’ acceptances of, or time
deposits or a deposit account with, Owner Trustee, Mortgagee or any
bank, trust
company or national banking association incorporated or doing business
under the
laws of the United States or any state thereof having a combined capital
and
surplus and retained earnings of at least $500,000,000 and having a
rate of “C”
or better from the Thomson BankWatch Service; or (d) commercial paper of
any issuer doing business under the Laws of the United States or one
of the
states thereof and in each case having a rating assigned to such commercial
paper by Standard & Poor’s Rating Services or ▇▇▇▇▇’▇ Investors Service,
Inc. equal to A1 or higher.
“Change
in Tax Law”
means
any change or proposed change in the Code or the regulations promulgated
thereunder or any change in the interpretation of the Code or such
regulations
in a decision by the United States Supreme Court, the United States
Tax Court,
the United States Claims Court or any of the United States Courts of
Appeal or
District Courts, or any issuance of an Internal Revenue Ruling, Revenue
Procedure or administrative pronouncement by the Internal Revenue Service
or the
Department of the Treasury.
“Citizen
of the United States”
is
defined in Section 40102(a)(15) of the Act and in the FAA
Regulations.
“Closing”
means
the occurrence of the following concurrent events: (i) execution, authentication
and delivery of the Equipment Notes in accordance with the Participation
Agreement; (ii) [payment of the Commitments of the Loan Participants
to Owner
Trustee]2
[purchase of the Aircraft by the Owner Trustee]3;
(iii) lease of the Aircraft by Owner Trustee to Lessee pursuant to the
Lease; and (iv) completion of the other events contemplated by the
Participation
Agreement to occur at the Closing.
“Closing
Date”
means
the Business Day specified in Lease Supplement No. 1 as the Closing Date,
which shall be the date on which the Closing occurs.
“Code”
means
the Internal Revenue Code of 1986, as amended; provided,
that
when used in relation to a Plan, “Code” shall mean the Internal Revenue Code of
1986 and any regulations and rulings issued thereunder, all as amended
and in
effect from time to time.
“Commitment”
means,
for any [Loan]4
Participant, the amount of its commitment set forth in Schedule 2 to
the
Participation Agreement.
“Commitment
Termination Date”
is
defined in Schedule 3 to the Participation Agreement.
“Consent
and Agreement”
means
the Manufacturer Consent and Agreement [TN], dated as of even date
with the
Participation Agreement, of Airframe Manufacturer.
“Continuous
Stay Period”
is
defined in Section 4.04(a) of the Trust Indenture.
“Corporate
Trust Department”
or
“Trust
Office”
means
the principal corporate trust office of Owner Trustee located from
time to time
at Owner Trustee’s address for notices under the Participation Agreement or such
other office at which Owner Trustee’s corporate trust
________________________
2. Delete
for New Aircraft.
3. Insert
for New Aircraft.
4. Delete
for New Aircraft.
business
shall be administered which Owner Trustee shall have specified by notice
in
writing to Lessee, Mortgagee and each Note Holder.
“Corporate
Trust Office”
means
the principal office of Mortgagee located at Mortgagee’s address for notices
under the Participation Agreement or such other office at which Mortgagee’s
corporate trust business shall be administered which Mortgagee shall
have
specified by notice in writing to Lessee, Owner Trustee and each Note
Holder.
“CRAF”
means
the Civil Reserve Air Fleet Program established pursuant to 10 U.S.C.
§ 9511-13 or any similar substitute program.
“Debt”
means
any liability for borrowed money, or any liability for the payment
of money in
connection with any letter of credit transaction or any other liabilities
evidenced or to be evidenced by bonds, debentures, notes or other similar
instruments.
“Debt
Rate”
means
the rate per annum specified under the heading “Interest Rate” in
Schedule I to the Trust Indenture.
“Default”
means
any event or condition that with the giving of notice or the lapse
of time or
both would become an Event of Default.
“Delayed
Closing Date”
means
a
delayed Closing Date notified to Lessee, each Participant, Owner Trustee
and
Mortgagee by Airframe Manufacturer pursuant to Section 4.3 of the
Participation Agreement, which delayed Closing Date shall be a Business
Day not
later than the Commitment Termination Date.
“Delivery
Date”
means
the date on which the Aircraft was leased to Lessee by Lessor, as lessor,
under
the [Existing]5
Lease.
“Deposit
Agreement”
means
the Deposit Agreement between the Depositary and the Escrow Agent,
dated as of
the Issuance Date, which relates to the Pass Through Trust, provided
that,
for purposes of any obligation of Lessee, no amendment, modification
or
supplement to, or substitution or replacement of, such Deposit Agreement
shall
be effective unless consented to by Lessee.
“Depositary”
means
Citibank, N.A., as Depositary under the Deposit Agreement.
“Dollars,”
“United
States Dollars”
or
“$”
means
the lawful currency of the United States.
“DOT”
means
the Department of Transportation of the United States or any Government
Entity
succeeding to the functions of such Department of Transportation.
________________________
5. Delete
for New Aircraft.
“Eligible
Account”
means
an account established by and with an Eligible Institution at the request
of the
Mortgagee, which institution agrees, for all purposes of the UCC including
Article 8 thereof, that (a) such account shall be a “securities account” (as
defined in Section 8-501 of the UCC), (b) all property (other than
cash)
credited to such account shall be treated as a “financial asset” (as defined in
Section 8-102(9) of the UCC), (c) the Mortgagee shall be the “entitlement
holder” (as defined in Section 8-102(7) of the UCC) in respect of such account,
(d) it will comply with all entitlement orders issued by the Mortgagee
to the
exclusion of the Lessee and the Owner Trustee, and (e) the “securities
intermediary jurisdiction” (under Section 8-110(e) of the UCC) shall be the
State of New York.
“Eligible
Institution”
means
the corporate trust department of (a) Wilmington Trust Company, acting
solely in
its capacity as a “securities intermediary” (as defined in Section 8-102(14) of
the UCC), or (b) a depository institution organized under the laws
of the United
States of America or any one of the states thereof or the District
of Columbia
(or any U.S. branch of a foreign bank), which has a long-term unsecured
debt
rating from Moody’s and Standard & Poor’s of at least A-3 or its
equivalent.
“Enforcement
Date”
is
defined in Section 4.03 of the Trust Indenture.
“Engine”
means
(a) each of the engines manufactured by Engine Manufacturer and identified
by Engine Manufacturer’s model number and Engine Manufacturer’s serial number
set forth in Lease Supplement No. 1, and any Replacement Engine, in any
case whether or not from time to time installed on such Airframe or
installed on
any other airframe or aircraft, and (b) any and all Parts incorporated or
installed in or attached or appurtenant to such engine, and any and
all Parts
removed from such engine, unless title to such Parts shall not be vested
in
Lessor in accordance with Section 8.1 and Annex C of the Lease. Upon
substitution of a Replacement Engine under and in accordance with the
Lease,
such Replacement Engine shall become subject to the Lease and shall
be an
“Engine” for all purposes of the Lease and the other Operative Agreements and
thereupon the Engine for which the substitution is made shall no longer
be
subject to the Lease, and such replaced Engine shall cease to be an
“Engine.”
“Engine
Manufacturer”
means
Rolls-Royce Company, formerly known as ▇▇▇▇▇▇▇ Engine Company, Inc.,
a Delaware
corporation.
“Equipment
Note Register”
is
defined in Section 2.07 of the Trust Indenture.
“Equipment
Notes”
means
and includes any equipment notes issued under the Trust Indenture in
the form
specified in Section 2.01 thereof (as such form may be varied pursuant to
the terms of the Trust Indenture) and any Equipment Note issued under
the Trust
Indenture in exchange for or replacement of any Equipment Note.
“Equity
Advisor”
has
the
meaning provided in Schedule 3 to the Participation Agreement.
“ERISA”
means
the Employee Retirement Income Security Act of 1974 and any regulations
and
rulings issued thereunder all as amended and in effect from time to
time.
