EXHIBIT 10.10
Execution Version
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SPARE PARTS MORTGAGE AND SECURITY AGREEMENT
Dated as of September 3, 2004
between
AMERICA WEST AIRLINES, INC.
and
▇▇▇▇▇ FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
as Security Trustee
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TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS......................................................................... 1
Section 1.01. Certain Definitions.................................................. 1
Section 1.02. Certain Rules of Construction........................................ 1
ARTICLE 2. SECURITY............................................................................ 2
Section 2.01. Grant of Security Interest........................................... 2
ARTICLE 3. COVENANTS OF THE COMPANY............................................................ 4
Section 3.01. Liens................................................................ 4
Section 3.02. Possession, Use, Designated Locations,
Excluded Locations, Permitted Sales, Maintenance and
Identification....................................................... 5
Section 3.03. Maintenance of Rotable Ratio......................................... 9
Section 3.04. Intentionally Left Blank............................................. 11
Section 3.05. Insurance............................................................ 11
Section 3.06. Assurances and Filings............................................... 13
Section 3.07. [Intentionally Left Blank]........................................... 13
Section 3.08. Notice of Change of the Company's Location........................... 13
Section 3.09. Inspection........................................................... 13
Section 3.10. Reports Regarding the Collateral..................................... 14
ARTICLE 4. REMEDIES OF THE SECURITY TRUSTEE UPON AN EVENT OF DEFAULT........................... 16
Section 4.01. Remedies with Respect to Collateral.................................. 16
Section 4.02. Remedies Cumulative.................................................. 17
Section 4.03. Discontinuance of Proceedings........................................ 18
Section 4.04. Allocation of Payments............................................... 18
ARTICLE 5. INTENTIONALLY LEFT BLANK............................................................ 19
ARTICLE 6. SECURITY FUNDS
Section 6.01. Investment of Security Funds......................................... 19
Section 6.02. Investment of Cash Collateral........................................ 20
Section 6.03. Release of Cash Collateral........................................... 20
ARTICLE 7. MISCELLANEOUS....................................................................... 20
Section 7.01. Termination of Mortgage.............................................. 20
Section 7.02. Alterations to Mortgage.............................................. 20
Section 7.03. No Legal Title to Collateral......................................... 20
Section 7.04. Sale of the Engines by Security Trustee Is Binding................... 20
Section 7.05. Benefit of Mortgage.................................................. 21
Section 7.06. Section 1110 of the Bankruptcy Code.................................. 21
Section 7.07. Notices.............................................................. 21
(i)
Section 7.08. Severability......................................................... 22
Section 7.09. Separate Counterparts................................................ 22
Section 7.10. Successors and Assigns............................................... 22
Section 7.11. Headings............................................................. 22
Section 7.12. Governing Law........................................................ 22
APPENDIX A Definitions
APPENDIX B Insurance
APPENDIX C Form of Appraisal Compliance Report
APPENDIX D Form of Data Report
APPENDIX E Form of Independent Appraiser's Certificate
EXHIBIT A Supplemental Mortgage
SCHEDULE I Designated Locations
(ii)
SPARE PARTS MORTGAGE AND SECURITY AGREEMENT
This SPARE PARTS MORTGAGE AND SECURITY AGREEMENT, dated as of
September 3, 2004 (the "Mortgage") between AMERICA WEST AIRLINES, INC., a
Delaware corporation (the "Company"), and ▇▇▇▇▇ FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION, as Security Trustee (the "Security Trustee").
W I T N E S S E T H :
WHEREAS, the Company, which is a certificated air carrier under
Section 44705 of title 49 of the U.S. Code, the Lenders and the Security Trustee
have entered into the Loan Agreement; and
WHEREAS, the Lenders have agreed, pursuant and subject to the terms
and conditions of the Loan Agreement, to make the Loan to the Company secured by
a Lien on the Collateral; and
WHEREAS, the Company desires by this Mortgage, among other things,
to grant to the Security Trustee for the benefit of the Secured Parties a first
priority perfected Lien on the Collateral in accordance with the terms hereof,
as security for the Obligations; and
WHEREAS, all things necessary to make this Mortgage a legal, valid
and binding obligation of the Company and the Security Trustee, for the uses and
purposes herein set forth, in accordance with its terms, have been done and
performed and have occurred;
NOW, THEREFORE, to secure the due and punctual payment of the
Obligations, it is hereby covenanted and agreed by and between the parties
hereto as follows.
ARTICLE 1.
DEFINITIONS
Section 1.01. Certain Definitions. Unless otherwise defined herein
or the context requires otherwise, capitalized terms used herein shall have the
meanings set forth in Appendix A hereto.
Section 1.02. Certain Rules of Construction. The defined terms and
the other provisions of this Mortgage shall be construed in accordance with the
rules of construction set forth under the heading "General Provisions" in
Appendix A hereto.
ARTICLE 2.
SECURITY
Section 2.01 Grant of Security Interest. In order to secure (i) the prompt
payment when due of the Obligations and (ii) the performance and observance by
the Company of all agreements, covenants and provisions contained herein and in
the other Operative Documents to the extent same relate to the Obligations and
in consideration of the premises and of the covenants herein contained, and of
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company 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 Security
Trustee, its successors in trust and assigns, for the security and benefit of
the Secured Parties, a first priority security interest in, and mortgage lien
on, all right, title and interest of the Company in, to and under the following
described properties, rights, interests and privileges (which, collectively,
including all property hereafter specifically subjected to the lien of this
Mortgage by any instrument supplemental hereto, are referred to herein as the
"Collateral"):
(a) all Spare Parts and Appliances (including all Rotables and Key
Repairables), other than any Excluded Parts, currently owned or hereafter
acquired by the Company including any replacements, substitutions or
renewals therefor, and accessions thereto, including but not limited to
Spare Parts and Appliances owned or hereafter acquired by the Company and
located at (a) the Designated Locations described on Schedule I attached
hereto or (b) any other place in the United States of America or in Mexico
(such Spare Parts and Appliances, the "Pledged Spare Parts");
(b) the rights of the Company under any existing or hereinafter
acquired warranty or indemnity, express or implied, regarding title,
materials, workmanship, design or patent infringement or related matters
in respect of the Pledged Spare Parts to the extent such rights can be
assigned or pledged by the Company (the "Warranties");
(c) all insurance proceeds and requisition proceeds with respect to
any Pledged Spare Part;
(d) all Software owned or hereafter acquired by the Company,
including any replacement, substitution or renewal thereof, as well as all
rights of the Company under any license or use agreement in respect of any
Software not owned by the Company and all rights of the Company under any
existing or hereinafter acquired service or support contracts or
agreements in respect of the Software (such licenses and support
agreements collectively, the "Software Support Agreements");
(e) all rents, revenues and other proceeds collected or required to
be collected by the Security Trustee hereunder, including, without
limitation, all proceeds with respect to the sale or other disposition by
the Security Trustee of any Pledged Spare Part or other Collateral
pursuant to the terms of this Mortgage;
(f) all repair, maintenance and inventory records, logs, tags,
manuals and all other documents and materials similar thereto (including,
without limitation, any such
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records (whether on paper or in an electronic format), logs, manuals,
documents and materials that are computer print-outs) at any time
maintained, created or used by the Company, and all records, logs, tags,
documents and other materials required at any time to be maintained by the
Company by the FAA or under the Federal Aviation Act, in each case with
respect to any of the Pledged Spare Parts (the "Spare Parts Documents");
and
(g) all proceeds of the foregoing;
PROVIDED, HOWEVER, that notwithstanding any of the foregoing provisions of this
Section 2.01, so long as no Event of Default shall have occurred and be
continuing, (i) the Company shall have the right, to the exclusion of the
Security Trustee, to quiet enjoyment of the Pledged Spare Parts and other
Collateral, and peaceably and quietly, without hindrance or molestation, to
possess, use, retain and control the Pledged Spare Parts, (ii) subject always to
compliance with Section 3.02(C)(2) hereof, the Company shall have the right to
dispose of Spare Parts Documents in the ordinary course of its business, and
(iii) the Company shall have the right, to the exclusion of the Security
Trustee, with respect to the Warranties and the Software Support Agreements, to
exercise in the Company's name all rights and powers as the beneficiary, owner
and/or licensee thereof and to retain any recovery or benefit resulting from the
enforcement of any warranty, indemnity or other contract right under the
Warranties and the Software Support Agreements;
TO HAVE AND TO HOLD the Collateral unto the Security Trustee, its
successors and assigns, forever, upon the terms herein set forth, for the
benefit, security and protection of the Security Trustee, and for the uses and
purposes and subject to the terms and provisions set forth in this Mortgage.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Company shall remain liable under the Warranties
and the Software Support Agreements to perform all of the obligations assumed by
it thereunder, all in accordance with and pursuant to the terms and provisions
thereof, and the Security Trustee shall have no obligation or liability under
the Warranties or Software Support Agreements by reason of or arising out of the
assignment hereunder, nor shall the Security Trustee be required or obligated in
any manner to perform or fulfill any obligations of the Company under any of the
Warranties or Software Support Agreements, or, except as herein expressly
provided, to make any payment, or to make any inquiry as to the nature or
sufficiency of any payment received by it, or present or file any claim, or take
any action to collect or enforce the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
The Company does hereby irrevocably constitute and appoint the
Security Trustee the true and lawful attorney of the Company (which appointment
is coupled with an interest) with full power (in the name of the Company or
otherwise) to ask, require, demand, receive, compound and give acquittance for
any and all moneys and claims for moneys (in each case including insurance and
requisition proceeds) and all other property which now or hereafter constitutes
part of the Collateral, to endorse any checks or other instruments or orders in
connection therewith and to file any claims or to take any action or to
institute any proceeding which the Security Trustee may deem to be necessary or
advisable to collect such property which constitutes Collateral; provided that
the Security Trustee shall not exercise any such rights except upon the
occurrence and during the continuance of an Event of Default. Without limiting
the
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provisions of the foregoing, during the continuance of any Event of Default, but
subject to the terms hereof and any mandatory requirements of applicable Law,
the Security Trustee shall have the right under such power of attorney in its
discretion to file any claim or to take any other action or proceedings, either
in its own name or in the name of the Company or otherwise, that the Security
Trustee may reasonably deem necessary or appropriate to protect and preserve the
right, title and interest of the Security Trustee in and to the security
intended to be afforded hereby. The Company hereby agrees that promptly on
receipt thereof, except as otherwise contemplated by the Operative Documents, it
will transfer to the Security Trustee any and all moneys from time to time
received by the Company constituting part of the Collateral, for distribution by
the Security Trustee pursuant to this Mortgage.
The Company does hereby warrant and represent that it has not sold
or assigned, and hereby covenants that it will not sell or assign, so long as
this Mortgage shall remain in effect and the Lien hereof shall not have been
released pursuant to the provisions hereof, any of its estate, right, title or
interest hereby assigned, to any Person other than the Security Trustee, except
as expressly permitted herein, in any other Operative Document or in the
Subordinated Mortgage.
The Company agrees that at any time and from time to time, upon the
written request of the Security Trustee, the Company will promptly and duly
execute and deliver or cause to be duly executed and delivered any and all such
further instruments and documents as the Security Trustee may reasonably deem
necessary to perfect and protect the priority of the security interests and
assignments created hereby and to obtain the full benefits of the security
interest granted hereunder and of the rights and powers herein granted.
ARTICLE 3.
