Note to Exhibit 10.4
The following Trust Indenture and Security Agreement is
substantially identical in all material respects to three additional Trust
Indenture and Security Agreement except as follows:
----------------------------------------------------------------------------------------
Aircraft
Owner Participant Date (Tail No.) Amortization
----------------------------------------------------------------------------------------
NCC Charlie Company* September 10, 1998* N575ML* *
----------------------------------------------------------------------------------------
NCC Charlie Company September 10, 1998 N576ML **
----------------------------------------------------------------------------------------
General Electric Capital Corporation November 10, 1998 N577ML ***
----------------------------------------------------------------------------------------
----------
* Filed document
** As attached to the following document.
*** As attached to this Note.
Annex B
Amortization Schedule
Series A Series B Series C Series D
Equipment Equipment Equipment Equipment
Payment Date Notes Notes Notes Notes
------------ --------- --------- --------- ---------
Jan 2 1999 0.00 0.00 1,077,749.79 0.00
Jul 2 1999 0.00 0.00 0.00 0.00
Jan 2 2000 218,236.59 94,446.99 270,514.98 0.00
Jul 2 2000 0.00 0.00 0.00 0.00
Jan 2 2001 218,235.60 94,446.00 34,495.40 285,532.33
Jul 2 2001 0.00 0.00 0.00 0.00
Jan 2 2002 218,235.60 94,445.99 8,997.21 365,047.67
Jul 2 2002 0.00 0.00 0.00 0.00
Jan 2 2003 218,235.60 94,446.00 433,192.82 0.00
Jul 2 2003 0.00 0.00 0.00 0.00
Jan 2 2004 218,235.60 94,446.00 497,976.86 0.00
Jul 2 2004 0.00 0.00 0.00 0.00
Jan 2 2005 218,235.59 430,616.61 231,272.94 0.00
Jul 2 2005 0.00 0.00 0.00 0.00
Jan 2 2006 218,235.60 735,224.50 0.00 0.00
Jul 2 2006 0.00 0.00 0.00 0.00
Jan 2 2007 218,235.60 436,158.94 0.00 0.00
Jul 2 2007 0.00 0.00 0.00 0.00
Jan 2 2008 218,235.60 579,875.58 0.00 0.00
Jul 2 2008 0.00 0.00 0.00 0.00
Jan 2 2009 574,770.58 286,925.24 0.00 0.00
Jul 2 2009 0.00 0.00 0.00 0.00
Jan 2 2010 926,981.25 0.00 0.00 0.00
Jul 2 2010 0.00 0.00 0.00 0.00
Jan 2 2011 995,603.92 0.00 0.00 0.00
Jul 2 2011 0.00 0.00 0.00 0.00
Jan 2 2012 1,069,306.60 0.00 0.00 0.00
Jul 2 2012 0.00 0.00 0.00 0.00
Jan 2 2013 942,365.22 207,168.15 0.00 0.00
Jul 2 2013 0.00 0.00 0.00 0.00
Jan 2 2014 801,371.05 0.00 0.00 0.00
Jul 2 2014 0.00 0.00 0.00 0.00
Jan 2 2015 0.00 0.00 0.00 0.00
TRUST INDENTURE AND SECURITY AGREEMENT [N576ML]
dated as of September 10, 1998
between
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
not in its individual capacity except as expressly
provided herein, but solely
Owner Trustee
and
THE FIRST NATIONAL BANK OF MARYLAND,
as Indenture Trustee
COVERING ONE CANADAIR REGIONAL JET SERIES 200 ER AIRCRAFT
BEARING U.S. REGISTRATION NO. N576ML
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS......................................................-7-
Section 1.01 Definitions..................................................-7-
ARTICLE II ISSUE, EXECUTION, FORM ANDREGISTRATION OF EQUIPMENT NOTES........-8-
Section 2.03 Authentication...............................................-8-
Section 2.04 Form and Terms of Equipment Notes; Payments on Equipment
Notes........................................................-8-
Section 2.05 Payments from Trust Indenture Estate Only...................-11-
Section 2.06 Registration, Transfer and Exchange.........................-12-
Section 2.07 Mutilated, Defaced, Destroyed, Lost and Stolen Equipment
Notes.......................................................-13-
Section 2.08 Cancellation of Equipment Notes; Destruction Thereof........-13-
Section 2.09 Termination of Interest in Trust Indenture Estate...........-14-
Section 2.10 Equipment Notes in Respect of Replacement Aircraft..........-14-
Section 2.11 Assumption of Obligations Under Equipment Notes and Other
Operative Agreements........................................-14-
ARTICLE III COVENANTS.......................................................-15-
Section 3.01 Payment of Principal, Make-Whole Premium and Interest.......-15-
Section 3.02 Offices for Payments, etc...................................-15-
Section 3.03 Appointment to Fill a Vacancy in Office of Indenture
Trustee.....................................................-15-
Section 3.04 Paying Agents...............................................-15-
Section 3.05 Covenants of the Owner Trustee..............................-16-
Section 3.06 [Reserved]..................................................-17-
Section 3.07 Disposal of Trust Indenture Estate..........................-17-
Section 3.08 No Representations or Warranties as to Aircraft or
Documents...................................................-17-
Section 3.09 Further Assurances; Financing Statements....................-17-
ARTICLE IV HOLDER LISTS....................................................-18-
ARTICLE V RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME FROM THE
TRUST INDENTURE ESTATE..........................................-18-
Section 5.01 Basic Rent Distribution.....................................-18-
Section 5.02 Event of Loss and Replacement; Prepayment...................-19-
Section 5.03 Payment After Indenture Event of Default, etc...............-21-
Section 5.04 Certain Payments............................................-23-
Section 5.05 Other Payments..............................................-23-
Section 5.06 Payments to Owner Trustee...................................-24-
Section 5.07 Application of Payments.....................................-24-
Section 5.08 Investment of Amounts Held by Indenture Trustee.............-24-
-i-
Section 5.09 Withholding Taxes...........................................-25-
ARTICLE VI PREPAYMENT OF EQUIPMENT NOTES..................................-26-
Section 6.01 No Prepayment Except as Specified...........................-26-
Section 6.02 Prepayment of Equipment Notes...............................-26-
Section 6.03 Notice of Prepayment to Holders.............................-27-
Section 6.04 Deposit of Prepayment Price.................................-28-
Section 6.05 Equipment Notes Payable on Prepayment Date..................-28-
ARTICLE VII INDENTURE EVENTS OF DEFAULT; REMEDIES OF INDENTURE TRUSTEE
AND HOLDERS....................................................-28-
Section 7.02 Remedies....................................................-30-
Section 7.03 Return of Aircraft, etc.....................................-33-
Section 7.04 Indenture Trustee May Prove Debt............................-35-
Section 7.05 Remedies Cumulative.........................................-37-
Section 7.06 Suits for Enforcement.......................................-37-
Section 7.07 Discontinuance of Proceedings...............................-37-
Section 7.08 Unconditional Right of Holders to Payments on Equipment
Notes.......................................................-38-
Section 7.09 Control by Holders..........................................-38-
Section 7.10 Waiver of Past Indenture Default............................-38-
Section 7.11 Notice of Indenture Default.................................-39-
ARTICLE VIII RIGHTS OF THE OWNER TRUSTEEAND THE OWNER PARTICIPANT...........-39-
Section 8.01 Certain Rights of Owner Trustee and Owner Participant.......-39-
Section 8.02 Owner Participant's Right to Prepay or Purchase the
Equipment Notes.............................................-42-
Section 8.03 Certain Rights of Owner Participant.........................-43-
ARTICLE IX CONCERNING THE INDENTURE TRUSTEE...............................-44-
Section 9.01 Acceptance of Trusts........................................-45-
Section 9.02 Duties Before, and During, Existence of Indenture Event of
Default.....................................................-45-
Section 9.03 Certain Rights of the Indenture Trustee.....................-46-
Section 9.04 Indenture Trustee Not Responsible for Recitals, Equipment
Notes, or Proceeds..........................................-47-
Section 9.05 Indenture Trustee and Agents May Hold Equipment Notes;
Collections, etc............................................-48-
Section 9.06 Moneys Held by Indenture Trustee............................-48-
Section 9.07 Right of Indenture Trustee to Rely on Officer's
Certificate, etc............................................-48-
Section 9.08 Replacement Airframes and Replacement Engines...............-48-
Section 9.10 Effect of Replacement.......................................-51-
Section 9.11 Compensation................................................-52-
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ARTICLE X CONCERNING THE HOLDERS.........................................-52-
Section 10.01 Evidence of Action Taken by Holders........................-52-
Section 10.02 Proof of Execution of Instruments and of Holding of
Equipment Notes............................................-52-
Section 10.03 Holders to Be Treated as Owners............................-53-
Section 10.04 Equipment Notes Owned by Owner Trustee or Lessee
Deemed Not Outstanding.....................................-53-
Section 10.05 ERISA......................................................-54-
ARTICLE XI INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER TRUSTEE..........-54-
ARTICLE XII SUCCESSOR TRUSTEES.............................................-55-
Section 12.01 Notice of Successor Owner Trustee..........................-55-
Section 12.02 Resignation and Removal of Indenture Trustee:
Appointment of Successor...................................-55-
Section 12.03 Persons Eligible for Appointment as Indenture Trustee......-56-
Section 12.04 Acceptance of Appointment by Successor Trustee.............-56-
Section 12.05 Merger, Consolidation or Succession to Business of
Indenture Trustee..........................................-57-
Section 12.06 Appointment of Separate Trustees...........................-58-
ARTICLE XIII SUPPLEMENTS AND AMENDMENTS TO THIS TRUST INDENTURE AND
OTHER DOCUMENTS................................................-59-
Section 13.01 Supplemental Indentures Without Consent of Holders.........-59-
Section 13.02 Supplemental Indentures With Consent of Holders............-61-
Section 13.03 Effect of Supplemental Indenture...........................-62-
Section 13.04 Documents to Be Given to Indenture Trustee.................-62-
Section 13.05 Notation on Equipment Notes in Respect of Supplemental
Indentures.................................................-62-
Section 13.06 No Request Necessary for Lease Supplement or Indenture
Supplement.................................................-62-
Section 13.07 Notices to Liquidity Providers.............................-63-
ARTICLE XIV SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS......-63-
Section 14.01 Satisfaction and Discharge of Indenture: Termination of
Indenture..................................................-63-
-iii-
Section 14.02 Application by Indenture Trustee of Funds Deposited for
Payment of Equipment Notes.................................-64-
Section 14.03 Repayment of Moneys Held by Paying Agent...................-64-
Section 14.04 Transfer of Unclaimed Money Held by Indenture Trustee
and Paying Agent...........................................-64-
ARTICLE XV MISCELLANEOUS....................................................-64-
Section 15.01 Capacity in Which Acting...................................-64-
Section 15.02 No Legal Title to Trust Indenture Estate in Holders........-64-
Section 15.03 Sale of Trust Indenture Estate by Indenture Trustee is
Binding....................................................-65-
Section 15.04 Indenture Benefits Trustees, Participants, Lessee, and
Liquidity Providers Only...................................-65-
Section 15.05 No Action Contrary to Lessee's Rights Under the Lease......-65-
Section 15.06 Notices....................................................-65-
Section 15.07 Officer's Certificates and Opinions of Counsel.............-65-
Section 15.08 Severability...............................................-66-
Section 15.09 No Oral Modifications or Continuing Waivers................-66-
Section 15.10 Successors and Assigns.....................................-66-
Section 15.11 Headings...................................................-67-
Section 15.12 Normal Commercial Relations................................-67-
Section 15.13 Governing Law; Counterparts................................-67-
Section 15.14 Lessee's Right of Quiet Enjoyment..........................-67-
Annex A - Principal Amount of Equipment Notes
Annex B - Amortization Schedule
Exhibit A - Form of Indenture Supplement
Exhibit B - Form of Equipment Note
Schedule I - Principal Amortization
-iv-
TRUST INDENTURE AND SECURITY AGREEMENT [N576ML]
TRUST INDENTURE AND SECURITY AGREEMENT [N576ML] dated as of
September 10, 1998 (the "Indenture"), between FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity, except as otherwise specifically set forth herein (when acting in such
individual capacity, "Trust Company"), but solely as owner trustee (the "Owner
Trustee") under the Trust Agreement, as defined herein, and THE FIRST NATIONAL
BANK OF MARYLAND, a national banking association (when acting in its individual
capacity, "FNBM"), as Indenture Trustee hereunder (the "Indenture Trustee").
W I T N E S S E T H:
WHEREAS, capitalized terms used herein shall have the respective
meanings set forth or referred to in Article I hereof;
WHEREAS, the Owner Participant and Trust Company have, prior to the
execution and delivery of this Indenture, entered into a Trust Agreement
[N576ML] dated as of September 10, 1998, (as amended or otherwise modified from
time to time in accordance with the provisions thereof and of the Participation
Agreement, the "Trust Agreement"), whereby, among other things, Trust Company
has declared a certain trust for the use and benefit of the Owner Participant,
subject, however, to the Lien of this Indenture for the use and benefit of, and
with the priority of payment to, the holders of the Equipment Notes issued
hereunder, and the Owner Trustee is authorized and directed to execute and
deliver this Indenture;
WHEREAS, the Owner Trustee desires by this Indenture, among other
things (i) to provide for the issuance by the Owner Trustee of Equipment Notes
as provided in the Participation Agreement, and (ii) to provide for the
assignment, mortgage and pledge by the Owner Trustee to the Indenture Trustee,
as part of the Trust Indenture Estate hereunder of, among other things, certain
of the Owner Trustee's estate, right, title and interest in and to the Aircraft
and the Indenture Documents and certain payments and other amounts (other than
Excepted Payments) received hereunder or thereunder in accordance with the terms
hereof, as security for, among other things, the Owner Trustee's and the
Lessee's obligations to the Holders and the Indenture Indemnitees and for the
benefit and security of such Holders;
WHEREAS, all things have been done to make the Equipment Notes, when
executed by the Owner Trustee, and authenticated, issued and delivered
hereunder, the valid obligations of the Owner Trustee; and
WHEREAS, all things necessary to make this Indenture the valid,
binding and legal obligation of the Owner Trustee, enforceable in accordance
with its terms, have been done and performed and have happened.
NOW, THEREFORE, the parties agree as follows:
GRANTING CLAUSE
NOW, THEREFORE, in consideration of the mutual promises contained
herein and to secure (i) the prompt payment of the principal of and Make-Whole
Premium, if any, and interest on, and all other amounts due with respect to, all
the Equipment Notes from time to time outstanding under this Indenture and all
other amounts due hereunder and (ii) the performance and observance by the Owner
Trustee and the Lessee of all the agreements, covenants and provisions in this
Indenture, the Equipment Notes, the Participation Agreement and in the Lease
contained for the benefit of the Holders, and the prompt payment of any and all
amounts from time to time owing under the Participation Agreement by the Owner
Trustee or the Lessee to the Holders and each of the Indenture Indemnitees
(provided that, with respect to amounts owed to the Liquidity Providers which
relate to amounts due under the Liquidity Facilities, the amounts secured hereby
shall only include such amounts to the extent due and owing pursuant to the
final paragraph of Section 2.04 hereof) (collectively the "Secured Obligations")
and for the uses and purposes and subject to the terms and provisions of this
Indenture, and in consideration of the premises and of the covenants in this
Indenture and in the Equipment Notes and of the purchase of the Equipment Notes
by their Holders, and of the sum of $1 paid to the Owner Trustee by the
Indenture Trustee at or before the delivery of this Indenture, the receipt and
sufficiency of which are hereby acknowledged, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged, granted a
first priority security interest in and confirmed, and does hereby grant,
bargain, sell, assign, transfer, convey, mortgage, pledge and grant a first
priority security interest in and confirm to the Indenture Trustee, its
successors and assigns, in trust for the equal and ratable security and benefit
of the Holders and each of the Indenture Indemnitees, a first priority security
interest in and first mortgage Lien on all estate, right, title and interest of
the Owner Trustee in, to and under the following described property, rights and
privileges other than Excepted Payments, which collectively, excluding Excepted
Payments but including all property specifically subjected to the Lien of this
Indenture by the terms hereof, by any supplement to this Indenture (including
the Indenture Supplement) or any mortgage supplemental to this Indenture, are
included within the Trust Indenture Estate, subject always to the rights granted
to
-2-
the Owner Trustee or the Owner Participant hereunder and to the other terms and
conditions of this Indenture:
(1) The Airframe, as described in the Indenture Supplement, and any
airframe substituted in replacement thereof pursuant to the provisions of this
Indenture; the Engines, as the same are more particularly described in the
Indenture Supplement, whether or not such Engines shall be installed in or
attached to the Airframe or any other airframe, and any Replacement Engine
therefor; and all Parts in respect of the Airframe and the Engines and all
records, logs and other documents at any time maintained with respect to the
foregoing property;
(2) The Lease and all Rent thereunder, including, without
limitation, all amounts of Basic Rent and Supplemental Rent, and payments of any
kind thereunder and including all rights of the Owner Trustee to execute any
election or option or to give or receive any notice, consent, waiver or approval
under or in respect of the Lease or to accept any surrender of the Aircraft or
any part thereof as well as any rights, powers or remedies on the part of the
Owner Trustee, whether arising under the Lease or by statute or at law or in
equity or otherwise arising out of any Event of Default;
(3) The Purchase Agreement (to the extent assigned by the Purchase
Agreement Assignment), the Purchase Agreement Assignment, the PAA Consent, the
Engine Warranty Assignment, the Warranties (as defined in the Engine Warranty
Assignment), the Engine Manufacturer's Consent, the FAA ▇▇▇▇ of Sale, the
Warranty ▇▇▇▇ of Sale and the Participation Agreement (to the extent of amounts
payable to the Owner Trustee thereunder) (collectively, and together with the
Lease and the Equipment Notes, the "Indenture Documents"), including all rights
of the Owner Trustee to execute any election or option or to give or receive any
notice, consent, waiver or approval under or in respect of any of the foregoing
documents and instruments;
(4) All the tolls, rents, issues, profits, products, revenues and
other income (including sales proceeds) of the property subjected or required to
be subjected to the Lien of this Indenture, and all of the estate, right, title
and interest of the Owner Trustee in and to the same and every part of said
property;
(5) All other moneys and securities (including Permitted
Investments) now or hereafter paid or deposited or required to be paid or
deposited to or with the Indenture Trustee by or for the account of the Owner
Trustee pursuant to any term of any Operative Agreement, except the Tax
Indemnity Agreement, the Deficiency Agreement and the Residual Agreement and
held or required to be held by the Indenture Trustee hereunder;
(6) All requisition and insurance proceeds with respect to the
Aircraft or any part thereof (to the extent of the Owner Trustee's interest
therein
-3-
pursuant to the terms of the Lease), including insurance required to be
maintained by the Lessee under Section 9 of the Lease; and
(7) All proceeds of the foregoing.
EXCLUDING, HOWEVER, from the foregoing grant of the Lien and
security interest of this Indenture and from the Trust Indenture Estate, (i) all
Excepted Payments, including without limitation all right, title and interest of
the Owner Participant in, to and under the Tax Indemnity Agreement, the
Deficiency Agreement and the Residual Agreement and any moneys due or to become
due under the Tax Indemnity Agreement, the Deficiency Agreement and the Residual
Agreement and all rights to collect and enforce Excepted Payments and (ii)
rights granted to or retained by the Owner Trustee or the Owner Participant
hereunder and SUBJECT TO the following provisions:
(a) (i) whether or not an Indenture Event of Default shall occur and
be continuing, the Owner Trustee and the Owner Participant shall at all
times retain the right, to the exclusion of the Indenture Trustee: (A) to
Excepted Payments and to commence an action at law to obtain or otherwise
demand, ▇▇▇ for or receive and enforce the payment of such Excepted
Payments, (B) to exercise any election or option or make any decision or
determination or to give or receive any notice (including notice of
Default), consent, waiver or approval in respect of any such Excepted
Payment, (C) to adjust (and make any decision or determination or give any
notice or consent with respect to) Basic Rent and the percentages relating
to Termination Value and the EBO Amount, as provided in Section 3(d) of
the Lease and Section 13.01 of the Participation Agreement, (D) to
exercise any election or option to 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, Excepted Payments (except for, in respect of any portion of Basic Rent
constituting an Excepted Payment, any action changing the manner by which
such Basic Rent is to be paid), (E) to retain the rights of the "Lessor"
with respect to solicitations of bids, and the election to retain the
Aircraft pursuant to Section 14(c) of the Lease, (F) to retain the right
of "Lessor" to determine the Fair Market Rental Value or Fair Market Sales
Value pursuant to the respective definitions thereof, (G) to exercise all
other rights of the Lessor under Section 13 of the Lease with respect to
the retention or purchase by the Lessee or the Lessor of the Aircraft or
the exercise by the Lessee of the Lessee's renewal or purchase options,
(H) to retain all rights with respect to insurance maintained for its own
account which Section 9(f) of the Lease specifically confers on the "Owner
Participant", (I) to approve appraisers, lawyers and other professionals
and receive notices, certificates, reports, filings, opinions and other
documents, in each case with respect to matters relating to the Owner
Participant's tax position, (J) to select or approve any accountants or
experts to be used in the verification of any Rent adjustment,
-4-
and (K) to exercise, to the extent necessary to enable it to exercise its
rights under Section 8.03 hereof, the rights of the "Lessor" under Section
18 of the Lease;
(ii) whether or not an Indenture Event of Default shall occur and be
continuing, the Owner Trustee and the Indenture Trustee shall each have
the rights separately but not to the exclusion of the other: (A) to
receive from the Lessee all notices, certificates, reports, filings,
opinions of counsel, copies of all documents and all information which the
Lessee is permitted or required to give or furnish to the "Lessor"
pursuant to the Lease or to the Owner Trustee pursuant to any other
Operative Agreement, (B) to exercise inspection rights pursuant to Section
6 of the Lease (provided that if an Indenture Event of Default shall be
continuing, no inspection right of the Owner Trustee shall interfere with
the efforts of the Indenture Trustee to exercise remedies under the Lease
or this Indenture), (C) to maintain separate insurance pursuant to Section
9(f) of the Lease and to retain all rights with respect to such insurance
maintained for its own account, and (D) to give any notice of default
under Section 16 of the Lease;
(iii) subject to the last sentence of this clause (a), so long as no
Indenture Event of Default shall have occurred and be continuing (but
subject to the provisions of Section 8.01), the Owner Trustee shall retain
the right, to the exclusion of the Indenture Trustee, to exercise all
rights of the "Lessor" under the Lease (other than the right to receive
any funds to be delivered to the "Lessor" under the Lease (except funds
which constitute or are delivered with respect to Excepted Payments)) and
under the Purchase Agreement;
(iv) subject to the last sentence of this clause (a), at all times
the Owner Trustee shall have the right as Lessor, but not to the exclusion
of the Indenture Trustee, to seek specific performance of the covenants of
the Lessee under the Lease relating to the protection, insurance,
maintenance, possession and use of the Aircraft;
(v) at all times the Owner Trustee and the Owner Participant shall
have the rights granted to them under Articles VI, VIII and X and Section
7.02 hereof; and
Notwithstanding the foregoing, but subject always to the provisions
of Section 15.05 hereof, the Indenture Trustee shall at all times have the
right, to the exclusion of the Owner Trustee and the Owner Participant, to (A)
(other than with respect to Excepted Payments) declare the Lease to be in
default under Section 17 thereof and (B) subject only to the provisions of this
Indenture (other than in connection with Excepted Payments), exercise the
remedies set forth in such Section 17 of the Lease.
-5-
(b) The leasehold interest granted to the Lessee by the Lease shall
not be subject to the security interest granted by this Indenture, and nothing
in this Indenture shall affect the rights of the Lessee under the Lease so long
as no Event of Default has occurred and is continuing.
HABENDUM CLAUSE
TO HAVE AND TO HOLD the aforesaid property unto the Indenture Trustee, its
successors and assigns, in trust for the equal and ratable benefit and security
of the Holders and the Indenture Indemnitees, except as provided in Section 2.12
and Article V hereof, without any priority of any one Equipment Note over any
other and for the uses and purposes and subject to the terms and conditions set
forth in this Indenture and the rights of the Owner Trustee and the Owner
Participant under this Indenture.