“Escrow
Agent”
means
▇▇▇▇▇ Fargo Bank Northwest, National Association, as Escrow Agent under
the
Escrow Agreement.
“Escrow
Agreement”
means
the Escrow and Paying Agent Agreement, among the Escrow Agent, the
Paying Agent,
certain initial purchasers of the Pass Through Certificates named therein
and
the Pass Through Trustee, dated as of the Issuance Date, which relates
to the
Pass Through Trust, provided
that,
for purposes of any obligation of Lessee, no amendment, modification
or
supplement to, or substitution or replacement of, such Escrow Agreement
shall be
effective unless consented to by Lessee.
“Event
of Default”
is
defined in Section 4.02 of the Trust Indenture.
“Event
of Loss”
means,
with respect to the Aircraft, Airframe or any Engine, any of the following
circumstances, conditions or events with respect to such property,
for any
reason whatsoever:
|
(a)
|
the
destruction of such property, damage to such property beyond
economic
repair or rendition of such property permanently unfit for
normal use by
Lessee;
|
|
(b)
|
the
actual or constructive total loss of such property or any
damage to such
property, or requisition of title or use of such property,
which results
in an insurance settlement with respect to such property
on the basis of a
total loss or constructive or compromised total
loss;
|
|
(c)
|
any
theft, hijacking or disappearance of such property for a
period of 180
consecutive days or more or, if earlier, the end of the
Term;
|
|
(d)
|
any
seizure, condemnation, confiscation, taking or requisition
(including loss
of title) of such property by any Government Entity or purported
Government Entity (other than a requisition of use by the
U.S. Government)
for a period exceeding 180 consecutive days or, if earlier,
at the end of
the Term;
|
|
(e)
|
any
seizure, condemnation, confiscation, taking or requisition
of use of such
property by the U.S. Government that continues until the
last day of the
Term, provided
that no such Event of Loss shall exist if Lessor shall have
elected not to
treat such event as an Event of Loss pursuant to Section
10.6 of the
Lease; and
|
|
(f)
|
as
a result of any law, rule, regulation, order or other action
by the
Aviation Authority or by any Government Entity of the government
of
registry of the Aircraft or by any Government Entity otherwise
having
jurisdiction over the operation or use of the Aircraft, the
use of such
property in the normal course of Lessee’s business of passenger air
transportation is prohibited for a period of 180 consecutive
days, unless
Lessee, prior to the expiration of such 180 day period, shall
have
undertaken and shall be diligently carrying forward such
steps as may be
necessary or desirable to permit the normal use of such property
by
Lessee, but in any event if such use shall have been prohibited
for a
period of 720 days, provided that no Event of Loss shall
be deemed to have
occurred if such prohibition has been applicable to Lessee’s (or a
Permitted Sublessee’s) entire
|
U.S.
fleet of such property and Lessee (or a Permitted Sublessee), prior
to the
expiration of such 720-day period, shall have conformed at least one
unit of
such property in its fleet to the requirements of any such law, rule,
regulation, order or other action and commenced regular commercial
use of the
same in such jurisdiction and shall be diligently carrying forward,
in a manner
which does not discriminate against such property in so conforming
such
property, steps which are necessary or desirable to permit the normal
use of
such property by Lessee, but in any event if such use shall have been
prohibited
for a period of three years or such use shall be prohibited at the
expiration of
the Term.
“Excluded
Payments”
means
(i) indemnity payments paid or payable by Lessee to or in respect of
Owner
Participant, or Owner Trustee in its individual capacity, their respective
Affiliates, successors and permitted assigns and their directors, officers,
employees, servants and agents pursuant to Section 9 of the Participation
Agreement or any corresponding payments under the Lease, (ii) proceeds
of public
liability insurance paid or payable as a result of insurance claims
made, or
losses suffered, by Owner Trustee in its individual capacity or by
Owner
Participant, that are payable directly to Owner Trustee in its individual
capacity, or Owner Participant, respectively, for their own account,
(iii)
proceeds of insurance maintained with respect to the Aircraft by Owner
Participant or any Affiliate thereof for its or their own account or
benefit
(whether directly or through Owner Trustee) and permitted under Section
11.2 of
the Lease, (iv) all payments required to be made under the Tax Indemnity
Agreement by Lessee whether or not denominated as Supplemental Rent,
(v) any
amount payable to the Owner Participant by any transferee as the purchase
price
of the Owner Participant’s interest in the Trust Estate, (vi) any interest that
pursuant to the Operative Agreements may from time to time accrue in
respect of
any of the amounts described in clauses (i) through (v) above, (vii)
proceeds of any right to enforce the payment of any amount described
in clauses
(i) through (vi) above (provided, that
the
rights referred to in this clause (vii) shall not be deemed to include
the
exercise of any remedies provided for in the Lease other than the right
to ▇▇▇
for specific performance of any covenant to make such payment or to
▇▇▇ for
damages in respect of the breach of any such covenant) and (viii) any
right to
exercise any election or option or make any decision or determination,
or to
give or receive any notice, consent, waiver or approval, or to take
any other
action in respect of, but in each case, only to the extent relating
to, any
Excluded Payments.
[“Existing
Lease”
has
the
meaning provided in Schedule 3 to the Participation Agreement.]6
[“Existing
Participation Agreement”
has
the
meaning provided in Schedule 3 to the Participation Agreement.]7
________________________
6. Delete
for New Aircraft.
7. Delete
for New Aircraft.
[“Existing
Sublease”
means
the Aircraft Sublease Agreement, dated the date of the Existing Participation
Agreement, between Lessee and Express relating to the Aircraft.]8
“Expense
Limit”
has
the
meaning provided in Schedule 3 to the Participation Agreement.
“Expenses”
means
any and all liabilities, obligations, losses, damages, settlements,
penalties,
claims, actions, suits, costs, expenses and disbursements (including,
without
limitation, reasonable fees and disbursements of legal counsel, accountants,
appraisers, inspectors or other professionals, and costs of
investigation).
“Express”
means
ExpressJet Airlines, Inc., a Delaware corporation.
“Express
Sublease”
means
the Permitted Sublease, dated as of the date of the Participation Agreement,
between Lessee and Express relating to the Aircraft.
“FAA”
means
the Federal Aviation Administration of the United States or any Government
Entity succeeding to the functions of such Federal Aviation
Administration.
“FAA
▇▇▇▇ of Sale”
means
a
▇▇▇▇ of sale for the Aircraft on AC Form 8050-2 (or such other form
as may be
approved by the FAA) delivered to Owner Trustee on the Delivery Date
by
Seller.
“FAA
Filed Documents”
means
the Lease, Lease Supplement No. 1, the Express Sublease, the Trust
Indenture, the Trust Agreement, the initial Trust Indenture Supplement,
the FAA
▇▇▇▇ of Sale, [the Termination Agreements]9
and an
application for registration of the Aircraft with the FAA in the name
of Owner
Trustee.
“FAA
Regulations”
means
the Federal Aviation Regulations issued or promulgated pursuant to
the Act from
time to time.
“Fair
Market Rental Value”
means
the fair market rental value in Dollars for the Aircraft that would
apply in an
arm’s-length transaction between an informed and willing lessee under no
compulsion to lease, and an informed and willing lessor under no compulsion
to
lease, the Aircraft, for the applicable Renewal Lease Term, assuming
that (a)
the Aircraft has been maintained in accordance with, and is in the
condition
required by, the Lease, (b) payments of rent would be made monthly,
and (c) the
Aircraft would be leased during any such Renewal Term on the same terms
and
conditions as are set forth in the Lease with respect to the Base Lease
Term.
________________________
8. Delete
for New Aircraft.
9. Delete
for New Aircraft.