COVENANTS OF THE COMPANY
Section 3.01. Liens. The Company will not directly or indirectly
create, incur, assume or permit to exist any Lien on or with ----- respect to
the Company's interest in the Collateral, except:
(a) the Lien of this Mortgage and the Subordinated Mortgage;
(b) the rights of others under agreements or arrangements to
the extent permitted by Section 3.02 hereof;
(c) Liens for Taxes of the Company and its U.S. Federal tax
law consolidated group either not yet due or payable or being contested in
good faith by appropriate proceedings so long as such Liens and such
proceedings do not involve any material risk of the sale, forfeiture or
loss (including loss of use) of any Pledged Spare Part or other portion of
the Collateral or any interest therein or any discernible risk of criminal
liability or any material risk of civil penalty against any Secured Party
or impair the Lien of this Mortgage;
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(d) materialmen's, mechanics', workmen's, repairmen's,
employees' or other like Liens arising in the ordinary course of business
(including those arising under maintenance agreements entered into in the
ordinary course of business) securing obligations that are not overdue for
more than sixty (60) days or are being contested in good faith by
appropriate proceedings so long as such Liens and such proceedings do not
involve any material risk of civil penalty or any discernible risk of
criminal liability against any Secured Party or any material risk of the
sale, forfeiture or loss of any Pledged Spare Part or other portion of the
Collateral or adversely affect the Lien of this Mortgage;
(e) Liens arising out of any judgment or award against the
Company, so long as such judgment or award shall, within sixty (60) days
after the entry thereof, have been discharged or vacated, or execution
thereof stayed pending appeal or shall have been discharged, vacated or
reversed within sixty (60) days after the expiration of such stay and so
long as during any such 60-day period there is not, or any such judgment
or award does not involve, any material risk of the sale, forfeiture or
loss (including loss of use) of any Pledged Spare Part or other portion of
the Collateral, or any interest therein or any discernible risk of
criminal liability or any material risk of civil penalty against any
Secured Party or impair the Lien of this Mortgage;
(f) salvage or similar rights of insurers under policies of
insurance maintained by the Company pursuant to Section 3.05 hereof;
(g) any other Lien with respect to which the Company shall
have provided a bond, cash collateral or other security adequate in the
reasonable opinion of the Security Trustee;
(h) Liens attributable to the Security Trustee; and
(i) Liens approved in writing by the Security Trustee.
Liens described in clauses (a) through (i) above are referred to herein as
"Permitted Liens." The Company shall promptly, at its own expense, take such
action as may be necessary to duly discharge (by bonding or otherwise) any such
Lien on the Collateral other than a Permitted Lien arising at any time.
Section 3.02. Possession, Use, Designated Locations, Excluded
Locations, Permitted Sales, Maintenance and Identification.
(a) Possession. Without the prior written consent of the Security Trustee,
the Company will not sell, lease, transfer or relinquish possession of any
Pledged Spare Part to anyone except as permitted by the provisions of Sections
3.02(b) of this Mortgage and except that the Company shall, subject to Section
3.03, have the right, in the ordinary course of business, (i) to transfer
possession of any Pledged Spare Part to the manufacturer thereof or any other
organization for testing, overhaul, repairs, maintenance, alterations or
modifications or to any Person for the purpose of transport to any of the
foregoing or (ii) to subject any Pledged Spare Part to a pooling, exchange,
borrowing or maintenance servicing agreement arrangement and entered into in the
ordinary course of business (provided always that no such arrangement
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results in any Pledged Spare Part being stored at a location other than one of
the Designated Locations, or being commingled with any Excluded Parts and/or any
other Spare Parts and/or Appliances that are not Pledged Spare Parts).
(b) Use; Designated Locations; Excluded Locations; Permitted Sales,
Dispositions or Modifications.
(1) Use. Subject to the terms of this Mortgage (including, without
limitation, Section 3.03 hereof), the Company shall have the right, at any time
and from time to time at its own cost and expense, without any release from or
consent by the Security Trustee, to:
(i) incorporate in, install on, attach or make appurtenant to, or
use in, any aircraft, Engine or Spare Part or Appliance (whether or not
subject to any Lien and whether or not operated by the Company) any
Pledged Spare Part, free from the Lien of this Mortgage; and
(ii) dismantle any Pledged Spare Part that has become worn out or
obsolete or unfit for use, and to scrap, sell or dispose of any such
Pledged Spare Part or any salvage resulting from such dismantling, free
from the Lien of this Mortgage.
(2) Designated Locations. The Company shall keep the Pledged Spare Parts
at one or more of the Designated Locations and, except as otherwise permitted
under Sections 3.02(a), 3.02(b)(1) or 3.02(b)(3) of this Mortgage, shall not
suffer or permit any Pledged Spare Part to be stored at any other location. The
Company shall not suffer or permit any Pledged Spare Parts at any Designated
Location to be commingled with any Excluded Parts (it being acknowledged that,
so long as the Company complies with Section 3.02(d)(1) hereof, Excluded Parts
which are stored on a separate shelf from Pledged Spare Parts and in a separate
storage bin or other storage unit from any Pledged Spare Parts shall not be
considered as having been commingled with Pledged Spare Parts even though such
Excluded Parts are present at the same Designated Location as the Pledged Spare
Parts). The Company shall ensure that each Designated Location is adequate for
warehousing and storing the Pledged Spare Parts, and at all times that the
Current Market Value of Rotables included in the Pledged Spare Parts which are
stored at a Secure Location is no less than eighty percent (80%) of the Current
Market Value of all the Rotables included within the Collateral. The Company
shall obtain from each landlord, mortgagee or other Person from time to time
holding title to or a security or leasehold interest in a Designated Location a
waiver in a form reasonably satisfactory to the Security Trustee of any right or
interest in the Pledged Spare Parts stored at such Designated Location. The
Company shall add as a Designated Location (in accordance with this Section
3.02(b)(2)) any location in the United States where Pledged Spare Parts may be
stored by the Company from time to time. Upon adding a location that is to
become a Designated Location, the Company will furnish to the Security Trustee
the following:
(i) a Supplemental Mortgage duly executed by the Company,
identifying each location that is to become a Designated Location and
specifically subjecting the Pledged Spare Parts at such location to the
Lien of this Mortgage;
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(ii) an Opinion of Counsel, dated the date of execution of said
Supplemental Mortgage, stating that said Supplemental Mortgage has been
duly filed for recording in accordance with the provisions of the Federal
Aviation Act, and either: (a) no other filing or recording is required in
any other place within the United States in order to perfect the Lien of
this Mortgage on the Pledged Spare Parts held at the Designated Locations
specified in such Supplemental Mortgage under the laws of the United
States, or (b) if any such other filing or recording shall be required
that said filing or recording has been accomplished in such other manner
and places, which shall be specified in such Opinion of Counsel, as are
necessary to perfect the Lien of this Mortgage with respect to such
Pledged Spare Parts; and
(iii) an Officer's Certificate stating that in the opinion of the
Officer executing the Officer's Certificate, all conditions precedent
provided for in this Mortgage relating to the subjection of such property
to the Lien of this Mortgage have been complied with.
(3) Excluded Locations. With the prior written consent of the Security
Trustee, which consent shall not be unreasonably withheld, the Company shall be
entitled, from time to time, to establish one or more locations for the storage
of Spare Parts and Appliances which shall not be subject to the lien of this
Mortgage (herein, "Excluded Locations"), provided that the Company's business
purpose in establishing such Excluded Location is to support operations that are
beyond the scope of the Company's existing and currently planned operations as
of the Funding Date. Without limiting the generality of the foregoing, the
Security Trustee shall be entitled to withhold its consent to the establishment
of an Excluded Location if the Required Lenders consider any of the following
circumstances to be applicable:
(i) the expected fair market value of the Spare Parts and Appliances
to be stored at the proposed location would be less than $5,000,000;
(ii) unless the proposed location would be devoted exclusively to
the storage of Spare Parts and Appliances that are not compatible with any
of the aircraft and engines operated by the Company as of the Funding
Date, the proposed location would be in any of the states of Arizona,
Maryland or Nevada;
(iii) all or any material portion of the proposed location would be
stocked by the transfer of Spare Parts and Appliances from any of the
Designated Locations;
(iv) the Lenders have not been offered the opportunity to provide
the Company with financing for the Spare Parts and Appliances to be stored
at the proposed location on terms, in the case of new acquisition
financing, substantially the same as the terms of the Operative Documents,
and in the case of financing assumed by the Company in connection with the
acquisition of such Spare Parts and Appliances, substantially the same as
the terms of such pre-existing financing and at the same net financing
cost to the Company (taking into account any prepayment premiums and/or
breakage costs thereunder); provided, however, that if any pre-existing
financing does not permit any voluntary prepayment thereof by the Company,
then the failure by the Company to offer the Lenders the opportunity to
provide financing to take out such pre-existing financing
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shall not be deemed grounds for the Security Trustee to withhold its
consent under this Section 3.02(b)(3);
(v) the Company's acquisition of the Spare Parts and Appliances to
be stored at the proposed location is part of the Company's ordinary fleet
replacement and/or growth and is associated with routes served by the
Company as of the Funding Date; or
(vi) the amount of Spare Parts and Appliances to be stored at the
proposed location will be greater than the amount reasonably required by
the Company to support the operations of the aircraft and engines that are
being added to the Company's fleet contemporaneously with the Company's
acquisition of such Spare Parts and Appliances.
The Security Trustee shall be entitled to condition its consent to the
establishment of an Excluded Location upon the amendment of this Mortgage to
include a covenant pursuant to which the Company would be obligated to comply
with such additional inspection, reporting and valuation requirements
(including, but not limited to, the obligation to afford access to the Excluded
Location to the Security Trustee and the Independent Appraiser for inspection
and other purposes) as the Security Trustee may deem appropriate in order to
ensure that the establishment and maintenance of such Excluded Location does not
have a prejudicial effect on the quantity or value of the Rotables and Key
Repairables included within the Pledged Spare Parts or on the interests of the
Security Trustee in the Collateral.
(4) Permitted Sales, Dispositions and Modifications. Unless an Event of
Default has occurred and is continuing and subject to the limitations contained
in Section 3.03 of this Mortgage, the Company may, in the ordinary course of its
business, (i) sell, lease, transfer or dispose of any Pledged Spare Parts which
have become surplus to its normal operations free from the Lien of this
Mortgage, and (ii) sell, lease, transfer or dispose of, in a single transaction
or in a series of transactions within any thirty (30) day period, Pledged Spare
Parts with an aggregate Current Market Value equal to the Permitted Disposition
Amount or less which are not surplus to the Company's normal operations so long
as the Company acquires replacements for such Spare Parts and causes such
replacements to be subject to the Lien of this Mortgage and to be stored within
the appropriately marked shelves or storage areas at the Designated Locations as
Pledged Spare Parts within the thirty (30) day period following any such sale,
lease, transfer or disposition (or, in the case of a series of transactions,
within the thirty (30) day period following the first of such transactions). In
addition, the Company may modify or alter any Pledged Spare Parts as the Company
may deem appropriate in the proper conduct of its business, so long as the
Company remains in compliance at all times with the requirements of Section
3.02(c) and Section 3.03 below, after giving effect to any such modification or
alteration.
(c) Maintenance. The Company:
(1) shall maintain, or cause to be maintained, at all times the Pledged
Spare Parts in accordance with (x) all applicable Laws issued by the FAA and (y)
all applicable Laws issued by any other Governmental Authority having
jurisdiction over the Company or any such Pledged Spare Parts, including making
any modifications, alterations, replacements and additions necessary therefor;
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(2) shall maintain, or cause to be maintained, all records, logs and other
materials required by the FAA or under the Federal Aviation Act to be maintained
in respect of the Pledged Spare Parts and shall not modify its record retention
procedures in respect of the Pledged Spare Parts unless such modification is
consistent with the Company's FAA approved maintenance program; provided
however, that such modification shall not materially diminish the value of the
Pledged Spare Parts, taken as a whole;
(3) shall maintain, or cause to be maintained on a timely basis, the
Pledged Spare Parts in good working order (other than during periods of
maintenance, overhaul, inspection and testing) and condition and shall perform
all maintenance thereon necessary for that purpose, excluding (i) Pledged Spare
Parts that have become worn out or unfit for use, beyond economic repair or
become obsolete or scrap, and (ii) Pledged Spare Parts that are not required for
the Company's normal operations. Notwithstanding anything herein to the
contrary, all Pledged Spare Parts located at Designated Locations other than for
the purpose of being maintained, altered, modified or overhauled shall have a
current and valid serviceable tag and shall be in compliance with such tag, in
each case in compliance with applicable FAA regulations.
(d) Identification of Security Trustee's Interest.
(1) On or prior to the Closing Date, the Company shall install signs, in
size and form reasonably satisfactory to the Security Trustee, at each of the
Designated Locations and on each shelf, bin or other storage unit in which the
Pledged Spare Parts are stored and otherwise as may be directed by the Security
Trustee within each Designated Location, bearing the inscription: "MORTGAGED TO
▇▇▇▇▇ FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS SECURITY TRUSTEE" (such
sign to be replaced if there is a successor Security Trustee).