It is expressly agreed that anything contained in this Indenture to the
contrary notwithstanding, the Owner Trustee shall remain liable under the
Indenture Documents to perform all of the obligations assumed by it under any of
those documents, all in accordance with and pursuant to the terms and provisions
of those documents, and the Indenture Trustee, the Holders and the Indenture
Indemnitees shall have no obligation or liability under the Indenture Documents
by reason of or arising out of the assignment under this Indenture, nor shall
the Indenture Trustee or the Holders or the Indenture Indemnitees be required or
obligated in any manner to perform or fulfill any obligations of the Owner
Trustee under or pursuant to the Indenture Documents or, except as expressly
provided in this Indenture, to make any payment, or to make any inquiry as to
the nature or sufficiency of any payment received by it, or present or file any
claim, or take any action to collect or enforce the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
Effective upon the occurrence and continuance of an Indenture Event of
Default, to the extent permitted by Applicable Law, the Owner Trustee hereby
constitutes the Indenture Trustee the true and lawful attorney of the Owner
Trustee, irrevocably, with full power (in the name of the Owner Trustee or
otherwise), subject to the terms and conditions of this Indenture, to ask,
require, demand, receive, compound and give acquittance for any and all Basic
Rent, Supplemental Rent payable to the Owner Trustee and Termination Value
payments, insurance proceeds and any and all moneys and claims for moneys due
and to become due under or arising out of the Lease (subject to Section 8.01
hereof) or the other Indenture Documents (other than Excepted Payments), to
endorse any checks or other instruments or orders in connection with the same
and to file any claims, take any action or institute any proceeding which the
Indenture Trustee may deem to be necessary or advisable in the premises. Without
limiting the generality of the foregoing, but subject to the rights of the Owner
Trustee and the Owner Participant under Sections 8.02, 7.02 and 7.03 hereof,
during the continuance of any Indenture
-6-
Event of Default, to the extent permitted by Applicable Law, the Indenture
Trustee shall have the right under such power of attorney to accept any offer in
connection with the exercise of remedies as set forth herein of any purchaser to
purchase the Airframe and Engines and upon such purchase to execute and deliver
in the name of and on behalf of the Owner Trustee an appropriate ▇▇▇▇ of sale
and other instruments of transfer relating to the Airframe and Engines, when
purchased by such purchaser, and to perform all other necessary or appropriate
acts with respect to any such purchase, and in its discretion to file any claim
or take any other action or proceedings, either in its own name or in the name
of the Owner Trustee or otherwise, which the Indenture Trustee may deem
necessary or appropriate to protect and preserve the right, title and interest
of the Indenture Trustee in and to such Rents and other sums and the security
intended to be afforded hereby; provided, however, that no action of the
Indenture Trustee pursuant to this paragraph shall increase the obligations or
liabilities of the Owner Trustee to any Person beyond those obligations and
liabilities specifically set forth in this Indenture and in the other Operative
Agreements.
Under the Lease the Lessee is directed to make all payments of Rent (other
than Excepted Payments not constituting Basic Rent) payable to the Owner Trustee
and all other amounts (other than Excepted Payments not constituting Basic Rent)
which are required to be paid to or deposited with the Owner Trustee pursuant to
the Lease directly to the Indenture Trustee at such address in the United States
of America as the Indenture Trustee shall specify for application as provided in
this Indenture. The Owner Trustee agrees that if, notwithstanding such
provision, it shall have received any such amounts, promptly on receipt of any
such payment, it will transfer to the Indenture Trustee any and all moneys from
time to time received by the Owner Trustee constituting part of the Trust
Indenture Estate for distribution by the Indenture Trustee pursuant to this
Indenture, except that the Owner Trustee shall accept for distribution pursuant
to the Trust Agreement (i) any amounts distributed to it by the Indenture
Trustee under this Indenture and (ii) any Excepted Payments.
The Owner Trustee agrees that at any time and from time to time, upon the
written request of the Indenture Trustee, the Owner Trustee will, at the expense
of the Lessee, promptly and duly execute and deliver or cause to be duly
executed and delivered any and all such further instruments and documents as the
Indenture Trustee may reasonably deem desirable in obtaining the full benefits
of the assignment hereunder and of the rights and powers herein granted;
provided however, that the Owner Trustee shall have no obligation to execute and
deliver or cause to be executed or delivered to the Indenture Trustee any such
instrument or document if such execution and delivery would result in the
imposition of additional liabilities on the Owner Trustee or the Owner
Participant or would result in a burden on the Owner Participant's business
activities, unless the Owner Trustee or the Owner Participant, as the case may
be, is indemnified to its reasonable satisfaction against any losses,
liabilities and expenses incurred in connection with such execution and
delivery.
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The Owner Trustee does hereby warrant and represent that it has not
assigned, pledged or otherwise disposed of, and hereby covenants that it will
not assign or pledge or otherwise dispose of, so long as the assignment
hereunder shall remain in effect and shall not have been terminated pursuant to
Section 14.01 hereof, any of its right, title or interest hereby assigned, to
anyone other than the Indenture Trustee, and that it will not, except in respect
of Excepted Payments or otherwise as provided in or permitted by this Indenture,
enter into an agreement amending or supplementing any of the Indenture
Documents, settle or compromise any claim (other than claims in respect of
Excepted Payments) against the Lessee arising under any of the Indenture
Documents, or submit or consent to the submission of any dispute, difference or
other matter arising under or in respect of any of the Indenture Documents, to
arbitration thereunder.
Concurrently with the delivery of this Indenture, the Owner Trustee has
delivered to the Indenture Trustee executed counterparts of the Trust Agreement.
It is hereby further covenanted and agreed by and between the parties as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. Unless the context otherwise requires, capitalized terms
utilized herein shall have the meanings set forth or incorporated by reference,
and shall be construed in the manner described, in Appendix A to the Lease
Agreement [N576ML] dated as of the date hereof between the Owner Trustee and
Midway Airlines Corporation.
ARTICLE
II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF EQUIPMENT NOTES
2.1 Authentication and Delivery of Equipment Notes. Upon the execution and
delivery of this Indenture, and from time to time thereafter, Equipment Notes in
the aggregate principal amount set forth on Annex A hereto shall be executed by
the Owner Trustee and delivered to the Indenture Trustee for authentication, and
the Indenture Trustee shall thereupon authenticate and deliver said Equipment
Notes to or upon the oral or written order of the Owner Trustee, signed, if
written, by an
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authorized officer of the Owner Trustee, without any further action by the Owner
Trustee.
2.2 Execution of Equipment Notes. The Equipment Notes shall be signed on
behalf of the Owner Trustee by an authorized officer of Trust Company. Such
signatures may be the manual or facsimile signatures of such officer and minor
errors or defects in any reproduction of any such signature shall not affect the
validity or enforceability of any Equipment Note which has been duly
authenticated and delivered by the Indenture Trustee. In case any officer of
Trust Company who shall have signed any of the Equipment Notes shall cease to be
such officer before the Equipment Notes so signed shall be authenticated and
delivered by the Indenture Trustee, such Equipment Note nevertheless may be
authenticated and delivered as though the person who signed such Equipment Note
had not ceased to be such officer of Trust Company; and any Equipment Note may
be signed on behalf of the Owner Trustee by such person or persons as, at the
actual date of the execution of such Equipment Note, shall be the proper
officers of Trust Company, although at the date of the execution and delivery of
this Indenture any such person was not such an officer. Equipment Notes bearing
the facsimile signatures of individuals who were authorized officers of Trust
Company at the time such Equipment Notes were issued shall bind the Owner
Trustee, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Equipment
Notes or did not hold such offices at the respective dates of such Equipment
Notes.
2.3 Authentication. Only such Equipment Notes as shall bear thereon a
certificate of authentication substantially in the form set forth in Exhibit B,
executed by the Indenture Trustee by manual signature of one of its authorized
officers, shall be entitled to the security and benefits of this Indenture or be
valid or obligatory for any purpose. Such certificate by the Indenture Trustee
upon any Equipment Note executed by the Owner Trustee shall be conclusive
evidence that the Equipment Note so authenticated has been duly authenticated
and delivered hereunder and that the Holder, as evidenced on the Register, is
entitled to the security and benefits of this Indenture.
2.4 Form and Terms of Equipment Notes; Payments on Equipment Notes. The
Equipment Notes and the Indenture Trustee's certificate of authentication shall
be substantially in the form set forth in Exhibit B hereto. The Equipment Notes
shall be issuable as registered securities without coupons and shall be
numbered, lettered, or otherwise distinguished in such manner or in accordance
with such plans as the Owner Trustee may determine with the approval of the
Indenture Trustee.
The Equipment Notes shall be issued in registered form only and in
denominations of $1,000 and any integral multiple thereof, shall be dated the
Delivery Date, shall be issued in four separate series consisting of Series A,
Series B, Series C, and Series D
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and shall be issued in the principal amounts, and shall bear interest at the
rates per annum, specified on Annex A. Interest shall be calculated on the basis
of a 360-day year of twelve 30-day months.
Any of the Equipment Notes may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the provisions
of this Indenture, as may be required to comply with any law or with any rules
or regulations pursuant thereto, or with the rules of any securities market in
which the Equipment Notes are admitted to trading, or to conform to general
usage.
Each Equipment Note shall bear interest from the date of original issuance
thereof or from the most recent date to which interest has been paid, and shall
be payable in arrears on January 2, 1999, and on each January 2 and July 2
thereafter until maturity; provided that, under certain circumstances provided
in the Registration Rights Agreement, including in the event a Registration
Event does not occur on or prior to the date (the "Increase Date") required
pursuant to the Registration Rights Agreement, such interest rate shall be
increased by 0.5% from and including the Increase Date to but excluding the date
such Registration Event does occur. The principal amount of each Equipment Note
shall be payable on the dates and in the installments as set forth in Annex B
hereto.
Notwithstanding the preceding paragraph, each Equipment Note shall bear
interest at the Past Due Rate on any principal, interest and any other amount
payable hereunder or under such Equipment Note, which shall not be paid in full
when due (whether at stated maturity, by acceleration, by mandatory prepayment
or otherwise), for the period from and including the due date thereof to but
excluding the date the same is paid in full, payable from time to time on demand
of the Indenture Trustee.
The principal of, and Make-Whole Premium, if any, and interest on, the
Equipment Notes shall be payable at the Corporate Trust Department of the
Indenture Trustee or at any office or agency maintained for such purpose
pursuant to Section 3.02 hereof in immediately available funds prior to 12:00
noon (New York time) on the due date thereof and the Indenture Trustee shall
remit all such amounts received by it to the Holders at such account or accounts
at such financial institution or institutions as the Holders shall have
designated to the Indenture Trustee in writing, in immediately available funds,
such payment to be made if the payment was received prior to 12:00 noon New York
time by the Indenture Trustee on any Business Day, by 1:00 p.m. New York time on
such Business Day; otherwise, the Indenture Trustee shall make payment promptly,
but not later than 11:00 A.M. New York time on the next succeeding Business Day.
If any amount payable under the Equipment Notes, or under this Indenture, falls
due on a day that is not a Business Day, then such sum shall be payable on the
next succeeding Business Day, without (provided that payment is made on such
next succeeding Business Day) additional interest thereon for the period of such
extension.
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The Holder at the close of business on any Record Date with respect to any
Payment Date shall be entitled to receive the interest if any payable on such
Payment Date notwithstanding any transfer or exchange of such Equipment Note
subsequent to the Record Date and prior to such Payment Date, except if and to
the extent the Owner Trustee shall default in the payment of the interest due on
such Payment Date, in which case such defaulted interest shall be paid to the
Holder at the close of business on a subsequent Record Date (which shall be not
less than five or more than 15 Business Days prior to the date of payment of
such defaulted interest) established by notice given by mail by or on behalf of
the Owner Trustee to the Holders not less than 15 days preceding such subsequent
Record Date.
The Owner Trustee agrees to pay to the Indenture Trustee (but only to the
extent not payable under Section 6(a) or 6(b) of the Note Purchase Agreement
(whether or not in fact paid)) for distribution in accordance with Section 5.04
hereof (a) any and all indemnity amounts received by the Owner Trustee which are
payable by the Lessee to (i) the Indenture Trustee in its individual capacity,
(ii) the Subordination Agent or (iii) each Liquidity Provider, in each case
pursuant to Article 6 or 7 of the Participation Agreement (it being acknowledged
that the Lessee has been instructed to pay such amounts to the Person or Persons
entitled thereto) and (b) the Owner Trustee's pro rata share of all amounts owed
to each Liquidity Provider by the Subordination Agent under each Liquidity
Facility other than amounts due as (i) repayments of the principal of advances
thereunder, (ii) interest on Downgrade Drawings and Non-Extension Drawings,
except to extent exceeding investment earnings thereon and (iii) interest on
Interest Drawings and Final Drawings except to the extent included in Net
Interest and Related Charges. As used in this Section, the Owner Trustee's pro
rata share means as of any time:
(A) with respect to all amounts other than Net Interest and Related
Charges, a fraction the numerator of which is the aggregate principal
balance then outstanding of the Equipment Notes issued under this
Indenture other than the Series D Equipment Notes and the denominator of
which is the aggregate principal balance of all Equipment Notes issued
under this Indenture and the Related Indentures other than the Series D
Equipment Notes and the "Series D Equipment Notes" under the Related
Indentures, and
(B) with respect to all Net Interest and Related Charges (x) if
there exists a Payment Default under any Equipment Note issued under this
Indenture a fraction, the numerator of which is the aggregate principal
balance then outstanding of Equipment Notes issued under this Indenture
other than the Series D Equipment Notes and the denominator of which is
the aggregate principal balance then outstanding of all Equipment Notes
issued under this Indenture and the Related Indentures other than the
Series D Equipment Notes and the "Series D Equipment Notes" under the
Related Indentures, under which there exists a Payment Default or (y) at
all other times, zero.
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As used in this Section, "Net Interest and Related Charges" means the sum of (i)
the amount, if any, by which interest payable to each Liquidity Provider on any
Interest Drawing and Final Drawing exceeds the amount which would be payable if
such drawings bore interest at the weighted average Past Due Rate applicable to
amounts in default on all Equipment Notes plus (ii) any amounts payable under
Section 3.1, Section 3.2, Section 3.3, Section 3.9 or Section 7.7 of each
Liquidity Facility (or similar provisions of any replacement Liquidity Facility)
which result from any Interest Drawing or Final Drawing. As used in this
Section, a "Payment Default" when used in connection with an Equipment Note
issued hereunder or an Equipment Note issued under any Related Indenture means a
default in the payment of principal thereof or interest thereon (which default
has not been cured), other than solely because of acceleration.
2.5 Payments from Trust Indenture Estate Only. All payments to be made by
the Owner Trustee under this Indenture shall be made only from the income and
the proceeds from the Lessor's Estate to the extent included in the Trust
Indenture Estate and from any other amounts of the type described in Section
8.03 hereof (but only to the extent actually received by the Indenture Trustee)
and only to the extent that the Owner Trustee shall have sufficient income or
proceeds from the Lessor's Estate to the extent included in the Trust Indenture
Estate (and such other amounts) to enable the Indenture Trustee to make
distributions of the amounts due in respect of the Equipment Notes in accordance
with the terms hereof and thereof. Each Holder by its acceptance of an Equipment
Note agrees that it will look solely to the income and proceeds from the Trust
Indenture Estate (and such other amounts of the type described in Section 8.03
hereof but only to the extent actually received by the Indenture Trustee) to the
extent available for distribution to it as provided herein and that none of the
Owner Participant, the Owner Trustee, Trust Company or the Indenture Trustee is
personally liable to such Holder for any amounts payable under this Indenture or
such Equipment Note or for any amounts payable or liability under any Equipment
Note or this Indenture, except as expressly provided herein in the case of Trust
Company, the Owner Trustee or the Indenture Trustee.
Trust Company is not personally liable to any Holder, the Lessee or the
Indenture Trustee for any amounts payable under this Indenture or for any
liability under this Indenture or the Equipment Notes, except as a result of
Trust Company's gross negligence or willful misconduct (or simple negligence in
the handling of funds), or as otherwise expressly provided herein or in the
Participation Agreement.
If (1) all or any part of the Lessor's Estate becomes the property of a
debtor subject to the reorganization provisions of the Bankruptcy Code, (2)
pursuant to such reorganization provisions the Owner Participant is required, by
reason of such Owner Participant being held to have recourse liability directly
or indirectly, to make payment on account of any amount payable as principal of
or interest, Make-Whole Premium or other amounts payable on the Equipment Notes,
and (3) the Indenture Trustee actually receives any Recourse Amount which
reflects any payment by an Owner Participant on account of (2) above, then the
Indenture Trustee shall promptly refund to such Owner
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Participant such Recourse Amount. Nothing contained in this paragraph shall
prevent the Indenture Trustee from enforcing any personal recourse obligation
(and retaining the proceeds thereof) of the Owner Participant under the
Participation Agreement, or from retaining any amount paid by the Owner
Participant under Sections 8.02 and 8.03 hereof.
2.6 Registration, Transfer and Exchange. The Indenture Trustee will keep,
on behalf of the Owner Trustee, at each office or agency to be maintained for
the purpose as provided in Section 3.02 hereof a Register or Registers on which,
subject to such reasonable regulations as it may prescribe, it will register,
and will register the transfer of, Equipment Notes as provided in this Article.
Such Register shall be in written form in the English language or in any other
form capable of being converted into such form within a reasonable period of
time. Upon due presentation for registration of transfer of any Equipment Note
at any such office or agency, the Owner Trustee shall execute and the Indenture
Trustee shall authenticate and deliver in the name of the transferee or
transferees, in authorized denominations, a new Equipment Note or Equipment
Notes of the same Series, and with same principal amount, interest rate and
amortization schedule, for an equal aggregate principal amount; provided, that
such Equipment Note being transferred shall be canceled in accordance with
Section 2.08 hereof simultaneously with the issuance of the new Equipment Note.
Any Equipment Note or Equipment Notes may be exchanged for an Equipment Note or
Equipment Notes of the same Series but in other authorized denominations, in an
equal aggregate principal amount. Equipment Notes to be exchanged shall be
surrendered at any office or agency to be maintained by the Indenture Trustee
for the purpose as provided in Section 3.02 hereof, and the Owner Trustee shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor the Equipment Note or Equipment Notes which the Holder making the
exchange shall be entitled to receive, bearing numbers not contemporaneously or
previously outstanding.
All Equipment Notes presented for registration of transfer, exchange,
prepayment or payment shall (if so required by the Owner Trustee or the
Indenture Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Owner Trustee
and the Indenture Trustee duly executed by the Holder or its attorney duly
authorized in writing and (except in the case of transfers pursuant to Article
13 of the Participation Agreement) the Indenture Trustee may require evidence
satisfactory to it as to the compliance of any such transfer with the Securities
Act. The Indenture Trustee may require payment from the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any exchange or registration of transfer of Equipment Notes. No
service charge shall be levied for any such transaction. The Indenture Trustee
shall not be required to exchange or register a transfer of any Equipment Notes
(a) for a period of 15 days immediately preceding the first mailing of notice of
prepayment of such Equipment Notes or (b) with respect to which notice of
prepayment has been given pursuant to Section 6.03 hereof and such notice has
not been revoked. All Equipment Notes issued upon any transfer or exchange of
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Equipment Notes shall be valid obligations of the Owner Trustee, evidencing the
same debt, and entitled to the same security and benefits under this Indenture,
as the Equipment Notes surrendered upon such transfer or exchange. Any such
transferee of an Equipment Note, by its acceptance of an Equipment Note, agrees
to the provisions of the Participation Agreement applicable to Holders, and
shall be deemed to have covenanted to the parties to the Participation Agreement
as to the matters covenanted by the original Loan Participant in the
Participation Agreement.
2.7 Mutilated, Defaced, Destroyed, Lost and Stolen Equipment Notes. In
case any Equipment Note shall become mutilated, defaced or be apparently
destroyed, lost or stolen, the Owner Trustee in its discretion may execute, and
upon the written request of any Holder shall execute, and the Indenture Trustee
shall authenticate and deliver in replacement thereof, a new Equipment Note,
payable to the same Holder, bearing the same principal amount and interest rate
as the Equipment Note being replaced and bearing a number not contemporaneously
or previously outstanding, in exchange and substitution for the mutilated or
defaced Equipment Note, or in lieu of and substitution for the Equipment Note so
apparently destroyed, lost or stolen. In the case of any Equipment Note so
apparently destroyed, lost or stolen, the applicant for a substitute Equipment
Note shall furnish to the Owner Trustee and to the Indenture Trustee such
security or indemnity as may be required by them to indemnify and defend and to
hold each of them harmless and evidence to their satisfaction of the apparent
destruction, loss or theft of such Equipment Note and of the ownership thereof.
Upon the issuance of any substitute Equipment Note, the Owner Trustee or
the Indenture Trustee may require payment from the Holder of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses incurred in connection therewith. In
case any Equipment Note which has matured or is about to mature, or has been
called for prepayment in full, shall become mutilated or defaced or be
apparently destroyed, lost or stolen, the Owner Trustee may, instead of issuing
a substitute Equipment Note, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated or defaced Equipment Note),
if the applicant of any Equipment Note so apparently destroyed, lost or stolen,
for such payment shall furnish to the Owner Trustee and to the Indenture Trustee
such security or indemnity as any of them may require to hold each of them
harmless and the applicant shall also furnish to the Owner Trustee and the
Indenture Trustee evidence to their satisfaction of the apparent destruction,
loss or theft of such Equipment Note and of the ownership thereof.
Every substitute Equipment Note issued pursuant to the provisions of this
Section by virtue of the fact that any Equipment Note is apparently destroyed,
lost or stolen shall constitute an original additional contractual obligation of
the Owner Trustee, whether or not the apparently destroyed, lost or stolen
Equipment Note shall be enforceable at any time by anyone and shall be entitled
to all the security and benefits of (but shall be subject to all the limitations
of rights set forth in) this
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Indenture equally and proportionately with any and all other Equipment Notes
duly authenticated and delivered hereunder. All Equipment Notes shall be held
and owned upon the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, defaced, or apparently destroyed, lost or stolen Equipment Notes and
shall preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
2.8 Cancellation of Equipment Notes; Destruction Thereof. All Equipment
Notes surrendered for payment, prepayment, registration of transfer or exchange,
if surrendered to the Owner Trustee or any agent of the Owner Trustee or the
Indenture Trustee, shall be delivered to the Indenture Trustee for cancellation
or, if surrendered to the Indenture Trustee, shall be canceled by it; and no
Equipment Notes shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Indenture. The Indenture Trustee shall destroy
cancelled Equipment Notes held by it and deliver a certificate of destruction to
the Owner Trustee. If the Owner Trustee shall acquire any of the Equipment
Notes, such acquisition shall not operate as a prepayment or satisfaction of the
indebtedness represented by such Equipment Notes unless and until the same are
delivered to the Indenture Trustee for cancellation.
2.9 Termination of Interest in Trust Indenture Estate. A Holder shall not,
as such, have any further interest in, or other right with respect to, the Trust
Indenture Estate when and if the principal amount of and Make-Whole Premium, if
any, and interest on and other amounts due under all Equipment Notes held by
such Holder and all other sums payable to such Holder hereunder and under the
other Operative Agreements shall have been paid in full.
2.10 Equipment Notes in Respect of Replacement Aircraft. Upon the
execution and delivery of a supplement to this Indenture covering a Replacement
Airframe and/or Replacement Engine, as provided in Section 9.09 hereof, each
Equipment Note shall be deemed to have been issued in connection with such
Replacement Airframe and/or Replacement Engine and (in the case of a Replacement
Airframe) each Equipment Note issued thereafter upon a transfer or exchange of,
or as a replacement for, an Equipment Note, shall be designated as having been
issued in connection with such Replacement Airframe, but without any other
change therein except as provided for in this Article II.
2.11 Assumption of Obligations Under Equipment Notes and Other Operative
Agreements. If, in accordance with and subject to the satisfaction of the
conditions set forth in Section 5.10 of the Participation Agreement, the Lessee
shall
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assume all of the obligations of the Owner Trustee hereunder, under the
Equipment Notes, and under all other Operative Agreements, the Owner Participant
and the Owner Trustee shall be released and discharged from any further
obligations hereunder and under the Equipment Notes and all other Operative
Agreements (except for any recourse obligations of the Owner Participant or the
Owner Trustee in its individual capacity with respect to matters arising out of
events occurring prior to such assumption).
2.12 Subordination.
(a) The Owner Trustee and, by acceptance of its Equipment Notes of any
Series, each Holder of such Series, hereby agree that no payment or distribution
shall be made on or in respect of the Secured Obligations owed to such Holder of
such Series, including any payment or distribution of cash, property or
securities after the commencement of a proceeding of the type referred to in
clause (iv), (v) or (vi) of Section 7.01 hereof, except as expressly provided in
Article V hereof.
