1
EXHIBIT 4.13
================================================================================
TRUST INDENTURE AND MORTGAGE
(2000-2 747-1)
Dated as of December 14, 2000
between
UNITED AIR LINES, INC.,
Owner
and
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION
as Indenture Trustee
------------------------------------
Equipment Notes Covering
One Boeing 747-422 Aircraft
Bearing U.S. Registration No. N119UA
------------------------------------
================================================================================
2
TABLE OF CONTENTS
Page
RECITALS................................................................................... 1
GRANTING CLAUSE.............................................................................1
HABENDUM CLAUSE.............................................................................3
ARTICLE 1
DEFINITIONS........................................................................4
Section 1.01 Definitions..........................................................4
ARTICLE 2
THE EQUIPMENT NOTES; OTHER OBLIGATIONS............................................17
Section 2.01 Equipment Notes; Title and Terms....................................17
Section 2.02 Execution and Authentication........................................17
Section 2.03 Registrar and Paying Agent..........................................18
Section 2.04 Transfer and Exchange...............................................18
Section 2.05 Noteholder Lists; Ownership of Equipment Notes......................19
Section 2.06 Mutilated, Destroyed, Lost or Stolen Equipment Notes................20
Section 2.07 Cancellation........................................................20
Section 2.08 Payment on Equipment Notes..........................................20
Section 2.09 Termination of Interest in the Indenture Estate.....................21
Section 2.10 Withholding Taxes...................................................21
Section 2.11 Subordination.......................................................22
Section 2.12 Certain Agreements Regarding Liquidity Facilities...................23
ARTICLE 3
RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS....................................24
Section 3.01 Basic Distributions.................................................24
Section 3.02 Event of Loss; Optional Redemption..................................25
Section 3.03 Payments After Indenture Event of Default...........................27
Section 3.04 Certain Payments....................................................29
Section 3.05 Other Payments......................................................29
Section 3.06 Payments to Owner...................................................30
ARTICLE 4
COVENANTS OF OWNER................................................................30
Section 4.01 Registration, Maintenance and Operation; Possession and
Permitted Leases; Insignia.........................................30
Section 4.02 Replacement and Pooling of Parts; Alterations, Modifications
and Additions......................................................35
i
3
Section 4.03 Insurance.........................................................37
Section 4.04 Inspection........................................................42
ARTICLE 5
EVENT OF LOSS...................................................................43
Section 5.01 (a) Event of Loss with Respect to the Aircraft....................43
(b) Event of Loss with Respect to an Engine.......................45
(c) Application of Payments from Governmental
Authorities for Requisition of Title, etc.....................46
(d) Requisition for Use of the Aircraft by the United States
Government or Government of Registry of the Aircraft..........47
(e) Requisition for Use of an Engine by the United States
Government or the Government of Registry of the Aircraft......47
(f) Application of Payments During Existence
of Certain Indenture Defaults and Events of Default...........48
Section 5.02 Liens.............................................................48
ARTICLE 6
REDEMPTION OF EQUIPMENT NOTES...................................................48
Section 6.01 Redemption of Equipment Notes upon Certain Events.................48
Section 6.02 Notice of Redemption to Noteholders...............................49
Section 6.03 Deposit of Redemption Price.......................................49
Section 6.04 Equipment Notes Payable on Redemption Date........................49
ARTICLE 7
MATTERS CONCERNING UNCLAIMED MONIES.............................................50
Section 7.01 Repayment of Monies for Equipment Note Payments Held
by the Indenture Trustee.........................................50
ARTICLE 8
DEFAULTS AND REMEDIES...........................................................50
Section 8.01 Indenture Events of Default.......................................50
Section 8.02 Acceleration; Rescission and Annulment............................52
Section 8.03 Other Remedies Available to Indenture Trustee.....................52
Section 8.04 Waiver of Existing Defaults.......................................55
Section 8.05 Control by Majority...............................................55
Section 8.06 Rights of Noteholders to Receive Payment..........................56
Section 8.07 Indenture Trustee May File Proofs of Claim........................56