(2) The Company shall consult with the Security Trustee and the Lenders,
prior to replacing the system utilized in tracking the Pledged Spare Parts and
preparing the necessary reports required pursuant to Section 3.10 of this
Mortgage. Any replacement system must be reasonably acceptable to the Security
Trustee. In addition, in the event that any such replacement system includes the
use of any Software that is licensed by the Company from a third party vendor,
rather than owned outright, then the Company shall, before implementing any such
new system and Software, cause such vendor or licensor to recognize the rights
in such Software granted to the Security Trustee under this Mortgage, including
the right to access and use such Software in connection with the exercise of
remedies under Section 4.01.
Section 3.03. Maintenance of Rotables Ratio.
(a) The Company hereby agrees that the Company shall not at any time
directly or indirectly permit the Rotables Ratio to be greater than the Maximum
Rotables Ratio. If, based upon an Appraisal Compliance Report, the Rotables
Ratio set forth therein is greater than the Maximum Rotables Ratio, the Company
shall promptly, and in any case within 10 Business Days:
(i) subject additional Rotables that are free and clear of all Liens
other than Permitted Liens and are otherwise acceptable to the Lenders in
their sole discretion (the
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"Additional Rotables") to the Lien of this Mortgage in accordance with
Section 3.03(c) hereof;
(ii) provide cash to the Security Trustee (any cash provided to the
Security Trustee pursuant to this Mortgage, the "Cash Collateral");
(iii) provide a letter of credit meeting the requirements set forth
in Section 3.03(b) below (each such letter of credit, a "Letter of
Credit");
(iv) prepay some or all of the Loans pursuant to Section 1.1(d) of
the Loan Agreement; or
(v) any combination of the foregoing;
such that, the Rotables Ratio, as recalculated giving effect to such action
taken pursuant to this Section 3.03(a) and, in the case of clause (i) of this
Section 3.03(a), using the Current Market Value of any Rotables included in such
additional Collateral determined pursuant to Section 3.03(d), would not be
greater than the Maximum Rotables Ratio.
(b) Any Letter of Credit provided by the Company to the Security Trustee
pursuant to Section 3.03(a)(iii) must satisfy each of the following conditions:
(i) Such Letter of Credit must be issued and payable by a
Pre-Approved Bank or another bank acceptable to the Security Trustee in
its sole and absolute discretion and in substantially the form of Exhibit
B or in another form and substance acceptable to the Security Trustee in
its sole and absolute discretion, and, if not issued by a Pre-Approved
Bank or the New York branch of a major international bank acceptable to
the Security Trustee in its sole and absolute discretion from time to
time, will be confirmed by and payable at a Pre-Approved Bank or the New
York branch of a major international bank acceptable to the Security
Trustee in its sole and absolute discretion from time to time, and shall
remain in full force and effect and may be drawn down by the Security
Trustee upon demand at any time or times following the occurrence of an
Event of Default until the Required LC Expiry Date.
(ii) Such Letter of Credit may have a validity period or periods
ending prior to the Required LC Expiry Date, provided that (i) the Letter
of Credit shall, in each case, be renewed, extended or reissued and
delivered to the Security Trustee not later than sixty (60) days prior to
its expiry; and (ii) a Letter of Credit shall remain in force at all times
up to the Required LC Expiry Date.
(iii) If at any time while the Lien of this Mortgage remains in
effect, the Security Trustee determines in its sole and absolute
discretion that the current issuing or confirming bank for the Letter of
Credit is no longer an acceptable issuing or confirming bank (whether by
virtue of a material adverse change in its financial condition, a decrease
in any credit rating of its long-term unsecured debt obligations or for
any other reason) the Security Trustee shall notify the Company of such
fact and the Company shall within five (5) Business Days after the date of
such notice cause the Letter of Credit to be
10
replaced by a Letter of Credit issued by a Pre-Approved Bank or another
bank acceptable to the Security Trustee in its sole and absolute.
(c) In order to comply with Section 3.03(a)(i) of this Mortgage, the
Company shall add to a Designated Location, Rotables, other than Excluded Parts,
that were not included as Pledged Spare Parts on the preceding Valuation Date.
(d) In connection with the provision of additional Collateral pursuant to
Section 3.03(a)(i) of this Mortgage, the Company shall cause the Independent
Appraiser (only to the extent of the AWA Appraiser Responsibility) to furnish to
the Security Trustee and the Lenders an Independent Appraiser's Certificate
signed by the Independent Appraiser, dated as of a date after the most recent
Valuation Date, stating, in the opinion of the Independent Appraiser, the
Current Market Value of the Rotables included in such additional Collateral
(other than Cash Collateral and any Letters of Credit), as of a date not earlier
than the most recent Valuation Date, and using the Physical Appraisal
Methodology. Each Independent Appraiser's Certificate shall be accompanied by an
Appraisal Compliance Report determined as of a date not earlier than the most
recent Valuation Date.
(e) If the Company shall have provided Cash Collateral pursuant to Section
3.03(a) or the Security Trustee shall have made a drawing upon a Letter of
Credit for any reason other than the occurrence of an Event of Default (the
amount of Cash Collateral so provided and/or the proceeds of such Letter of
Credit drawing being referred to herein as "Temporary Cash Collateral"), it
shall within 60 days after providing such Temporary Cash Collateral take
additional action pursuant to Section 3.03(a) (excluding the right to provide
Cash Collateral), including directing the Security Trustee to apply such Cash
Collateral to the prepayment of the Loans, to cause the Rotables Ratio,
calculated to exclude such Temporary Cash Collateral, not to be greater than the
Maximum Rotables Ratio. If pursuant to such Appraisal Compliance Report, the
Rotables Ratio is less than the Maximum Rotables Ratio the Security Trustee
shall release the Temporary Cash Collateral in accordance with, and to the
extent provided in, Section 6.03 of this Mortgage. If the Company fails to take
any such action, the Security Trustee shall, on the 60th day after Cash
Collateral is posted, or earlier at the Company's direction, apply such
Temporary Cash Collateral to prepay the Loan in accordance with Section 1.1(d)
of the Loan Agreement, but excluding any Prepayment Fee or, if an Event of
Default exists and remedies are being exercised, Article VII of the Loan
Agreement, as applicable.
Section 3.04. [Intentionally Left Blank] .
Section 3.05. Insurance.
(a) Obligation to Insure. The Company shall comply with, or cause to be
complied with, each of the provisions of Appendix B, which provisions are hereby
incorporated by this reference as if set forth in full herein.
(b) Insurance for Own Account. Nothing in Section 3.05 shall limit or
prohibit (a) the Company from maintaining the policies of insurance required
under Appendix B with higher limits than those specified in Appendix B, or (b)
the Security Trustee or any Lender from obtaining insurance for its own account
(and any proceeds payable under such separate insurance
11
shall be payable as provided in the policy relating thereto); provided, however,
that no insurance may be obtained or maintained that would limit or otherwise
adversely affect the coverage of any insurance required to be obtained or
maintained by the Company pursuant to this Section 3.05 and Appendix B.
(c) Indemnification by Government in Lieu of Insurance. Security Trustee
agrees to accept, in lieu of insurance against any risk with respect to any
aircraft or Engine described in Appendix B, indemnification from, or insurance
provided by, the U.S. Government, or upon the written consent of Security
Trustee, other Government Entity, against such risk in an amount that, when
added to the amount of insurance (including permitted self-insurance), if any,
against such risk that the Company (or any Lessee) may continue to maintain, in
accordance with this Section 3.05, shall be at least equal to the amount of
insurance against such risk otherwise required by this Section 3.05.
(d) Application of Insurance Proceeds.
(1) All insurance proceeds in respect of the Pledged Spare Parts in
excess of the Threshold Amount up to an amount equal to the outstanding
principal amount of the Loan together with accrued but unpaid interest thereon
paid under policies required to be maintained by the Company pursuant to this
Mortgage shall be held by or paid over to the Security Trustee as security for
the obligations of the Company under this Mortgage and be invested pursuant to
Section 6.01. If the Rotables Ratio at any time is less than the Maximum
Rotables Ratio such proceeds shall be released and paid by the Security Trustee
to the Company in accordance with Section 6.03.
(2) Except as expressly provided in Section 3.05(e) below, all
proceeds of insurance in respect of the Pledged Spare Parts required to be
maintained by the Company in accordance with this Mortgage in respect of any
property damage or loss involving proceeds less than the Threshold Amount shall
be paid over to, and retained by, the Company.
(e) Application of Payments During Existence of Event of Default. Any
amount referred to in this Section 3.05 which is payable to or retainable by the
Company shall not be paid to or retained by the Company, if at the time of such
payment or retention a Special Default or an Event of Default shall have
occurred and be continuing, but shall be held by or paid over to the Security
Trustee as security for the Obligations and invested pursuant to Section 6.01.
Upon the earlier of (a) such time as there shall not be continuing any such
Special Default or Event of Default or (b) the termination of this Mortgage in
accordance with Section 7.01, such amount, and any interest realized thereon
pursuant to Section 6.01 hereof, shall be paid over to the Company to the extent
not previously applied in accordance with the preceding sentence, provided that
if at the time of the termination of this Mortgage a "Special Default" or
"Subordinated Event of Default" (as such terms are defined in the Subordinated
Mortgage) has occurred and is continuing, then such amount, and any such
interest, not so previously applied shall be held or paid over to the
Subordinated Trustee as security under the Subordinated Mortgage.
12
Section 3.06. Assurances and Filings.
(a) The Company shall duly execute, acknowledge and deliver, or shall
cause to be executed, acknowledged and delivered, all such further agreements,
instruments, certificates or documents, and shall do and cause to be done such
further acts and things, in any case, as Security Trustee shall reasonably
request for accomplishing the purposes of this Mortgage including, without
limitation, ensuring that each of the Security Trustee, the Independent
Appraiser and GECC (so long as it is a Lender), subject, in each case, to such
Person executing any non-disclosure agreement as may be required by the Software
provider, remains at all times a third party beneficiary of any Software Support
Agreements.
(b) The Company shall promptly take such action with respect to the
recording, filing, re-recording and refiling of this Mortgage and any amendments
or supplements thereto, as shall be necessary to continue the perfection and
priority of the Lien created by this Mortgage with respect to the Pledged Spare
Parts held at Designated Locations.
(c) The Company, at its sole cost and expense, will cause the FAA Filed
Documents, the Financing Statements and all continuation statements (and any
amendments necessitated by any consolidation or merger of the Company, any
conveyance, transfer or lease of all or substantially all of the assets of the
Company, or any change of the Company's location) in respect of the Financing
Statements to be prepared and, subject only to the execution and delivery
thereof by Security Trustee, duly and timely filed and recorded, or filed for
recordation, to the extent permitted under the Federal Aviation Act (with
respect to the FAA Filed Documents) or the UCC or similar law of any other
applicable jurisdiction (with respect to such other documents). In addition, the
Company will pay any and all recording, stamp and other similar taxes payable in
the United States, in connection with the execution, delivery, recording,
filing, re-recording and refiling of this Mortgage or any such Financing
Statements or other instruments.
Section 3.07. [Intentionally Left Blank].
Section 3.08. Notice of Change of the Company's Location. The
Company will notify the Security Trustee of any change in the location of the
Company (within the meaning of Section 9-307 of the Uniform Commercial Code)
promptly after making such change and in any event within a reasonable period of
time prior to the date by which it is necessary under applicable Law to make any
filing in order to prevent the lapse of perfection (absent refiling) of
financing statements filed under or with respect to this Mortgage.
Section 3.09. Inspection.
(a) At reasonable times but, so long as no Default shall have occurred and
be continuing, not more often than once every 12 months, the Security Trustee
and its authorized representatives (the "Inspecting Parties") may inspect the
Pledged Spare Parts located at Designated Locations (including without
limitation, the Spare Parts Documents [and any computer files] maintained by the
Company with respect to the Pledged Spare Parts) and the Company shall cooperate
with the Inspecting Parties in connection with any such inspection (including,
without limitation, providing Inspecting Parties reasonable access to buildings
or
13
facilities at Designated Locations where such Pledged Spare Parts are located
and permitting any such Inspecting Party to make copies of Spare Parts Documents
and computer files (excluding the Software) not reasonably deemed confidential
by the Company) at its own cost and expense. Additionally, the Independent
Appraiser shall have such inspection rights as permitted to the Inspecting
Parties hereunder. For the avoidance of doubt, however, this Section 3.09 shall
not be considered to limit the AWA Appraiser Responsibility with respect to the
audits contemplated by Section 3.10 hereof.