(b) By the acceptance of its Equipment Notes of any Series (other than
Series A), each Holder of such Series agrees that in the event that such Holder,
in its capacity as a Holder, shall receive any payment or distribution on any
Secured Obligations in respect of such Series which it is not entitled to
receive under this Section 2.12 or Article V hereof, it will hold any amount so
received in trust for the Senior Holder (as defined in Section 2.12(c) hereof)
and will forthwith turn over such payment to the Indenture Trustee in the form
received to be applied as provided in Article V hereof.
(c) As used in this Section 2.12, the term "Senior Holder" shall mean, (i)
the Holders of Series A Equipment Notes until the Secured Obligations in respect
of Series A Equipment Notes have been paid in full, (ii) after the Secured
Obligations in respect of Series A Equipment Notes have been paid in full, the
Holders of Series B Equipment Notes until the Secured Obligations in respect of
Series B Equipment Notes have been paid in full, (iii) after the Secured
Obligations in respect of Series B Equipment Notes have been paid in full, the
Holders of Series C Equipment Notes until the Secured Obligations in respect of
Series C Equipment Notes have been paid in full, and (iv) after the Secured
Obligations in respect of Series C Equipment Notes have been paid in full, the
Holders of Series D Equipment Notes until the Secured Obligations in respect of
Series D Equipment Notes have been paid in full.
ARTICLE III
COVENANTS
3.1 Payment of Principal, Make-Whole Premium and Interest. The Owner
Trustee covenants and agrees that it will, subject to Section 2.05 hereof, duly
and punctually pay or cause to be paid the principal of, and interest and Make-
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Whole Premium, if any, and all other amounts due on, each of the Equipment Notes
and under this Indenture at the place or places, at the respective times and in
the manner provided in this Indenture and in the Equipment Notes.
3.2 Offices for Payments, etc. So long as any of the Equipment Notes
remain outstanding, the Indenture Trustee will maintain the following: (a) an
office or agency where the Equipment Notes may be presented for payment and (b)
a facility or agency where the Equipment Notes may be presented for registration
of transfer and for exchange and for prepayment as provided in this Indenture
(the "Registrar"). The Registrar shall keep a register (the "Register") with
respect to the Equipment Notes and their transfer and exchange. The Indenture
Trustee may appoint one or more co-registrars ("Co-Registrars") for the
Equipment Notes and may terminate any such appointment at any time upon written
notice. The term "Registrar" includes any Co-Registrar. The Indenture Trustee
shall initially act as Registrar.
3.3 Appointment to Fill a Vacancy in Office of Indenture Trustee. The
Owner Trustee, whenever necessary to avoid or fill a vacancy in the office of
Indenture Trustee, will, with the consent of the Lessee, appoint, in the manner
provided in Section 12.02 hereof, an Indenture Trustee, so that there shall at
all times be an Indenture Trustee hereunder.
3.4 Paying Agents. Whenever the Indenture Trustee in its sole discretion
shall appoint a paying agent (the "Paying Agent"), it will cause the Paying
Agent to execute and deliver an instrument in which the Paying Agent shall agree
with the Indenture Trustee, subject to the provisions of this Section:
(a) that it will hold all sums received by it as such agent for the
payment of the principal of, and interest and Make-Whole Premium, if any,
on the Equipment Notes (whether such sums have been paid to it by the
Indenture Trustee or the Owner Trustee) in trust for the benefit of the
Holders or of the Indenture Trustee, and
(b) that it will give the Indenture Trustee notice of any failure by
the Owner Trustee to make any payment of the principal of or interest or
Make-Whole Premium, if any, on the Equipment Notes when the same shall be
due and payable.
Anything in this Section to the contrary notwithstanding, the agreements
to hold sums in trust as provided in this Section are subject to the provisions
of Sections 14.03 and 14.04 hereof.
3.5 Covenants of the Owner Trustee.
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(a) The Owner Trustee hereby covenants and agrees as follows:
(i) in the event a Responsible Officer of the Owner Trustee shall
have actual knowledge of an Indenture Event of Default, an Indenture
Default or an Event of Loss, the Owner Trustee will give prompt written
notice of such Indenture Event of Default, Indenture Default or Event of
Loss to the Indenture Trustee, the Lessee and the Owner Participant;
(ii) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof by a Responsible Officer of the Owner
Trustee, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and other instruments furnished to the
Owner Trustee under the Lease, including, without limitation, a copy of
each report or notice from an insurer or an insurance broker received
pursuant to Section 9 of the Lease, to the extent that the Operative
Agreements do not provide that the same shall be furnished to the
Indenture Trustee;
(iii) the Owner Trustee will not enter into any business or other
activity other than the business of owning the Aircraft, the leasing
thereof to the Lessee and the carrying out of the transactions
contemplated hereby and by the Lease, the Participation Agreement, the
Trust Agreement and the other Indenture Documents; and
(iv) except as contemplated by the Operative Agreements, the Owner
Trustee will not contract for, create, incur or assume any debt, and will
not guarantee (directly or indirectly or by an instrument having the
effect of assuring another's payment or performance on any obligation or
capability of so doing, or otherwise), endorse or otherwise take action to
become contingently liable, directly or indirectly, in connection with the
debt of any other Person.
3.6 [Reserved]
3.7 Disposal of Trust Indenture Estate. At any time and from time to time
any part of the Trust Indenture Estate may be sold or disposed of in accordance
with the provisions of this Indenture and the Lease. The Indenture Trustee
shall, from time to time, release any part of the Trust Indenture Estate so sold
or disposed of or as to which an Event of Loss has occurred or as to which the
Lease has been terminated from the Lien of this Indenture. In addition, to the
extent that such property constitutes an Airframe or Engine, the further
requirements of Section 9.08 hereof shall be satisfied.
3.8 No Representations or Warranties as to Aircraft or Documents. NEITHER
THE INDENTURE TRUSTEE NOR THE OWNER TRUSTEE NOR
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TRUST COMPANY NOR THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED TO HAVE MADE
ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE,
AIRWORTHINESS, WORKMANSHIP, VALUE, CONDITION, DESIGN, COMPLIANCE WITH
SPECIFICATIONS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR USE OR PURPOSE OF
THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT,
TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT
LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE
AIRCRAFT OR ANY ENGINE WHATSOEVER, except that Trust Company warrants that on
the Delivery Date (a) the Owner Trustee shall have received whatever title was
conveyed to it by the Seller, and (b) the Aircraft shall be free and clear of
Lessor's Liens attributable to Trust Company. Neither Trust Company nor the
Indenture Trustee makes or shall be deemed to have made any representation or
warranty as to the validity, legality or enforceability of this Indenture, the
Trust Agreement, the Equipment Notes or any Indenture Document or as to the
correctness of any statement contained in any thereof, except for the
representations and warranties of Trust Company and the Indenture Trustee made
under this Indenture or in the Participation Agreement.
3.9 Further Assurances; Financing Statements. At any time and from time to
time, upon the request of the Indenture Trustee, the Lessee or the Owner
Trustee, at the expense of the Lessee, the Owner Trustee shall promptly and duly
execute and deliver any and all such further instruments and documents as may be
specified (and in the form included) in such request and as are reasonably
necessary or advisable to perfect, preserve or protect the Liens and assignments
created or intended to be created hereby, or to obtain for the Indenture Trustee
the full benefit of the specific rights and powers granted herein, including,
without limitation, the execution and delivery of Uniform Commercial Code
financing statements and continuation statements with respect thereto, or
similar instruments relating to the perfection of the Liens or assignments
created or intended to be created hereby.
ARTICLE
IV
HOLDER LISTS
4.1 Holder Lists: Ownership of Equipment Notes.
(a) The Indenture Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of the Holders. If the Indenture Trustee is not the Registrar, the
Registrar shall furnish to the Indenture Trustee semi-annually not more than ten
days after each Record Date, as of such Record Date, or at such other times as
the Indenture Trustee may request in
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writing, a list, in such form and as of such date as the Indenture Trustee may
reasonably require, containing all the information in the possession or control
of the Registrar as to the names and addresses of the Holders and the amounts
and Maturities of the Equipment Notes held by such Holders.
(b) Ownership of the Equipment Notes shall be proved by the Register kept
by the Registrar.
ARTICLE V
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE TRUST INDENTURE ESTATE
5.1 Basic Rent Distribution. Except as otherwise provided in Section 5.03
hereof, each installment of Basic Rent, any payment of interest on overdue
installments of Basic Rent and any payment received by the Indenture Trustee
pursuant to Section 8.03(a) hereof and shall be distributed by the Indenture
Trustee no later than the time herein provided in the following order of
priority:
first, (i) so much of such installment or payment as shall be required to
pay in full the aggregate amount of principal and interest (as well
as any interest on any overdue principal and, to the extent
permitted by applicable law, on any overdue interest) then due under
all Series A Equipment Notes shall be distributed to the Holders of
Series A Equipment Notes ratably, without priority of one over the
other, in the proportion that the amount of such payment or payments
then due under each Series A Equipment Note bears to the aggregate
amount of the payments then due under all Series A Equipment Notes;
(ii) after giving effect to paragraph (i) above, so much of such
installment or payment as shall be required to pay in full the
aggregate amount of principal and interest (as well as any interest
on any overdue principal and, to the extent permitted by applicable
law, on any overdue interest) then due under all Series B Equipment
Notes shall be distributed to the Holders of Series B Equipment
Notes ratably, without priority of one over the other, in the
proportion that the amount of such payment or payments then due
under each Series B Equipment Note bears to the aggregate amount of
the payments then due under all Series B Equipment Notes;
(iii) after giving effect to paragraph (ii) above, so much of such
installment or payment as shall be required to pay in full the
aggregate amount of principal and interest (as well as any interest
on any overdue
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principal and, to the extent permitted by applicable law, on any
overdue interest) then due under all Series C Equipment Notes shall
be distributed to the Holders of Series C Equipment Notes ratably,
without priority of one over the other, in the proportion that the
amount of such payment or payments then due under each Series C
Equipment Note bears to the aggregate amount of the payments then
due under all Series C Equipment Notes; and
(iv) after giving effect to paragraph (iii) above, so much of such
installment or payment as shall be required to pay in full the
aggregate amount of principal and interest (as well as any interest
on any overdue principal and, to the extent permitted by applicable
law, on any overdue interest) then due under all Series D Equipment
Notes shall be distributed to the Holders of Series D Equipment
Notes ratably, without priority of one over the other, in the
proportion that the amount of such payment or payments then due
under each Series D Equipment Note bears to the aggregate amount of
the payments then due under all Series D Equipment Notes; and
second, the balance if any of such installment or payment remaining
thereafter shall be distributed to the Owner Trustee or as otherwise
directed in writing by the Owner Trustee for distribution pursuant
to the Trust Agreement; provided, however, that if an Event of
Default shall have occurred and be continuing, then such balance
shall not be distributed as provided in this clause "second" but
shall be held by the Indenture Trustee as part of the Trust
Indenture Estate and invested in accordance with Section 5.08 hereof
until whichever of the following shall first occur: (i) all Events
of Default shall have been cured or waived, in which event such
balance shall be distributed as provided in this clause "second",
(ii) Section 5.03 hereof shall be applicable, in which event such
balance shall be distributed in accordance with the provisions of
such Section 5.03, or (iii) the 120th day after the receipt of such
payment in which case such payment shall be distributed as provided
in this clause "second".
5.2 Event of Loss and Replacement; Prepayment.
(a) Except as otherwise provided in Section 5.03 hereof, any payment received by
the Indenture Trustee as the result of or in connection with an Event of Loss
with respect to the Aircraft (and with respect to which the Lessee has not made
the replacement election in Section 8(a)(i) of the Lease) or as the result of,
or in connection with any event under the Lease giving rise to, a prepayment
pursuant to Section 6.02 hereof, shall be promptly distributed by the Indenture
Trustee in the following order of priority:
first, (i) to reimburse the Indenture Trustee and the Holders for any costs
or expenses reasonably incurred in connection with such prepayment
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and (b) then to pay any other similar amounts then due to the other
Indenture Indemnitees;
second, (ii) to pay the amounts specified in paragraph (i) of clause "third"
of Section 5.03 hereof then due and payable in respect of the Series
A Equipment Notes;
(iii) after giving effect to paragraph (i) above, to pay the amounts
specified in paragraph (ii) of clause "third" of Section 5.03 hereof
then due and payable in respect of the Series B Equipment Notes;
(iv) after giving effect to paragraph (ii) above, to pay the amounts
specified in paragraph (iii) of clause "third" of Section 5.03
hereof then due and payable in respect of the Series C Equipment
Notes; and
(v) after giving effect to paragraph (iii) above, to pay the amounts
specified in paragraph (iv) of clause "third" of Section 5.03 hereof
then due and payable in respect of the Series D Equipment Notes;
provided, that payments pursuant to this clause "second" shall be
made without the payment of Make-Whole Premium; and
third, as provided in clause "fourth" of Section 5.03 hereof;
provided that if a Replacement Airframe shall be substituted for an Airframe
subject to an Event of Loss as provided in Section 8(a)(i) of the Lease and
Section 9.08 hereof, any proceeds which result from such Event of Loss and are
paid to the Indenture Trustee shall be held by the Indenture Trustee as part of
the Trust Indenture Estate and, unless otherwise applied pursuant to Section
5.01 or 5.03 hereof, such proceeds shall be released to the Lessee upon the
release of such damaged Airframe and the replacement thereof as provided herein
and in the Lease.
(b) Any amounts received directly or indirectly from any governmental
authority, insurer or other party pursuant to any provision of Section 8 or 9 of
the Lease as the result of loss or damage not constituting an Event of Loss with
respect to the Aircraft, or as a result of such loss or damage constituting an
Event of Loss if and to the extent that such amounts would at the time be
required to be paid to the Lessee pursuant to Section 8 or 9 but for the fact
that a Specified Default exists shall be held by the Indenture Trustee as
security for the obligations of the Lessee under the Lease and the Participation
Agreement and shall be invested in accordance with the terms of Section 5.08
hereof and at such time as the conditions for payment to the Lessee specified in
Section 8 or 9, as the case may be, shall be fulfilled and no Specified Default
exists, such amount, and the proceeds of any investment thereof, shall, to the
extent not theretofore applied, be paid to the Lessee to the extent provided in
the Lease.
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5.3 Payment After Indenture Event of Default, etc. Except as otherwise
provided in Sections 5.02(b), 5.04(b), 5.04(c) and 5.05 hereof, all payments
(other than Excepted Payments) received and all amounts held or realized by the
Indenture Trustee after an Indenture Event of Default shall have occurred and be
continuing and the Equipment Notes shall have become due and payable as provided
in Section 7.02(b) or (c) hereof, shall be promptly distributed by the Indenture
Trustee in the following order of priority:
first, so much of such payments or amounts as shall be required to pay or
reimburse (i) the Indenture Trustee for any tax (except to the
extent resulting from a failure of the Indenture Trustee to withhold
pursuant to Section 5.09 hereof), expense, charge or other loss
(including, without limitation, all amounts to be expended at the
expense of, or charged upon the tolls, rents, revenues, issues,
products and profits of, the property included in the Trust
Indenture Estate pursuant to Section 7.03(b) hereof) incurred by the
Indenture Trustee (to the extent not previously reimbursed), the
expenses of any sale, taking or other proceeding, attorneys' fees
and expenses, court costs, and any other expenditures incurred or
expenditures or advances made by the Indenture Trustee or the
Holders in the protection, exercise or enforcement of any right,
power or remedy or any damages sustained by the Indenture Trustee or
the Holders, liquidated or otherwise, upon such Indenture Event of
Default, shall be applied by the Indenture Trustee as between itself
and the Holders in reimbursement of such expenses and (ii) all
similar amounts payable to the other Indenture Indemnitees hereunder
and under the Participation Agreement; and in the case the aggregate
amount to be so distributed is insufficient to pay as set forth in
this clause "first", then ratably, without priority of one over the
other, in proportion to the amounts owed each hereunder;
second, so much of such payments or amounts remaining as shall be required
to reimburse the then existing or prior Holders for payments made
pursuant to Section 9.03(d) hereof (to the extent not previously
reimbursed) shall be distributed to such then existing or prior
Holders ratably, without priority of one over the other, in
accordance with the amount of the payment or payments made by each
such then existing or prior Holder pursuant to said Section 9.03(d)
hereof;
third, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid principal amount of all
Series A Equipment Notes, and the accrued but unpaid interest and
other amounts due thereon and all other Secured Obligations (other
than Make-Whole Premium) in respect of the Series A Equipment Notes
to the date of distribution, shall be distributed to the Holders of
Series A Equipment Notes, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the
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other, in the proportion that the aggregate unpaid Principal Amount
of all Series A Equipment Notes held by each Holder plus the accrued
but unpaid interest and other amounts due hereunder or thereunder
(other than Make-Whole Premium) to the date of distribution, bears
to the aggregate unpaid Principal Amount of all Series A Equipment
Notes held by all such Holders plus the accrued but unpaid interest
and other amounts due thereon (other than Make-Whole Premium) to the
date of distribution;
(ii) after giving effect to paragraph (i) above, so much of such
payments or amounts remaining as shall be required to pay in full
the aggregate unpaid principal amount of all Series B Equipment
Notes, and the accrued but unpaid interest and other amounts due
thereon and all other Secured Obligations (other than Make-Whole
Premium) in respect of the Series B Equipment Notes to the date of
distribution, shall be distributed to the Holders of Series B
Equipment Notes, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion
that the aggregate unpaid Principal Amount of all Series B Equipment
Notes held by each Holder plus the accrued but unpaid interest and
other amounts due hereunder or thereunder (other than Make-Whole
Premium) to the date of distribution, bears to the aggregate unpaid
Principal Amount of all Series B Equipment Notes held by all such
Holders plus the accrued but unpaid interest and other amounts due
thereon (other than Make-Whole Premium) to the date of distribution;
(iii) after giving effect to paragraph (ii) above, so much of such
payments or amounts remaining as shall be required to pay in full
the aggregate unpaid Principal Amount of all Series C Equipment
Notes, and the accrued but unpaid interest and other amounts due
thereon and all other Secured Obligations (other than Make-Whole
Premium) in respect of the Series C Equipment Notes to the date of
distribution, shall be distributed to the Holders of Series C
Equipment Notes, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion
that the aggregate unpaid Principal Amount of all Series C Equipment
Notes held by each Holder plus the accrued but unpaid interest and
other amounts due hereunder or thereunder (other than Make-Whole
Premium) to the date of distribution, bears to the aggregate unpaid
Principal Amount of all Series C Equipment Notes held by all such
Holders plus the accrued but unpaid interest and other amounts due
thereon (other than Make-Whole Premium) to the date of distribution;
and
(iv) after giving effect to paragraph (iii) above, so much of such
payments or amounts remaining as shall be required to pay in full
the aggregate unpaid principal amount of all Series D Equipment
Notes, and
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the accrued but unpaid interest and other amounts due thereon and
all other Secured Obligations (other than Make-Whole Premium) in
respect of the Series D Equipment Notes to the date of distribution,
shall be distributed to the Holders of Series D Equipment Notes, and
in case the aggregate amount so to be distributed shall be
insufficient to pay in full as aforesaid, then ratably, without
priority of one over the other, in the proportion that the aggregate
unpaid Principal Amount of all Series D Equipment Notes held by each
Holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder (other than Make-Whole Premium) to the date
of distribution, bears to the aggregate unpaid Principal Amount of
all Series D Equipment Notes held by all such Holders plus the
accrued but unpaid interest and other amounts due thereon (other
than Make-Whole Premium) to the date of distribution;
(it being understood that amounts payable under this clause "third"
shall not in any event include Make-Whole Premium); and
fourth, the balance, if any of such payments or amounts remaining thereafter
shall be distributed to the Owner Trustee for distribution pursuant
to the Trust Agreement.
5.4 Certain Payments.
(a) Any payments received by the Indenture Trustee which are to be held or
applied according to any provision in any other Indenture Document shall be held
or applied thereunder in accordance therewith, except to the extent this
Indenture expressly provides for such payments to be held or applied in a
different manner.
(b) Notwithstanding anything to the contrary contained in this Article V,
the Indenture Trustee will distribute, promptly upon receipt, any indemnity or
other payment received by it from the Owner Trustee or the Lessee in respect of
(i) the Indenture Trustee in its individual capacity, (ii) the Subordination
Agent, (iii) each Liquidity Provider, (iv) the Pass-Through Trustee, and (v) any
other Indenture Indemnitee, in each case whether pursuant to Article 6 or 7 of
the Participation Agreement or as Supplemental Rent, directly to the Person
(which may include the Indenture Trustee) entitled thereto. Any payment received
by the Indenture Trustee under clause (b) of the last paragraph of Section 2.04
shall be distributed to the Subordination Agent to be distributed in accordance
with the terms of the Intercreditor Agreement.
(c) Notwithstanding anything to the contrary contained herein, any sums
received by the Indenture Trustee which constitute Excepted Payments shall be
distributed promptly upon receipt by the Indenture Trustee directly to the
Person or Persons entitled thereto.
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(d) Notwithstanding any provision of this Indenture to the contrary, any
amounts held by Indenture Trustee pursuant to the terms of the Lease shall be
held by the Indenture Trustee as security for the obligations of Lessee under
the Indenture Documents and, if and when required by the Lease, paid and/or
applied in accordance with the applicable provisions of the Lease.
5.5 Other Payments. Any payments received by the Indenture Trustee for
which no provision as to the application thereof is made elsewhere in this
Indenture or in any other Indenture Document shall be distributed by the
Indenture Trustee (a) to the extent received or realized at any time prior to
the payment in full of all obligations to the Holders, in the order of priority
specified in Section 5.01 hereof, and (b) to the extent received or realized at
any time after payment in full of all obligations to the Holders, in the
following order of priority:
first, in the manner provided in clause "first" of Section 5.03 hereof, and
second, in the manner provided in clause "fourth" of Section 5.03 hereof.
Further, and except as otherwise provided in Sections 5.02, 5.03 and 5.04
hereof, all payments received and amounts realized by the Indenture Trustee
under the Lease or otherwise with respect to the Aircraft (including, without
limitation, all amounts realized upon the sale or release of the Aircraft after
the termination of the Lease with respect thereto), to the extent received or
realized at any time after payment in full of all Secured Obligations, shall be
distributed by the Indenture Trustee in the order of priority specified in
clause (b) of the immediately preceding sentence of this Section 5.05.
5.6 Payments to Owner Trustee. Any amounts distributed hereunder by the
Indenture Trustee to the Owner Trustee shall be paid to the Owner Trustee by
wire transfer of immediately available funds of the type received by the
Indenture Trustee at such office and to such account or accounts of such entity
or entities as shall be designated by notice from the Owner Trustee to the
Indenture Trustee from time to time. The Owner Trustee hereby notifies the
Indenture Trustee that unless and until the Indenture Trustee receives notice to
the contrary from the Owner Trustee, all amounts to be distributed to the Owner
Trustee hereunder for distribution in accordance with the Trust Agreement shall
be distributed by wire transfer of immediately available funds of the type
received by the Indenture Trustee to such account of the Owner Participant as
may be specified pursuant to Section 4.02 of the Trust Agreement.
5.7 Application of Payments. Each payment of principal of and interest or
other amounts due on each Equipment Note shall, except as otherwise provided
herein, be applied,
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first, to the payment of interest on such Equipment Note due and payable to
the date of such payment, as provided in such Certificate, as well
as any interest on overdue principal and Make-Whole Premium, if any,
and, to the extent permitted by law, interest and other amounts due
thereunder,
second, the payment of any other amount (other than the principal of such
Equipment Note), including any Make-Whole Premium, due hereunder to
the Holder of such Equipment Note or under such Equipment Note; and
third, to the payment of the principal of such Equipment Note if then due
hereunder or under such Equipment Note.