“Fair
Market Sales Value”
means
the fair market sales value in Dollars for the Aircraft that would
apply in an
arm’s-length transaction between an informed and willing buyer under no
compulsion to buy, and an informed and willing seller under no compulsion
to
sell, the Aircraft, in a transaction that would close on or about the
relevant
time of determination, assuming (except as otherwise provided in Section
15.4 of
the Lease) that (a) the Aircraft has been maintained in accordance with,
and is in the condition required by, the Lease and (b) the Aircraft would
be delivered to such informed and willing buyer in the return condition
required
by the Lease.
“Financing
Statements”
means,
collectively, [(a)]10 UCC-1
financing statements (i) covering the Trust Indenture Estate, by Owner
Trustee, as debtor, showing Mortgagee as secured party, for filing
in Utah and
each other jurisdiction that, in the opinion of Mortgagee, is necessary
to
perfect its Lien on the Trust Indenture Estate and (ii) covering the Lease
and the Aircraft, as a precautionary matter, by Lessee, as lessee,
showing Owner
Trustee as lessor and Mortgagee as assignee of Owner Trustee, for filing
in
Delaware and each other jurisdiction that, in the opinion of Owner
Trustee and
Mortgagee, is reasonably desirable [and (b) UCC-3 financing statements
evidencing the termination of the Existing Lease and the Existing Sublease,
for
filing in Delaware and each other jurisdiction that, in the opinion
of Owner
Trustee and Mortgagee, is reasonably desirable].11
“GAAP”
means
generally accepted accounting principles as set forth in the statements
of
financial accounting standards issued by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants, as
such
principles may at any time or from time to time be varied by any applicable
financial accounting rules or regulations issued by the SEC and, with
respect to
any person, shall mean such principles applied on a basis consistent
with prior
periods except as may be disclosed in such person’s financial
statements.
“Government
Entity”
means
(a) any federal, state, provincial or similar government, and any
body, board, department, commission, court, tribunal, authority, agency
or other
instrumentality of any such government or otherwise exercising any
executive,
legislative, judicial, administrative or regulatory functions of such
government
or (b) any other government entity having jurisdiction over any matter
contemplated by the Operative Agreements or relating to the observance
or
performance of the obligations of any of the parties to the Operative
Agreements.
“Indemnitee”
means
(i) ▇▇▇▇▇ Fargo and Owner Trustee, (ii) WTC and Mortgagee, (iii) each
separate
or additional trustee appointed pursuant to the Trust Agreement or
the Trust
Indenture, (iv) each Participant, (v) the Trust Estate and the Trust
Indenture
Estate, (vi) each Affiliate of the persons described in clauses (i)
through
(iv), inclusive, (vii) the respective directors, officers, employees,
agents and
servants of each of the persons described in clauses (i)
________________________
10. Delete
for New Aircraft.
11. Delete
for New Aircraft.
through
(iv) inclusive and in clause (vi), (viii) the successors and permitted
assigns
of the persons described in clauses (i) through (iv), inclusive, and
in clauses
(vi) and (vii) and (ix) the Pass Through Indemnitees; provided that
the Pass
Through Indemnitees are Indemnitees only for purposes of Section 9.1
of the
Participation Agreement. If any Indemnitee is Airframe Manufacturer
or Engine
Manufacturer or any subcontractor or supplier of either thereof, such
Person
shall be an Indemnitee only in its capacity as Owner Participant, Loan
Participant or Note Holder.
“Indemnity
Agreement”
means
the agreement, dated as of September 14, 2005, between Lessee and Airframe
Manufacturer, which states that it is the Indemnity Agreement for purposes
of
the Pass Through Certificates.
“Indenture
Agreements”
means
the Participation Agreement, the Lease, the Purchase Agreement, the
Purchase
Agreement Assignment, the Consent and Agreement, the Bills of Sale
and any other
contract, agreement or instrument from time to time assigned or pledged
under
the Trust Indenture.
“Indenture
Default”
means
any condition, circumstance, act or event that, with the giving of
notice, the
lapse of time or both, would constitute an Indenture Event of
Default.
“Indenture
Event of Default”
means
any one or more of the conditions, circumstances, acts or events set
forth in
Section 4.02 of the Trust Indenture.
“Indenture
Indemnitee”
means
(i) WTC and the Mortgagee, (ii) each separate or additional trustee
appointed pursuant to the Trust Indenture, (iii) the Subordination
Agent, (iv)
the Liquidity Provider, (v) the Pass Through Trustee, (vi) the Paying
Agent,
(vii) the Escrow Agent and (viii) each of the respective directors,
officers,
employees, agents and servants of each of the persons described in
clauses (i)
through (vii) inclusive above.
[“Initial
Purchase Agreement Assignment”
means
the Purchase Agreement Assignment [TN], dated as of even date with
the
Participation Agreement, between Express and Seller.]12
“Intercreditor
Agreement”
means
that certain Intercreditor Agreement among the Pass Through Trustee,
the
Liquidity Provider and the Subordination Agent, dated as of the Issuance
Date,
provided
that,
for purposes of any obligation of Lessee, no amendment, modification
or
supplement to, or substitution or replacement of, such Intercreditor
Agreement
shall be effective unless consented to by Lessee.
“IRS”
means
the Internal Revenue Service of the United States or any Government
Entity
succeeding to the functions of such Internal Revenue Service.
“Issuance
Date”
means
September 22, 2005.
________________________
12. Insert
for New Aircraft.
“Law”
means
(a) any constitution, treaty, statute, law, decree, regulation, order,
rule
or directive of any Government Entity, and (b) any judicial or
administrative interpretation or application of, or decision under,
any of the
foregoing.
“Lease”
or
“Lease
Agreement”
means
the Lease Agreement [TN], dated as of even date with the Participation
Agreement, between Owner Trustee and Lessee.
“Lease
Default”
means
any condition, circumstance, act or event that, with the giving of
notice, the
lapse of time or both, would constitute a Lease Event of Default.
“Lease
Event of Default”
means
any one or more of the conditions, circumstances, acts or events set
forth in
Section 14 of the Lease.
“Lease
Supplement”
means
a
supplement to the Lease, in the form of Exhibit A to the Lease.
“Lease
Supplement No. 1”
means
the initial Lease Supplement, dated the Closing Date.
“Lessee”
means
Continental Airlines, Inc., a Delaware corporation.
“Lessee
Operative Agreements”
means
the Participation Agreement, the Lease, Lease Supplement No. 1, the
Express
Sublease[, the Termination Agreement with respect to the Existing
Sublease]13
and the
Tax Indemnity Agreement.
“Lessee
Person”
means
Lessee, any sublessee, assignee, successor or other user or person
in possession
of the Aircraft, Airframe or an Engine during the Term with or without
color of
right, or any Affiliate of any of the foregoing (excluding any Tax
Indemnitee or
any related Tax Indemnitee with respect thereto, or any person using
or claiming
any rights with respect to the Aircraft, Airframe or an Engine directly
by or
through any of the persons in this parenthetical, but not excluding
any Person
claiming directly or indirectly through or under the Lease).
“Lessor”
means
Owner Trustee in its capacity as lessor under the Lease.
“Lessor
Lien”
means,
with respect to any person and in respect of any property (including,
without
limitation, the Trust Estate, the Trust Indenture Estate, the Aircraft,
Airframe, Engines, Parts or Aircraft Documents) or any payments, any
Lien on
such property or payments which (a) arises from claims against such person
(if such person is a trustee, whether in its individual capacity or
in its
capacity as a trustee) not related to any of the transactions contemplated
by
the Operative Agreements, (b) results from acts or omissions of such person
(if such person is a trustee, whether in its individual capacity or
in its
capacity as a trustee) in violation of such person’s obligations under any of
the terms of the Operative Agreements, or not related to the transactions
contemplated by the Operative Agreements, (c) is imposed as a result
________________________
13. Delete
for New Aircraft.
of Taxes
against such person (if such person is a trustee, whether in its individual
capacity or in its capacity as a trustee) or any of its Affiliates
not required
to be indemnified by Lessee under the Participation Agreement, or (d)
claims
against such person arising out of any transfer by such person of its
interest
in the Aircraft, the Trust Estate or the Operative Agreements, other
than a
Transfer permitted by the terms of the Operative Agreements or pursuant
to the
exercise of remedies set forth in Section 15 of the Lease.