(b) Any inspection of the Pledged Spare Parts hereunder shall be limited
to a visual inspection, shall be in compliance with the Company's work and
safety rules at the Designated Locations (and any applicable governmental rules
and regulations), and shall not include the disassembling, or opening of any
components, of any Pledged Spare Part, and no such inspection shall interfere
with the Company's or any Lessee's maintenance or use of any Pledged Spare Part.
(c) With respect to such rights of inspection, the Security Trustee shall
not:
(i) have any duty or liability to make, or any duty or liability
arising out of, any such visit, inspection or survey or failure to make
any such visit, inspection or survey; or
(ii) so long as no Event of Default has occurred and is continuing,
exercise its inspection rights hereunder other than on reasonable notice
and, whether or not an Event of Default shall have occurred and be
continuing, so as not to unreasonably interfere with the Company's spare
parts management operations or maintenance and operation of its aircraft
and Engines.
(d) Each person inspecting the Pledged Spare Parts hereunder shall bear
its own expenses in connection with any such inspection, unless an Event of
Default shall have occurred and be continuing, in which case the Company shall
bear all such expenses; provided further that, any costs of the Independent
Appraiser in connection with the performance of his duties under Section 3.10
shall be for the account of the Company.
Section 3.10. Compliance Reports Regarding the Collateral.
(a) Report Dates. On each Data Report Date, the Company shall furnish the
Independent Appraiser with a Data Report that is certified (pursuant to an
Officer's Certificate) as a true and correct copy of the data obtained from the
Company's spare parts tracking system as of the final calendar day of the
preceding month. On or before the twentieth calendar day after each Desk-Top
Data Report Date (each such day, a "Desk-Top Appraisal Date"), and after each
Physical Appraisal Data Report Date (each such day, a "Physical Appraisal Date",
and together with the Desk-Top Appraisal Date, each an "Appraisal Date"), the
Company shall cause the Independent Appraiser (only to the extent of the AWA
Appraiser Responsibility) to furnish to the Security Trustee, the Company and
each Lender an Independent Appraiser's Certificate signed by the Independent
Appraiser, dated as of a date no earlier than seven Business Days prior to the
applicable Appraisal Date. Each such Independent Appraiser's Certificate shall
state,
14
in the opinion of the Independent Appraiser, based in the case of a Desk-Top
Appraisal Date, upon use of the Desk-Top Appraisal Methodology, and in the case
of a Physical Appraisal Date, upon the use of the Physical Appraisal
Methodology, the Current Market Value of the Rotables and the Key Repairables
that are included in the Collateral (excluding any Cash Collateral, excluding
any Letters of Credit, and excluding any such Pledged Spare Parts as are out for
repair or in transit and consequently not located at a Designated Location) as
of the final calendar day of the month preceding the date of such Independent
Appraiser's Certificate (the "Valuation Date").
On or prior to the tenth calendar day following the issuance of the
Independent Appraiser's Certificate, the Company shall furnish to the Security
Trustee and each Lender an Appraisal Compliance Report determined as of the
applicable Valuation Date. The Appraisal Compliance Report shall set forth the
calculation of the Rotables Ratio based on the Current Market Value of the
Rotables included in the Collateral set forth in such Independent Appraiser's
Certificate, the amount of Cash Collateral held by the Security Trustee, and the
aggregate outstanding principal amount of the Loans, each as of the applicable
Valuation Date.
(b) Binding Determination. Each of the Company, the Security Trustee and
each Lender agree that any determination made by the Independent Appraiser in
any Independent Appraiser's Certificate shall be binding on each party, absent
manifest error.
(c) Independent Appraiser. All fees and expenses of the Independent
Appraiser in preparing the Independent Appraiser's Certificates shall be for the
account of the Company; provided, however, that such fees and expenses to the
extent incurred in the ordinary course of preparing ten such Independent
Appraiser's Certificates based upon the Desk-Top Appraisal Methodology and two
such Independent Appraiser's Certificates based upon the Physical Appraisal
Methodology shall not exceed the Independent Appraiser's Fee Amount (as such
amount may be adjusted from time to time) during any consecutive 12-month
period. If the same Independent Appraiser is unable to continue preparing the
certificates, the Security Trustee will select an alternative independent
appraiser of recognized standing which shall be reasonably acceptable to the
Company. If the Security Trustee has a reasonable basis for concluding that the
performance of the Independent Appraiser that executed the most recent
Independent Appraiser's Certificate delivered pursuant to this Section 3.10 was
unsatisfactory as to the quality, accuracy and/or timeliness of work product,
the Security Trustee may, by written notice to the Company delivered no later
than 60 days following the date of such Independent Appraiser's Certificate,
select an alternative independent appraiser of recognized standing which shall
be reasonably acceptable to the Company to perform the next required appraisal
under this Section 3.10. Each appraisal inspection pursuant to this Section 3.10
shall be carried out during the Company's normal business hours and subject to
the safety, security and workplace rules applicable at the location where such
appraisal is conducted and any applicable governmental rules or regulations.
15
ARTICLE 4.
REMEDIES OF THE SECURITY TRUSTEE UPON AN EVENT OF DEFAULT
Section 4.01. Remedies with Respect to Collateral.
(a) Remedies Available. Upon the occurrence of any Event of Default and at
any time thereafter so long as the same shall be continuing, the Security
Trustee may do one or more of the following:
(i) cause the Company, upon the written demand of the Security
Trustee, at the Company's expense, to deliver promptly, and the Company
shall deliver promptly, all or any of the Pledged Spare Parts constituting
the Collateral at the Designated Locations, together in each case with the
Spare Parts Documents for such Pledged Spare Parts as the Security Trustee
may so demand, to the Security Trustee or its order, or the Security
Trustee, at its option, may enter upon the premises where all or any of
such Pledged Spare Parts and/or Spare Parts Documents are located and take
immediate possession (to the exclusion of the Company and all Persons
claiming under or through the Company) of and remove the same by summary
proceedings;
(ii) sell all or any part of the Collateral at public or private
sale, whether or not the Security Trustee shall at the time have
possession thereof, as the Security Trustee may determine, or lease or
otherwise dispose of all or any part of the Collateral as the Security
Trustee, in its sole discretion, may determine, all free and clear of any
rights or claims of whatsoever kind of the Company; provided, however,
that the Company shall be entitled at any time prior to any such
disposition to redeem the Collateral by paying in full all of the
Obligations;
(iii) draw upon any Cash Collateral and/or Letters of Credit then
held and apply such amounts as provided in Section 4.04 hereof; or
(iv) exercise any or all of the rights and powers and pursue any and
all remedies of a secured party under applicable Law.
Upon every such taking of possession of Collateral under this
Section 4.01, the Security Trustee may, from time to time, make all such
expenditures for maintenance, insurance, repairs, replacements, alterations,
additions and improvements to and of the Collateral, as it may deem proper. In
each such case, the Security Trustee shall have the right to maintain, store,
lease, control or manage the Collateral and to exercise all rights and powers of
the Company relating to the Collateral in connection therewith, as the Security
Trustee shall deem best, including the right to enter into any and all such
agreements with respect to the maintenance, insurance, storage, leasing,
control, management or disposition of the Collateral or any part thereof as the
Security Trustee may determine; and the Security Trustee shall be entitled to
collect and receive directly all tolls, rents, revenues, issues, income,
products and profits of the Collateral and every part thereof, without
prejudice, however, to the right of the Security Trustee under any provision of
this Mortgage to collect and receive all cash held by, or required to be
deposited with, the Security Trustee hereunder. Such tolls, rents, revenues,
issues, income,
16
products and profits shall be applied to pay the expenses of storage, leasing,
control, management or disposition of the Collateral, and of all maintenance,
repairs, replacements, alterations, additions and improvements, and to make all
payments which the Security Trustee may be required or may elect to make, if
any, for taxes, assessments, insurance or other proper charges upon the
Collateral or any part thereof (including the employment of engineers and
accountants to examine, inspect and make reports upon the properties and books
and records of the Company), and all other payments which the Security Trustee
may be required or authorized to make under any provision of this Mortgage, as
well as compensation for the services of the Security Trustee, and of all
Persons engaged and employed by the Security Trustee. If the income and proceeds
of the Collateral shall not be sufficient to pay in full the Obligations, the
Company shall be liable for any deficiency.
In addition, the Company shall be liable for all reasonable legal
fees and other costs and expenses incurred by reason of the occurrence of any
Event of Default or the exercise of the Security Trustee's remedies with respect
thereto, including, without limitation, all costs and expenses incurred in
connection with the retaking or return of any Pledged Spare Parts in accordance
with the terms hereof or under applicable Law, which amounts shall, until paid,
be secured by the Lien of this Mortgage.
If an Event of Default shall have occurred and be continuing, at the
request of the Security Trustee the Company shall promptly execute and deliver
to the Security Trustee such instruments of title and other documents as the
Security Trustee may deem necessary or advisable to enable the Security Trustee
or an agent or representative designated by the Security Trustee, at such time
or times and place or places as the Security Trustee may specify, to obtain
possession of all or any part of the Collateral to which the Security Trustee
shall at the time be entitled hereunder. If the Company shall for any reason
fail to execute and deliver such instruments and documents after such request by
the Security Trustee, the Security Trustee may obtain a judgment conferring on
the Security Trustee the right to immediate possession of the Collateral and
requiring the Company to execute and deliver such instruments and documents to
the Security Trustee, to the entry of which judgment the Company hereby
specifically consents to the fullest extent it may lawfully do so. If an Event
of Default shall have occurred and be continuing, the Company shall provide the
Security Trustee and the Independent Appraiser or any of their agents or
representatives, with full and complete access to the system (including the
Software) utilized by the Company or its designees solely to track the Pledged
Spare Parts and prepare the Data Reports; provided, however, access to the
system and Software required to prepare Data Reports will be provided to the
Security Trustee and the Independent Appraiser, or their respective agents or
representatives, only if the Company fails to prepare and deliver such Data
Reports in the manner and within the deadlines required pursuant to Section
3.10(a) hereof.
(b) Notice of Sale. The Security Trustee shall give the Company at
least fifteen (15) days' prior written notice of the date fixed for any public
sale of any Pledged Spare Parts or of the date on or after which any private
sale will be held, which notice the Company hereby agrees is reasonable notice,
and any such public sale shall be conducted in general so as to afford the
Company a reasonable opportunity to bid.
Section 4.02. Remedies Cumulative. Each and every right, power and
remedy herein specifically given to the Security Trustee or otherwise in this
Mortgage shall be
17
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time and as often and
in such order as may be deemed expedient by the Security Trustee, and the
exercise or the beginning of the exercise of any power or remedy shall not be
construed to be a waiver of the right to exercise at the time or thereafter any
other right, power or remedy. No delay or omission by the Security Trustee in
the exercise of any right, remedy or power or in the pursuance of any remedy
shall impair any such right, power or remedy or be construed to be a waiver of
any default on the part of the Company or to be an acquiescence therein.
Section 4.03. Discontinuance of Proceedings. If the Security Trustee
shall have proceeded to enforce any right, power or remedy under this Mortgage
by foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason, then and in every such case the
Company and the Security Trustee shall be restored to their former positions and
rights hereunder with respect to the property, subject to the Lien of this
Mortgage, and all rights, remedies and powers of the Security Trustee shall
continue, as if no such proceedings had been undertaken (but otherwise without
prejudice).