5.8 Investment of Amounts Held by Indenture Trustee. Amounts held by the
Indenture Trustee pursuant to Section 5.02(b) hereof or pursuant to any
provision of any Indenture Document providing for investment by the Indenture
Trustee of sums pursuant to Section 15 of the Lease or this Section 5.08 shall
be invested by the Indenture Trustee from time to time in securities selected by
(i) so long as no Event of Default shall have occurred and be continuing, the
Lessee (and in the absence of written direction by the Lessee, the Indenture
Trustee shall invest such monies in direct obligations of the United States of
America) or (ii) so long as an Event of Default shall have occurred and be
continuing, the Indenture Trustee and in each case shall be of the type meeting
the criteria for Permitted Investments. Unless otherwise expressly provided in
this Indenture, any income realized as a result of any such investment, net of
the Indenture Trustee's reasonable fees and expenses in making such investment,
shall be held and applied by the Indenture Trustee in the same manner as the
principal amount of such investment is to be applied and any losses, net of
earnings and such reasonable fees and expenses, shall be charged against the
principal amount invested. The Lessee shall be responsible for and will promptly
pay to the Indenture Trustee or the Owner Trustee, as the case may be, on
demand, the amount of any loss realized as the result of any such investment
(together with any fees, commissions and other costs and expenses, if any,
incurred by the Indenture Trustee or the Owner Trustee in connection with such
investment), such amount to be disposed of in accordance with the terms hereof
or the Lease, as the case may be. The Indenture Trustee shall not be liable for
any loss resulting from any investment made by it or any investment sold by it
under this Indenture in accordance with instructions from the Lessee other than
by reason of its willful misconduct or gross negligence, and any such investment
may be sold (without regard to its maturity) by the Indenture Trustee without
instructions whenever the Indenture Trustee reasonably believes such sale is
necessary to make a distribution required by this Indenture.
Unless otherwise confirmed in writing, an account statement delivered by
the Indenture Trustee to the Owner Trustee (with a copy to the Lessee) shall be
deemed written confirmation by the Owner Trustee that the investment
transactions identified therein accurately reflect the investment directions
given to the Indenture Trustee by
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or on behalf of the Lessee, unless the Lessee notifies the Indenture Trustee in
writing to the contrary within 30 days of the date of receipt of such statement.
5.9 Withholding Taxes. The Indenture Trustee, as agent for the Owner
Trustee, shall exclude and withhold from each payment of principal, premium, if
any, and interest and other amounts due hereunder or under the Equipment Notes,
any and all withholding taxes applicable thereto as required by law. The
Indenture Trustee agrees to act as such withholding agent and, in connection
therewith, whenever any present or future taxes or similar charges are required
to be withheld with respect to any amounts payable in respect of the Equipment
Notes, it will withhold such amounts and timely pay the same to the appropriate
authority in the name of and on behalf of the Holders, it will file any
necessary withholding tax returns or statements when due, and that, as promptly
as possible after the payment thereof, it will deliver to each Holder
appropriate documentation showing the payment thereof, together with such
additional documentary evidence as such Holder may reasonably request from time
to time.
ARTICLE
VI
PREPAYMENT OF EQUIPMENT NOTES
6.1 No Prepayment Except as Specified. Except as provided in Sections 6.02
and 8.02 hereof, the Equipment Notes may not be prepaid.
6.2 Prepayment of Equipment Notes.
(a) The Outstanding Equipment Notes shall be prepaid in full and not in
part:
(i) If an Event of Loss occurs with respect to the Airframe or
with respect to the Airframe and the Engines or engines then installed on
the Airframe (unless pursuant to Section 8(a)(i) of the Lease and Section
9.08 hereof replacement equipment is substituted therefor);
(ii) If the Lessee, pursuant to Section 13(b) of the Lease,
gives notice of purchase of the Aircraft (and Section 2.11 hereof is not
applicable in connection with such purchase);
(iii) If the Owner Participant, or the Owner Trustee on behalf
of the Owner Participant, gives notice of prepayment to the Indenture
Trustee pursuant to Section 8.02 hereof;
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(iv) If the Lessee, pursuant to Section 14(a) of the Lease,
gives notice of a voluntary termination for obsolescence or surplus, but
subject to Section 6.02(c) below;
(v) Pursuant to Section 13.01 of the Participation Agreement
in connection with a refinancing of the Equipment Notes, but subject to
Section 6.02(c) below; or
(vi) At the option of the Owner Trustee, with the prior
written consent of the Lessee and the Owner Participant, upon not less
than 25 days' prior written notice.
(b) In the event of a prepayment of the Equipment Notes pursuant to
Sections 6.02(a)(ii), (iv) or (v) above, the Owner Trustee, a Responsible
Officer of which having received notice from the Lessee in accordance with and
subject to the terms of Section 13(b) or 14(a) of the Lease or Article 13 of the
Participation Agreement, as the case may be, shall give written notice to the
Indenture Trustee and to the Holders of all of the Equipment Notes specifying
the Business Day on which the Equipment Notes shall be prepaid. In the case of a
prepayment of the Equipment Notes pursuant to Section 6.02(a)(i) above, the
Equipment Notes shall be prepaid in full on the Termination Date specified in
Section 8(a)(ii) of the Lease. In the case of a prepayment of the Equipment
Notes pursuant to Section 6.02(a)(ii) above, the Equipment Notes shall be paid
in full on the EBO Date. In the case of a prepayment of the Equipment Notes
pursuant to Section 6.02(a)(iii) above, the Equipment Notes shall be prepaid in
full on the date so designated in the notice referred to in Section 8.02 hereof.
In the case of a prepayment of the Equipment Notes pursuant to Section
6.02(a)(iv) above, the Equipment Notes shall be prepaid in full on the
Termination Date specified in Section 14(a) of the Lease. In the case of a
prepayment of the Equipment Notes pursuant to Section 6.02(a)(v) above, the
Equipment Notes shall be prepaid on the effective date of the Refinancing. In
the case of a prepayment of the Equipment Notes pursuant to Section 6.02(a)(vi)
above, the Equipment Notes shall be prepaid on the date designated in the notice
referred to therein. The day on which the Equipment Notes are to be prepaid
pursuant to this Section 6.02(b) is herein referred to as the "Prepayment Date".
On or prior to the Prepayment Date, immediately available funds shall be
deposited with the Indenture Trustee in an amount in respect of the Equipment
Notes equal to:
(1) if such prepayment is made pursuant to Section
6.02(a)(i) or (iii) (if clause (i), but not clause (ii) or clause (iii) of
the first sentence of Section 8.02(a) of the Indenture is applicable and
such prepayment is made when an Event of Default has occurred and been
continuing for 180 days or more, or if clause (ii) or clause (iii) of the
first sentence of Section 8.02(a) hereof is applicable), the sum of (A)
the aggregate principal amount of such Equipment Notes then Outstanding,
(B) accrued interest on the Equipment
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Notes to the Prepayment Date and (C) all other aggregate sums due the
Indenture Trustee hereunder or under the Participation Agreement or the
Lease, but excluding any Make-Whole Premium or other premium or penalty,
or
(2) if such prepayment is made pursuant to Section
6.02(a)(ii) or (iii) (if clause (i), but not clause (ii) or clause (iii)
of the first sentence of Section 8.02(a) of the Indenture is applicable
and such prepayment is made when an Event of Default has occurred and been
continuing for less than 180 days) 6.02(a)(iv), 6.02(a)(v) or 6.02(a)(vi)
above, the sum of the amounts specified in clauses (A), (B) and (C) of the
preceding clause (1) plus any Make-Whole Premium payable in respect of all
Equipment Notes
(the aggregate amount required to be paid pursuant to this sentence being herein
referred to as the "Prepayment Price").
(c) Notwithstanding the foregoing provisions of this Section 6.02, if (x)
a prepayment notice has been given in respect of Section 6.02(a)(iv) and no
termination of the Lease actually occurs or (y) a prepayment notice has been
given in respect of Section 6.02(a)(v) and no refinancing shall occur pursuant
to Article 13 of the Participation Agreement, any notice of prepayment given
pursuant to Section 6.02(b) in respect thereof shall be deemed revoked.
6.3 Notice of Prepayment to Holders. In order to effect any prepayment set
forth in Section 6.02(a) hereof, the Indenture Trustee shall give prompt notice
by first class mail of prepayment to each Holder. Any notice of prepayment given
by the Owner Trustee shall be irrevocable except (x) as provided in Section
6.02(c) or (y) in the case of a notice given pursuant to Section 6.02(a)(vi),
which notice may be revoked by the Owner Trustee at any time on or before the
third Business Day preceding the Prepayment Date by prompt notice to the
Holders.
All notices of prepayment shall state: (1) the Prepayment Date, (2) the
applicable basis for determining the Prepayment Price, (3) that on the
Prepayment Date, subject to the provisions hereof, the Prepayment Price will
become due and payable and interest on the Equipment Notes shall cease to accrue
on and after such Prepayment Date, and (4) the place or places where such
Equipment Notes are to be surrendered for payment.
6.4 Deposit of Prepayment Price. On the Prepayment Date, the Owner Trustee
shall, to the extent an amount equal to the Prepayment Price shall not then be
held in cash by the Indenture Trustee in immediately available funds and
deposited for the purpose, pay to the Indenture Trustee an amount equal to the
difference between (a) the amount then so held and (b) the Prepayment Price. If
there shall so be on deposit and/or deposited the applicable Prepayment Price on
or prior to a Prepayment Date, interest shall cease to accrue in respect of all
the Outstanding Equipment Notes on and after such Prepayment Date.
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6.5 Equipment Notes Payable on Prepayment Date. On the Prepayment Date,
the Outstanding Equipment Notes shall (except (A) if the Owner Trustee has
requested the Indenture Trustee to revoke such notice of prepayment in
accordance with Section 6.03 hereof or such notice is deemed to be revoked
pursuant to Section 6.02(c) hereof or (B) as otherwise provided in the Lease)
become due and payable and from and after such Prepayment Date (unless there
shall be a default in the payment of the Prepayment Price) such Equipment Notes
shall cease to bear interest. Upon surrender by any Holder of its Equipment Note
for prepayment in accordance with said notice, such Holder shall be paid the
principal amount of its Equipment Note then outstanding, accrued interest
thereon to the Prepayment Date, all other sums due to such Holder hereunder
plus, if a Make-Whole Premium is payable pursuant to Section 6.02(b) hereof, the
Make-Whole Premium in respect of such Equipment Certificate.
If any Equipment Note called for prepayment shall not be so paid upon
timely surrender thereof for prepayment, the principal shall, until paid,
continue to bear interest from the Prepayment Date at the interest rate
applicable to such Equipment Note.
ARTICLE
VII
INDENTURE EVENTS OF DEFAULT; REMEDIES
OF INDENTURE TRUSTEE AND HOLDERS
7.1 Indenture Event of Default. "Indenture Event of Default" means any of
the following events (whatever the reason for such Indenture Event of Default
and whether it shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body):
(i) any Event of Default specified in Section 16 of the Lease (other
than an Event of Default arising solely as the result of the failure to
make an Excepted Payment unless the Owner Participant shall notify the
Indenture Trustee in writing that such failure shall constitute an
Indenture Event of Default); or
(ii) the failure of the Owner Trustee other than by reason of a
Default or an Event of Default (i) to pay principal, interest or
Make-Whole Premium, if any, on any Equipment Note when due, and such
failure shall have continued unremedied for ten Business Days after the
date when due or (ii) to pay any other amounts hereunder or under the
Equipment Notes when due and
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such failure shall have continued unremedied for a period of 30 days after
the Owner Trustee and the Owner Participant shall receive written demand
therefor from the Indenture Trustee or by any Holder; or
(iii) (A) any representation or warranty made by the Owner Trustee,
the Owner Participant or any Owner Participant Guarantor in any Operative
Agreement or in any certificate the Owner Trustee, the Owner Participant
or any Owner Participant Guarantor furnished to the Indenture Trustee or
any Holder in connection herewith or therewith or pursuant hereto or
thereto shall prove to have been false or incorrect in any material
respect when made and was and remains in any respect materially adverse to
the interests of the Holders and such misrepresentation shall not have
been corrected within 30 days following notice thereof identified as a
"Notice of Indenture Event of Default" being given to the Owner Trustee
and the Owner Participant by the Indenture Trustee or by a Majority in
Interest of Holders, unless such misrepresentation is capable of being
corrected, and Owner Trustee or Owner Participant shall, after the
delivery of such notice, be diligently proceeding to correct such
misrepresentation and shall in fact correct such misrepresentation within
60 days after delivery of such notice; or
(B) any (x) covenant made by the Owner Trustee in the fifth
paragraph following the Habendum Clause hereof or in Section 5.02(b) of
the Participation Agreement shall be breached in any material respect and
any such breach shall not be cured within 10 Business Days after the Owner
Participant has received notice thereof from any Holder or the Indenture
Trustee (for purposes of Section 7.02(b) of the Participation Agreement,
it being agreed that such breach may be cured by replacement of the Owner
Trustee), or (y) any other covenant made by the Owner Trustee, by the
Owner Participant or by any Owner Participant Guarantor in any Operative
Agreement shall be breached in any material respect and such breach shall
remain unremedied for a period of 30 days after there has been given to
the Owner Trustee and the Owner Participant by Holders holding not less
than a Majority in Interest of Holders a written notice identified as a
"Notice of Indenture Event of Default" specifying such breach and
requiring it to be remedied unless such failure is curable and the Owner
Trustee or the Owner Participant shall, after the delivery of such notice,
be diligently proceeding to correct such failure and shall in fact correct
such failure 60 days after delivery of such notice; or
(iv) the Owner Trustee, the Lessor's Estate, the Owner Participant
or any Owner Participant Guarantor shall file any petition or answer
seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present
or future bankruptcy, insolvency or similar statute, law or regulation;
(v) an order for relief shall be entered in respect of the Owner
Trustee, the Owner Participant or any Owner Participant Guarantor or the
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Lessor's Estate by a court having jurisdiction in the premises in an
involuntary case under the federal bankruptcy laws as now or hereafter in
effect; or the Owner Trustee, the Owner Participant or any Owner
Participant Guarantor or the Lessor's Estate shall file any answer
admitting or not contesting the material allegations of a petition filed
against the Owner Trustee, the Owner Participant or any Owner Participant
Guarantor or the Lessor's Estate in any proceeding referred to in clause
(vi) below or seek or consent or acquiesce in the appointment of any
trustee, custodian, receiver or liquidator of the Owner Trustee, the Owner
Participant or any Owner Participant Guarantor or the Lessor's Estate, as
the case may be, or of all or any substantial part of its properties; or
(vi) without the consent or acquiescence of the Owner Trustee, the
Owner Participant or any Owner Participant Guarantor or the Lessor's
Estate, as the case may be, an order shall be entered constituting an
order for relief or approving a petition for relief or reorganization or
any other petition seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or other similar relief under any
present or future bankruptcy, insolvency or similar statute, law or
regulation, or if any such petition shall be filed against the Owner
Trustee, the Owner Participant or any Owner Participant Guarantor or the
Lessor's Estate, as the case may be, and such petition shall not be
dismissed within 60 days, or if, without the consent or acquiescence of
the Owner Trustee, the Owner Participant or any Owner Participant
Guarantor or the Lessor's Estate, as the case may be, an order shall be
entered appointing a trustee, custodian, receiver or liquidator of the
Owner Trustee, the Owner Participant or any Owner Participant Guarantor or
the Lessor's Estate, as the case may be, or of all or any substantial part
of the properties of the Owner Trustee, the Owner Participant or any Owner
Participant Guarantor or the Lessor's Estate, as the case may be, and such
order shall not be dismissed within 60 days;
7.2 Remedies.
(a) If an Indenture Event of Default shall have occurred and be continuing
and so long as the same shall be continuing unremedied, then and in every such
case, the Indenture Trustee may, and when required by the provisions of Article
IX or Section 7.02(c) hereof, shall (i) exercise any or all of the rights and
powers and pursue any and all of the remedies pursuant to this Article VII, and
(ii) in the event such Indenture Event of Default is an Indenture Event of
Default referred to in clause (i) of Section 7.01 hereof, exercise any and all
of the remedies pursuant to Section 17 of the Lease; provided that without the
consent of the Owner Trustee and the Owner Participant such exercise of remedies
shall not occur until after the latest date on which the Owner Trustee may cure
the related Event of Default pursuant to Section 8.03 hereof. The Indenture
Trustee may (subject to the provisions of the next succeeding paragraph) take
possession of all or any part of the properties covered or intended to be
covered by the Lien and security interest created hereby or pursuant hereto and
may exclude the Owner Participant, the Owner Trustee, the Lessee and any
transferee of the Lessee
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(subject to Section 15.05 hereof), and all Persons claiming under any of them
wholly or partly therefrom. In addition, the Indenture Trustee may (subject to
the provisions of the next succeeding paragraph) exercise any other right or
remedy in lieu of or in addition to the foregoing that may be available to it
under applicable law, or proceed by appropriate court action to enforce the
terms hereof, of the Lease, or both, or to rescind the Lease. Without limiting
any of the foregoing, it is understood and agreed that the Indenture Trustee may
exercise any right of sale of the Aircraft available to it, even though it shall
not have taken possession of the Aircraft and shall not have possession thereof
at the time of such sale.
Anything in this Indenture to the contrary notwithstanding, the Indenture
Trustee shall not be entitled to exercise any remedy hereunder as a result of an
Indenture Event of Default which arises solely by reason of one or more events
or circumstances which constitute a Lease Event of Default unless the Indenture
Trustee as security assignee of the Owner Trustee shall have declared the Lease
to be in default and shall have exercised or concurrently be exercising one or
more of the dispossessory remedies provided for in Section 17 of the Lease with
respect to the Aircraft; provided, however, that such requirement to exercise
one or more of such remedies under the Lease shall not apply in circumstances
where the Indenture Trustee is, and has been, for a continuous period in excess
of 60 days or such other period as may be specified in Section 1110(a)(1)(A) of
the Bankruptcy Code (such 60-day or other period being the "Section 1110
Period"), involuntarily stayed or prohibited by applicable law or court order
from exercising such remedies under the Lease (a "Continuous Stay Period");
provided further, however, that the requirement to exercise one or more of such
remedies under the Lease shall nonetheless be applicable during a Continuous
Stay Period subsequent to the expiration of the Section 1110 Period to the
extent that the continuation of such Continuous Stay Period subsequent to the
expiration of the Section 1110 Period (A) results from an agreement by the
trustee or the debtor-in-possession in such proceeding during the Section 1110
Period with the approval of the relevant court to perform the Lease in
accordance with Section 1110(a)(1)(A) of the Bankruptcy Code and continues to
perform as required by Section 1110(a)(1)(A-B) of the Bankruptcy Code or (B) is
an extension of the Section 1110 Period with the consent of the Indenture
Trustee pursuant to Section 1110(b) of the Bankruptcy Code or (C) results from
the Lessee's assumption during the Section 1110 Period with the approval of the
relevant court of the Lease pursuant to Section 365 of the Bankruptcy Code and
Lessee's continuous performance of the Lease as so assumed or (D) is the
consequence of the Indenture Trustee's own failure to give any requisite notice
to any person. In the event that the applicability of Section 1110 of the
Bankruptcy Code to the Aircraft is being contested by Lessee in judicial
proceedings, both of the Indenture Trustee and the Owner Trustee shall have the
right to participate in such proceedings; provided that any such participation
by the Owner Trustee shall not affect in any way any rights or remedy of the
Indenture Trustee hereunder.
(b) If an Indenture Event of Default under clause (i) (attributable to an
Event of Default under Section 16(f), (g) and (h) of the Lease), (iv), (v) or
(vi) of Section 7.01 hereof shall occur and be continuing, the unpaid principal
of all
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Outstanding Equipment Notes, together with interest accrued but unpaid thereon
and all other amounts due thereunder, but without Make-Whole Premium, shall
immediately become due and payable, without presentment, demand, protest or
notice, all of which are hereby waived.
(c) If any Indenture Event of Default not described in the preceding
paragraph (b) shall have occurred and be continuing, then and in every such
case, the Indenture Trustee may on its own accord or at the direction of a
Majority in Interest of Holders, at any time, by written notice to the Owner
Trustee, the Owner Participant and the Lessee, declare the principal of all the
Equipment Notes to be due and payable, whereupon the unpaid principal amount of
all Outstanding Equipment Notes, together with accrued interest thereon and all
other amounts due thereunder, but without Make-Whole Premium, shall immediately
become due and payable without presentment, demand, protest or other notice, all
of which are hereby waived. At any time after such declaration and prior to the
sale or disposition of the Trust Indenture Estate, however, a Majority in
Interest of Holders, by notice to the Indenture Trustee, the Owner Trustee and
the Lessee, may rescind such declaration, whether made by the Indenture Trustee
on its own accord or as directed, if (x) there has been paid or deposited with
the Indenture Trustee a sum sufficient to pay all overdue installments of
interest on all Equipment Notes (together, to the extent permitted by law, with
interest on such overdue installments of interest), the principal on any
Equipment Notes that would have become due otherwise than by such declaration of
acceleration, all sums paid or advanced by the Indenture Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee, its agents and counsel, or (y) all Indenture Events of
Default (other than the nonpayment of principal that has become due solely
because of such acceleration) have been either cured or waived as provided in
Section 7.11 hereof. No such rescission shall affect any subsequent default or
impair any right consequent thereon.
(d) Each Holder shall be entitled at any sale to credit against any
purchase price bid at such sale by such Holder all or any part of the unpaid
obligations owing to such Holder secured by the Lien of this Indenture (but only
to the extent that an amount equal to such purchase price would have been paid
to such Holder pursuant to Article V hereof if such purchase price were paid in
cash and the foregoing provisions of this subsection (d) were not given effect).
(e) In the event of any sale of the Trust Indenture Estate, or any part
thereof, pursuant to any judgment or decree of any court or otherwise in
connection with the enforcement of any of the term of this Indenture, the unpaid
principal amount of all Equipment Notes then outstanding, together with accrued
interest thereon (without Make-Whole Amount), and other amounts due thereunder,
shall immediately become due and payable without presentment, demand, protest or
notice, all of which are hereby waived.
(f) Notwithstanding anything contained herein, so long as the Pass Through
Trustee under any Pass Through Trust Agreement (or its designee) is a
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Holder, the Indenture Trustee will not be authorized or empowered to acquire
title to the Trust Indenture Estate or take any action with respect to the Trust
Indenture Estate so acquired by it if such acquisition or action would cause any
Trust to fail to qualify as a "grantor trust" for federal income tax purposes.
7.3 Return of Aircraft, etc.
(a) Subject to Section 7.02 hereof, if an Indenture Event of Default shall
have occurred and be continuing, at the request of the Indenture Trustee, the
Owner Trustee shall promptly execute and deliver to the Indenture Trustee such
documents as the Indenture Trustee may reasonably deem necessary or advisable to
enable the Indenture Trustee or an agent or representative designated by the
Indenture Trustee, at such time or times and place or places as the Indenture
Trustee may specify, to obtain possession of all or any part of the Trust
Indenture Estate to which the Indenture Trustee shall at the time be entitled
under this Indenture. Subject to the foregoing, if the Owner Trustee shall for
any reason fail to execute and deliver such documents after such request by the
Indenture Trustee, the Indenture Trustee may pursue all or part of such Trust
Indenture Estate wherever it may be found and enter any of the premises of the
Lessee or the Owner Trustee wherever such Trust Indenture Estate may be or be
supposed to be and search for such Trust Indenture Estate and take possession of
and remove such Trust Indenture Estate. All expenses of pursuing, searching for
and taking such Trust Indenture Estate shall, until paid, be secured by the Lien
of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee may, from
time to time, at the expense of the Trust Indenture Estate, make all such
expenditures for maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, modification, alterations and repairs to and
of such Trust Indenture Estate, as the Indenture Trustee may reasonably deem
proper. In each case subject to Section 7.02 hereof, the Indenture Trustee shall
have the right to maintain, use, operate, store, insure, lease, dispose of,
modify, alter, control or manage the Trust Indenture Estate and to carry on the
business and to exercise all rights and powers of the Owner Participant and the
Owner Trustee relating to the Trust Indenture Estate, as the Indenture Trustee
may reasonably deem best, including the right to enter into any and all such
agreements with respect to the maintenance, insurance, use, operation, storage,
leasing, control, management, modification, alteration or disposition of all or
any part of the Trust Indenture Estate as the Indenture Trustee may determine.