“Lessor’s
Cost”
means
the amount paid by Owner Trustee to Airframe Manufacturer to purchase
the
Aircraft pursuant to the Purchase Agreement, and is designated by Dollar
amount
in Schedule 3 to the Participation Agreement.
“Lien”
means
any mortgage, pledge, lien, charge, claim, encumbrance, lease or security
interest affecting the title to or any interest in property.
“Liquidity
Facility”
means
the Revolving Credit Agreement between the Subordination Agent, as
borrower, and
the Liquidity Provider, dated as of the Issuance Date, provided
that,
for the purposes of any obligation of Lessee, no amendment, modification
or
supplement to, or substitution or replacement of, such Liquidity Facility
shall
be effective unless consented to by Lessee.
“Liquidity
Provider”
means
Landesbank Baden-Württemburg, as Liquidity Provider under the Liquidity
Facility, or any successor thereto.
“Loan
Participant”
means,
until the Closing shall have been consummated, the Pass Through Trustee,
and
after the Closing shall have been consummated, each Note Holder.
“Loss
Payment Date”
means
the date on which payment is due pursuant to Section 10.1.2(a)(i) of
the
Lease.
“Maintenance
Program”
is
defined in Annex C to the Lease.
“Majority
in Interest of Note Holders”
means
as of a particular date of determination, the holders of a majority
in aggregate
unpaid Original Amount of all Equipment Notes outstanding as of such
date
(excluding any Equipment Notes held by Owner Trustee, Lessee, or Owner
Participant or any Affiliate of any such party or any interests of
Owner Trustee
or Owner Participant therein by reason of subrogation pursuant to Section
4.03
of the Trust Indenture (unless all Equipment Notes then outstanding
shall be
held by Owner Trustee, Lessee, Owner Participant or any Affiliate of
any
thereof)); provided
that for
the purposes of directing any action or casting any vote or giving
any consent,
waiver or instruction hereunder any Note Holder of an Equipment Note
or
Equipment Notes may allocate, in such Note Holder’s sole discretion, any
fractional portion of the principal amount of such Equipment Note or
Equipment
Notes in favor of or in opposition to any such action, vote, consent,
waiver or
instruction.
“Make-Whole
Amount”
means,
with respect to any Equipment Note, an amount (as determined by an
independent
investment banker of national standing) equal to the excess, if any,
of (a) the
present value of the remaining scheduled payments of principal and
interest to
maturity of such Equipment Note computed by discounting such payments
on a
monthly basis on each Payment Date (assuming a 360-day year of twelve
30-day
months) using a discount rate
equal
to
the Treasury Yield over (b) the outstanding principal amount of such
Equipment
Note plus accrued interest to the date of determination. For purposes
of
determining the Make-Whole Amount, “Treasury Yield” means, at the date of
determination with respect to any Equipment Note, the sum of (i) 50 basis
points and (ii) the interest rate (expressed 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 monthly yield to maturity for
United
States Treasury securities maturing on the Average Life Date of such
Equipment
Note and trading in the public securities markets either as determined
by
interpolation between the most recent weekly average yield to maturity
for two
series of United States Treasury securities, trading in the public
securities
markets, (A) one maturing as close as possible to, but earlier than,
the Average
Life Date of such Equipment Note and (B) the other maturing as close
as possible
to, but later than, the Average Life Date of such Equipment Note, in
each case
as published in the most recent H.15(519) or, if a weekly average yield
to
maturity for United States Treasury securities maturing on the Average
Life Date
of such Equipment Note 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 payment or 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 payment or redemption date.
“Material
Adverse Change”
means,
with respect to any person, any event, condition or circumstance that
materially
and adversely affects such person’s business or consolidated financial
condition, or its ability to observe or perform its obligations, liabilities
and
agreements under, or affect the validity or enforceability of the Operative
Agreements.
“Mortgaged
Property”
is
defined in Section 3.03 of the Trust Indenture.
“Mortgagee”
means
Wilmington Trust Company, a Delaware banking corporation, not in its
individual
capacity but solely as loan trustee under the Trust Indenture.
“Mortgagee
Agreements”
means,
collectively, the Participation Agreement, the Trust Indenture and
any Trust
Indenture Supplement.
“Mortgagee
Event”
means
(i) in the event of a reorganization proceeding involving the Lessee under
Chapter 11 of the Bankruptcy Code, (A) the trustee in such proceeding
or the
Lessee not assuming or agreeing to perform its obligations under the
Lease, as
contemplated under Section 1110, during the 60-day period under Section
1110(a)(2)(A) of the Bankruptcy Code (or such longer period as may
apply under
Section 1110(b) of the Bankruptcy Code) or (B) at any time after agreeing
to perform such obligations, such trustee or the Lessee ceasing to
perform such
obligations with the result that the Continuous Stay Period comes to
an end or
(ii) either the Equipment Notes shall have become due and payable pursuant
to Section 4.04(b) of the Trust Indenture or Mortgagee has taken action or
notified Owner Trustee that it intends to take action to foreclose
the Lien of
the Trust Indenture or otherwise commence the exercise of any significant
remedy
in accordance with Section 4.04(a) of the Trust Indenture.
“Net
Economic Return”
means
the Owner Participant’s net after-tax yield utilizing the multiple investment
sinking fund method of analysis and aggregate net after-tax cash flow,
computed
on the basis of the same methodology and assumptions as were utilized
by the
initial Owner Participant in determining Stipulated Loss Value percentages
and
Termination Value percentages, as of the Closing Date.
“Net
Worth”
means,
for any person, the excess of its total assets over its total liabilities
in
accordance with GAAP.
“Non-U.S.
Person”
means
any Person other than a United States person, as defined in Section
7701(a)(30)
of the Code.
“Note
Holder”
means
at any time each registered holder of one or more Equipment Notes.
“Note
Purchase Agreement”
means
the Note Purchase Agreement, dated as of the Issuance Date, among Continental
Airlines, Inc., the Subordination Agent, the Escrow Agent, the Paying
Agent and
the Pass Through Trustee under the Pass Through Trust Agreement providing
for,
among other things, the issuance and sale of certain equipment notes,
provided
that,
for purposes of any obligation of Lessee, no amendment, modification
or
supplement to, or substitution or replacement of, such Agreement shall
be
effective unless consented to by Lessee.
“Obsolete
Part”
is
defined in Section D of Annex C to the Lease.
“Officer’s
Certificate”
means,
in respect of any party to the Participation Agreement, a certificate
signed by
the Chairman, the President, any Vice President (including those with
varying
ranks such as Executive, Senior, Assistant or Staff Vice President),
the
Treasurer or the Secretary of such party.
“Operative
Agreements”
means,
collectively, the Participation Agreement, the Trust Agreement, the
Purchase
Agreement Assignment, the Consent and Agreement, the Lease, Lease Supplement
No. 1, the Trust Indenture, the initial Trust Indenture Supplement, the
Bills of Sale, the Tax Indemnity Agreement[, the Termination
Agreements]14
and the
Equipment Notes.
“Operative
Indentures”
means
each of the indentures under which notes have been issued and purchased
by the
Pass Through Trustee.
[“OP
Guarantor”
means
the Airframe Manufacturer.]15
________________________
14. Delete
for New Aircraft.
15. Insert
if
OP is an Affiliate of Airframe Manufacturer.
[“OP
Guaranty”
means
the Guaranty, dated as of the date of the Participation Agreement,
providing,
among other things, for the guaranty by the OP Guarantor of Owner Participant’s
obligations under the Operative Agreements.]16
“OP
Jurisdiction”
is
defined in Schedule 3 to the Participation Agreement.
“Original
Amount,”
with
respect to an Equipment Note, means the stated original principal amount
of such
Equipment Note and, with respect to all Equipment Notes, means the
aggregate
stated original principal amounts of all Equipment Notes.