Section 4.04. Allocation of Payments. Notwithstanding any other
provisions of the Loan Agreement to the contrary, after the occurrence and
during the continuance of an Event of Default, all amounts collected or received
by the Security Trustee or any Lender on account of the Obligations shall be
paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees and
expenses actually incurred) of the Security Trustee in connection with
enforcing the rights of the Security Trustee under the Operative
Documents;
SECOND, to payment of any fees owed to any Transaction Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees and
expenses actually incurred) of each of the Lenders in connection with
enforcing its rights under the Operative Documents or otherwise with
respect to the Obligations owing to such Lender (it being understood,
however, that (i) the Original Series A Lender, the Original Series B
Lender and their respective Affiliates shall use joint counsel, and (ii)
all other Lenders shall use reasonable endeavors to select joint counsel,
but may retain separate counsel if in the reasonable judgment of such
other Lenders joint counsel would not be able to provide effective
representation, whether due to conflicts of interest among such Lenders, a
conflict of interest between the proposed joint counsel's representation
of any Lender and its representation of any other client, or for any other
reason);
FOURTH, to all other Obligations (other than as covered by Clause
"FIFTH", "SIXTH" and "SEVENTH" below) which shall have become due and
payable under the Operative Documents or otherwise and not repaid pursuant
to clauses "FIRST" through "THIRD" above; and
18
FIFTH, to the payment of all accrued interest on the Obligations;
SIXTH, to the payment of LIBOR Breakage Costs, if any, due under the
Loan Agreement in respect of the Loan;
SEVENTH, to the payment of the outstanding principal amount of the
Loan;
EIGHTH, so long as the Lien of the Subordinated Mortgage has not
been discharged, to the Subordinated Trustee to be held as security under
the Subordinated Mortgage;
NINTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category and (ii) if amounts available are insufficient to pay all
amounts due within any category, such available amounts shall be paid pro rata
to the parties entitled thereto based upon the amount due under such category to
each such party.
ARTICLE 5.
INTENTIONALLY LEFT BLANK
ARTICLE 6.
SECURITY FUNDS
Section 6.01. Investment of Security Funds. Any monies paid to or
received by the Security Trustee as cash collateral or which are required to be
paid to the Company or applied for the benefit of the Company (including,
without limitation, amounts payable to the Company under Sections 3.05(d) and
3.05(e) hereof), but which the Security Trustee is entitled to hold under the
terms hereof pending the occurrence of some event or the performance of some act
(including, without limitation, the remedying of an Event of Default), shall,
until paid to the Company or applied as provided herein, be invested by the
Security Trustee at the written authorization and direction of the Company (or,
if an Event of Default shall have occurred and be continuing, the Security
Trustee) from time to time at the sole expense and risk of the Company in
Permitted Investments. All Permitted Investments held by the Security Trustee
pursuant to this Section 6.01 shall either be (a) registered in the name of,
payable to the order of, or specially endorsed to, the Security Trustee or (b)
held in an Eligible Account. At the time of such payment or application, there
shall be remitted to the Company any gain (including interest received) realized
as the result of any such investment (net of any fees, commissions, other
expenses or losses, if any, incurred in connection with such investment) unless
an Event of Default shall have occurred and be continuing. The Security Trustee
shall not be liable for any loss relating to a Permitted Investment made
pursuant to this Section 6.01. The Company will promptly pay to the Security
Trustee, on demand, the amount of any loss (net of any gains,
19
including interest received) realized as the result of any such investment
(together with any fees, commissions and other expenses, if any, incurred in
connection with such investment).
Section 6.02 Investing of Cash Collateral. The Company may from time
to time provide Cash Collateral to the Security Trustee in accordance with the
terms and conditions of this Mortgage. The Security Trustee agrees that any Cash
Collateral provided by the Company shall be retained and invested by the
Security Trustee in accordance with the terms and conditions of Section 6.01
hereof.
Section 6.03 Release of Cash Collateral. If the Rotables Ratio is
less than the Maximum Rotables Ratio, as most recently determined pursuant to
Section 3.03, Section 3.05(d) and Section 3.10, upon written request of the
Company the Security Trustee shall, unless an Event of Default has occurred and
is continuing, pay to the Company an amount of the Cash Collateral or insurance
proceeds held by the Security Trustee pursuant to Section 3.05(d)(1), as the
case may be, such that the Rotables Ratio would not be greater than the Maximum
Rotables Ratio giving effect to such payment.
ARTICLE 7.
MISCELLANEOUS
Section 7.01. Termination of Mortgage. Upon (or at any time after)
payment in full of the unpaid principal of, and accrued interest on, the Loans
and all other Obligations then due and payable (and regardless of whether any
Default or Event of Default shall have occurred and be continuing), the Security
Trustee shall, upon the written request of the Company execute and deliver to,
or as directed in writing by, the Company an appropriate instrument (in due form
for recording) releasing the Pledged Spare Parts and the balance of the
Collateral from the Lien of this Mortgage and, in such event, this Mortgage
shall terminate and this Mortgage shall be of no further force or effect,
provided that the Security Trustee shall have no obligation to release such
Pledged Spare Parts and Collateral from the Lien of this Mortgage or otherwise
terminate this Mortgage prior to such payment in full. Upon any release of any
Pledged Spare Parts from the Lien of this Mortgage in accordance with the terms
of this Mortgage, the Spare Parts Documents and other Collateral referred to in
subsections (b), (c), (d) and (e) of Section 2.01 relating to such Pledged Spare
Part shall also be released.
Section 7.02. Alterations to Mortgage. This Mortgage shall not be
varied except in accordance with the Loan Agreement.
Section 7.03. No Legal Title to Collateral. No Secured Party shall
have legal title to any part of the Collateral. No transfer, by operation of Law
or otherwise, of a Note or any right, title and interest of any Secured Party in
and to the Collateral or this Mortgage shall operate to terminate this Mortgage
or entitle any successor or transferee to an accounting or to the transfer to it
of legal title to any part of the Collateral.
Section 7.04. Sale of the Collateral by Security Trustee Is Binding.
Any sale or other conveyance of the Collateral, or any part thereof or any
interest therein by the Security Trustee made pursuant to and in accordance with
the terms of this Mortgage shall bind the
20
Secured Parties, and shall be effective to transfer or convey all right, title
and interest of the Security Trustee, the Secured Parties and the Company, in
and to such Collateral, or such part thereof or interest therein. 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 Security
Trustee.
Section 7.05. Benefit of Mortgage. Nothing in this Mortgage, whether
express or implied, shall be construed to give to any Person other than the
Company, the Secured Parties and the Security Trustee any legal or equitable
right, remedy or claim under or in respect of this Mortgage.
Section 7.06. Section 1110 of the Bankruptcy Code. It is the
intention of the parties hereto that the security interest created hereby in the
Pledged Spare Parts entitles the Security Trustee on behalf of the Lenders to
all of the benefits of Section 1110 of Chapter 11 of the Bankruptcy Code with
respect to at least the Minimum 1110 Percentage (determined on the basis of
Appraisal Value) of the Rotables included within the Pledged Spare Parts in the
event the Company becomes a debtor under such Chapter.
Section 7.07. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, any notice or other communication herein required
or permitted to be given shall be in writing and may be personally served or
sent by telefacsimile, United States mail, courier service or overnight delivery
and shall be effective when received addressed:
(i) if to the Company, at its office at
America West Airlines, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Vice President and Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
(ii) if to the Security Trustee, at its office at
MAC: U1228-120
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
21
(iii) if to any Lender, at its address for notices to it provided
under the Loan Agreement,
or, as to any party, at such other address as such party shall from
time to time designate by written notice to the other parties in
accordance with this Section 7.07.
Section 7.08. Severability. Should any one or more provisions of
this Mortgage be determined to be illegal or unenforceable by a court of any
jurisdiction, such provision shall be ineffective to the extent of such
illegality or unenforceability without invalidating the remaining provisions
hereof or affecting the validity or enforceability of such provisions in any
other jurisdiction. The Company and the Security Trustee agree, as to such
jurisdiction and to the extent permitted by such jurisdiction's Laws, to replace
any provision of this Mortgage which is so determined to be illegal or
unenforceable by a valid provision which has as nearly as possible the same
effect; provided that such replacement provision shall not expand the Company's
or the Security Trustee's obligations hereunder.
Section 7.09. Separate Counterparts. This Mortgage may be executed
in any number of counterparts (and each of the parties hereto shall not be
required to execute the same counterpart). Each counterpart of this Mortgage
executed by a party hereto shall be an original counterpart of this Mortgage,
and all of such counterparts together shall constitute one instrument.
Section 7.10. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the Company
and its successors and permitted assigns, and the Security Trustee and its
successors and permitted assigns, all as herein provided.
Section 7.11. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 7.12. Governing Law. THIS MORTGAGE IS BEING DELIVERED IN THE
STATE OF NEW YORK AND SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. The provisions of Sections
9.11 and 9.12 of the Loan Agreement are incorporated herein by reference,
mutatis mutandis.
Section 7.13 Certification. The Company hereby represents that it is
a certificated air carrier under Section 44705 of title 49 of the U.S. Code.
[Remainder of this page is blank.]
22
IN WITNESS WHEREOF, the parties hereto have caused this Mortgage to
be duly executed by their respective officers, as the case may be, thereunto
duly authorized, as of the day and year first above written.
AMERICA WEST AIRLINES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
_________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President and Treasurer
▇▇▇▇▇ FARGO BANK NORTHWEST
NATIONAL ASSOCIATION, as Security Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
APPENDIX A
DEFINITIONS RELATING TO THE
MORTGAGE AND SECURITY AGREEMENT
General Provisions
(a) Unless otherwise expressly provided, a reference to:
(i) each of "the Company," "Security Trustee" or any other person
includes, without prejudice to the provisions of any Operative
Document, any successor in interest to it and any permitted
transferee or permitted assignee of it;
(ii) words importing the plural include the singular and words importing
the singular include the plural;
(iii) any agreement, instrument or document, or any annex, schedule or
exhibit thereto, or any other part thereof, includes, without
prejudice to the provisions of any Operative Document, that
agreement, instrument or document, or annex, schedule or exhibit, or
part, respectively, as amended, modified or supplemented from time
to time in accordance with its terms and in accordance with the
Operative Documents, and any agreement, instrument or document
entered into in substitution or replacement therefor;
(iv) any provision of any Law includes any such provision as amended,
modified, supplemented, substituted, reissued or reenacted prior to
the Closing Date, and thereafter from time to time;
(v) the words "Mortgage," "this Mortgage," "hereby," "herein," "hereto,"
"hereof" and "hereunder" and words of similar import when used in
the Mortgage refer to the Mortgage as a whole and not to any
particular provision of the Mortgage;
(vi) the words "including," "including, without limitation," "including,
but not limited to," and terms or phrases of similar import when
used in the Mortgage, with respect to any matter or thing, mean
including, without limitation, such matter or thing; and
(vii) a "Section," an "Exhibit," an "Appendix," an "Annex" or a "Schedule"
referred to in the Mortgage, or in any annex thereto, is a reference
to a section of, or an exhibit, an appendix, an annex or a schedule
to, the Mortgage or such annex, respectively.
(b) Each exhibit, appendix, annex and schedule to the Mortgage is incorporated
in, and shall be deemed to be a part of, the Mortgage.
(c) Headings used in the Mortgage are for convenience only and shall not in
any way affect the construction of, or be taken into consideration in
interpreting, the Mortgage.
1
APPENDIX A
(d) The occurrence and continuance of a Default, Special Default or Event of
Default referred to in Section 7.1 of the Loan Agreement shall not be
deemed to prohibit the Company from taking any action or exercising any
right that is conditioned on no Default, Special Default or Event of
Default having occurred and be continuing if such Default, Special Default
or Event of Default consists of the institution of reorganization
proceedings with respect to the Company under Chapter 11 of the Bankruptcy
Code and the trustee or debtor-in-possession in such proceedings shall
have agreed to perform its obligations under the Mortgage with the
approval of the applicable court and thereafter shall have continued to
perform such obligations in accordance with Section 1110 of the Bankruptcy
Code.
Definitions
"Additional Rotables" has the meaning specified in Section 3.03(a)
of the Mortgage.
"Affiliate" means, with respect to any person, any other person
directly or indirectly controlling, controlled by or under common control with
such person. For purposes of this definition, "control" means the power,
directly or indirectly, to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities or
by contract or otherwise and "controlling," "controlled by" and "under common
control with" have correlative meanings.
"Appliance" means an instrument, equipment, apparatus, a part, an
appurtenance, or an accessory used, capable of being used, or intended to be
used, in operating or controlling aircraft in flight, including a parachute,
communication equipment, and another mechanism installed in or attached to
aircraft during flight, and not a part of an aircraft, Engine, or Propeller.