Further, the Indenture Trustee shall be entitled to collect and receive directly
all tolls, rents (including Rent), revenues, issues, income, products and
profits of the Trust Indenture Estate and every part thereof other than Excepted
Payments, without prejudice, however, to the right of the Indenture Trustee
under any provision of this Indenture to collect and receive all cash held by,
or required to be deposited with, the Indenture Trustee under this Indenture
(other than Excepted Payments). Such tolls, rents (including Rent), revenues,
issues, income, products and profits shall be applied to pay the expenses of the
use, operation, storage, insurance, leasing, control, management, modification,
alteration or disposition of the Trust Indenture Estate, and of all maintenance
and repairs, and of conducting the business thereof, and to make all payments
which the Indenture Trustee may be required or may reasonably elect to
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make for any taxes, assessments, insurance or other proper charges upon the
Trust Indenture Estate (including the employment of engineers and accountants to
examine, inspect and make reports upon the properties and books and records of
the Owner Trustee and the Lessee), and all other payments which the Indenture
Trustee may be required or authorized to make under any provision of this
Indenture, as well as just and reasonable compensation for the services of the
Indenture Trustee and of all persons properly engaged and employed for such
purposes by the Indenture Trustee; provided, that any excess amounts shall be
promptly distributed in accordance with Section 5.03 hereof.
(c) Subject to Section 7.02 hereof, if an Indenture Event of Default shall
have occurred and be continuing and the Indenture Trustee shall be entitled to
exercise remedies hereunder, and subject to Article VIII hereof, the Indenture
Trustee, either with or without taking possession, and either before or after
taking possession, and without instituting any legal proceedings whatsoever, may
sell, assign, transfer and deliver the whole or, from time to time, to the
extent permitted by law, any part of the Trust Indenture Estate, or interest
therein, at any private sale or public auction to the highest bidder, with or
without demand, advertisement or notice, except that in respect of any private
sale 30 days' prior written notice by registered mail to the Owner Trustee and
the Owner Participant will be provided, for cash or, with the consent of the
Owner Trustee and the Owner Participant, credit or for other property, for
immediate or future delivery, and for such price or prices and on such terms as
the Indenture Trustee in exercising reasonable commercial discretion may
determine; provided, that any such action shall be at the time lawful and that
all mandatory legal requirements shall be complied with. Any notice required
pursuant to the terms hereof in the case of a public sale, shall state the time
and place fixed for such sale. Any such public sale shall be held at such time
or times within ordinary business hours as the Indenture Trustee shall fix in
the notice of such sale. At any such sale, the Trust Indenture Estate may be
sold in one lot as an entirety or in separate lots. The Indenture Trustee shall
not be obligated to make any sale pursuant to such notice. The Indenture Trustee
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for such sale, and any such sale may be made at any time or place to which
the same may be so adjourned without further notice or publication. The
Indenture Trustee may exercise such right of sale without possession or
production of the Equipment Notes or proof of ownership thereof, and as
representative of the Holders may exercise such right without notice to the
Holders or without including the Holders as parties to any suit or proceedings
relating to the foreclosure of any part of the Trust Indenture Estate. The Owner
Trustee shall execute any and all such bills of sale, assignments and other
documents, and perform and do all other acts and things requested by the
Indenture Trustee in order to permit consummation of any sale of the Trust
Indenture Estate in accordance with this Section 7.03(c) and to effectuate the
transfer or conveyance referred to in the first sentence of this Section
7.03(c). Notwithstanding any other provision of this Indenture, the Indenture
Trustee shall not sell the Trust Indenture Estate or any part thereof unless the
Equipment Notes shall have been accelerated.
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(d) To the extent permitted by Applicable Law, and subject to Section 7.02
hereof, the Indenture Trustee or any Holder may be a purchaser of the Trust
Indenture Estate or any part thereof or any interest therein at any sale
thereof, whether pursuant to foreclosure or power of sale or otherwise. The
Indenture Trustee may apply against the purchase price therefor the amount then
due hereunder or under any of the Equipment Notes secured hereby and any Holder
may apply against the purchase price therefor the amount then due to it
hereunder, under any other Indenture Document or under the Equipment Notes held
by such Holder to the extent of such portion of the purchase price as it would
have received had it been entitled to share any distribution thereof. The
Indenture Trustee or any Holder or nominee thereof shall, upon any such
purchase, acquire good title to the property so purchased, free of the Lien of
this Indenture and, to the extent permitted by applicable law, free of all
rights of redemption in the Owner Trustee or the Owner Participant in respect of
the property so purchased.
(e) The Indenture Trustee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Indenture Trustee or any successor or
nominee) for all or any part of the Trust Indenture Estate, whether such
receivership be incidental to a proposed sale of the Trust Indenture Estate or
the taking of possession thereof or otherwise, and the Owner Trustee hereby
consents to the appointment of such receiver and will not oppose any such
appointment. Any receiver appointed for all or any part of the Trust Indenture
Estate shall be entitled to exercise all of the rights and powers of the
Indenture Trustee with respect to the Trust Indenture Estate.
(f) Subject to the provisions of this Indenture, to the extent permitted
by Applicable Law, upon the occurrence and during the continuation of an
Indenture Event of Default the Owner Trustee irrevocably appoints the Indenture
Trustee the true and lawful attorney-in-fact of the Owner Trustee (which
appointment is coupled with an interest) in its name and stead and on its
behalf, for the purpose of effectuating any sale, assignment, transfer or
delivery for the enforcement of the Lien of this Indenture, whether pursuant to
foreclosure or power of sale, assignments and other instruments as may be
necessary or appropriate, with full power substitution, the Owner Trustee hereby
ratifying and confirming all that such attorney or any substitute shall do by
virtue hereof in accordance with applicable law. Nevertheless, if so requested
by the Indenture Trustee or any purchaser, the Owner Trustee shall ratify and
confirm any such sale, assignment, transfer or delivery, by executing and
delivering to the Indenture Trustee or such purchaser all bills of sale,
assignments, releases and other proper instruments to effect such ratification
and confirmation as may be designated in any such request.
7.4 Indenture Trustee May Prove Debt. If the Owner Trustee shall fail to
pay any amount payable hereunder or under the Equipment Notes, the Indenture
Trustee, in its own name and as trustee of an express trust, shall be entitled
and empowered to institute any action or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any such action or
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proceedings to judgment or final decree, and may enforce any such judgment or
final decree against the Owner Trustee and collect in the manner provided by law
out of the property of the Owner Trustee wherever situated, the moneys adjudged
or decreed to be payable; provided, that any sale of any portion of the Trust
Indenture Estate shall be done in accordance with Sections 7.02 and 7.03(c)
hereof.
In case there shall be pending proceedings relative to the Owner Trustee
under the Bankruptcy Code or any other applicable Federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of the Owner Trustee or its
property, or in case of any other comparable judicial proceedings relative to
the Owner Trustee, or to the creditors or property of the Owner Trustee, the
Indenture Trustee, irrespective of whether the principal of the Equipment Notes
shall then be due and payable as therein or herein expressed or by declaration
or otherwise and irrespective of whether the Indenture Trustee shall have made
any demand pursuant to the provisions of this Section, shall be entitled and
empowered, by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount
of principal, interest and other amounts owing and unpaid in respect of
the Equipment Notes or hereunder, and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Indenture Trustee (including any claim for reasonable compensation to
the Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of the
Indenture Trustee and each predecessor Indenture Trustee, except as a
result of negligence or bad faith) and of the Holders allowed in any
judicial proceedings relative to the Owner Trustee or to the creditors or
property of the Owner Trustee,
(b) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders in any election of a trustee or a standby
trustee in arrangement, reorganization, liquidation or other bankruptcy or
insolvency proceedings or person performing similar functions in
comparable proceedings, and
(c) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute all amounts
received with respect to the claims of the Holders and of the Indenture
Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or other similar official is
hereby authorized by each of the Holders to make payments to the Indenture
Trustee, and, in the event that the Indenture Trustee shall consent to the
making of payments directly to the Holders, to pay to the Indenture Trustee such
amounts as shall be sufficient to cover reasonable compensation to the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents,
attorneys and counsel, and all other expenses and
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liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or willful
misconduct.
Nothing contained herein shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Equipment Notes or the rights of any Holder thereof, or to
authorize the Indenture Trustee to vote in respect of the claim of any Holder in
any such proceeding except, as aforesaid, to vote for the election of a trustee
in bankruptcy or similar person.
All rights of action and rights to assert claims under this Indenture, or
under any of the Equipment Notes, may be enforced by the Indenture Trustee
without the possession of such Equipment Notes. Any trial or other proceedings
instituted by the Indenture Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders, as provided herein.
In any proceedings brought by the Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party) the Indenture Trustee shall be
held to represent all the Holders of the Equipment Notes, and it shall not be
necessary to make any Holders parties to such proceedings.
7.5 Remedies Cumulative. Each and every right, power and remedy given to
the Indenture Trustee in this Indenture shall be cumulative and shall be in
addition to every other right, power and remedy specifically given herein or now
or hereafter existing at law, in equity or by statute, and each and every right,
power and remedy whether specifically given herein or otherwise existing may be
exercised from time to time and as often and in such order as may be deemed
expedient by the Indenture Trustee or the Holders, and the exercise or the
beginning of the exercise of any power or remedy shall not be construed to be a
waiver of the right to exercise at the same time or later any other right, power
or remedy. No delay or omission by the Indenture Trustee or of any Holder in the
exercise of any right, remedy or power or in the pursuance of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default on the part of the Owner Trustee or the Lessee or to be an acquiescence
in any such default.
7.6 Suits for Enforcement. If an Indenture Event of Default has occurred,
has not been waived and is continuing, the Indenture Trustee may in its
discretion and subject to its rights of appropriate indemnification under
Sections 7.09 and 9.03 and Article XI hereof proceed to protect and enforce its
rights and rights of the Holders by such appropriate judicial proceedings as the
Indenture Trustee shall deem most effectual to protect and enforce any of such
rights, either at law or in equity
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or in bankruptcy or otherwise, whether for the specific enforcement of any
covenant or agreement contained in this Indenture or in aid of the exercise of
any power granted in this Indenture or to enforce any other legal or equitable
right vested in the Indenture Trustee or the Holders by this Indenture or by
law; provided that, any sale of any portion of the Trust Indenture Estate shall
be done in accordance with Sections 7.02 and 7.03(c) hereof.
7.7 Discontinuance of Proceedings. In case the Indenture Trustee or any
Holder shall have instituted any proceeding to enforce any right, power or
remedy under this Indenture by foreclosure, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Indenture Trustee or such Holder, then the
Owner Trustee, the Indenture Trustee, any Owner Participant, the Holders and the
Lessee shall, subject to any binding determination in such proceeding, be
restored to their former positions and rights under this Indenture with respect
to the Trust Indenture Estate, and all rights, remedies and powers of the
Indenture Trustee and the Holders shall continue as if no such proceeding had
been instituted.
7.8 Unconditional Right of Holders to Payments on Equipment Notes.
Notwithstanding any other provision in this Indenture and any provision of any
Equipment Note, the right of any Holder to receive payment of the principal of
and interest and Make-Whole Premium, if any, on such Equipment Note on or after
the respective due dates and in the manner expressed in such Equipment Note or
to institute suit for the enforcement of any such payment on or after such
respective dates as provided herein, shall not be impaired or affected without
the consent of such Holder.
7.9 Control by Holders. The Majority in Interest of Holders shall have the
right to direct the Indenture Trustee as to the time, method, and place of
conducting any proceeding for any remedy available to the Indenture Trustee
under this Indenture, or exercising any trust or power conferred on the
Indenture Trustee by this Indenture; provided that such direction shall not be
otherwise than in accordance with law and the provisions of this Indenture and
the Indenture Trustee shall have received, to the extent provided in Sections
7.06 and 9.03 and Article XI hereof, such reasonable indemnification as it may
require against the costs, expenses and liabilities to be incurred by the
Indenture Trustee; and provided further that (subject to the provisions of
Section 9.02 hereof) the Indenture Trustee shall have the right to decline to
follow any such direction if the Indenture Trustee, being advised by counsel,
shall determine that the action or proceeding so directed may not lawfully be
taken or if the Indenture Trustee in good faith by its board of directors, the
executive committee, or a trust committee of directors or Responsible Officers
of the Indenture Trustee shall determine that the action or proceedings so
directed would involve the Indenture Trustee in personal liability or if the
Indenture Trustee in good faith shall so determine that the
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actions or forbearance specified in or pursuant to such direction shall be
unduly prejudicial to the interests of Holders not joining in the giving of said
direction, it being understood that (subject to Section 9.02 hereof) the
Indenture Trustee shall have no duty to ascertain whether or not such actions or
forbearance are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Indenture Trustee
in its discretion to take any action deemed proper by the Indenture Trustee and
which is not inconsistent with the direction by the Majority in Interest of
Holders.
7.10 Waiver of Past Indenture Default. Upon written instructions from the
Majority in Interest of Holders, the Indenture Trustee shall waive any past
Indenture Default and its consequences and upon any such waiver such Indenture
Default shall cease to exist and any Indenture Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture, but no such waiver shall extend to any subsequent or other Indenture
Default or impair any right consequent thereon; provided, however, that in the
absence of written instructions from all Holders and each Liquidity Provider,
the Indenture Trustee shall not waive any Indenture Default (a) in the payment
of the principal of or Make-Whole Premium, if any, or interest on, or other
amounts due under, any Equipment Note then Outstanding, or (b) in respect of a
covenant or provision of this Indenture which, under Article XIII hereof, cannot
be modified or amended without the consent of each Holder.
7.11 Notice of Indenture Default. The Indenture Trustee shall transmit to
the Owner Trustee, the Holders, the Liquidity Provider and the Owner Participant
notice of any Indenture Event of Defaults actually known to a Responsible
Officer of the Indenture Trustee or any Indenture Event of Default or Indenture
Default arising under Section 7.01(i) (arising out of a Lease Event of Default
under Section 16(a) of the Lease) or 7.01(ii), such notice to be transmitted by
mail to the Holders, the Liquidity Provider, the Owner Trustee and any Owner
Participant promptly after the occurrence thereof, unless any such Indenture
Default or Indenture Event of Default shall have been cured before the giving of
such notice; provided that, except in the case of default in the payment of the
principal of or interest on or any other amount due under any of the Equipment
Notes, the Indenture Trustee shall be protected in withholding such notice to
the Holders if and so long as the board of directors, the executive committee,
or a trust committee of directors or trustees and/or Responsible Officers of the
Indenture Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders. In the case of any Indenture Event of
Default relating to a Lease Event of Default, the Indenture Trustee agrees to
give the Holders, the Owner Trustee and the Owner Participant not less than ten
Business Days prior notice of the date on which the Indenture Trustee may
commence the exercise of any remedy made under Section 7.02.
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ARTICLE
VIII
RIGHTS OF THE OWNER TRUSTEE
AND THE OWNER PARTICIPANT
8.1 Certain Rights of Owner Trustee and Owner Participant.
(a) Except as provided in paragraph (a) immediately following the Granting
Clause hereof and in Section 13.01 hereof, without the consent of a Majority in
Interest of Holders, the respective parties to the Indenture Documents may not
modify, amend or supplement any of said agreements, or give any consent, waiver,
authorization or approval thereunder, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions thereof or of
modifying in any manner the rights of the respective parties thereunder;
provided, however, that the actions specified in subsection (b) of this Section
8.01 may be taken without the consent of the Indenture Trustee or any Holder.
(b) Subject to the provisions of subsection (c) of this Section 8.01, the
Lessor and the respective parties to the Indenture Documents, at any time and
from time to time, without the consent of the Indenture Trustee or of any
Holder, may:
(1) so long as no Indenture Event of Default shall have
occurred and be continuing, modify, amend or supplement the Lease, or give
any consent, waiver, authorization or approval with respect thereto,
except that without compliance with subsection (a) of this Section 8.01
the parties to the Lease shall not modify, amend or supplement, or give
any waiver for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions thereof or of modifying in any
manner the rights of the respective parties thereunder, with respect to
the following provisions of the Lease as in effect on the effective date
hereof: Sections 2, 3(c) (except to the extent such Section relates to
amounts payable (whether directly or pursuant to this Indenture) to
Persons other than Holders, each Liquidity Provider, the Subordination
Agent and the Indenture Trustee in its individual capacity), 3(e) (except
insofar as it relates to the address or account information of the Owner
Trustee or the Indenture Trustee), 3(f), 3(g), 4, 6 (except in order to
increase the Lessee's liabilities or enhance the Lessor's or the Owner
Participant's rights thereunder), 8 (except that additional requirements
may be imposed on the Lessee), 9 (except for Section 9(f) and except that
additional insurance requirements may be imposed on the Lessee), 10, 11(b)
(except to impose additional requirements on the Lessee) 14(a) (except
that further restrictions may be imposed on the Lessee), 16 (except to
impose additional or more stringent Events of Default), 17 (except to
impose additional remedies), 20(b) and 23(e) and any definition of terms
used in the Lease, to the extent that any modification of such definition
would result in a modification of the Lease not permitted pursuant to
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this subsection (b); provided that the parties to the Lease may take any
such action without the consent of the Indenture Trustee or any Holder to
the extent such action relates to the payment of amounts constituting, or
the Owner Trustee's, the Owner Participant's or the Lessee's rights or
obligations with respect to, Excepted Payments;
(2) modify, amend or supplement the Trust Agreement and
any other Indenture Document (other than the Lease and the Participation
Agreement), or give any consent, waiver, authorization or approval with
respect thereto, in each case only to the extent any such action shall not
materially adversely impact the interests of the Holders;
(3) modify, amend or supplement the Participation
Agreement, or give any consent, waiver, authorization or approval with
respect thereto, except that without compliance with subsection (a) of
this Section 8.01 the parties to the Participation Agreement shall not
modify, amend or supplement, or give any consent, waiver, authorization or
approval for the purpose of adding provisions to or changing in any manner
or eliminating any of the provisions thereof or of modifying in any manner
the rights of the respective parties thereunder, with respect to the
following provisions of the Participation Agreement as in effect on the
effective date hereof: Article 4 and Section 8.01(b) (insofar as such
Article 4 and Section 8.01(b) relate to the Indenture Trustee, the
Pass-Through Trustee and the Holders), Articles 5, 6 and 7 and Sections
13.01 and 15.08 (insofar as such Articles and Sections relate to the
Indenture Trustee; it being understood that only the Indenture Trustee's
consent in respect thereof need be obtained) and any definition of terms
used in the Participation Agreement, to the extent that any modification
of such definition would result in a modification of the Participation
Agreement not permitted pursuant to this subsection (b); and
(4) modify, amend or supplement any of the Indenture
Documents in order to cure any ambiguity, to correct or supplement any
provisions thereof which may be defective or inconsistent with any other
provision thereof or of any provision of this Indenture, or to make any
other provision with respect to matters or questions arising thereunder or
under this Indenture which shall not be inconsistent with the provisions
of this Indenture, provided the making of any such other provision shall
not adversely affect the interests of the Holders.
(c) No modification, amendment, supplement, consent, waiver, authorization
or approval with respect to the Lease or the Participation Agreement, whether
effected pursuant to subsection (a) or pursuant to subsection (b) of this
Section 8.01 and anything in such subsections or elsewhere in this Indenture to
the contrary notwithstanding, shall, without the consent of the Holder of each
Outstanding Equipment Note affected thereby, and each Liquidity Provider,
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(1) modify, amend or supplement the Lease in such a way
as to (a) extend the time of payment of Basic Rent or Termination Value or
Supplemental Rent payable to the Holders or any Liquidity Provider or any
other amounts payable for the account of the Holders or any Liquidity
Provider (subject in any event to Section 3(f) of the Lease) upon the
occurrence of an Event of Loss or Termination Value and any other amounts
payable for the account of the Holders (subject in any event to Section
3(f) of the Lease) upon termination of the Lease with respect to the
Aircraft payable under, or as provided in, the Lease as in effect on the
Delivery Date, or (b) reduce the amount of any installment of Basic Rent
or Supplemental Rent so that the same is less than the payment of
principal of, and interest on the Equipment Notes and Make-Whole Premium,
if any, and amounts due to each Liquidity Provider, as the case may be, to
be made from such installment of Basic Rent or Supplemental Rent, or (c)
reduce the aggregate amount of Termination Value, or any other amounts
payable under, or as provided in, the Lease as in effect on the Delivery
Date, upon the occurrence of an Event of Loss so that the sum of the same
is, as of the applicable Termination Date, less than the accrued interest
on and the principal of the Equipment Notes at the time Outstanding or (d)
reduce the aggregate amount of Termination Value and any other amounts
payable under, or as provided in, the Lease as in effect on the Delivery
Date, upon termination of the Lease with respect to the Aircraft so that
the sum of the same is, as of the applicable Termination Date, less than
the accrued interest on, principal of and Make-Whole Premium, if any, of
Equipment Notes at the time Outstanding, or
(2) modify, amend or supplement the Lease in such a way
as to, or consent to any assignment of the Lease or give any consent,
waiver, authorization or approval which would, release the Lessee from its
absolute and unconditional obligations in respect of payment of Basic Rent
or Supplemental Rent, or Termination Value and any other amounts payable
for the account of the Holders (subject in any event to Section 3(f) of
the Lease) upon the occurrence of an Event of Loss, or Termination Value
and any other amounts payable for the account of the Holders (subject in
any event to Section 3(f) of the Lease) with respect to the Aircraft,
payable under, or as provided in, the Lease as in effect on the Delivery
Date, except as provided in the Lease as in effect on the Delivery Date.
(d) At all times so long as this Indenture is in effect and
notwithstanding that an Indenture Event of Default has occurred and is
continuing, the consent of the Owner Trustee (at the direction of the Owner
Participant) shall be required in order (i) to amend, modify or supplement the
Lease or any other Operative Agreement to which the Owner Trustee is a party or
to waive compliance by the Lessee or any other party with any of its obligations
thereunder and (ii) to grant any consent requested under the Lease or any other
Operative Agreement to which it is a party.
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Notwithstanding the foregoing, but subject always to the provision of Section
15.05 hereof, the Indenture Trustee shall at all times have the right, to the
exclusion of the Owner Trustee and the Owner Participant, to (A) declare the
Lease to be in default under Section 17 (other than with respect to Excepted
Payments) thereof and (B) subject only to the provisions of this Indenture,
exercise the remedies set forth in Section 17 of the Lease (other than in
connection with Excepted Payments).
Nothing in this Indenture shall be deemed to prohibit the Owner
Participant or the Owner Trustee from making demand on the Lessee for, or from
commencing an action at law to obtain the payment of, or from receiving payment
of, any Excepted Payment; provided, however, that if the Owner Trustee is
proceeding under the Lease, the Owner Trustee shall proceed pursuant to Section
17(e), and only Section 17(e), of the Lease.
8.2 Owner Participant's Right to Prepay or Purchase the Equipment Notes.
(a) If (i) an Event of Default shall have occurred and be continuing, (ii)
the Indenture Trustee shall have taken action, or notified the Owner Trustee or
Owner Participant that it intends to take action, to foreclose the Lien of this
Indenture or otherwise commence the exercise of any significant remedy under
Section 7.02 of this Indenture or Section 17 of the Lease or (iii) the Equipment
Notes shall have become due and payable pursuant to Section 7.02(b) or (c)
hereof, the Owner Participant (or the Owner Trustee on behalf of the Owner
Participant) may, but shall be under no obligation to do either of the
following:
(1) direct the Owner Trustee to cause the prepayment of all, but
not less than all, of the Equipment Notes then Outstanding by notifying the
Indenture Trustee of such election, which notice in order to be effective shall
state that it is irrevocable and shall designate a Prepayment Date which shall
be a Business Day which shall be not less than 15 days after the date of such
notice on which the Owner Trustee shall, in the manner provided for in Section
6.04 hereof, deposit the sum of amounts contemplated by paragraph "first" under
Section 5.03 and the aggregate Prepayment Price (determined in accordance with
Section 6.02(b) hereof) of all such Equipment Notes with the Indenture Trustee.