“Owner
Participant”
means
the person executing the Participation Agreement as “Owner Participant” or, if a
second person becomes an “Owner Participant” pursuant to Section 10.1.1 of
the Participation Agreement, both of such persons; provided
that if
an Owner Participant Transfers 100% of its interest to a successor
Owner
Participant, such transferring Owner Participant shall thereafter no
longer be
considered an “Owner Participant.”
“Owner
Participant Agreements”
means,
collectively, the Participation Agreement, the Tax Indemnity Agreement
and the
Trust Agreement.
“Owner
Participant’s Percentage”
means
the percentage of Lessor’s Cost allocated to the Owner Participant in
Schedule 2 to the Participation Agreement.
“Owner
Trustee”
means
▇▇▇▇▇ Fargo Bank Northwest, National Association, a national banking
association, not in its individual capacity, except as expressly provided
in any
Operative Agreement, but solely as Owner Trustee under the Trust
Agreement.
“Owner
Trustee Agreements”
means,
collectively, the Participation Agreement, the Lease, Lease Supplement
No. 1,
the Trust Agreement, the Trust Indenture, the initial Trust Indenture
Supplement, the Equipment Notes and the Purchase Agreement
Assignment.
“Participants”
means,
collectively, Owner Participant and each Loan Participant and “Participant”
means Owner Participant or a Loan Participant, individually.
“Participation
Agreement”
means
the Participation Agreement [TN] dated as of [DD] among Lessee, Owner
Participant, Owner Trustee, the Pass Through Trustee, Subordination
Agent,
Mortgagee and Airframe Manufacturer.
“Parts”
means
all appliances, parts, components, avionics, landing gear, instruments,
appurtenances, accessories, furnishings, seats and other equipment
of whatever
nature (other than (a) Engines or engines, and (b) any items leased
by Lessee
from a third party other than Lessor)), that may from time to time
be installed
or incorporated in or attached or appurtenant to the Airframe or any
Engine.
________________________
16. Insert
if
OP is an Affiliate of Airframe Manufacturer.
“Pass
Through Agreements”
means
the Pass Through Trust Agreement, the Note Purchase Agreement, the
Deposit
Agreement, the Escrow Agreement, the Intercreditor Agreement, the Liquidity
Facility and the Fee Letter (as defined in the Intercreditor Agreement),
provided,
that no
amendment, modification or supplement to, or substitution or replacement
of, any
such Fee Letter shall be effective for purposes of any obligation of
Lessee,
unless consented to by Lessee.
“Pass
Through Certificates”
means
the pass through certificates issued by the Pass Through Trust (and
any other
pass through certificates for which such pass through certificates
may be
exchanged).
“Pass
Through Indemnitees”
means
(i) the Subordination Agent, the Paying Agent, the Escrow Agent, the
Liquidity
Provider and the Pass Through Trustee, (ii) each Affiliate of a person
described
in the preceding clause (i), (iii) the respective directors, trustees,
officers,
employees, agents and servants of each of the persons described in
the preceding
clauses (i) and (ii) and (iv) the successors and permitted assigns
of the
persons described in the preceding clauses (i), (ii) and (iii).
“Pass
Through Trust”
means
the pass through trust created under the Pass Through Trust
Agreement.
“Pass
Through Trust Agreement”
means
the Trust Supplement, dated as of the Issuance Date, by and between
the Lessee
and Pass Through Trustee, together with the Basic Pass Through Trust
Agreement.
“Pass
Through Trustee”
means
Wilmington Trust Company, a Delaware banking corporation, in its capacity
as
trustee under the Pass Through Trust Agreement.
“Pass
Through Trustee Agreements”
means
the Participation Agreement, the Pass Through Trust Agreement, the
Note Purchase
Agreement, the Deposit Agreement, the Escrow Agreement and the Intercreditor
Agreement.
“Paying
Agent”
means
Wilmington Trust Company, as Paying Agent under the Escrow
Agreement.
“Payment
Date”
means
the first day of each month during the Term, commencing with
[____________________].
“Payment
Default”
means
the failure by Lessee to pay any amount of Basic Rent, Renewal Rent,
Stipulated
Loss Value or Termination Value when due.
“Payment
Due Rate”
is
defined in Schedule 1 to the Lease.
“Payment
Period”
means
each of the consecutive monthly periods during the Term ending on a
Payment
Date, the first such period commencing on and including the Closing
Date and
being other than monthly.
“Permitted
Air Carrier”
means
(i) any Permitted Foreign Air Carrier, (ii) any person approved in
writing by
Lessor or (iii) any U.S. Air Carrier.
“Permitted
Country”
means
any country listed on Schedule 5 to the Lease.
“Permitted
Foreign Air Carrier”
means
any air carrier with its principal executive offices in any Permitted
Country
and which is authorized to conduct commercial airline operations and
to operate
jet aircraft similar to the Aircraft under the applicable Laws of such
Permitted
Country.
“Permitted
Government Entity”
means
(i) the U.S. Government or (ii) any Government Entity if the Aircraft
is then
registered under the Laws of the country of such Government Entity.
“Permitted
Institution”
means
any bank, trust company, insurance company, financial institution,
partnership,
limited liability company or corporation (other than, without Lessee’s consent,
a commercial air carrier, a commercial aircraft operator, a freight
forwarder or
Affiliate of any of the foregoing), in each case with a combined capital
and
surplus or net worth of at least $25,000,000.
“Permitted
Lien”
means
any Lien described in clauses (a) through (f), inclusive, of Section 6
of the Lease.
“Permitted
Sublease”
means
a
sublease or sub-sublease permitted under Section 7.2.7 of the
Lease.
“Permitted
Sublessee”
means
the sublessee under a Permitted Sublease.
“Persons”
or
“persons”
means
individuals, firms, partnerships, joint ventures, trusts, trustees,
Government
Entities, organizations, associations, corporations, limited liability
companies, government agencies, committees, departments, authorities
and other
bodies, corporate or incorporate, whether having distinct legal status
or not,
or any member of any of the same.
“Plan”
means
any employee benefit plan within the meaning of Section 3(3) of ERISA, or
any plan within the meaning of Section 4975(e)(1) of the Code.
“Preliminary
Notice”
is
defined in Section 17.1 of the Lease.
“Premium
Termination Date”
means
October 22, 2014.
“PTT
Percentage”
means,
with respect to the Pass Through Trustee, the percentage of Lessor’s Cost
allocated to such Pass Through Trustee in Schedule 2 to the Participation
Agreement.
“Purchase
Agreement”
means
the Purchase Agreement GPJ-003/96 between Airframe Manufacturer and
Express
(including all exhibits thereto, together with all letter agreements
entered
into that by their terms constitute part of such Purchase Agreement),
to the
extent assigned pursuant to the Purchase Agreement Assignment.
“Purchase
Agreement Assignment”
means
the [Amended and Restated]17
Purchase
Agreement Assignment [TN], dated as of even date with the Participation
Agreement, among Seller [, Express]18
and
Owner Trustee.
“Purchase
Date”
means
the last Business Day of the Base Lease Term or any Renewal Lease Term,
as
specified in any Purchase Notice.
“Purchase
Notice”
is
defined in Section 17.3.1 of the Lease.
“QIB”
is
defined in Section 2.08 of the Trust Indenture.
“Removable
Parts”
is
defined in Section D of Annex C to the Lease.
“Renewal
Lease Term”
means
each two year term for which the Lease is extended by Lessee, if any,
pursuant
to the first or second such extensions in accordance with Section 17
of the
Lease.
“Renewal
Notice”
is
defined in Section 17.2.1 of the Lease.
“Renewal
Rent”
for
the
Aircraft means the rent payable therefor in respect of a Renewal Lease
Term
determined pursuant to Section 17.2.2 of the Lease.
“Rent”
means,
collectively, Basic Rent, Renewal Rent and Supplemental Rent.