"Appraisal" means an appraisal of the Pledged Spare Parts completed
with the either the Desk-Top Appraisal Methodology or the Physical Appraisal
Methodology, as the case may be.
"Appraisal Compliance Report" means, as of any date, a report
providing information relating to the calculation of the Rotables Ratio, which
shall be substantially in the form of Appendix C to this Mortgage.
"Appraisal Date" has the meaning set forth in Section 3.10(a) of the
Mortgage.
"Appraisal Value" means, with respect to any Rotable included in the
Collateral, the Current Market Value of such Rotable as most recently determined
pursuant to Section 3.03(d), 3.03(e) or Section 3.10 of the Mortgage (including,
without limitation, in connection with an Independent Appraiser's Certificate).
"AWA Appraiser Responsibility" means the responsibility of the
Company to (i) make timely payment of the Independent Appraiser's fees and
expenses (subject to the limitation set forth in Section 3.10(c) of the
Mortgage), (ii) provide the Independent Appraiser with timely and accurate Data
Reports, and (iii) in the case of any Physical Appraisal, provide the
A-2
APPENDIX A
Independent Appraiser with full and complete access to all Designated Locations
required by the Independent Appraiser.
"Bankruptcy Code" means Title 11 of the United States Code.
"Business Day" means any day except Saturday, Sunday and any day
which shall be in New York City or Phoenix, Arizona a day on which banking
institutions are authorized or required by Law to close.
"Cash Collateral" has the meaning set forth in Section 3.03(a)(ii)
of the Mortgage.
"Certificated Air Carrier" means a Person holding an air carrier
operating certificate issued by the Secretary of Transportation pursuant to
Chapter 447 of Title 49, United States Code, for aircraft capable of carrying
ten or more individuals or 6,000 pounds or more of cargo.
"Citizen of the United States" has the meaning specified in Section
40102(a)(15) of Title 49 of the United States Code.
"Closing Date" means the date on which the Loan is made pursuant to
the Loan Agreement.
"Collateral" has the meaning given such term in Section 2.01 of the
Mortgage.
"Collateral Diminution Event" means as of any Appraisal Date, if the
Current Market Value of the Rotables included in the Collateral, as of such
Appraisal Date, is 10% (or more) lower than the Current Market Value of the
Rotables included within the Collateral, as of the immediately preceding
Appraisal Date; provided, however, if such 10% or more change in the Current
Market Value of the Rotables included within the Collateral is attributable
primarily to a change in industry-wide market values or to a change in the
valuation methodology used by the Independent Appraiser, then such change shall
not constitute a "Collateral Diminution Event" for purposes of this Mortgage.
"Company" means America West Airlines, Inc., a Delaware corporation.
"Current Market Value" means, with respect to any Rotable included
in the Collateral, its current market value determined on the basis of a
hypothetical sale negotiated in an arm's length free market transaction between
a willing and able seller and a willing and able buyer, neither of whom is under
undue pressure to complete the transaction, under then current market condition,
as determined by the Independent Appraiser.
"Data Report" means information and data relating to the Pledged
Spare Parts supplied by the Company to the Independent Appraiser necessary for
the Independent Appraiser to complete the Independent Appraiser's Certificate
and substantially in the form of Appendix D to the Mortgage.
A-3
APPENDIX A
"Data Report Date" means the sixth calendar day of each month,
commencing with the first month following the month in which the Funding Date
occurs.
"Default" means any event which, with the giving of notice, lapse of
time or both would become an Event of Default.
"Designated Locations" means the locations designated from time to
time by the Company at which the Pledged Spare Parts may be maintained by or on
behalf of the Company, which initially shall be the locations set forth on
Schedule I to the Mortgage and shall include the additional locations designated
by the Company pursuant to Section 3.02(b)(2) of the Mortgage.
"Desk-Top Appraisal Date" has the meaning set forth in Section
3.10(a) of the Mortgage.
"Desk-Top Appraisal Methodology" means the Physical Appraisal
Methodology, excluding the actions referred to in clauses (vi) and (vii) of the
definition of Physical Appraisal Methodology.
"Desk-Top Data Report Date" means each Data Report Date that is not
a Physical Data Report Date.
"Dollars" and "$" means the lawful currency of the United States of
America.
"Eligible Account" means an account established by and with an
Eligible Institution at the request of the Security Trustee, which institution
agrees, for all purposes of the New York UCC including Article 8 thereof, that
(a) such account shall be a "securities account" (as defined in Section 8-501 of
the New York UCC), (b) such institution is a "securities intermediary" (as
defined in Section 8-102(a)(14) of the New York UCC), (c) all property (other
than cash) credited to such account shall be treated as a "financial asset" (as
defined in Section 8-102(9) of the New York UCC), (d) the Security Trustee shall
be the "entitlement holder" (as defined in Section 8-102(7) of the New York UCC)
in respect of such account, (e) it will comply with all entitlement orders
issued by the Security Trustee to the exclusion of the Company, (f) it will
waive or subordinate in favor of the Security Trustee all claims (including
without limitation, claims by way of security interest, lien or right of set-off
or right of recoupment), and (g) the "securities intermediary jurisdiction"
(under Section 8-110(e) of the New York UCC) shall be the State of New York.
"Eligible Institution" means (a) the Security Trustee, acting solely
in its capacity as a "securities intermediary" (as defined in Section 8-102(14)
of the New York UCC), or (b) a depository institution organized under the Laws
of the United States of America or any of the states thereof or the District of
Columbia (or any U.S. branch of a foreign bank), which has a long-term unsecured
debt rating from Moody's and Standard & Poor's of at least A3 or its equivalent.
"Engine" means an engine used, or intended to be used, to propel an
aircraft, including a part, appurtenance, and accessory of the Engine.
A-4
APPENDIX A
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Event of Default" has the meaning given such term in the Loan
Agreement.
"Excluded Parts" means (i) Expendable Parts that are not stored on a
shelf or within an area marked with the signs and inscriptions required pursuant
to Section 3.02(d) at a Designated Location, (ii) Spare Parts and Appliances
that are stored at an Excluded Location established in accordance with Section
3.02(b)(3) of the Mortgage and (iii) Hazardous Materials.
"Expendable Parts" means those Spare Parts and Appliances that, once
used, cannot be re-used, and if not serviceable, cannot be overhauled or
repaired.
"FAA Filed Documents" has the meaning set forth in the Loan
Agreement.
"Federal Aviation Act" means Part A of Subtitle VII of ▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ Code.
"Federal Aviation Administration" and "FAA" mean the United States
Federal Aviation Administration, and any agency or instrumentality of the United
States government succeeding to its functions.
"Financing Statements" has the meaning set forth in the Loan
Agreement.
"Funding Date" has the meaning given to such term in the Loan
Agreement.
"Government Entity" means (a) any federal, state, provincial or
similar government, and any body, board, department, commission, court,
tribunal, authority, agency or other instrumentality of any such government or
otherwise exercising any executive, legislative, judicial, administrative or
regulatory functions of such government or (b) any other government entity
having jurisdiction over any matter contemplated by the Operative Documents or
relating to the observance or performance of the obligations of any of the
parties to the Operative Documents.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Laws.
"Independent Appraiser" means ▇▇▇▇-▇▇▇▇▇▇▇▇, Inc. or, if
▇▇▇▇-▇▇▇▇▇▇▇▇, Inc. is no longer the Independent Appraiser, any other Person
selected by the Security Trustee and reasonably acceptable to the Company
pursuant to Section 3.10(c).
A-5
APPENDIX A
"Independent Appraiser's Certificate" means a certificate delivered
pursuant to Section 3.03(d), 3.03(e) or Section 3.10 of the Mortgage, and
substantially in the form of Appendix E to the Mortgage.
"Independent Appraiser's Fee Amount" has the meaning set forth in
Schedule 3 to the Loan Agreement.
"JAA" means the European Joint Aviation Authorities, and any agency
or instrumentality succeeding to its functions.
"Key Repairable" means those Spare Parts and Appliances that can be
economically restored or repaired to a serviceable condition, but have a life
that is considerably less than the life of the flight equipment to which they
are related.
"Law" means (a) any constitution, treaty, statute, law, decree,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision under,
any of the foregoing.
"Lender" has the meaning given to that term in the Loan Agreement.
"Letter of Credit" has the meaning specified in Section
3.03(a)(iii).
"Lien" means any mortgage, pledge, lien, charge, encumbrance, lease,
or security interest affecting the title to or interest in property.
"Loan" has the meaning given to that term in the Loan Agreement.
"Loan Agreement" means the Loan Agreement [Spare Parts], dated as of
September 3, 2004 among the Company, General Electric Capital Corporation, the
Security Trustee and the Lenders from time to time party thereto.
"Maximum Rotables Ratio" has the meaning set forth in Schedule 3 to
the Loan Agreement.
"Maximum Self-Insurance Amount" has the meaning set forth in
Schedule 3 to the Loan Agreement.
"Minimum 1110 Percentage" has the meaning set forth in Schedule 3 to
the Loan Agreement.
"Minimum Liability Amount" has the meaning set forth in Schedule 3
to the Loan Agreement.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means the Spare Parts Mortgage and Security Agreement
covering the Collateral dated as of September 3, 2004, between the Company and
the Security Trustee.
A-6
APPENDIX A
"New York UCC" means the Uniform Commercial Code as in effect in the
State of New York.
"Note" has the meaning given to that term in the Loan Agreement.
"Obligations" means the principal of and interest on the Loan, any
LIBOR Breakage Costs (as defined in the Loan Agreement), the Prepayment Fee (as
defined in the Loan Agreement), if applicable, and all other obligations of
every nature of the Company from time to time owed to the Security Trustee, the
other Secured Parties or any of them under the Loan Agreement or any other
Operative Document.
"Officer's Certificate" means, as to any company, a certificate
signed by the Chairman, any Vice Chairman, the President, any Executive Vice
President, any Senior Vice President, any Vice President, any Assistant Vice
President, the Treasurer, any Assistant Treasurer, the Secretary, or any
Assistant Secretary of such company.
"Operative Documents" means the Loan Agreement, each Note, the
Restructure Letter, the Mortgage and each Supplemental Mortgage.
"Permitted Disposition Amount" has the meaning set forth in Schedule
3 to the Loan Agreement.
"Permitted Investments" means (i) securities issued or directly and
fully guaranteed by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), the Federal Home Loan Mortgage
Corporation, the Student Loan Marketing Association and the Federal National
Mortgage Association, in all cases having a maturity of not more than 90 days
or, in the case of auction rate notes issued by any of the foregoing, having an
action reset interval of not more than 30 days; (ii) certificates of deposit,
bankers' acceptances, repurchase agreements or time deposits issued or accepted
or guaranteed by any bank, trust company or national banking association
incorporated under the Laws of the United States of America or one of the states
thereof having combined capital and surplus and retained earnings as of its last
report of condition of at least $500,000,000 and having a rating of AA or better
by Moody's or AA or better by Standard & Poor's and having a final maturity of
90 days or less from date of purchase thereof; and (iii) commercial paper of any
holding company of a bank, trust company or national banking association
described in (ii) and commercial paper of any corporation or finance company
incorporated or doing business under the Laws of the United States of America or
any state thereof having a rating assigned to such commercial paper of A1 by
Standard & Poor's or P1 by Moody's and having a final maturity of 90 days or
less from the date of purchase thereof; provided that the aggregate amount at
any one time invested in certificates of deposit issued by any one bank shall
not be in excess of 5% of such bank's capital and surplus.
"Permitted Liens" has them meaning given such term in Section 3.01
of the Mortgage.
"Person" has the meaning given to such term in the Loan Agreement.
A-7
APPENDIX A
"Physical Appraisal" means an appraisal of the Rotables included
within the Pledged Spare Parts conducted using the Physical Appraisal
Methodology.