If such payment by the Owner Trustee to the Indenture Trustee is made, the
Equipment Notes shall cease to accrue interest from and after the Prepayment
Date, and after distribution of such payment to the Holders, the Indenture
Trustee shall release the Trust Indenture Estate from the Lien of this
Indenture; or
(2) purchase all, but not less than all, of the Outstanding
Equipment Notes by notifying the Indenture Trustee of such election, which
notice in order to be effective shall state that it is irrevocable and shall
designate a date which shall be a Business Day which shall be not less than 15
days after the date of such notice on which the Owner Trustee shall pay to the
Indenture Trustee an amount equal to the aggregate unpaid principal amount of
all Outstanding Equipment Notes, together with accrued interest on such amount
to the date of purchase, plus all other sums due any
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Holder or the Indenture Trustee hereunder or under the Participation Agreement
or the Lease, but without any Make-Whole Premium (provided that the Make-Whole
Premium shall be included if the purchase is made pursuant to clause (a)(i)
above (but not pursuant to clause (a)(ii) or (a)(iii) above) when the Event of
Default shall have occurred and been continuing for less than 180 days). Upon
receipt by the Indenture Trustee of such amount, each Holder will be deemed,
whether or not Equipment Notes shall have been delivered to the Indenture
Trustee on such date, to have thereupon sold, assigned, transferred and conveyed
(and shall promptly take such actions as the Owner Participant shall reasonably
request to evidence such sale, assignment, transfer and conveyance) to the Owner
Participant (without recourse or warranty of any kind except for its own acts),
all of the right, title and interest of such Holder in and to the Trust
Indenture Estate and this Indenture and all Equipment Notes held by such Holder
and the former Holders shall not be entitled to receive any interest on the
principal amount of such Equipment Notes after the purchase date, and the Owner
Participant shall be deemed to have assumed (and shall promptly take such
actions as any Holder shall reasonably request to evidence such assumption) all
of such Holder's obligations under the Participation Agreement and this
Indenture arising subsequent to such sale. If the Owner Trustee shall so
request, such Holder will comply with all the provisions of Section 2.06 of this
Indenture to enable new Equipment Notes to be issued to the Owner Participant in
such authorized denominations as the Owner Participant shall request. All
charges and expenses required pursuant to Section 2.06 hereof in connection with
the issuance of any such new Equipment Notes shall be borne by the Owner
Participant.
(b) From and after the deposit by the Owner Trustee of the applicable
Prepayment Price or purchase price with the Indenture Trustee pursuant to
Section 8.02(a) hereof, the Owner Trustee shall be entitled to exercise all
remedies of the Indenture Trustee under Article VII hereof as well as of the
Lessor under the Lease.
8.3 Certain Rights of Owner Participant.
(a) If (A) there shall occur an Event of Default under the Lease as a
result of the Lessee's failure to make any payment of an installment of Basic
Rent, and (B) the Owner Trustee shall have paid or caused to be paid on or prior
to the date which is 15 Business Days after the Owner Participant's receipt of
written notice of such Event of Default all principal and interest on the
Equipment Notes then due (as well as any interest on overdue principal and (to
the extent permitted by applicable law) interest), but not including any
principal or interest becoming due on account of such Event of Default, then the
failure of the Lessee to make the payment of such installment of Basic Rent or
of interest on account of such installment's being overdue shall not constitute
or result in an Indenture Event of Default under this Indenture and any
declaration based solely on the same shall be deemed to be automatically
rescinded. Nothing contained in the preceding sentence shall be deemed to
entitle the Owner Trustee to exercise any rights and powers or pursue any
remedies pursuant to Section 17 of the Lease or otherwise except as set forth in
this Indenture, and except that the Owner Trustee or the Owner Participant may
attempt to recover any amount paid by it or them under this Indenture by
demanding of the Lessee payment of such amount
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pursuant to Section 17(e), but only said Section 17(e), of the Lease. Upon
curing any such Event of Default pursuant to this Section 8.03, the Owner
Trustee or the Owner Participant, as the case may be, shall be subrogated on an
unsecured basis to all the rights of the Indenture Trustee under the Lease in
respect of the payment giving rise to such Event of Default, and any right to
any interest in respect of the same, and shall be entitled to any payment of
Basic Rent (or interest thereon) actually made by the Lessee in respect of such
cured payment upon receipt by the Indenture Trustee; provided that no such
amount shall be paid to the Owner Trustee or the Owner Participant until all
amounts then due and payable to each Holder hereunder and thereunder shall have
been paid in full and no Indenture Event of Default shall have occurred and be
continuing and the Owner Trustee will not be entitled to recover any such
payments, except pursuant to the foregoing right of subrogation, by demand or
suit for damages. Notwithstanding anything in this Indenture or the Lease to the
contrary, the Owner Participant and the Owner Trustee collectively, shall not be
entitled to cure more than six Events of Default (no more than three of which
may be consecutive) occasioned by defaults in the payment of Basic Rent.
(b) If (A) there shall occur an Event of Default under the Lease for any
reason other than the Lessee's failure to make any payment of an installment of
Basic Rent and (B) the Owner Trustee shall have taken or caused to be taken such
action necessary to cure and shall have cured such Event of Default prior to the
date which is 15 Business Days after the Owner Participant's receipt of the
written notice of such Event of Default, then the failure of the Lessee to
perform such covenant, condition or agreement, the observance or performance of
which was accomplished by the Owner Trustee hereunder shall not constitute or
result in an Indenture Event of Default under this Indenture and any declaration
based solely on the same shall be deemed to be automatically rescinded. Nothing
contained in the preceding sentence shall be deemed to entitle the Owner Trustee
or the Owner Participant to exercise any rights and powers or pursue any
remedies pursuant to Section 17 of the Lease or otherwise except as set forth in
this Indenture, and except that the Owner Trustee or the Owner Participant may
attempt to recover any amount paid by it or them in effecting such cure by
demanding of the Lessee payment of such amount, plus any interest due, or by
commencing an action at law or in equity against the Lessee for the payment of
such amount pursuant to Section 17(e), but only Section 17(e), of the Lease.
Upon curing any such Event of Default pursuant to this Section 8.03(b), the
Owner Trustee or the Owner Participant, as the case may be, shall be subrogated
to all the rights of the Indenture Trustee under the Lease in respect of the
payment, agreement or covenant giving rise to such Event of Default, and any
right to any interest in respect of the same, and shall be entitled to any
payment or other performance upon receipt by the Indenture Trustee; provided
that no such amount shall be paid to the Owner Trustee or the Owner Participant
until all amounts then due and payable to each Holder hereunder and thereunder
shall have been paid in full and no Indenture Event of Default shall have
occurred and be continuing.
ARTICLE IX
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CONCERNING THE INDENTURE TRUSTEE
9.1 Acceptance of Trusts. The Indenture Trustee in its individual capacity
hereby accepts the trusts imposed upon it by this Indenture, and covenants and
agrees to perform the same as expressed herein and agrees to receive and
disburse all moneys constituting part of the Trust Indenture Estate in
accordance with the terms hereof.
9.2 Duties Before, and During, Existence of Indenture Event of Default.
(a) The Indenture Trustee, prior to the occurrence of an Indenture Event
of Default and after the curing or waiving of all Indenture Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture. So long as an Indenture Event
of Default has occurred and has not been cured or waived, the Indenture Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs. No
provision of this Indenture shall be construed to relieve the Indenture Trustee
from liability for its own gross negligence (or any simple negligence in the
handling of funds) or its own willful misconduct, except that:
(i) prior to the occurrence of an Indenture Event of Default and after the
curing or waiving of all Indenture Events of Default which may have occurred:
(x) the duties and obligations of the Indenture Trustee shall
be determined solely by the express provisions of this Indenture, and the
Indenture Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read in to this Indenture
against the Indenture Trustee; and
(y) in the absence of bad faith on the part of the Indenture
Trustee, the Indenture Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
any statements, certificates or opinions furnished to the Indenture
Trustee and conforming to the requirements of this Indenture; but in the
case of any such statements, certificate or opinions which by any
provision hereof are specifically required to be furnished to the
Indenture Trustee, the Indenture Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements of
this Indenture;
(ii) the Indenture Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of the
Indenture
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Trustee, unless it shall be proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any action
taken or not taken by it in good faith in accordance with the direction of the
Holders of not less than a majority in aggregate principal amount of Outstanding
Equipment Notes relating to the time, method and place of conducting any
proceeding for any remedy available to the Indenture Trustee, or exercising any
trust or power conferred upon the Indenture Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if the Indenture Trustee shall have determined
in good faith that the repayment of such funds or adequate indemnity against
such liability is not reasonably assured to it.
The Indenture Trustee agrees that it will execute and the Owner Trustee
agrees that it will, at the expense of the Lessee, file or cause to be filed
such continuation statements with respect to financing statements relating to
the security interest created hereunder in the Trust Indenture Estate as may be
specified from time to time in written instructions of the Holders of not less
than 25% in aggregate principal amount of Equipment Notes (which instructions
may, by their terms, be operative only at a future date and which shall be
accompanied by the execution form of such continuation statement so to be
filed); provided that, notwithstanding the foregoing, the Indenture Trustee may
execute and file or cause to be filed any financing statement which it from time
to time deems appropriate.
(b) [Reserved].
(c) The Indenture Trustee agrees that it will, in its individual capacity
and at its own cost and expense (but without any right of indemnity in respect
of any such cost or expense under Article XI hereof or under any other Operative
Agreement) promptly take such action as may be necessary duly to discharge all
Indenture Trustee's Liens on any part of the Trust Indenture Estate.
(d) [Reserved].
(e) The Indenture Trustee will furnish to each Holder promptly upon
receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and other instruments furnished to
the Indenture Trustee, to the extent that the same shall not have been otherwise
furnished to such Holder pursuant to this Indenture or to the extent the
Indenture Trustee does not reasonably believe that the same shall have been
furnished by the Lessee directly to such Holder.
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9.3 Certain Rights of the Indenture Trustee. Subject to Section 9.02
hereof:
(a) the Indenture Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, bond, debenture, note, coupon, security or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request, direction, order or demand of the Owner Trustee mentioned
herein shall be sufficiently evidenced by an Officer's Certificate (unless other
evidence in respect thereof be herein specifically prescribed) upon which the
Indenture Trustee may rely to prove or establish a matter set forth therein;
(c) the Indenture Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by it hereunder in
good faith and in accordance with such advice or Opinion of Counsel;
(d) the Indenture Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Indenture Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred therein or thereby;
(e) the Indenture Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Indenture Event of Default hereunder and
after the curing or waiving of all Indenture Events of Default, the Indenture
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, or other paper or document unless requested in writing to do
so by the Majority in Interest of Holders; provided that, if the payment within
a reasonable time to the Indenture Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Indenture Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require reasonable indemnity against such costs, expenses
or liabilities as a condition to proceeding; the reasonable expenses of every
such examination shall be paid by the Owner Trustee or, if paid by the Indenture
Trustee or any predecessor trustee, shall be repaid by the Owner Trustee upon
demand; and
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(g) the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care by it hereunder.
9.4 Indenture Trustee Not Responsible for Recitals, Equipment Notes, or
Proceeds. The Indenture Trustee assumes no responsibility for the correctness of
the recitals contained herein and in the Equipment Notes, except the Indenture
Trustee's certificates of authentication. The Indenture Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Equipment Notes. The Indenture Trustee shall not be accountable for the use or
application by the Owner Trustee of any of the Equipment Notes or of the
proceeds thereof.
9.5 Indenture Trustee and Agents May Hold Equipment Notes; Collections,
etc. The Indenture Trustee or any agent of the Indenture Trustee in its
individual or any other capacity may become the owner or pledgee of Equipment
Notes with the same rights it would have if it were not the Indenture Trustee or
such agent and may otherwise deal with the Owner Trustee and receive, collect,
hold and retain collections from the Owner Trustee with the same rights it would
have if it were not the Indenture Trustee or such agent.
9.6 Moneys Held by Indenture Trustee. Subject to Sections 5.08 hereof and
14.04 hereof, all moneys received by the Indenture Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Owner Trustee nor, subject
to Section 5.08 hereof, the Indenture Trustee nor any agent thereof shall be
under any liability for interest on any moneys received by it hereunder.
9.7 Right of Indenture Trustee to Rely on Officer's Certificate, etc.
Subject to Sections 9.02 and 9.03 hereof, whenever in the administration of the
trusts of this Indenture the Indenture Trustee shall deem it necessary or
desirable that a matter be proved or established prior to taking or suffering or
omitting any action hereunder, such matter (unless other evidence in respect
thereof be specifically prescribed herein) may, in the absence of bad faith on
the part of the Indenture Trustee, be deemed to be conclusively proved and
established by an Officer's Equipment Note delivered to the Indenture Trustee,
and such certificate, in the absence of bad faith on the part of the Indenture
Trustee, shall be full warrant to the Indenture Trustee for any action taken,
suffered or omitted by it under the provisions of this Indenture upon the faith
thereof.
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9.8 Replacement Airframes and Replacement Engines. At any time and from
time to time any Airframe or Engine may, or is required to, be replaced under
Section 8(a) or 7(e) of the Lease by a Replacement Airframe or Replacement
Engine, as the case may be, shall be replaced in accordance with the provisions
of this Section 9.08 and the provisions of such Sections of the Lease, the Owner
Trustee shall, from time to time, direct the Indenture Trustee to execute and
deliver to or as directed in writing by the Owner Trustee an appropriate
instrument releasing such Airframe and/or Engine as appropriate from the Lien of
this Indenture and the Indenture Trustee shall execute and deliver such
instrument as aforesaid without recourse or warranty, but only upon receipt by
or deposit with the Indenture Trustee of the following:
(1) A written request from the Owner Trustee requesting such release
and specifically describing the Airframe and/or Engine(s) to be so released.
(2) A certificate signed by a duly authorized officer of the Lessee
stating the following:
(A) With respect to the replacement of any Airframe:
(i) a description of the Airframe subject to the Event of Loss
including the manufacturer, model, FAA registration number (or other
applicable registration information) and manufacturer's serial number;
(ii) a description of the Replacement Airframe, including the
manufacturer, model, FAA registration number (or other applicable
registration information) and manufacturer's serial number;
(iii) that on the date of the supplement to this Indenture
relating to the Replacement Airframe the Owner Trustee will be the legal
owner of and have good title to such Replacement Airframe free and clear
of all Liens except Permitted Liens that such Replacement Airframe will on
such date be in at least as good operating condition and repair as
required by the terms of the Lease, and that such Replacement Airframe has
been or, substantially concurrently with such replacement, will be duly
registered in the name of the Owner Trustee under the Transportation Code
or under the law then applicable to the registration of the Airframe
subject to the Event of Loss and that an airworthiness certificate has
been duly issued under the Aviation Act (or such other applicable law)
with respect to such Replacement Airframe and that such registration and
certificate is, or will be, in full force and effect, and that the Lessee
will have the full right and authority to use such Replacement Airframe;
(iv) that the insurance required by Section 9 of the Lease is
in full force and effect with respect to such Replacement Airframe;
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(v) that the Replacement Airframe is of the same or an
improved make or model as the Airframe requested to be released from this
Indenture;
(vi) that the value of the Replacement Airframe as of the date
of such certificate is not less than the value of the Airframe requested
to be released (assuming such Airframe was in the condition and repair
required to be maintained under the Lease);
(vii) that no Event of Default exists or would result from the
making and granting of the request for release and the addition of a
Replacement Airframe;
(viii) that the release of the Airframe subject to the Event
of Loss will not impair the security of the Indenture in contravention of
any of the provisions of this Indenture;
(ix) that upon such replacement, the Lien of this Indenture
will apply to the Replacement Airframe and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(x) that each of the conditions specified in Section 8(d) of
the Lease with respect to such Replacement Airframe has been satisfied.
(B) With respect to the replacement of any Engine:
(i) a description of the Engine subject to the Event of Loss
including the manufacturer's serial number;
(ii) a description of the Replacement Engine including the
manufacturer's name, the engine model and serial number;
(iii) that on the date of the supplement to this Indenture
relating to the Replacement Engine the Owner Trustee will be the legal
owner of such Replacement Engine free and clear of all Liens except
Permitted Liens, and that such Replacement Engine will on such date be in
at least as good operating condition and repair as required by the terms
of the Lease and will otherwise conform to the requirements set forth in
the definition of "Replacement Engine";
(iv) that the value of the Replacement Engine as of the date
of such certificate is not less than the value of the Engine to be
released (without regard to the number of hours or cycles remaining until
the next scheduled maintenance visit, and assuming such Engine was in the
condition and repair required to be maintained under the Lease);
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(v) that the release of the Engine subject to the Event of
Loss will not impair the security of the Indenture in contravention of any
of the provisions of this Indenture;
(vi) that upon such replacement, the Lien of this Indenture
will apply to the Replacement Engine and such Lien will be a first
priority security interest in favor of the Indenture Trustee; and
(vii) that each of the conditions specified in Section 7(e) of
the Lease with respect to such Replacement Engine has been satisfied.
(3) The appropriate instruments (i) transferring to the Owner
Trustee title to the Replacement Airframe or Replacement Engine to be received
as consideration for the Airframe or Engine to be released and (ii) assigning to
the Owner Trustee the benefit of all manufacturer's and vendor's warranties, if
any, generally available with respect to such Replacement Airframe or
Replacement Engine, and a supplement to this Indenture subjecting such
Replacement Airframe or Replacement Engine to the Trust Agreement and to the
Lien of this Indenture.
(4) A certificate from a firm of independent aircraft appraisers of
national standing reasonably satisfactory to the Indenture Trustee and the Owner
Trustee confirming the accuracy of the information set forth in clause (2)A(vi)
of this Section 9.08.
(5) The opinions of counsel to the Lessee (which may be Lessee's
General Counsel), or (with respect to those matters set forth in clause (ii)
below relating to the filing of documents pursuant to the Transportation Code)
of the Lessee's special aviation counsel, or (in either case) other counsel
reasonably satisfactory to the Indenture Trustee, stating that:
(i) the certificates, opinions and other instruments and/or
property which have been or are therewith delivered to and deposited with
the Indenture Trustee conform to the requirements of this Indenture and
the Lease and, upon the basis of such application, the property so sold or
disposed of may be properly released from the Lien of this Indenture and
all conditions precedent herein provided for relating to such release have
been complied with; and
(ii) the Replacement Airframe or Replacement Engine has been
validly subjected to the Lien of this Indenture and covered by the Lease,
the instruments subjecting such Replacement Airframe or Replacement Engine
to the Lease and to the Lien of this Indenture, as the case may be, have
been duly filed for recordation pursuant to the Transportation Code or any
other law then applicable to the registration of the Aircraft, and no
further action, filing or recording of any document is necessary or
advisable in order to establish and perfect the title of the Owner Trustee
to and the Lien of this Indenture on such Replacement Airframe or
Replacement Engine and, with respect to a
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Replacement Airframe, the Indenture Trustee would be entitled to the
benefits of Section 1110 of the Bankruptcy Code with respect to such
Replacement Airframe, provided, that such opinion need not be to the
effect specified in the foregoing clause to the extent that the benefits
of such Section 1110 would not have been, by reason of a change in law or
governmental interpretation thereof after the date hereof, available to
the Indenture Trustee with respect to the Aircraft immediately prior to
such substitution had such Event of Loss not occurred.
Section 9.09 Indenture Supplement for Replacements. In the event of the
substitution of a Replacement Airframe or a Replacement Engine as contemplated
by Section 8(a) or 7(e) of the Lease, as the case may be, the Owner Trustee and
the Indenture Trustee agree for the benefit of the Holders and the Lessee,
subject to fulfillment of the conditions precedent and compliance by the Lessee
with its obligations set forth in Section 8(a) or 7(e) of the Lease, as the case
may be, to execute and deliver a supplement to this Indenture as contemplated by
Section 9.08(3) hereof and, provided no Event of Default shall have occurred and
be continuing, execute and deliver to the Lessee an appropriate instrument
releasing the Airframe or Engine being replaced from the Lien of this Indenture.
Section 9.10 Effect of Replacement. In the event of the substitution of a
Replacement Airframe or a Replacement Engine as contemplated by Section 8(a) or
7(e) of the Lease, as the case may be, and Section 9.08 hereof, all provisions
of this Indenture relating to the Airframe or Engine or Engines being replaced
shall be applicable to such Replacement Airframe or Replacement Engine or
Engines with the same force and effect as if such Replacement Airframe or
Replacement Engine or Engines were the same Airframe or engine or engines, as
the case may be, as the Airframe or Engine or Engines being replaced but for any
Event of Loss with respect to the Airframe or Engine or Engines being replaced.
Section 9.11 Compensation. The Owner Trustee covenants and agrees to pay,
and the Indenture Trustee shall be entitled to receive, reasonable compensation
and payment or reimbursement for its reasonable advances, expenses and
disbursements (including the reasonable compensation and expenses and
disbursements of its counsel, agents and other persons not regularly in its
employ) in connection with its services rendered hereunder or in any way
relating to or arising out of the administration of the Trust Indenture Estate
and shall have a priority claim on the Trust Indenture Estate for the payment of
such compensation, advances, expenses and disbursements to the extent that such
compensation, advances, expenses and disbursements shall not be paid by the
Lessee, and shall have the right to use or apply any moneys held by it hereunder
in the Trust Indenture Estate toward such payments; provided that, so long as
the Lease is in effect, the Indenture Trustee shall not make any claim for
payment under this Section 9.11 against the Owner Trustee or use or apply such
moneys without first making demand on the Lessee for payment of such claim. The
Indenture Trustee agrees that it shall have no right against any Holder (except
as provided in Section 9.03(d)
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above), Trust Company, or the Owner Participant for any fee as compensation for
its services as trustee under this Indenture.
ARTICLE X
CONCERNING THE HOLDERS
10.1 Evidence of Action Taken by Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing,
and, except as otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to the Indenture
Trustee and, if expressly required herein, to the Owner Trustee. Proof of
execution of any instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Sections 9.02 and
9.03 hereof) conclusive in favor of the Indenture Trustee and the Owner Trustee,
if made in the manner provided in this Article.
(b) For the purpose of determining the Holders entitled to vote or consent
to any direction, waiver or other action of such Holders under Section 7.10 or
7.11 hereof, the Lessee may set a record date for such vote or consent by
specifying such record date in an Officer's Certificate delivered to the
Indenture Trustee. Such record date shall be a date not more than 15 days prior
to the first solicitation of such vote or consent.
10.2 Proof of Execution of Instruments and of Holding of Equipment Notes.
Subject to Sections 9.02 and 9.03 hereof, the execution of any instrument by a
Holder or his agent or proxy may be proved in accordance with such reasonable
rules and regulations as may be prescribed by the Indenture Trustee. The holding
of Equipment Notes shall be proved by the Register or by a certificate of the
Registrar.
10.3 Holders to Be Treated as Owners. Prior to due presentment for
registration of transfer of any Equipment Note, the Owner Trustee, the Indenture
Trustee, any agent of the Owner Trustee or the Indenture Trustee, the Paying
Agent, if any, the Registrar and the Lessee shall deem and treat the Person in
whose name such Equipment shall be registered upon the Register as the absolute
owner of such Equipment Note (whether or not such Equipment Note shall be
overdue and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment of or on account of the principal of and,
subject to the provisions of this Indenture, interest on such Equipment Note and
for all other purposes; and neither the Owner Trustee nor the Indenture Trustee
(nor any agent of the Owner Trustee or the Indenture Trustee) nor the Paying
Agent, if any, nor the Registrar nor
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the Lessee shall be affected by any notice to the contrary. All such payments so
made to any such person, or upon his order, shall be valid, and, to the extent
of the sum or sums so paid, effectual to satisfy and discharge the liability for
moneys payable upon any such Equipment Note.
10.4 Equipment Notes Owned by Owner Trustee or Lessee Deemed Not
Outstanding. In determining whether the Holders of the requisite aggregate
principal amount of Equipment Notes have concurred in any direction, consent or
waiver under this Indenture, Equipment Notes which are owned by the Owner
Trustee, any Owner Participant, the Lessee or any Affiliate thereof shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination; provided that for the purpose of determining whether the
Indenture Trustee shall be protected in relying on any such direction, consent
or waiver, only if a Responsible Officer of the Indenture Trustee has actual
knowledge that certain Equipment Notes are so owned by any person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Owner Trustee, such Owner Participant, Trust Company or the
Lessee shall such Equipment Notes be so disregarded; and provided further that
if all Equipment Notes which would be deemed Outstanding in the absence of the
foregoing provision are owned by the Owner Trustee, Trust Company or any Owner
Participant or by any Affiliate thereof, then such Equipment Notes shall be
deemed Outstanding for the purpose of any such determination. Equipment Notes so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Equipment Notes and that the
pledgee is not the Owner Trustee, the Owner Participant, Trust Company or the
Lessee or any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Owner Trustee, the Owner
Participant, Trust Company or the Lessee. In case of a dispute as to such right,
the advice of counsel shall be full protection in respect of any decision made
by the Indenture Trustee in accordance with such advice, unless the Lessee, the
Owner Trustee, Trust Company, or the Owner Participant are actually named in the
Register. Upon request of the Indenture Trustee, the Owner Trustee, the Owner
Participant, Trust Company and the Lessee shall furnish to the Indenture Trustee
promptly an Officer's Certificate listing and identifying all Equipment Notes,
if any, known by the Owner Trustee, the Owner Participant, Trust Company or the
Lessee to be owned or held by or for the account of any of the above-described
persons; and, subject to Sections 9.02 and 9.03 hereof, the Indenture Trustee
shall be entitled to accept such Officer's Certificate as conclusive evidence of
the facts set forth therein and of the fact that all Equipment Notes not listed
therein are outstanding for the purpose of any such determination.