ARTICLE 9
INDENTURE TRUSTEE...............................................................56
Section 9.01 Duties of Indenture Trustee.......................................56
Section 9.02 Rights of Indenture Trustee.......................................56
ii
4
Section 9.03 Individual Rights of Indenture Trustee..............................57
Section 9.04 Funds May Be Held by Indenture Trustee or Paying Agent;
Investments........................................................57
Section 9.05 Notice of Defaults..................................................58
Section 9.06 Compensation and Indemnity..........................................59
Section 9.07 Replacement of Indenture Trustee....................................59
Section 9.08 Successor Indenture Trustee, Agents by Merger, etc..................60
Section 9.09 Eligibility; Disqualification.......................................60
Section 9.10 Trustee's Liens.....................................................61
ARTICLE 10
TERMINATION OF TRUST INDENTURE....................................................61
Section 10.01 Termination of Trust Indenture.....................................61
Section 10.02 Survival of Certain Obligations....................................62
Section 10.03 Monies to Be Held in Trust.........................................62
Section 10.04 Monies to Be Returned to Owner.....................................62
ARTICLE 11
AMENDMENTS AND WAIVERS............................................................63
Section 11.01 Amendments to this Agreement Without Consent of the Noteholders....63
Section 11.02 Amendments to this Agreement with Consent of Noteholders...........64
Section 11.03 Revocation and Effect of Consents..................................65
Section 11.04 Notation on or Exchange of Equipment Notes.........................65
Section 11.05 Indenture Trustee Protected........................................65
Section 11.06 Amendments, Waivers, etc. of Other Operative Documents.............65
Section 11.07 Notices to Liquidity Providers.....................................65
ARTICLE 12
MISCELLANEOUS.....................................................................66
Section 12.01 Notices............................................................66
Section 12.02 GOVERNING LAW......................................................67
Section 12.03 Execution in Counterparts..........................................68
SIGNATURES.................................................................................69
Exhibit A-1 Form of Series A-1 Equipment Notes
Exhibit A-2 Form of Series A-2, B and C Equipment Notes
Exhibit A-3 Form of Series D Equipment Note, if any
Exhibit B-1 Description of Series A-1 Equipment Notes
Exhibit B-2 Description of Series A-2 Equipment Notes
Exhibit B-3 Description of Series B Equipment Notes
Exhibit B-4 Description of Series C Equipment Notes
Exhibit B-5 Description of Series D Equipment Notes, if any
iii
5
Exhibit C Certain Economic Terms
Exhibit D Form of Indenture Supplement
Exhibit E Schedule of Countries Authorized for Domicile of Permitted Lessee
Exhibit F Schedule of Countries Authorized for Aircraft Registration
iv
6
[Trust Indenture and Mortgage (2000-2 747-1)]
TRUST INDENTURE AND MORTGAGE (2000-2 747-1)
This TRUST INDENTURE AND MORTGAGE (2000-2 747-1) dated as of
December 14, 2000 is between UNITED AIR LINES, INC., a Delaware corporation
("Owner"), and STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association, as Indenture Trustee hereunder (the
"Indenture Trustee").
WITNESSETH:
WHEREAS, all capitalized terms used and not otherwise defined
herein shall have the respective meanings set forth or referred to in Article 1
hereof;
WHEREAS, the parties desire by this Agreement, among other
things, (i) to provide for the issuance by the Owner of the Equipment Notes and
(ii) to provide for the assignment, mortgage and pledge by the Owner to the
Indenture Trustee, as part of the Indenture Estate hereunder, among other
things, of certain of the Owner's right, title and interest in and to the
Aircraft and certain payments and other amounts received hereunder or thereunder
in accordance with the terms hereof, as security for, among other things, the
Owner's obligations in respect of the Equipment Notes and subject to Section
2.11 and Article 3 hereof;
WHEREAS, all things have been done to make the Equipment
Notes, when executed by the Owner and authenticated and delivered by the
Indenture Trustee hereunder, the valid, binding and enforceable obligations of
the Owner; and
WHEREAS, all things necessary to make this Agreement the
legal, valid and binding obligation of the Owner and the Indenture Trustee, for
the uses and purposes herein set forth, in accordance with its terms, have been
done and performed and have happened;
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND MORTGAGE
WITNESSETH, that, to secure the prompt payment of the principal of, Make-Whole
Amount, if any, and interest on, and all other amounts due with respect to, all
Equipment Notes from time to time outstanding hereunder, all other amounts due
hereunder and to secure the performance and observance by the Owner of all the
agreements, covenants and provisions contained herein and in the other Operative