"Physical Appraisal Methodology" means, in determining an opinion as
to the Current Market Value of the Pledged Spare Parts, taking at least the
following actions: (i) reviewing the Data Report prepared as of the applicable
Valuation Date; (ii) reviewing the Independent Appraiser's internal value
database for values applicable to the Pledged Spare Parts; (iii) developing a
representative sampling of a reasonable number of the different Rotables
included in Pledged Spare Parts for which a market check will be conducted; (iv)
checking other sources, such as manufacturers, other airlines, U.S. Government
procurement data and airline parts pooling price lists, for current market
prices of the sample parts referred to in clause (iii); (v) establishing an
assumed ratio of Serviceable Parts to Unserviceable Parts as of the applicable
Valuation Date based upon information provided by the Company and the
Independent Appraiser's limited physical review of the Rotables referred to in
the following clause (vi); (vi) visiting Designated Locations selected by the
Independent Appraiser where in the aggregate up to 80% (by measure of Appraisal
Value) of the Pledged Spare Parts are kept by the Company to conduct a physical
inspection of the Pledged Spare Parts; (vii) conducting a limited review of the
inventory reporting system applicable to the Pledged Spare Parts, including
checking information reported in such system against information determined
through physical inspection pursuant to the proceeding clause (vi); and (viii)
reviewing a sampling of the Spare Parts Documents (including tear-down reports).
"Physical Data Report Date" means the Data Report Date occurring on
the sixth calendar day of the sixth month following the Funding Date, and
thereafter on the sixth calendar day of the sixth month after the preceding
Physical Data Report Date; provided that, if at any time, a Collateral
Diminution Event has occurred as of a Data Report Date occurring after a
Physical Appraisal Date (or, if a Physical Appraisal Date has not yet occurred,
after the Funding Date) but prior to the next succeeding Data Report Date (and
is not cured as of the next succeeding Data Report Date, if any, occurring prior
to such next succeeding Data Report Date), then the next Physical Data Report
Date shall be such next succeeding Data Report Date.
"Pledged Spare Parts" has the meaning set forth in clause (a) of the
first paragraph of Section 2.01 of the Mortgage.
"Pre-Approved Bank" means any bank organized under the laws of the
United States or any State thereof, or the New York branch of a major
international bank, in each case for only so long as its long-term Dollar
denominated unsecured debt (or if it does not have long-term unsecured Dollar
denominated debt, its parent corporation's long-term unsecured Dollar
denominated debt) carries a rating from Standard & Poor's of A or better.
"Propeller" includes a part, appurtenance, and accessory of a
propeller.
"Required LC Expiry Date" means the day that is the ninety-first
(91st) day following the Maturity Date of the Notes issued pursuant to the Loan
Agreement.
"Restructure Letter" means the Restructure Letter [Spare Parts],
dated as of September 3, 2004, between General Electric Capital Corporation and
the Company.
A-8
APPENDIX A
"Rotable" means those Spare Parts and Appliances that can be
repeatedly and economically restored to a serviceable condition over a period
approximating the life of the flight equipment to which they are related.
"Rotables Ratio" shall mean, as of any date, a percentage determined
by dividing (i) the aggregate outstanding principal amount of the Loan minus the
amount of the Cash Collateral held by the Security Trustee as of such date by
(ii) the aggregate Current Market Value of all Rotables that are Pledged Spare
Parts, excluding (x) those Rotables which are either in transit or out for
repair and consequently not located at a Designated Location as of such date,
and (y) those Rotables which are located at any Designated Location which is at
the premises of a third party maintenance facility, including, but not limited
to the two locations identified as "TIMCO" locations as of the Closing Date.
"Secure Location" means an area in a Designated Location to which
access is controlled by lock and key, supported by an appropriate security
system, and which is accessible only to authorized employees of the Company.
"Secured Parties" means the Lenders, the Security Trustee and the
parties (except the Company) from time to time party to the Restructure Letter.
"Security Trustee" means ▇▇▇▇▇ Fargo Bank Northwest, National
Association, in its capacity as security trustee under the Mortgage.
"Serviceable Parts" means Pledged Spare Parts in condition
satisfactory for incorporation in, installation on, attachment or appurtenance
to or use in an aircraft, Engine or other Pledged Spare Part.
"Software" means any and all computer programs and inventory
management systems, including, but not limited to all source code and user
interfaces associated therewith as well as all data files used as input thereto
and data files or other records generated thereby, used by the Company to track
and manage the location, use and maintenance status of Spare Parts and
Appliances.
"Special Default" has the meaning given to that term in the Loan
Agreement.
"Spare Part" means an accessory, appurtenance, or part of an
aircraft (except an Engine or Propeller), Engine (except a Propeller),
Propeller, or Appliance, that is to be installed at a later time in an aircraft,
Engine, Propeller or Appliance.
"Spare Parts Documents" has the meaning set forth in clause (e) of
the first paragraph of Section 2.01 of the Mortgage.
"Standard & Poor's" has the meaning given to such term in the Loan
Agreement.
"Subordinated Mortgage" has the meaning given to that term in the
Loan Agreement.
A-9
APPENDIX A
"Subordinated Trustee" means the "Security Trustee" as defined in
the Subordinated Mortgage.
"Supplemental Mortgage" means a Supplemental Mortgage and Security
Agreement in substantially the form of Exhibit A to the Mortgage.
"Taxes" has the meaning given to that term in the Loan Agreement.
"Threshold Amount" has the meaning set forth in Schedule 3 to the
Loan Agreement.
"Transaction Agents" has the meaning given to that term in the Loan
Agreement.
"UCC" or "Uniform Commercial Code" means the Uniform Commercial Code
as in effect in any applicable jurisdiction.
"Unserviceable Parts" means Pledged Spare Parts that are not
Serviceable Parts.
"U.S. Government" means the federal government of the United States,
or any instrumentality or agency thereof the obligations of which are guaranteed
by the full faith and credit of the federal government of the United States.
"Valuation Date" has the meaning given to that term in Section
3.10(a) of the Mortgage.
"Warranties"" has the meaning given to that term in Section 2.01 of
the Mortgage.
A-10
APPENDIX B
INSURANCE
Capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference in Appendix A to the Mortgage.
A. LIABILITY INSURANCE
The Company will carry or cause to be carried at all times, at no
expense to any Secured Party, third party liability insurance with
respect to the Pledged Spare Parts, which is (i) of amount and scope as is
usually carried by airlines engaged in the same or similar business, similarly
situated with Company and owning or operating similar spare parts for aircraft
and engines and covering risks of the kind customarily insured against by the
Company for equipment similar to the Pledged Spare Parts and (ii) maintained in
effect with insurers of recognized responsibility (such insurers being referred
to herein as "Approved Insurers").
The Company will carry or cause to be carried at all times, at no
expense to any Secured Party, with Approved Insurers third party
liability insurance covering the Designated Locations where any Pledged Spare
Parts shall be located. Pursuant to Section C below, the Secured Parties shall
be named as Additional Insureds under any such insurance policy.
B. PROPERTY INSURANCE
The Company will carry or cause to be carried at all times, at no
expense to Security Trustee or any Lender, with Approved Insurers insurance
covering physical damage to the Pledged Spare Parts, of the type covering the
same risks as are usually carried by airlines engaged in the same or similar
business as Company and covering risks of the kind customarily insured against
by Company and providing for the reimbursement of the actual expenditure
incurred in repairing or replacing any damaged or destroyed Pledged Spare Part
or, if not repaired or replaced, for the payment of the amount it would cost
(determined as of the date of loss) to repair or replace such Pledged Spare Part
with proper deduction for obsolescence and physical depreciation.
The Company will carry or cause to be carried at all times, at no
expense to any Secured Party, with Approved Insurers property insurance covering
the Designated Locations where any Pledged Spare Parts shall be located.
Any policies of insurance carried in accordance with this Section B
covering the Pledged Spare Parts and any policies taken out in substitution or
replacement for any such policies shall provide that (A) all insurance proceeds
paid under such policies as a result of the occurrence of any loss or damage
with respect to any Pledged Spare Parts involving proceeds in excess of the
Threshold Amount up to an amount equal to the unpaid principal amount of the
Loan and the accrued but unpaid interest due thereon will be paid to the
Security Trustee and (B) the entire amount of any insurance proceeds up to the
Threshold Amount shall be paid to the
B-1
Company or its order; provided that if a Special Default or Event of Default
shall have occurred and be continuing and the insurers have been notified
thereof by the Security Trustee or any other Person, the amount of any proceeds
up to the Threshold Amount of any loss with respect to the Pledged Spare Parts
shall not be paid to the Company, but shall instead be paid to the Security
Trustee notwithstanding the preceding clause (B) of this paragraph.
C. GENERAL PROVISIONS
Any policies of insurance carried in accordance with Sections A and
B, including any policies taken out in substitution or replacement for such
policies:
(a) shall name each Secured Party as an additional insured
(collectively, the "Additional Insureds"), as their respective interests
may appear;
(b) in the case of Section A, shall provide that, in respect of the
interests of the Additional Insureds in such policies, the insurance shall
not be invalidated or impaired by any act or omission (including
misrepresentation and nondisclosure) by the Company or any other Person
(including, without limitation, use of the Pledged Spare Parts for illegal
purposes) and shall insure the Additional Insureds regardless of any
breach or violation of any representation, warranty, declaration, term or
condition contained in such policies by the Company;
(c) shall provide that, if the insurers cancel such insurance for
any reason whatsoever, including nonpayment of premium, or if any material
change is made in the insurance which adversely affects the interest of
any of the Additional Insureds, such cancellation or change shall not be
effective as to the Additional Insureds for 30 days (10 days for
nonpayment of premiums or cancellation by the Company) after receipt by
the Additional Insureds of written notice by such insurers of such
cancellation or change;
(d) shall waive any right of recourse, subrogation, setoff,
recoupment, counterclaim or other deduction against any Additional
Insured;
(e) shall be primary without right of contribution from any other
insurance that may be available to any Additional Insured;
(f) in the case of Section A, shall provide that all of the
liability insurance provisions thereof, except the limits of liability,
shall operate in all respects as if a separate policy had been issued
covering each party insured thereunder; and
(g) shall provide that none of the Additional Insureds shall be
liable for any insurance premium.
D. REPORTS, ETC.
On or prior to the Closing Date and on or prior to each renewal date
of the insurance policies required hereunder, the Company will furnish or cause
to be furnished to the Secured Parties insurance certificates describing in
reasonable detail the insurance maintained by the Company hereunder and a
report, signed by the Company's regularly retained independent
B-2
insurance broker (the "Insurance Broker"), stating the opinion of such Insurance
Broker that all premiums in connection with the insurance then due have been
paid and that the insurance terms are in compliance with the requirements of
this Annex I. Such information shall remain confidential as provided in Section
9.9 of the Loan Agreement. The Company will cause such Insurance Broker to agree
to advise the Security Trustee in writing of any default in the payment of
premium as required by the terms hereof and to advise the Security Trustee at
least sixty (60) days (ten (10) days in the case of nonpayment of premium) prior
to the cancellation or material adverse change of any insurance maintained
pursuant to this Appendix B. In the event that the Company shall fail to
maintain or cause to be maintained insurance as herein provided, the Security
Trustee may, at its sole option, provide such insurance and, in such event, the
Company shall, upon demand, reimburse the Security Trustee for the cost thereof.
E. REINSURANCE
The Company shall procure that in respect of insurances maintained
by the Company in accordance with the provisions in this Appendix B the insurers
shall maintain, if such insurances do not provide for direct coverage in the
markets hereafter referred to, reinsurance covering identical subject matter and
risk for an amount which shall not be less than 100% of the coverage amount
under Sections A and B hereof in Lloyd's of London or other internationally
recognized aviation reinsurance markets. Such reinsurance shall contain a
customary "cut-through" endorsement and shall provide that any payment by the
reinsurers shall be made notwithstanding any bankruptcy, insolvency or
liquidation of the original insurer and/or that the original insurer has made no
payment under the original policies.
F. SELF-INSURANCE
The Company may self-insure, by way of deductible, premium
adjustment provisions in insurance policies, or otherwise, on a basis consistent
with standard industry practice among major U.S. Airlines, the risks required to
be insured against pursuant to Sections A and B hereof but in no case shall the
self-insurance exceed the Maximum Self-Insurance Amount for any one occurrence.