“Replacement
Airframe”
means
any airframe substituted for the Airframe pursuant to Section 10 of
the
Lease.
“Replacement
Engine”
means
an engine substituted for an Engine pursuant to the Lease.
“Return
Acceptance Supplement”
means
a
Return Acceptance Supplement, dated as of the date the Aircraft is
returned to
Lessor pursuant to Section 5 of the Lease, by Lessor and Lessee substantially
in
the form of Exhibit B to
the
Lease.
“Scheduled
Closing Date”
means
the expected Closing Date notified to Lessee, each Participant, Owner
Trustee
and Mortgagee by Airframe Manufacturer pursuant to Section 4.1 of the
Participation Agreement, which expected Closing Date shall be a Business
Day not
later than the Commitment Termination Date.
“Scheduled
Expiration Date”
is
defined in Schedule 1 to the Lease.
________________________
17. Delete
for New Aircraft.
18. Delete
for New Aircraft.
“Scheduled
Renewal Term Expiration Date”
means,
in the case of the first Renewal Lease Term, the second anniversary
of the
Scheduled Expiration Date, and in the case of the second Renewal Lease
Term, the
fourth anniversary of the Scheduled Expiration Date.
“SEC”
means
the Securities and Exchange Commission of the United States, or any
Government
Entity succeeding to the functions of such Securities and Exchange
Commission.
“Section 1110”
means
11 U.S.C. § 1110 of the Bankruptcy Code or any successor or analogous
section of the federal bankruptcy Law in effect from time to time.
“Section
1110 Event”
means
the institution of reorganization proceedings with respect to Lessee
under
Chapter 11 of the Bankruptcy Code and thereafter so long as the Section
1110
Period continues.
“Section
1110 Period”
means
the continuous period of 60 days specified in Section 1110(a)(2)(A)
of the
Bankruptcy Code (or such longer period, if any, agreed to under Section
1110(b)
of the Bankruptcy Code), plus an additional period, if any, commencing
with the
trustee or debtor-in-possession in such proceeding agreeing to perform
its
obligations under the Lease with the approval of the applicable court
and
continuing until such time as such trustee or debtor-in-possession
ceases to
fully perform its obligations thereunder with the result that the period
during
which the Owner Trustee is prohibited from repossessing the Aircraft
under the
Lease comes to an end.
“Secured
Obligations”
is
defined in Section 2.06 of the Trust Indenture.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Security”
means
a
“security” as defined in Section 2(1) of the Securities Act.
“Seller”
is
defined in Schedule 3 to the Participation Agreement.
“Similar
Aircraft”
is
defined in Schedule 1 to the Lease.
“SLV
Rate”
is
defined in Schedule 1 to the Lease.
“Stipulated
Loss Value”
means,
with respect to the Aircraft, (a) during the Base Lease Term, the amount
determined by multiplying (i) the percentage set forth in Schedule 3
to the Lease (as adjusted from time to time in accordance with
Section 3.2.3 of the Lease) opposite the Stipulated Loss Value Date by
(ii) Lessor’s Cost, (b) during any Renewal Lease Term, the amount
determined pursuant to Section 17.2.3 of the Lease and (c) during any
extension of the Term pursuant to the proviso to the definition of
“Term”, the
Stipulated Loss Value immediately prior to the commencement of such
extension.
Notwithstanding anything to the contrary in any Operative Agreement,
Stipulated
Loss Value shall always be sufficient to pay in full, as of the date
of payment
thereof (assuming timely payment of the Equipment Notes prior to such
date), the
aggregate unpaid principal amount of all Equipment Notes outstanding
as of such
date, together with accrued and unpaid interest on all such Equipment
Notes as
of such date.
“Stipulated
Loss Value Date”
means,
for any month, the day in such month specified in Schedule 3 to the
Lease or, if
such day is not a Business Day, the immediately succeeding Business
Day.
“Subordination
Agent”
means
Wilmington Trust Company, as subordination agent under the Intercreditor
Agreement.
“Subordination
Agent Agreements”
means
the Participation Agreement, the Liquidity Facility and the Intercreditor
Agreement.
“Supplemental
Rent”
means,
without duplication (a) all amounts, liabilities, indemnities and obligations
(other than Basic Rent or Renewal Rent but including Make-Whole Amount,
if any)
that Lessee assumes or becomes obligated to or agrees to pay under
any Lessee
Operative Agreement to or on behalf of Lessor or any other person,
including,
without limitation, payments of Stipulated Loss Value, Termination
Value and
payments of indemnities under Section 9 of the Participation Agreement,
but
excluding any amount as to which Lessee is obligated to pay a pro rata
share
pursuant to clause (e) of this definition, (b) (i) to the extent
not payable (whether or not in fact paid) under Section 6(a) of the
Note
Purchase Agreement (as originally in effect or amended with the consent
of the
Owner Participant), an amount or amounts equal to the fees payable
to the
Liquidity Provider under Section 2.03 of the Liquidity Facility and
the related
Fee Letter (as defined in the Intercreditor Agreement) multiplied by
a fraction
the numerator of which shall be the then outstanding aggregate principal
amount
of the Equipment Notes and the denominator of which shall be the then
outstanding aggregate principal amount of all “Equipment Notes” (as defined in
the Intercreditor Agreement); (ii) (x) the amount equal to interest on any
Downgrade Advance (other than any Applied Downgrade Advance) payable
under
Section 3.07 of the Liquidity Facility minus Investment Earnings from
such
Downgrade Advance multiplied by (y) the fraction specified in the foregoing
clause (i); (iii) (x) the amount equal to interest on any Special Termination
Advance (other than any Applied Special Termination Advance) payable
under
Section 3.07 of the Liquidity Facility minus Investment Earnings from
such
Special Termination Advance multiplied by (y) the fraction specified in the
forgoing clause (i); (iv) (x) the amount equal to interest on any Early
Termination Advance (other than any Applied Early Termination Advance)
payable
under Section 3.07 of the Liquidity Facility minus Investment Earnings
from such
Early Termination Advance multiplied by (y) the fraction specified
in the
foregoing clause (i); (v) if any payment default shall have occurred
and be
continuing with respect to interest on any Equipment Notes, (x) the excess,
if any, of (1) an amount equal to interest on any Unpaid Advance, Applied
Downgrade Advance, Applied Special Termination Advance or Applied Early
Termination Advance payable under Section 3.07 of the Liquidity Facility
over
(2) the sum of Investment Earnings from any Final Advance plus any amount
of interest at the Payment Due Rate actually payable (whether or not
in fact
paid) by Owner Trustee on the overdue scheduled interest on the Equipment
Notes
in respect of which such Unpaid Advance, Applied Downgrade Advance,
Applied
Special Termination Advance or Applied Early Termination Advance was
made
multiplied by (y) a fraction the numerator of which shall be the then
aggregate
overdue amounts of interest on the Equipment Notes (other than interest
becoming
due and payable solely as a result of acceleration of any such Equipment
Notes)
and the denominator of which shall be the then aggregate overdue amounts
of
interest on all “Equipment Notes” (as defined in the Intercreditor Agreement)
(other than interest becoming due and payable solely as a result of
acceleration
of any such “Equipment Notes”); and
(vi) Lessee’s
pro rata share of any other amounts owed to the Liquidity Provider
by the
Subordination Agent as borrower under the Liquidity Facility (other
than amounts
due as repayment of advances thereunder or as interest on such advances,
except
to the extent payable pursuant to clause (i), (ii), (iii), (iv) or
(v) above),
in each case, to the extent not paid when due by the Airframe Manufacturer
pursuant to the Fee Letter (as defined in the Intercreditor Agreement),
(c) Lessee’s pro rata share of all compensation and reimbursement of
expenses, disbursements and advances payable by Lessee under the Pass
Through
Trust Agreement, (d) Lessee’s pro rata share of all compensation and
reimbursement of expenses and disbursements payable to the Subordination
Agent
under the Intercreditor Agreement except with respect to any income
or franchise
taxes incurred by the Subordination Agent in connection with the transactions
contemplated by the Intercreditor Agreement, (e) Lessee’s pro rata share of
any amount payable under Section 9.1 (and, if attributable thereto,
Section 9.5) of the Participation Agreement to any Pass Through Indemnitee
to the extent such amount relates to, results from or arises out of
or in
connection with (i) the Pass Through Agreements or the enforcement of any
of the terms of any of the Pass Through Agreements, (ii) the offer, sale or
delivery of the Pass Through Certificates or any interest therein or
represented
thereby or (iii) any breach of or failure to perform or observe, or any
other noncompliance with, any covenant or agreement or other obligation
to be
performed by Lessee under any Pass Through Agreement or the falsity
of any
representation or warranty of Lessee in any Pass Through Agreement
and
(f) in the event Lessee requests any amendment to any Operative Agreement
or Pass Through Agreement, Lessee’s pro rata share of all reasonable fees and
expenses (including, without limitation, fees and disbursements of
counsel) of
the Escrow Agents and the Paying Agents in connection therewith payable
by the
Pass Through Trustee under the Escrow Agreement. As used herein, “Lessee’s pro
rata share” means as of any time a fraction, the numerator of which is the
principal balance then outstanding of Equipment Notes and the denominator
of
which is the aggregate principal balance then outstanding of all “Equipment
Notes” (as such term is defined in each of the Operative Indentures). For
purposes of this definition, (i) the terms “Applied Downgrade Advance”, “Applied
Early Termination Advance”, “Applied Special Termination Advance”, “Downgrade
Advance”, “Early Termination Advance”, “Final Advance”, “Investment Earnings”,
“Special Termination Advance” and “Unpaid Advance” shall have the meanings
specified in the Liquidity Facility.