10.5 ERISA. Any Person, other than the Subordination Agent and any
Pass-Through Trustee, who is acquiring the Equipment Notes will be deemed to
represent and warrant that (i) no assets of an employee benefit plan subject to
Title I of ERISA or an individual retirement account or plan subject to Section
4975 of the
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Code, or any trust established under any such plan or account, have been used to
acquire or hold any of the Equipment Notes, or (ii) that one or more
administrative or statutory exemptions from the prohibited transaction rules
under Section 406 of ERISA and Section 4975 of the Code applies to its purchase
and holding of the Equipment Notes such that its purchase and holding of the
Equipment Notes will not result in a non-exempt prohibited transaction under
Section 406 of ERISA and Section 4975 of the Code.
ARTICLE XI
INDEMNIFICATION OF INDENTURE
TRUSTEE BY OWNER TRUSTEE
The Owner Trustee, not individually but solely in its capacity as Owner
Trustee, hereby agrees, whether or not any of the transactions contemplated
hereby shall be consummated, to assume liability for, and does hereby indemnify,
protect, save and keep harmless the Indenture Trustee, in its individual
capacity, and its successors, assigns, agents and servants solely from the
Lessor's Estate, with respect to the claims of the Indenture Trustee for payment
or reimbursement under Section 9.11 hereof and from and against any and all
liabilities, obligations, losses, damages, penalties, taxes (excluding any taxes
payable by the Indenture Trustee on or measured by any compensation received by
the Indenture Trustee for its services under this Indenture and any taxes
excluded from the Lessee's indemnity obligation under Section 6.01(b) of the
Participation Agreement), claims, actions, suits, costs, expenses or
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against the
Indenture Trustee (whether or not also agreed to be indemnified against by any
other person under any other document) in any way relating to or arising out of
this Indenture, or any other Indenture Documents or the enforcement of any of
the terms of any thereof, or in any way relating to or arising out of the
manufacture, purchase, acceptance, nonacceptance, rejection, ownership,
delivery, lease, possession, use, operation, condition, sale, return or other
disposition of the Aircraft or any Engine (including, without limitation, latent
and other defects, whether or not discoverable, and any claim for patent,
trademark or copyright infringement), or in any way relating to or arising out
of the administration of the Trust Indenture Estate or the action or inaction of
the Indenture Trustee hereunder, except only (a) in the case of willful
misconduct or gross negligence of the Indenture Trustee in the performance of
its duties hereunder, (b) as may result from the inaccuracy of any
representation or warranty of the Indenture Trustee in the Participation
Agreement, (c) as otherwise provided in Section 9.02(c) hereof or (d) as
otherwise excluded by the terms of Article 6 or Article 7 of the Participation
Agreement from the Lessee's general indemnity or general tax indemnity to the
Indenture Trustee under said Article; provided that so long as the Lease is in
effect, the Indenture Trustee shall not make any claim under this Article XI for
any claim or expense indemnified by the Lessee under the Participation Agreement
without first making demand on the Lessee for payment of such claim or expense.
The Indenture Trustee shall be entitled
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to indemnification, from the Trust Indenture Estate, for any liability,
obligation, loss, damage, penalty, claim, action, suit, cost, expense or
disbursement indemnified against pursuant to this Article XI to the extent not
reimbursed by the Lessee or others, but without releasing any of them from their
respective agreements of reimbursement; and to secure the same the Indenture
Trustee shall have a prior Lien on the Trust Indenture Estate. The indemnities
contained in this Article XI shall survive the termination of this Indenture and
the resignation or removal of the Indenture Trustee. Upon payment in full by the
Owner Trustee of any indemnity pursuant to this Article XI, the Owner Trustee
shall, so long as no Indenture Event of Default shall have occurred and be
continuing, be subrogated to the rights of the Indenture Trustee, if any, in
respect of the matter as to which the indemnity was paid.
ARTICLE XII
SUCCESSOR TRUSTEES
12.1 Notice of Successor Owner Trustee. In the case of any appointment of
a successor to the Owner Trustee pursuant to the Trust Agreement or any merger,
conversion, consolidation or sale of substantially all of the corporate trust
business of the Owner Trustee pursuant to the Trust Agreement, the successor
Owner Trustee shall give prompt written notice thereof to the Indenture Trustee.
12.2 Resignation and Removal of Indenture Trustee: Appointment of
Successor.
(a) The Indenture Trustee or any successor thereto may resign at any time
without cause by giving at least 30 days' prior written notice to the Owner
Trustee, the Owner Participant, the Lessee and each Holder, such resignation to
be effective upon the acceptance of the trusteeship by a successor Indenture
Trustee. In addition, the Lessee, the Majority in Interest of the Holders or the
Owner Trustee (with the consent of the Lessee and the Majority in Interest of
the Holders) may at any time remove the Indenture Trustee without cause by an
instrument in writing delivered to the Lessee, the Owner Trustee, the Owner
Participant, and the Indenture Trustee, and the Indenture Trustee shall promptly
notify each Holder thereof of such action in writing, such removal to be
effective upon the acceptance of the trusteeship by a successor Indenture
Trustee. In the case of the resignation or removal of the Indenture Trustee, the
Majority in Interest of the Holders (based on the recommendation of the Lessee)
or the Owner Trustee (with the consent of the Lessee and the Majority in
Interest of the Holders), may appoint a successor Indenture Trustee by an
instrument signed by such Holders. If a successor Indenture Trustee shall not
have been appointed within 30 days after such notice of resignation or removal,
the Indenture Trustee, the Owner Trustee, the Lessee, the Owner Participant, or
any Holder may apply to any court of competent jurisdiction to appoint a
successor Indenture Trustee to act until such time,
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if any, as a successor shall have been appointed as provided above. The
successor Indenture Trustee so appointed by such court shall immediately and
without further act be superseded by any successor Indenture Trustee appointed
as provided above.
(b) In case at any time any of the following shall occur:
(i) the Indenture Trustee shall cease to be eligible in
accordance with the provisions of Section 12.03 hereof and shall fail to
resign after written request therefor by the Owner Trustee or by any
Holder; or
(ii) the Indenture Trustee shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or a receiver or liquidator
of the Indenture Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Indenture Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then the Owner Trustee may remove the Indenture Trustee and, with the consent of
the Lessee, appoint a successor trustee by written instrument, in duplicate,
executed by a Responsible Officer of the Owner Trustee, one copy of which
instrument shall be delivered to the Indenture Trustee so removed and one copy
to the successor trustee, or, subject to the provisions of Section 7.13 hereof,
any Holder who has been a bona fide Holder for at least six months may, on
behalf of himself and all others similarly situated Holders, petition any court
of competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, remove the Indenture Trustee and
appoint a successor trustee, which removal and appointment shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 12.04 hereof. The successor Indenture Trustee so appointed by such court
shall immediately and without further act be superseded by any successor
Indenture Trustee appointed as provided above within one year from the date of
appointment by such court.
12.3 Persons Eligible for Appointment as Indenture Trustee. There shall at
all times be an Indenture Trustee hereunder which shall be (i)(x) a bank or
trust company organized and doing business under the laws of the United States
of America or any state or the District of Columbia having a combined capital
and surplus of at least $75,000,000 or (y) a bank or trust company whose
obligations hereunder are fully guaranteed by a direct or indirect parent
thereof having a combined capital and surplus of at least $75,000,000 and (ii) a
Person authorized under applicable law to exercise corporate trust powers and
subject to supervision of examination by Federal, state or District of Columbia
authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Indenture Trustee shall cease to be eligible in accordance
with the provisions
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of this Section, the Indenture Trustee shall resign immediately in the manner
and with the effect specified in Section 12.02 hereof.
12.4 Acceptance of Appointment by Successor Trustee. Any successor trustee
appointed as provided in Section 12.02 hereof shall execute and deliver to the
Owner Trustee, the Lessee, and to its predecessor trustee an instrument
accepting such appointment hereunder, in form and substance reasonably
satisfactory to the Owner Trustee, and thereupon the resignation or removal of
the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as trustee herein; but, nevertheless, on the
written request of the Owner Trustee or of the successor trustee, upon payment
of its charges then unpaid, the trustee ceasing to act shall, subject to Section
14.04 hereof, pay over to the successor trustee all moneys at the time held by
it hereunder and shall execute and deliver an instrument transferring to such
successor trustee all such rights, powers, duties and obligations. Upon request
of any such successor trustee, the Owner Trustee shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming to
such successor trustee all such rights and powers. Any trustee ceasing to act
shall, nevertheless, retain a prior claim upon all property or funds held or
collected by such trustee to secure any amounts then due it pursuant to the
provisions of Article XI hereof.
No successor trustee shall accept appointment as provided in this Section
12.04 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 12.03 hereof.
Upon acceptance of appointment by a successor trustee as provided in this
Section 12.04, the successor trustee shall mail notice thereof by first-class
mail to the Holders at their last addresses as they shall appear in the
Register, and shall mail a copy of such notice to the Lessee and the Owner
Trustee. If the acceptance of appointment is substantially contemporaneous with
the resignation, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 12.02 hereof.
12.5 Merger, Consolidation or Succession to Business of Indenture Trustee.
Any corporation into which the Indenture Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Indenture Trustee shall be a party, or
any corporation succeeding to the corporate trust business of the Indenture
Trustee, shall be the successor to the Indenture Trustee hereunder, provided
that, anything herein to the contrary notwithstanding, such corporation shall be
eligible under the provisions of Section 12.03 hereof, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
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In case at the time such successor to the Indenture Trustee shall succeed
to the trusts created by this Indenture any of the Equipment Notes shall have
been authenticated but not delivered, any such successor to the Indenture
Trustee may adopt the certificate of authentication of any predecessor Indenture
Trustee and deliver such Equipment Notes so authenticated; and, in case at that
time any of the Equipment Notes shall not have been authenticated, any successor
to the Indenture Trustee may authenticate such Equipment Notes either in the
name of any predecessor hereunder or in the name of the successor Indenture
Trustee; and in all such cases such certificate shall have the full force which
it is anywhere in the Equipment Notes or in this Indenture provided that the
certificate of the Indenture Trustee shall have; provided, that the right to
adopt the certificate of authentication of any predecessor Indenture Trustee or
to authenticate Equipment Notes in the name of any predecessor Indenture Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
12.6 Appointment of Separate Trustees.
(a) At any time or times, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Trust Indenture Estate
may at the time be located or in which any action of the Indenture Trustee may
be required to be performed or taken, the Indenture Trustee, by an instrument in
writing signed by it, may appoint one or more individuals or corporations to act
as a separate trustee or separate trustees or co-trustee, acting jointly with
the Indenture Trustee, of all or any part of the Trust Indenture Estate, to the
full extent that local law makes it necessary for such separate trustee or
separate trustees or co-trustee acting jointly with the Indenture Trustee to
act.
(b) The Indenture Trustee and, at the request of the Indenture Trustee,
the Owner Trustee, shall execute, acknowledge and deliver all such instruments
as may be required by the legal requirements of any jurisdiction or by any such
separate trustee or separate trustees or co-trustee for the purpose of more
fully confirming such title, rights or duties to such separate trustee or
separate trustees or co-trustee. Upon the acceptance in writing of such
appointment by any such separate trustee or separate trustees or co-trustee, it,
he or they shall be vested with such title to the Trust Indenture Estate or any
part thereof, and with such rights, powers, duties and obligations, as shall be
specified in the instrument of appointment, and such rights, powers, duties and
obligations shall be conferred or imposed upon and exercised or performed by the
Indenture Trustee, or the Indenture Trustee and such separate trustee or
separate trustees or co-trustee jointly with the Indenture Trustee subject to
all the terms of this Indenture, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the
Indenture Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations shall be
exercised and performed by such separate trustee or separate trustees or
co-trustee, as the case may be. Any separate trustee or separate trustees or
co-trustee may, at any time by an instrument in writing, constitute the
Indenture Trustee its or his attorney-in-fact and agent with full power
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and authority to do all acts and things and to exercise all discretion on its or
his behalf and in its or his name. In case any such separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, the
title to the Trust Indenture Estate and all assets, property, rights, powers,
duties and obligations and duties of such separate trustee or co-trustee shall,
so far as permitted by law, vest in and be exercised by the Indenture Trustee,
without the appointment of a successor to such separate trustee or co-trustee
unless and until a successor is appointed.
(c) All provisions of this Indenture which are for the benefit of the
Indenture Trustee (including without limitation Article XI hereof) shall extend
to and apply to each separate trustee or co-trustee appointed pursuant to the
foregoing provisions of this Section 12.06.
(d) Every additional trustee and separate trustee hereunder shall, to the
extent permitted by law, be appointed and act and the Indenture Trustee shall
act, subject to the following provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon the
Indenture Trustee in respect of the receipt, custody, investment and
payment of moneys shall be exercised solely by the Indenture Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed and
exercised or performed by the Indenture Trustee and such additional
trustee or trustees and separate trustee or trustees jointly except to the
extent that under any law of any jurisdiction in which any particular act
or acts are to be performed, the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
Trust Indenture Estate in any such jurisdiction) shall be exercised and
performed by such additional trustee or trustees or separate trustee or
trustees;
(iii) no power hereby given to, or exercisable by, any such
additional trustee or separate trustee shall be exercised hereunder by
such additional trustee or separate trustee except jointly with, or with
the consent of, the Indenture Trustee; and
(iv) no trustee hereunder shall be liable either personally or in
its capacity as such trustee, by reason of any act or omission of any
other trustee hereunder.
If at any time the Indenture Trustee shall deem it no longer necessary or
prudent in order to conform to any such law, the Indenture Trustee shall execute
and deliver an indenture supplemental hereto and all other instruments and
agreements necessary or proper to remove any additional trustee or separate
trustee.
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(e) Any request, approval or consent in writing by the Indenture Trustee
to any additional trustee or separate trustee shall be sufficient warrant to
such additional trustee or separate trustee, as the case may be, to take such
action as may be so requested, approved or consented to.
(f) Notwithstanding any other provision of this Section 12.06, the powers
of any additional trustee or separate trustee shall not exceed those of the
Indenture Trustee hereunder.
ARTICLE XIII
SUPPLEMENTS AND AMENDMENTS TO THIS
TRUST INDENTURE AND OTHER DOCUMENTS
13.1 Supplemental Indentures Without Consent of Holders. The Owner Trustee
(when authorized by the Owner Participant) and the Indenture Trustee, without
consent of the Holders, may enter into an indenture or indentures supplemental
hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge any property or assets
to the Indenture Trustee as security for the Equipment Notes;
(b) to evidence the succession of another corporation to the Owner Trustee
or successive successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of the Owner Trustee herein and in the
Equipment Notes;
(c) to add to the covenants of the Owner Trustee such further covenants,
restrictions, conditions or provisions as it and the Indenture Trustee shall
consider to be for the protection of the Holders, and to make the occurrence, or
the occurrence and continuance, of a default in any such additional covenants,
restrictions, conditions or provisions an Indenture Event of Default permitting
the enforcement of all or any of the several remedies provided herein; provided,
that in respect of any such additional covenant, restriction, condition or
provision such supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an immediate enforcement upon
such an Indenture Event of Default or may limit the remedies available to the
Indenture Trustee upon such an Indenture Event of Default or may limit the right
of not less than the Majority in Interest of Holders to waive such an Indenture
Event of Default;
(d) to surrender any right or power conferred herein upon the Owner
Trustee or the Owner Participant;
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(e) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture; or to make such other provisions in regard to matters or questions
arising under this Indenture or under any supplemental indenture as the Owner
Trustee may deem necessary or desirable and which shall not adversely affect the
interests of the Holders;
(f) to correct or amplify the description of any property at any time
subject to the Lien of this Indenture or better to assure, convey and confirm
unto the Indenture Trustee any property subject or required to be subject to the
Lien of this Indenture or to subject any Replacement Airframe or Replacement
Engine to the Lien of this Indenture in accordance with the provisions hereof or
with the Lease or to release from the Lien of this Indenture property that has
been substituted on or removed from the Aircraft as contemplated in Section 3.07
hereof; provided that supplements to this Indenture entered into for the purpose
of subjecting any Replacement Airframe or Replacement Engine to the Lien of this
Indenture need only be executed by the Owner Trustee and the Indenture Trustee;
(g) to provide for the issuance under this Indenture of Equipment Notes in
coupon form (including Equipment Notes registrable as to principal only) and to
provide for exchangeability of such Equipment Notes with Equipment Notes issued
hereunder in fully registered form, and to make all appropriate changes for such
purpose;
(h) to effect the re-registration of the Aircraft pursuant to Section
4.02(b) of the Participation Agreement; and
(i) to add, eliminate or change any provision hereunder so long as such
action shall not adversely affect the interests of the Holders.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture, to make any further appropriate agreements and
stipulations which may be contained therein and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Indenture Trustee shall not be obligated to enter into any such supplemental
indenture which adversely affects the Indenture Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any such supplemental indenture may be executed without the consent of the
Holders notwithstanding any of the provisions of Section 13.02 hereof.
13.2 Supplemental Indentures With Consent of Holders. With the consent
(evidenced as provided in Article X) of the Majority in Interest of Holders, the
Owner Trustee (when authorized by the Owner Participant) and the Indenture
Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any
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manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders;
provided, however, that, without the consent of each and every Holder and each
Liquidity Provider, no such amendment of or supplement to this Indenture or any
indenture supplemental hereto, or modification of the terms of, or consent
under, any thereof, shall (a) modify any of the provisions of Section 7.11
hereof or this Section 13.02, (b) reduce the amount or extend the time of
payment of any amount owing or payable under any Equipment Note or reduce the
interest payable on any Equipment Note, or alter or modify the provisions of
Article V hereof with respect to the order of priorities in which distributions
thereunder shall be made as among Holders of different Series of Equipment Notes
or as between the Holder and the Owner Trustee or the Owner Participant or with
respect to the amount or time of payment of any such distribution, or alter or
modify the circumstances under which a Make-Whole Premium shall be payable, or
alter the currency in which any amount payable under any Equipment Note is to be
paid, or impair the right of any Holder to commence legal proceedings to enforce
a right to receive payment hereunder or (c) create or permit the creation of any
Lien on the Trust Indenture Estate or any part thereof prior to or pari passu
with the Lien of this Indenture, except as expressly permitted herein, or
deprive any Holder of the benefit of the Lien of this Indenture on the Trust
Indenture Estate, except as provided in Section 7.02 hereof or in connection
with the exercise of remedies under Article VII. This Section 13.02 shall not
apply to any indenture or indentures supplemental hereto permitted by, and
complying with the terms of, Section 13.06 hereof.
Upon the request of the Owner Trustee (at the direction of the Owner
Participant) and upon the filing with the Indenture Trustee of evidence of the
consent of Holders and other documents, if any, required by Section 10.01, the
Indenture Trustee shall join with the Owner Trustee and the Lessee in the
execution of such supplemental indenture unless such supplemental indenture
affects the Indenture Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Indenture Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Holders under this
Section 13.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Owner Trustee, the Indenture Trustee
and the Lessee of any supplemental indenture pursuant to the provisions of this
Section, the Indenture Trustee shall mail a notice thereof by first-class mail
to the Holders at their addresses as they shall appear on the registry books of
the Registrar, setting forth in general terms the substance of such supplemental
indenture. Any failure of the Indenture Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
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13.3 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Indenture Trustee, the Owner Trustee, the Lessee and
the Holders shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
13.4 Documents to Be Given to Indenture Trustee. The Indenture Trustee,
subject to the provisions of Sections 9.02 and 9.03, may receive an Officer's
Certificate and an Opinion of Counsel as conclusive evidence that any such
supplemental indenture complies with the applicable provisions of this
Indenture.
13.5 Notation on Equipment Notes in Respect of Supplemental Indentures.
Equipment Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article may bear a
notation in form approved by the Indenture Trustee as to any matter provided for
by such supplemental indenture. If the Owner Trustee or the Indenture Trustee
shall so determine, new Equipment Notes so modified as to conform, in the
opinion of the Owner Trustee and the Indenture Trustee, to any modification of
this Indenture contained in any such supplemental indenture may be prepared by
the Owner Trustee, authenticated by the Indenture Trustee and delivered in
exchange for the Outstanding Equipment Notes.
13.6 No Request Necessary for Lease Supplement or Indenture Supplement.
Notwithstanding anything contained in Section 13.02 hereof, no written request
or consent of the Indenture Trustee, any Holder or the Owner Participant
pursuant to Section 13.02 hereof shall be required to enable the Owner Trustee
to enter into any supplement to the Lease with the Lessee in accordance with the
terms and conditions of the Lease to subject a Replacement Airframe or
Replacement Engine thereto or to execute and deliver any supplement to the
Indenture (including the Indenture Supplement) pursuant to the terms hereof.
13.7 Notices to Liquidity Providers. Any request made to any Holder for
consent to any amendment, supplement or waiver pursuant to Section 7.11, 8.01 or
this Article XIII shall be promptly furnished by the Indenture Trustee to each
Liquidity Provider.
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ARTICLE XIV
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
14.1 Satisfaction and Discharge of Indenture: Termination of Indenture. If
at any time after (a) the Owner Trustee shall have paid or caused to be paid the
principal of and interest on all the Equipment Notes outstanding hereunder, as
and when the same shall have become due and payable and provided that there
shall be no Secured Obligations due to the Indenture Indemnitees, or (b) the
Owner Trustee shall have delivered to the Indenture Trustee for cancellation all
Equipment Notes theretofore authenticated (other than any Equipment Notes which
shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.07 hereof), then this Indenture shall cease to be
of further effect, and the Indenture Trustee, on demand of the Owner Trustee and
at the cost and expense of the Owner Trustee, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture. The Owner
Trustee agrees to reimburse and indemnify the Indenture Trustee for any costs or
expenses thereafter reasonably and properly incurred and to compensate the
Indenture Trustee for any services thereafter reasonably and properly rendered
by the Indenture Trustee in connection with this Indenture or the Equipment
Notes.
Upon (or at any time after) payment in full to the Indenture Trustee, as
trust funds, of the principal of and interest on and Make-Whole Premium, if any,
and all other amounts due hereunder and under all Equipment Notes and of any
Secured Obligations owed to the Indenture Indemnitees, and provided that there
shall then be no other amounts due to the Indenture Trustee hereunder or under
the Participation Agreement or otherwise secured hereby, the Owner Trustee shall
direct the Indenture Trustee to execute and deliver to or as directed in writing
by the Owner Trustee an appropriate instrument releasing the Aircraft from the
Lien of this Indenture and releasing the Indenture Documents from the assignment
thereof hereunder, and the Indenture Trustee shall execute and deliver such
instrument as aforesaid and, at the Owner Trustee's expense, will execute and
deliver such other instruments or documents as may be reasonably requested by
the Owner Trustee to give effect to such release; provided, however, that this
Indenture and the trusts created hereby shall terminate earlier and this
Indenture shall be of no further force or effect upon any sale or other final
disposition by the Indenture Trustee of all property forming a part of the Trust
Indenture Estate and the final distribution by the Indenture Trustee of all
moneys or other property or proceeds constituting part of the Trust Indenture
Estate in accordance with the terms hereof. Except as aforesaid otherwise
provided, this Indenture and the trusts created hereby shall continue in full
force and effect in accordance with the terms hereof.
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14.2 Application by Indenture Trustee of Funds Deposited for Payment of
Equipment Notes. Subject to Section 14.04 hereof, all moneys deposited with the
Indenture Trustee pursuant to Section 14.01 hereof shall be held in trust and
applied by it to the prompt payment, either directly or through any Paying
Agent, to the Holders of the particular Equipment Notes for the payment or
prepayment of which such moneys have been deposited with the Indenture Trustee,
of all sums due and to become due thereon for principal, interest and Make-Whole
Premium, if any, but such money need not be segregated from other funds except
to the extent required by law.