B-3
APPENDIX C
FORM OF APPRAISAL COMPLIANCE REPORT
[Address to each Lender and
to the Security Trustee]
APPRAISAL COMPLIANCE REPORT UNDER THE SPARE PARTS MORTGAGE AND SECURITY
AGREEMENT
Ladies and Gentlemen:
We refer to the Spare Parts Mortgage and Security Agreement (the
"Mortgage"), dated as of ______, between America West Airlines, Inc. (the
"Company") and ▇▇▇▇▇ Fargo Bank Northwest, National Association (the "Security
Trustee"). Terms defined in the Mortgage and used herein have such respective
defined meanings. The Company hereby certifies that:
1. This Appraisal Compliance Report is based upon an Independent
Appraiser's Certificate (the "Relevant Appraisal") dated [___________]. The
Valuation Date for purposes of the Relevant Appraisal was [___________] (the
"Relevant Valuation Date").
2. Based on the Relevant Appraisal, the following sets forth the
calculation of the Rotable Ratio as of the Relevant Valuation Date:
a. The Current Market Value of the Rotables included
in the Collateral, is at least
$[_____]
b. The Current Market Value of the Rotables included in
the Collateral and either (A) in transit or out for $[_____]
repair and consequently not located at a Designated
Location as of the Relevant Valuation Date, or (B)
located at a Designated Location that is at the
premises of a third party maintenance facility as of
the Relevant Valuation Date, in each case as set
forth in the accompanying Independent Appraiser's
Certificate, is at least
C-1
c. The aggregate principal amount of all Loans
outstanding as of the Relevant Valuation Date $[_____]
d. The amount of the Cash Collateral as of the
Relevant Valuation Date
$[_____]
e. The aggregate amount of Letters of Credit as of
the Relevant Valuation Date $[_____]
f. The Rotables Ratio
((c - d - e) / (a - b)) $[_____]
Dated: [__________]
Very truly yours,
AMERICA WEST AIRLINES, INC.
By:____________________________
Name:
Title:
C-2
APPENDIX D
FORM OF DATA REPORT
[Address to each Lender, to
the Security Trustee and the
Independent Appraiser]
______________, 20__
DATA REPORT UNDER THE SPARE PARTS MORTGAGE AND SECURITY AGREEMENT
Ladies and Gentlemen:
We refer to the Spare Parts Mortgage and Security Agreement (the
"Mortgage"), dated as of ______, between America West Airlines, Inc. (the
"Company") and ▇▇▇▇▇ Fargo Bank Northwest, National Association (the "Security
Trustee"). Terms defined in the Mortgage and used herein have such respective
defined meanings. The Company hereby certifies that:
1. Attached hereto as Exhibit 1 is a report that correctly sets forth
the following information as of the date hereof with respect to each Pledged
Spare Part:
i) Manufacturer's part number;
ii) part description;
iii) related aircraft model(s) in summary form;
iv) classification as Rotable or Key Repairable;
v) quantity on hand;
vi) the Company's cost basis;
vii) each Pledged Spare Part out for repair; and
viii) each Pledged Spare Part in transit.
2. The respective values of all Rotables and Key Repairables stored at
a Designated Location calculated on a historical basis, by Designated Location,
are _______________.
D-1
3. Attached hereto as Exhibit 2 is a report that correctly sets forth
the following information as of the date hereof with respect to each Pledged
Spare Part:
i) Rotable/Key Repairable Asset Report by total quantity and value by
part number;
ii) Rotable and Key Repairable by Designated Location;
iii) Rotable/Key Repairable asset summary values;
iv) Key Repairable allocation summary quantity and value by Designated
Location; and
v) Rotable allocation summary quantity and value by Designated
Location.
Very truly yours,
AMERICA WEST AIRLINES, INC.
By:____________________________
Name:
Title
Date:
D-2
APPENDIX E
FORM OF INDEPENDENT APPRAISER'S CERTIFICATE
[Address to each Lender and
to the Security Trustee]
INDEPENDENT APPRAISER'S CERTIFICATE UNDER THE SPARE PARTS MORTGAGE AND SECURITY
AGREEMENT
Ladies and Gentlemen:
We refer to the Spare Parts Mortgage and Security Agreement (the "Mortgage"),
dated as of ______, between America West Airlines, Inc. (the "Company") and
▇▇▇▇▇ Fargo Bank Northwest, National Association (the "Security Trustee"). Terms
defined in the Mortgage and used herein have such respective defined meanings.
The Independent Appraiser hereby certifies that as of the Data Report Date of
[insert date]:
1. The aggregate Appraisal Value of (x) all Rotables that are included within
the Pledged Spare Parts and that are located at a Designated Location is
$[________], and (y) all Key Repairables that are included within the Pledged
Spare Parts and that are located at a Designated Location is $[________].
2. The aggregate Appraisal Value of (x) all Rotables that are included within
the Pledged Spare Parts and that are in transit or outside a Designated Location
for maintenance or at a Designated Location that is at the premises of a third
party maintenance facility is $[ ], and (y) all Rotable Parts that are
Unserviceable Parts is $[ ].
Very truly yours,
[NAME OF INDEPENDENT APPRAISER]
By:_________________________
Name:
Title:
Date:
E-1
EXHIBIT A
FORM OF SUPPLEMENTAL MORTGAGE AND SECURITY AGREEMENT
(TO ADD DESIGNATED LOCATIONS)
SUPPLEMENTAL MORTGAGE NO. _____
SUPPLEMENTAL MORTGAGE NO.________, dated as of __________ of AMERICA
WEST AIRLINES, INC., a Delaware corporation (together with its successors and
assigns, the "Company").
WHEREAS, the Company, which is a certificated air carrier under
Section 44705 of title 49 of the U.S. Code, and ▇▇▇▇▇ Fargo Bank Northwest,
National Association, as Security Trustee (the "Security Trustee"), have
heretofore executed and delivered a Spare Parts Mortgage and Security Agreement,
dated as of September 3, 2004 (the "Mortgage"), and terms defined in the
Mortgage and used herein have such defined meanings unless otherwise defined
herein;
WHEREAS, the Mortgage grants a Lien on, among other things, certain
Spare Parts and Appliances to secure (subject to the provisions of the Mortgage)
the payment of the Loans and the other obligations under the Loan Agreement, the
other Operative Documents; and
WHEREAS, the Company has previously designated the locations at
which the Pledged Spare Parts may be stored by the Company in the Mortgage [and
in Supplemental Mortgage No. __];
WHEREAS, the Mortgage [and the Supplemental Mortgages] has [have]
been duly recorded with the Federal Aviation Administration at Oklahoma City,
Oklahoma, pursuant to the Federal Aviation Act on the following date as a
document or conveyance bearing the following number:
DATE OF DOCUMENT OR
DATE RECORDING CONVEYANCE NO.
Mortgage
[Supplemental
Mortgage]
WHEREAS, the Company, as provided in the Mortgage, is hereby
executing and delivering to the Security Trustee this Supplemental Mortgage for
the purposes of adding locations at which the Pledged Spare Parts may be stored
by the Company; and
WHEREAS, all things necessary to make this Supplemental Mortgage the
valid, binding and legal obligation of the Company, including all proper
corporate action on the part of the Company, have been done and performed and
have happened;
1
NOW, THEREFORE, THIS SUPPLEMENTAL MORTGAGE, WITNESSETH, that the
locations listed on Schedule I hereto shall be Designated Locations for purposes
of the Mortgage at which Pledged Spare Parts may be maintained by or on behalf
of the Company.
This Supplemental Mortgage shall be construed as supplemental to the
Mortgage and shall form a part thereof, and the Mortgage is hereby incorporated
by reference herein and is hereby ratified, approved and confirmed.
THIS SUPPLEMENTAL MORTGAGE IS DELIVERED IN THE STATE OF NEW YORK.
THIS SUPPLEMENTAL MORTGAGE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
Delivery of an executed counterpart of a signature page to this
Supplemental Mortgage by telecopier shall be effective as delivery of an
original executed counterpart of this Supplemental Mortgage.
IN WITNESS WHEREOF, this Supplemental Mortgage has been duly
executed and delivered all as of the date first above written.
AMERICA WEST AIRLINES, INC.
By:____________________________
Name:
Title:
2
SCHEDULE I to EXHIBIT A
3
EXHIBIT B
FORM OF LETTER OF CREDIT
▇▇▇▇▇ Fargo Bank Northwest, National Association,
as Security Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dated _________
This Letter of Credit is provided pursuant to the Spare Parts Mortgage and
Security Agreement dated as of September 3, 2004 between America West Airlines,
Inc. , and ▇▇▇▇▇ Fargo Bank Northwest, National Association, as Security Trustee
(the "SECURITY TRUSTEE"). This letter of credit however creates primary
obligations on us and is independent from the mortgage.
On the instructions of America West Airlines, Inc. and for its account, we
hereby establish this irrevocable Letter of Credit to authorize the Security
Trustee, to draw on [APPROPRIATE BRANCH/DEPARTMENT DETAILS/ADDRESS OF ISSUING
BANK] an amount or amounts not exceeding a total of USD [AMOUNT IN FIGURES
(AMOUNT IN WORDS] United States Dollars) upon receipt by us of a signed demand
certificate from you in the following format (with the square bracketed sections
completed):
"The undersigned as an authorized signatory or representative of the Security
Trustee hereby draws upon your irrevocable Letter of Credit dated [DATE OF THIS
LETTER OF CREDIT] and instructs you to transfer US$ [AMOUNT IN FIGURES] ([AMOUNT
IN WORDS] United States Dollars) to [INSERT APPROPRIATE BANK details]
immediately."
We will honor drawings under this Letter of Credit upon our receipt of such a
demand certificate (by facsimile to fax number: [BANK FAX NUMBER], mail, courier
service or by hand) and will make payment to the account specified in the demand
certificate, for value no later than close of business on the next succeeding
banking day following our receipt of the demand certificate. If any drawing
hereunder does not conform with these terms, we shall promptly notify you of
that, state the reason(s) why and hold the document(s) presented at your
disposal (or return them to you if you so request).
Partial drawings are permitted.
This letter of credit expires on [INITIAL EXPIRY DATE] ("Expiry Date") but shall
be automatically extended, without the need for amendment, for one year from the
said Expiry Date and annually thereafter unless at least 60 days prior to the
then applicable Expiry Date we have notified you by registered mail that we will
not renew the letter of credit for the following year.
1
This Letter of Credit is transferable and constitutes an obligation to make
payment against documents.
(1) Except as provided above, this Letter of Credit is issued subject to the
Uniform Customs and Practice for Documentary Credits (1993 Revision)
International Chamber of Commerce Publication No. 500 and is governed by New
York law. Unless you otherwise require, any disputes arising out of or in
connection with this letter of credit shall be resolved before the United States
District Court for the Southern District of New York and any New York state
court sitting in the County of New York, New York, and all related appellate
courts.
All bank charges, including, but not by way of limitation, fees or commissions,
shall be for the applicant's account.
------------------------
(1) Alternatively where bank wants to use ISP 98: Except as provided above, this
Letter of Credit is issued subject to the International Standby Practices 1998
and is governed by New York law. Unless you otherwise require, any disputes
arising out of or in connection with this letter of credit shall be resolved
before the United States District Court for the Southern District of New York
and any New York state court sitting in the County of New York, New York, and
all related appellate courts.
2
SCHEDULE I
DESIGNATED LOCATIONS
America West Airlines - ATL
▇▇▇▇▇▇▇▇▇▇ International Airport
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
America West Airlines - BWI
Baltimore/Washington International Airport
Terminal D, Gate 29
Baltimore, MD 21240
America West Airlines - CMH
Port Columbus International Airport
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
America West Airlines - COS
Colorado Springs Municipal Airport
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
America West Airlines - DEN
Denver International Airport
▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
America West Airlines - ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ / ▇▇▇▇▇▇▇▇ ▇ - ▇▇▇ ▇▇ Facility
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
America West Airlines -LAS
McCarran International Airport
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
America West Airlines - LAX
Los Angeles International Airport
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
America West Airlines - PHC
Hohokam 10 Business Center #3
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
America West Airlines - PDX
Portland International Airport
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
America West Airlines - PHL
Philadelphia International Airport
Terminal D
Philadelphia, PA 19153
America West Airlines-PHT
Terminal 4
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
America West Airlines-PHX
Phoenix Hangar
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
America West Airlines - PVR
AeroPuerto International
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Puerto Vallarta, Mexico
America West Airlines - SAN
Lindbergh Field
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ #▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ - ▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇▇ International Airport
Main Terminal
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
America West Airlines- SNA
▇▇▇▇ ▇▇▇▇▇ Airport-Orange County
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
3