“Tax
Attribute Period”
is
defined in Section 1(e) of the Tax Indemnity Agreement.
“Tax
Indemnitee”
means
(a) ▇▇▇▇▇ Fargo and Owner Trustee, (b) WTC and Mortgagee,
(c) each separate or additional trustee appointed pursuant to the Trust
Agreement or the Trust Indenture, (d) each Participant, (e) the Trust
Estate and the Trust Indenture Estate and (f) the respective successors,
assigns, agents and servants of the foregoing. For purposes of this
definition,
the term “Owner Participant” shall include any member of an affiliated group
(within the meaning of Section 1504 of the Code) of which Owner Participant
is, or may become, a member if consolidated, joint or combined returns
are filed
for such affiliated group for federal, state or local income tax purposes.
“Tax
Indemnity Agreement”
means
the Tax Indemnity Agreement [TN], dated as of even date with the Participation
Agreement, between Lessee and Owner Participant.
“Taxes”
means
all license, recording, documentary, registration and other similar
fees and all
taxes, levies, imposts, duties, charges, assessments or withholdings
of any
nature whatsoever imposed by any Taxing Authority, together with any
penalties,
additions to tax, fines or interest thereon or additions thereto.
“Taxing
Authority”
means
any federal, state or local government or other taxing authority in
the United
States, any foreign government or any political subdivision or taxing
authority
thereof, any international taxing authority or any territory or possession
of
the United States or any taxing authority thereof.
“Term”
means
the term, commencing on the Closing Date, for which the Aircraft is
leased
pursuant to Section 3 of the Lease, and shall include the Base Lease Term
and, if applicable, any Renewal Lease Term; provided
that if
at the scheduled end of the Term the Aircraft or Airframe is being
used, or was
within six (6) months prior thereto being used, by the U.S. Government
pursuant
to CRAF, the Term shall be deemed extended for the period necessary
to
accommodate usage of the Aircraft or Airframe pursuant to CRAF plus
six months
thereafter, and Lessee shall be obligated to pay Basic Rent with respect
to any
such period of extension at a rate equal to the Basic Rent paid during
the Base
Lease Term or the applicable Renewal Lease Term, whichever shall have
ended
immediately prior to such extension.
[“Termination
Agreements”
means,
collectively, the termination agreement with respect to the Existing
Lease and
the termination agreement with respect to the Existing Sublease, in
each case
delivered pursuant to Section 5.1.2(xiv) of the Participation
Agreement.]19
“Termination
Date”
means
any Payment Date on which the Lease shall terminate in accordance with
Section 9 of the Lease.
“Termination
Value”
means,
with respect to the Aircraft, the amount determined by multiplying
(a) the
percentage set forth in Schedule 4 to the Lease (as adjusted from time to
time in accordance with Section 3.2.3 of the Lease) opposite the applicable
Payment Date by (b) Lessor’s Cost. Notwithstanding anything to the contrary
in any Operative Agreement, Termination Value shall always be sufficient
to pay
in full, as of the date of payment thereof (assuming timely payment
of the
Equipment Notes prior to such date), the aggregate unpaid principal
amount of
all Equipment Notes outstanding as of such date, together with accrued
and
unpaid interest on all such Equipment Notes as of such date.
“Threshold
Amount”
is
defined in Schedule 1 to the Lease.
“Transactions”
means
the transactions contemplated by the Participation Agreement and the
other
Operative Agreements to occur on the Closing Date.
________________________
19. Delete
for New Aircraft.
“Transaction
Expenses” means
(a) all costs and expenses incurred by Owner Participant, the Pass Through
Trustee, the Subordination Agent, Owner Trustee and Mortgagee in connection
with
the preparation, execution and delivery of the Operative Agreements
(including,
without limitation, the reasonable fees and expenses of counsel for
such
parties), (b) all costs and expenses for the recording or filing of any
documents, certificates or instruments in accordance with any Operative
Agreement, including, without limitation, the FAA Filed Documents and
the
Financing Statements, (c) the OP Pro Rata Share of (i) the placement
fees and expenses attributable to the offering and sale of the Pass
Through
Certificates and (ii) all costs and expenses incurred by the Pass Through
Trustee, the Subordination Agent, Owner Trustee and Mortgagee in connection
with
the preparation, execution and delivery of the Pass Through Agreements
(including, without limitation, the reasonable fees and expenses of
counsel for
such parties), (d) the reasonable fees and disbursements of special
counsel in
Oklahoma City, Oklahoma, in connection with the Closing, and (e) all
initial and ongoing fees, disbursements and expenses of Owner Trustee
and
Mortgagee. For purposes of the foregoing, “OP
Pro
Rata Share”
shall
mean a fraction, the numerator of which shall be one and the denominator
of
which shall be the number of aircraft financed under the Note Purchase
Agreement.
“Transfer”
means
the transfer, sale, assignment or other conveyance of all or any interest
in any
property, right or interest.
“Transferee”
means
a
person to which any Owner Participant, Owner Trustee or any Loan Participant
or
Note Holder purports or intends to Transfer any or all of its right,
title or
interest in the Trust Estate or in its Equipment Note and the Trust
Indenture
Estate, respectively, as described in Section 10.1.1(a), 10.1.2 or 10.1.3
(but excluding participants in any participation referred to in Section
10.1.3),
respectively, of the Participation Agreement.
“Trust”
means
the trust created by the Trust Agreement.
“Trust
Agreement”
means
the [Amended and Restated]20
Trust
Agreement [TN], dated as of even date with the Participation Agreement,
between
Owner Participant and Owner Trustee.
“Trust
Estate”
means
all estate, right, title and interest of Owner Trustee in and to the
Aircraft,
the Lease, any Lease Supplement and the Purchase Agreement including,
without
limitation, all amounts of Basic Rent and Supplemental Rent including,
without
limitation, insurance proceeds (other than insurance proceeds payable
to or for
the benefit of Owner Participant, Note Holders or WTC) and requisition,
indemnity or other payments of any kind for or with respect to the
Aircraft
(except amounts owing to Owner Participant, Note Holders or WTC, or
to any of
their respective directors, officers, employees, servants and agents,
pursuant
to Section 9 of the Participation Agreement). Notwithstanding the
foregoing, “Trust Estate” shall not include any Excluded Payment.