14.3 Repayment of Moneys Held by Paying Agent. Upon the satisfaction and
discharge of this Indenture all moneys then held by any Paying Agent under the
provisions of this Indenture shall, upon demand of the Owner Trustee, be repaid
to it or paid to the Indenture Trustee and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
14.4 Transfer of Unclaimed Money Held by Indenture Trustee and Paying
Agent. Any moneys deposited with or paid to the Indenture Trustee or any Paying
Agent for the payment of the principal of or interest or Make-Whole Premium on
any Equipment Note and not applied but remaining unclaimed for two years and
eleven months after the date upon which such principal, interest or Make-Whole
Premium shall have become due and payable, shall, unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
law, be paid to the Owner Trustee (or, if the Trust Agreement shall no longer be
in effect, to the Owner Participant) by the Indenture Trustee or such Paying
Agent and the Holder of such Certificate, as a general unsecured creditor,
shall, unless otherwise required by mandatory provisions of applicable escheat
or abandoned or unclaimed property laws, thereafter look only to the Owner
Trustee (or the Owner Participant) for any payment which such Holder may be
entitled to collect, and all liability of the Indenture Trustee, or any Paying
Agent with respect to such moneys shall thereupon cease.
ARTICLE XV
MISCELLANEOUS
15.1 Capacity in Which Acting. Each of Trust Company (or its permitted
successors or assigns) and FNBM acts hereunder not in its individual capacity
but solely as trustee except as expressly provided herein and in the other
Operative Agreements, and, in the case of Trust Company (or its permitted
successors or assigns), in the Trust Agreement.
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15.2 No Legal Title to Trust Indenture Estate in Holders. No Holder shall
have legal title to any part of the Trust Indenture Estate. No transfer, by
operation of law or otherwise, of any Equipment Note or other right, title and
interest of any Holder in and to the Trust Indenture Estate or hereunder shall
operate to terminate this Indenture or entitle such Holder or any successor or
transferee of such Holder to an accounting or to the transfer to it of legal
title to any part of the Trust Indenture Estate.
15.3 Sale of Trust Indenture Estate by Indenture Trustee is Binding. Any
sale or other conveyance of all or any part of the Trust Indenture Estate by the
Indenture Trustee made pursuant to the terms of this Indenture or of the Lease
shall bind the Lessee, the Owner Trustee, the Holders and the Owner Participant
and shall be effective to transfer or convey all right, title and interest of
the Indenture Trustee, the Owner Trustee, the Owner Participant and such Holders
therein and thereto. No purchaser or other grantee shall be required to inquire
as to the authorization, necessity, expediency or regularity of such sale or
conveyance or as to the application of any sale or other proceeds with respect
thereto by the Indenture Trustee.
15.4 Indenture Benefits Trustees, Participants, Lessee, and Liquidity
Providers Only. Nothing in this Indenture, whether express or implied, shall be
construed to give to any person other than Trust Company, the Owner Trustee, the
Lessee, FNBM, the Indenture Trustee, the Owner Participant, each Liquidity
Provider and the Holders any legal or equitable right, remedy or claim under or
in respect of this Indenture. Upon termination of this Indenture pursuant to
Article XIV hereof, the Indenture Trustee in connection with the satisfaction of
the Indenture shall return to the Owner Trustee all property (and related
documents and instruments) constituting or evidencing the Trust Indenture
Estate.
15.5 No Action Contrary to Lessee's Rights Under the Lease.
Notwithstanding any of the provisions of this Indenture or the Trust Agreement
to the contrary, so long as no Event of Default shall have occurred and be
continuing, neither the Indenture Trustee nor the Owner Trustee will take any
action that interfere with the peaceful and quiet possession and enjoyment of
the Aircraft by the Lessee or any Permitted Sublessee.
15.6 Notices. Unless otherwise expressly specified or permitted by the
terms hereof, all notices, requests, demands, authorizations, directions,
consents, waivers or documents provided or permitted by this Indenture to be
made, given, furnished or filed shall be in writing, and shall be given and
become effective in the manner set forth in Section 12.01 of the Participation
Agreement. Any party hereto
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may change the address to which notices to such party will be sent by giving
notice of such change to the other parties to this Indenture.
15.7 Officer's Certificates and Opinions of Counsel. Upon any application
or demand by the Lessee or the Owner Trustee to the Indenture Trustee to take
any action under any of the provisions of this Indenture, the Lessee or the
Owner Trustee, as the case may be, shall furnish to the Indenture Trustee upon
request (a) an Officer's Certificate stating that all conditions precedent
provided for in this Indenture relating to the proposed action have been
complied with and that the proposed action is in conformity with the
requirements of this Indenture, and (b) an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Any certificate, statement or opinion of an officer of the Lessee or the
Trust Company may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or representations by counsel, unless such officer
knows that the certificate or opinion or representations with respect to the
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous. Any certificate, statement or opinion of counsel may be
based, insofar as it relates to factual matters information with respect to
which is in the possession of the Lessee or Trust Company, upon the certificate,
statement or opinion of or representations by an officer or officers of the
Lessee or Trust Company, as the case may be, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Lessee or Trust
Company or of counsel thereto may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an accountant or
firm of accountants employed by the Lessee or the Owner Trustee, as the case may
be, unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate or opinion of any independent firm of public accountants
filed with the Indenture Trustee shall contain a statement that such firm is
independent.
15.8 Severability. Any provision of this Indenture which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the
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extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
15.9 No Oral Modifications or Continuing Waivers. No terms or provisions
of this Indenture or the Equipment Notes may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party or
other person against whom enforcement of the change, waiver, discharge or
termination is sought; and any waiver of the terms hereof or of any Equipment
Note shall be effective only in the specific instance and for the specific
purpose given.
15.10 Successors and Assigns. All covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, each of the parties
hereto and the successors and permitted assigns of each, all as herein provided.
Any request, notice, direction, consent, waiver or other instrument or action by
any Holder shall bind the successors and assigns of such Holder. This Indenture
and the Trust Indenture Estate shall not be affected by any amendment or
supplement to the Trust Agreement or by any other action taken under or in
respect of the Trust Agreement, except that each reference in this Indenture to
the Trust Agreement shall mean the Trust Agreement as amended and supplemented
from time to time to the extent permitted hereby and thereby.
15.11 Headings. The headings of the various Articles and Sections herein
and in the table of contents hereto are for the convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
15.12 Normal Commercial Relations. Anything contained in this Indenture to
the contrary notwithstanding, the Owner Participant, the Indenture Trustee and
any Holder, or any bank or other affiliate of any such party, may conduct any
banking or other financial transactions, and have banking or other commercial
relationships, with the Lessee fully to the same extent as if this Indenture
were not in effect, including without limitation the making of loans or other
extensions of credit to the Lessee for any purpose whatsoever, whether related
to any of the transactions contemplated hereby or otherwise.
15.13 Governing Law; Counterparts. THIS INDENTURE IS DELIVERED IN THE
STATE OF NEW YORK. THIS INDENTURE AND EACH EQUIPMENT NOTE SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. This
Indenture may be executed by the parties hereto in separate
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counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.
15.14 Lessee's Right of Quiet Enjoyment. Notwithstanding any of the
provisions of this Indenture to the contrary, so long as no Event of Default has
occurred and is continuing unremedied, the Indenture Trustee will comply with
Section 4(b) of the Lease to the same extent as if it were the Lessor under the
Lease. Each Holder, by its acceptance thereof, consents in all respects to the
terms of the Lease and agrees to the provisions of this Section 15.14. The
Indenture Trustee acknowledges that any right it may have to possess, use,
operate, store, lease, control, manage, sell, dispose of or otherwise deal with
the Aircraft or any other property in which Lessee has any interest pursuant to
the Lease is derivative of the rights of the Owner Trustee under the Lease and
subject to the agreement of the Owner Trustee under Section 4(b) of the Lease as
referred to in the second preceding sentence herein.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Trust Indenture and
Security Agreement to be executed by their respective officers thereunto duly
authorized as of the date first written above.
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
not in its individual capacity, except as
specifically set forth herein but solely as Owner
Trustee
By:
Name:
Title:
THE FIRST NATIONAL BANK OF MARYLAND, as
Indenture Trustee
By:
Name:
Title:
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Annex A
Series Principal Amount Interest Rate
------ ---------------- -------------
A 7,237,780 7.14%
B 3,132,300 8.14%
C 2,541,300 8.92%
D 808,620 8.86%
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Annex B
Amortization Schedule
Series A Series B Series C Series D
Equipment Equipment Equipment Equipment
Payment Date Notes Notes Notes Notes
------------ --------- --------- --------- ---------
Jan 2 1999 0.00 0.00 1,165,219.89 0.00
Jul 2 1999 0.00 0.00 0.00 0.00
Jan 2 2000 217,134.40 93,970.00 205,931.45 72,517.85
Jul 2 2000 0.00 0.00 0.00 0.00
Jan 2 2001 217,133.40 93,969.00 0.00 328,543.35
Jul 2 2001 0.00 0.00 0.00 0.00
Jan 2 2002 217,133.40 93,969.00 0.00 383,213.10
Jul 2 2002 0.00 0.00 0.00 0.00
Jan 2 2003 217,133.40 93,969.00 418,734.80 24,345.70
Jul 2 2003 0.00 0.00 0.00 0.00
Jan 2 2004 217,133.40 93,969.00 508,656.79 0.00
Jul 2 2004 0.00 0.00 0.00 0.00
Jan 2 2005 217,133.40 430,209.01 242,757.07 0.00
Jul 2 2005 0.00 0.00 0.00 0.00
Jan 2 2006 217,133.40 746,134.52 0.00 0.00
Jul 2 2006 0.00 0.00 0.00 0.00
Jan 2 2007 217,133.40 263,151.39 0.00 0.00
Jul 2 2007 0.00 0.00 0.00 0.00
Jan 2 2008 217,133.40 549,679.67 0.00 0.00
Jul 2 2008 0.00 0.00 0.00 0.00
Jan 2 2009 850,079.31 1,437.74 0.00 0.00
Jul 2 2009 0.00 0.00 0.00 0.00
Jan 2 2010 914,560.76 0.00 0.00 0.00
Jul 2 2010 0.00 0.00 0.00 0.00
Jan 2 2011 982,263.98 0.00 0.00 0.00
Jul 2 2011 0.00 0.00 0.00 0.00
Jan 2 2012 1,054,979.13 0.00 0.00 0.00
Jul 2 2012 0.00 0.00 0.00 0.00
Jan 2 2013 464,699.10 671,841.67 0.00 0.00
Jul 2 2013 0.00 0.00 0.00 0.00
Jan 2 2014 1,016,996.12 0.00 0.00 0.00
Jul 2 2014 0.00 0.00 0.00 0.00
Jan 2 2015 0.00 0.00 0.00 0.00
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Exhibit A to
Trust Indenture and
Security Agreement
INDENTURE SUPPLEMENT NO. 1 [N576ML]
This Indenture Supplement No. 1 [N576ML] dated September _____, 1998, of
First Union Trust Company, National Association, a national banking association,
not in its individual capacity but solely as owner trustee (herein called the
"Owner Trustee") under the Trust Agreement [N576ML] dated as of September 10,
1998, (the "Trust Agreement") between First Union Trust Company, National
Association, and the Owner Participant named therein,
WITNESSETH:
WHEREAS, the Indenture provides for the execution and delivery of this
Indenture Supplement which shall particularly describe the Aircraft included in
the property covered by the Indenture.
WHEREAS, the Trust Indenture and Security Agreement [N576ML] dated as of
September 10, 1998 (the "Indenture") between the Owner Trustee and The First
National Bank of Maryland (herein called the "Indenture Trustee") provides for
the execution and delivery of an Indenture Supplement substantially in the form
of this Indenture Supplement No. 1, which Supplement shall particularly describe
the Aircraft included in the Trust Indenture Estate, and shall specifically
mortgage such Aircraft to the Indenture Trustee.
WHEREAS, the Indenture relates to the Aircraft and the Engines described
in the following paragraph and a counterpart of the Indenture is attached to and
made a part of this Indenture Supplement No. 1, and this Indenture Supplement
No. 1, together with such attachment, is being filed for recordation on or
promptly after the date of this Indenture Supplement No. 1 with the Federal
Aviation Administration as one document.
NOW, THEREFORE, to secure the prompt payment of the principal of and
Make-Whole Premium, if any, and interest on, and all other amounts due with
respect to, all Outstanding Equipment Notes under the Indenture and all other
amounts due hereunder and the performance and observance by the Owner Trustee of
all the agreements, covenants and provisions for the benefit of the Holders and
contained in the Indenture, the Participation Agreement and the Equipment Notes,
and the prompt payment of any and all amounts from time to time owing under the
Participation Agreement by the Owner Trustee or the Lessee to the Holders and
the Indenture
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Indemnitees and for the uses and purposes and subject to the terms and
provisions of the Indenture and the Equipment Notes, and in consideration of the
premises and of the covenants contained in the Indenture, and of the purchase of
the Equipment Notes by the Holders, and of the sum of $1 paid to the Owner
Trustee by the Indenture Trustee at or before the delivery of the Indenture, the
receipt of which is hereby acknowledged, the Owner Trustee has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged, granted a
security interest in, and confirmed, and does hereby grant, bargain, sell,
assign, transfer, convey, mortgage, pledge, grant a security interest in, and
confirm, unto the Indenture Trustee, its successors and assigns, in trust for
the equal and ratable security and benefit of the Holders, in the trust created
by the Indenture, and subject to all of the terms, conditions, provisions and
limitations set forth in the Indenture, a first priority security interest in
and mortgage lien on all estate, right, title and interest of the Owner Trustee
in, to and under the following described property:
AIRFRAME
One Airframe identified as follows:
FAA Manufacturer's
Registration Serial
Manufacturer Model Number Number
------------ ----- ------------ --------------
Bombardier Inc. CL-600-2B19 N576ML 7257
together with all appliances, equipment, instruments and accessories (including,
without limitation, radio and radar) from time to time belonging thereto, owned
by the Owner Trustee and installed in or appurtenant to said aircraft.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated takeoff
horsepower or the equivalent thereof, identified as follows:
FAA Manufacturer's
Registration Serial
Manufacturer Model Number Number
------------ ----- ------------ --------------
General Electric Company CF34-3B1 GE-E-872371
GE-E-872373
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together with all equipment and accessories belonging thereto, by whomsoever
manufactured, owned by the Owner Trustee and installed in or appurtenant to such
aircraft engines.
Together with all substitutions, replacements and renewals of the property
described above, and all property owned by the Owner Trustee which shall
hereafter become physically attached to or incorporated in the property
described above, whether the same are now owned by the Owner Trustee or shall
hereafter be acquired by it.
As further security for the obligations referred to above and secured by
the Indenture and hereby, the Owner Trustee has granted, bargained, sold,
assigned, transferred, conveyed, mortgaged, pledged and confirmed, and does
hereby grant, bargain, sell, assign, transfer, convey, mortgage, pledge and
confirm, unto the Indenture Trustee, its successors and assigns, for the
security and benefit of the Holders, in the trust created by the Indenture, and
subject to all of the terms, conditions, provisions and limitations set forth in
the Indenture, all of the estate, right, title and interest of the Owner Trustee
in, to and under the Lease Supplement (other than Excepted Payments, if any)
covering the property described above.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, for the benefit and security of
the Holders for the uses and purposes and subject to the terms and provisions
set forth in the Indenture.
This Indenture Supplement shall be construed as supplemental to the
Indenture and shall form a part thereof, and the Indenture is hereby
incorporated by reference herein and is hereby ratified, approved and confirmed.
This Indenture Supplement is being delivered in the State of New York.
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IN WITNESS WHEREOF, the Owner Trustee has caused this Indenture Supplement
No. 1 to be duly executed as of the date first written above by one of its
officers thereunto duly authorized.
First Union Trust Company, National Association,
not in its individual capacity, except as
specifically set forth herein, but solely as
Owner Trustee
By:
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Name:
Title:
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Exhibit B
to
Trust Indenture and
Security Agreement
[Form of Certificate]
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES LAWS OF ANY STATE.
ACCORDINGLY, THIS EQUIPMENT NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED UNDER
THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM SUCH REGISTRATIONS
IS AVAILABLE.
No._________ $____________
EQUIPMENT TRUST EQUIPMENT NOTE [N576ML]
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, not in its individual
capacity but solely as Owner Trustee under Trust Agreement [N576ML] dated as of
September 10, 1998.
SERIES _____
Interest Rate Maturity
------------- --------
___% ____________, 2___
First Union Trust Company, National Association, a national banking
association, not in its individual capacity but solely as Owner Trustee (herein
in such capacity called the "Owner Trustee") under that certain Trust Agreement
[N576ML] dated as of September 10, 1998, between the Owner Participant named
therein and (herein as such Trust Agreement may be amended or supplemented from
time to time called the "Trust Agreement"), hereby promises to pay to The First
National Bank of Maryland, as Subordination Agent, or its registered assigns,
the principal sum of ______________________ ________________ Dollars, together
with interest on the principal outstanding from time to time, semiannually on
each January 2 and July 2, on such principal sum at the rate per annum set forth
above; provided that, under certain circumstances including, in the event a
Registration Event (as defined in the Indenture referred to below) does not
occur on or prior to the date (the "Increase Date") required pursuant to the
Registration Rights Agreement (as defined in the
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Indenture referred to below), such interest rate shall be increased by 0.5% from
and including the Increase Date to but excluding the date such Registration
Event does occur. The principal amount of this Equipment Note shall be payable
in installments on the dates and hereto in amounts set forth in Schedule I
hereto. Notwithstanding the foregoing, the final payment made on this Equipment
Note shall be in an amount sufficient to discharge in the full the unpaid
principal amount and all accrued and unpaid interest on, and any other amounts
due under, this Equipment Note. Notwithstanding anything to the contrary
contained herein, if any date on which a payment under this Equipment Note
becomes due and payable is not a Business Day, then such payment shall not be
made on such scheduled date but shall be made on the next succeeding Business
Day and if such payment is made on such next succeeding Business Day, no
interest shall accrue on the amount of such payment during such extension.
This Equipment Note shall bear interest at the Past Due Rate on any
principal hereof and on any other amount payable hereunder or under the
Indenture which shall not be paid in full when due (whether at stated maturity,
by acceleration, by mandatory prepayment or otherwise), for the period from and
including the date thereof to but excluding the date the same is paid in full,
payable from time to time on demand of the Indenture Trustee.
Principal and interest and other amounts due hereunder shall be payable at
the office or agency of The First National Bank of Maryland (the "Indenture
Trustee") maintained for such purpose in immediately available funds prior to
12:00 noon. (New York time) on the due date thereof and the Indenture Trustee
shall remit all such amounts received by it to the Holders at such account or
accounts at such financial institution or institutions as the Holders shall have
designated to the Indenture Trustee in writing, in immediately available funds,
such payment to be made if the payment was received prior to 12:00 noon, New
York time by the Indenture Trustee on any Business Day, by 1 p.m. New York time
on such Business Day; otherwise, the Indenture Trustee shall make payment
promptly, but not later than 11:00 A.M. New York time on the next succeeding
Business Day; provided that, at the option of the Indenture Trustee or its
Paying Agent, interest may be paid by mailing a check therefor payable to or
upon the written order of the registered holder entitled thereto at his last
address as it appears on the Register. If any amount payable under this
Certificate, or under the Indenture, falls due on a day that is not a Business
Day, then such sum shall be payable on the next succeeding Business Day, without
(provided that payment is made on such next succeeding Business Day) additional
interest thereon for the period of such extension.
First Union Trust Company, National Association and The First National
Bank of Maryland are not acting individually hereunder, but solely as Owner
Trustee and Indenture Trustee, respectively.
Any Person, other than the Subordination Agent and any Pass-Through
Trustee, who is acquiring the Equipment Notes will be deemed to represent and
warrant that
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(i) no assets of an employee benefit plan subject to Title I of ERISA or an
individual retirement account or plan subject to Section 4975 of the Code, or
any trust established under any such plan or account, have been used to acquire
or hold any of the Equipment Notes, or (ii) that one or more administrative or
statutory exemptions from the prohibited transaction rules under Section 406 of
ERISA and Section 4975 of the Code applies to its purchase and holding of the
Equipment Notes such that its purchase and holding of the Equipment Notes will
not result in a non-exempt prohibited transaction under Section 406 of ERISA and
Section 4975 of the Code.
This Equipment Note is one of a duly authorized issue of Equipment Notes
issued under the Trust Indenture and Security Agreement [N576ML] dated as of
September 10, 1998 (the "Indenture") between the Owner Trustee and the Indenture
Trustee. Capitalized terms not otherwise defined herein shall have the meanings
given to them in the Indenture. Reference is made to the Indenture and all
supplements and amendments thereto (a copy of which is on file with the
Indenture Trustee at its principal corporate trust office) for a more complete
statement of the terms and provisions thereof, including a statement of the
properties conveyed, pledged and assigned thereby, the nature and extent of the
security, the respective rights of the Owner Trustee, the Owner Participant, the
Lessee, the Indenture Trustee and the Holders, and the terms upon which the
Equipment Notes are, and are to be, executed and delivered, to all of which
terms and conditions in the Indenture each Holder hereof agrees by its
acceptance of this Equipment Note.
This Equipment Note is subject to redemption as provided in Section 6.02
of the Indenture but not otherwise. This Equipment Note is also subject to
exchange and to purchase by the Owner Participant or the Owner Trustee as
provided in Section 8.02 of the Indenture but not otherwise. In addition, this
Equipment Note may be accelerated as provided in Section 7.02 of the Indenture.
Except as expressly provided in the Indenture, all payments of principal,
Make-Whole Premium, if any, and interest and other amounts to be made to the
Holder hereof by or at the behest of the Owner Trustee hereunder or under the
Indenture shall be made only from the income and proceeds from the Lessor's
Estate to the extent included in the Trust Indenture Estate and only to the
extent that the Owner Trustee shall have sufficient income or proceeds from the
Lessor's Estate to the extent included in the Trust Indenture Estate to enable
the Indenture Trustee to make such distributions in accordance with the terms of
the Indenture; provided that under the Lease, the Lessee is obligated to pay or
cause to be paid, to the extent such payments are not required to be made from
the assets subject to the Lien of this Indenture or the income and proceeds
received by the Indenture Trustee therefrom, any net loss arising from the
investment of funds held by the Indenture Trustee which but for an Event of
Default would be payable to Lessee, and each Holder hereof, by its acceptance of
this Equipment Note, agrees that it will (except as aforesaid) look solely to
the income and proceeds from the Trust Indenture Estate to the extent available
for distribution to the Holder hereof as provided above and that neither the
Owner Participant, nor the Owner Trustee, nor First Union Trust Company,
National Association, nor the
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Indenture Trustee is personally liable to the Holder hereof for any amounts
payable or any liability under this Equipment Note or under the Indenture,
except as expressly provided in the Indenture, in the case of First Union Trust
Company, National Association, the Owner Trustee and the Indenture Trustee.
If, in accordance with and subject to the satisfaction of the conditions
set forth in Section 5.10 of the Participation Agreement, the Lessee shall
assume all of the obligations of the Owner Trustee hereunder, under the
Equipment Notes and all other Operative Agreements, the Owner Participant and
the Owner Trustee shall (except for prior acts) be released and discharged from
any further obligations hereunder and under the Equipment Notes and all other
Operative Agreements (except any obligations that have accrued prior to such
assumption).
The indebtedness evidenced by this Equipment Note is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of the Secured Obligations (as defined in
the Indenture) in respect of [Series A Equipment Notes](1), [Series A and Series
B Equipment Notes](2) [Series A, Series B, and Series C Equipment Notes](3) and
this Equipment Note is issued subject to such provisions. The Holder of this
Certificate, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Indenture Trustee on such Holder's
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture, and (c) appoints the Indenture
Trustee such Holder's attorney-in-fact for such purpose.*
This Equipment Notes shall be construed in accordance with and governed by
the laws of the State of New York.
This Equipment Note shall not be secured by or be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose unless
authenticated by the Indenture Trustee as evidenced by the manual signature of
one of its authorized officers on the certificate below.
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(1) To be inserted in the case of a Series B Equipment Note.
(2) To be inserted in the case of a Series C Equipment Note.
(3) To be inserted in the case of a Series D Equipment Note.
* To be inserted for each Equipment Note other than any Series A
Equipment Note.
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IN WITNESS WHEREOF, the Owner Trustee has caused this Equipment Note to be
duly executed in its corporate name by its officer thereunto duly authorized.
Dated: _________________ FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Owner Trustee
By:
---------------------------------------------
Name:
Title:
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[FORM OF INDENTURE TRUSTEE'S EQUIPMENT NOTE
OF AUTHENTICATION]
This is one of the Equipment Notes referred to in the within mentioned
Indenture.
Dated: _______________ THE FIRST NATIONAL BANK OF MARYLAND, as
Indenture Trustee
By:
-------------------------------------
Name:
Title:
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Schedule I to Certificate
Principal Amortization
Payment Date Principal Amount
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