________________________
20. Delete
for New Aircraft.
“Trust
Indenture”
means
the Trust Indenture and Mortgage [TN], dated as of even date with the
Participation Agreement, between Owner Trustee and Mortgagee.
“Trust
Indenture Estate”
is
defined in the “Granting Clause” of the Trust Indenture.
“Trust
Indenture Supplement”
means
a
Trust Indenture and Mortgage [TN] Supplement, substantially in the
form of
Exhibit A to the Trust Indenture, with appropriate modifications to reflect
the purpose for which it is being used.
“Trust
Supplement”
means
an agreement supplemental to the Basic Pass Through Trust Agreement
pursuant to
which (i) a separate trust is created for the benefit of the holders
of the Pass
Through Certificates, (ii) the issuance of the Pass Through Certificates
representing fractional undivided interests in such trust is authorized
and
(iii) the terms of the Pass Through Certificates are established.
“UCC”
means
the Uniform Commercial Code as in effect in any applicable
jurisdiction.
“United
States”
or
“U.S.”
means
the United States of America; provided,
that
for geographic purposes, “United States” means, in aggregate, the 50 states and
the District of Columbia of the United States of America.
“U.S.
Air Carrier”
means
any Person 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 10 or more individuals or 6000 pounds
or more
of cargo, and as to which there is in force an air carrier operating
certificate
issued pursuant to Part 121 of the FAA Regulations, or which may operate
as an
air carrier by certification or otherwise under any successor or substitute
provisions therefor or in the absence thereof.
“U.S.
Person”
means
any Person described in Section 7701(a)(30) of the Code.
“U.S.
Government”
means
the federal government of the United States, or any instrumentality
or agency
thereof the obligations of which are guaranteed by the full faith and
credit of
the federal government of the United States.
“Weighted
Average Life to Maturity”
means,
with respect to any specified Debt, at the time of the determination
thereof the
number of years obtained by dividing the then Remaining Dollar-years
of such
Debt by the then outstanding principal amount of such Debt. The term
“Remaining
Dollar-years” shall mean the amount obtained by (1) multiplying the amount of
each then-remaining principal payment on such Debt by the number of
years
(calculated at the nearest one-twelfth) that will elapse between the
date of
determination of the Weighted Average Life to Maturity of such Debt
and the date
of that required payment and (2) totaling all the products obtained
in clause
(1) above.
“▇▇▇▇▇
Fargo”
means
▇▇▇▇▇ Fargo Bank Northwest, National Association, a national banking
association, not in its capacity as Owner Trustee under the Trust Agreement,
but
in its individual capacity.
“Wet
Lease”
means
any arrangement whereby Lessee or a Permitted Sublessee agrees to furnish
the
Aircraft, Airframe or any Engine to a third party pursuant to which
the
Aircraft, Airframe or Engine shall at all times be in the operational
control of
Lessee or a Permitted Sublessee, provided that Lessee’s obligations under this
Lease shall continue in full force and effect notwithstanding any such
arrangement.
“WTC”
means
Wilmington Trust Company, a Delaware banking corporation, not in its
capacity as
Mortgagee under the Trust Indenture, but in its individual
capacity.
|
TO
Participation
Agreement [TN]
|
ACCOUNTS;
ADDRESSES
|
Account
for Payments
|
Address
for Notices
|
||||
|
Continental
Airlines, Inc.
|
▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Account
No.: ▇▇▇-▇-▇▇▇▇▇▇
ABA#:
021-000021
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Voice:
▇▇▇-▇▇▇-▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
Reference:
Continental
Lease [TN]
|
Continental
Airlines, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇.
▇▇▇-▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|||
|
Owner
Participant
|
[Banco
do Brasil S.A.
New
York Branch
ABA#
▇▇▇▇▇▇▇▇▇
Account
No.: 75592-011
Reference:
Continental Lease [TN]]
|
[Refine,
Inc.
c/o
CT Corporation
▇▇▇▇
▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇]
|
|||
|
▇▇▇▇▇
Fargo Bank Northwest, National Association
|
▇▇▇▇▇
Fargo Bank Northwest,
National
Association
ABA:
▇▇▇▇▇▇▇▇▇
Cr:
Corporate Trust Services
A/C:
▇▇▇-▇▇▇▇▇-▇▇
Ref:
Continental Lease [TN]
|
▇▇▇▇▇
Fargo Bank Northwest,
National
Association
MAC:
U1228-120
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust Services
Facsimi le:
(▇▇▇)
▇▇▇-▇▇▇▇
|
|||
|
Wilmington
Trust Company, as Mortgagee
|
Wilmington
Trust Company
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Account
No.: [AC]
ABA
#: 031-100092
Attention:
Corporate Capital Market
Services/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Reference:
Continental
Lease [TN]
|
Wilmington
Trust Company
▇▇▇▇▇▇
Square North
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust
Administration
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|||
|
Wilmington
Trust Company, as Subordination Agent
|
Wilmington
Trust Company
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Account
No.: ▇▇▇▇▇-▇
▇▇▇
#: 031-100092
Attention:
Corporate Capital Market
Services/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Reference:
Continental
Lease [TN]
|
Wilmington
Trust Company
▇▇▇▇▇▇
Square North
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust
Administration
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
|||
PAGE
1
|
Wilmington
Trust
Company,
as Pass
Through
Trustee
for
the 2005-ERJ1
Pass
Through
Trust
|
Wilmington
Trust Company
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Account
No.: ▇▇▇▇▇-▇
▇▇▇
#: 031-100092
Attention:
Corporate Capital Market
Services/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Reference:
Continental
Lease [TN]
|
Wilmington
Trust Company
▇▇▇▇▇▇
Square North
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Corporate Trust
Administration
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||
|
EMBRAER-
Empresa
Brasileira
de
Aeroná;utica S.A.
|
Banco
do Brasil S.A.
Av.
▇▇▇▇▇▇ ▇’▇▇▇▇▇, 149
12245-030,
São ▇▇▇▇ dos
▇▇▇▇▇▇-SP
Brazil
Swift
Code: ▇▇▇▇▇▇▇▇▇▇▇
Account
No.: 9405-6
Reference:
COEX Lease [TN]
|
EMBRAER-Empresa
Brasileira de Aeronáutica S.A.
▇▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
12227-901
São ▇▇▇▇ dos ▇▇▇▇▇▇-SP
Brazil
Attention:
General Counsel
Facsimile:
(▇▇-▇▇▇) ▇▇▇-▇▇▇▇
|
||
|
TO
Participation
Agreement [TN]
|
|
Participant
|
Percentage
of Lessor’s
Cost
|
Dollar
Amount
|
|
Pass
Through Trustee
|
Loan
Participant’s
PTT
Percentage
|
|
|
2005-ERJ1
|
[PTT]%
|
$[DA]
|
|
Owner
Participant
|
Owner
Participant’s Percentage
|
|
|
[OPP]%
|
$[OPDA]
|
|
|
Total
|
$[TDA]
|
|
TO
Participation
Agreement [TN]
|
|
Defined
Term
|
Definition
|
|
Commitment
Termination Date
|
[__________,
200_]
|
|
[Existing
Lease
|
Lease
Agreement-[TN], dated as of
[ELD],
between Lessor and Lessee]28
|
|
[Existing
Participation Agreement
|
Participation
Agreement-[TN], dated
as
of [EPD], among Lessee, Refine,
Inc.,
Owner Trustee, Express and
Airframe
Manufacturer]29
|
|
Equity
Advisor
|
[________]
|
|
Expense
Limit
|
$[___]
|
|
Lessor’s
Cost
|
$[LC]
|
|
OP
Jurisdiction
|
[Delaware]
|
|
Seller
|
PM
Limited, a Cayman Islands
company
|
|
Special
Counsel to the Owner Participant
|
[________]
|
28.
Delete for New Aircraft.
29.
Delete for New Aircraft.
PAGE
1