Documents to which it is a party, for the benefit of the Noteholders and each of
the Indenture Indemnitees and the prompt payment of any and all amounts from
time to time owing hereunder and under the Participation Agreement by the Owner
to the Noteholders and the Indenture Indemnitees (the obligations specified
above being collectively referred to herein as the "Secured Obligations") and
for the uses and purposes and subject to the terms and provisions hereof, and in
consideration of the premises and of the covenants herein contained, and of the
acceptance of the Equipment Notes by the Noteholders, and of other good and
valuable consideration the receipt and adequacy whereof are hereby acknowledged,
the Owner has granted, bargained, sold, assigned, transferred, conveyed,
mortgaged, pledged and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge and confirm, unto the Indenture Trustee, its
successors and permitted assigns, for the security and benefit of the
1
7
[Trust Indenture and Mortgage (2000-2 747-1)]
Noteholders and each of the other Indenture Indemnitees from time to time, a
first priority security interest in and first priority mortgage lien on all
estate, right, title and interest of the Owner in, to and under the following
described property, rights, interests and privileges whether now or hereafter
acquired and subject to the Lien hereof (which collectively, including all
property hereafter specifically subjected to the lien of this Agreement by any
instrument supplemental hereto, are herein called the "Indenture Estate"):
(1) the Airframe and Engines (each such Engine having 750 or
more rated take-off horsepower or the equivalent thereof) as the same
is now and will hereafter be constituted, whether now or hereafter
acquired and subjected to the Lien hereof, and in the case of such
Engines, whether or not any such Engine shall be installed in or
attached to the Airframe or any other airframe and all substitutions or
replacements therefor, as provided in this Agreement, together with all
Parts of whatever nature which are from time to time included in the
"Airframe" or the "Engines", whether now or hereafter acquired and
subjected to the Lien hereof, and all renewals, substitutions,
replacements, additions, improvements, accessories and accumulations
with respect to any of the foregoing, and all records, logs and other
related materials with respect to any of the foregoing as may be
required to be maintained by the FAA;
(2) The Purchase Agreement to the extent the same relates to
continuing rights of the Owner in respect of any warranty, indemnity or
agreement, express or implied, as to title, materials, workmanship,
design or patent infringement or related matters with respect to the
Airframe or the Engines (reserving to the Owner, however, all of the
Owner's other rights and interest in and to the Purchase Agreement),
the Consent and Agreement, and the Bills of Sale, together in each case
with all rights, powers, privileges, options and other benefits of the
Owner thereunder (subject to such reservation) with respect to the
Airframe or the Engines, including, without limitation, the right to
make all waivers and agreements, to give and receive all notices and
other instruments or communications, to take such action upon the
occurrence of a default thereunder, including the commencement, conduct
and consummation of legal, administrative or other proceedings, as
shall be permitted thereby or by law, and to do any and all other
things which the Owner is or may be entitled to do thereunder (subject
to such reservation), subject to the terms and conditions of the
Consent and Agreement;
(3) without limiting the generality of the foregoing, all
requisition proceeds with respect to the Aircraft or any Part thereof
or any other property described in any of the Granting Clauses and all
insurance proceeds with respect to the Aircraft or any Part thereof or
any other property described in any of the Granting Clauses from
insurance required to be maintained by the Owner under Section 4.03,
but excluding any liability insurance in favor of the Owner or any
other insured party and any insurance maintained by the Owner and not
required under Section 4.03 and all proceeds from the sale or
disposition of the Aircraft or any other property described in these
Granting Clauses;
(4) all rents, revenues and other proceeds collected by the
Indenture Trustee pursuant to Section 8.03 and all moneys and
securities now or hereafter paid or deposited or required to be paid or
deposited to or with the Indenture Trustee by or for the account
2
8
[Trust Indenture and Mortgage (2000-2 747-1)]
of the Owner pursuant to any term of any Operative Document and held or
required to be held by the Indenture Trustee hereunder; and
(5) all proceeds of the foregoing.
PROVIDED, HOWEVER, that notwithstanding any of the foregoing
provisions, so long as no Indenture Event of Default shall have occurred and be
continuing, (a) the Indenture Trustee shall not take or cause to be taken any
action contrary to the Owner's right hereunder to quiet enjoyment of the
Airframe and Engines, and to possess, use, retain and control the Airframe and
Engines and all revenues, income and profits derived therefrom, and (b) the
Owner shall have the right, to the exclusion of the Indenture Trustee, with
respect to the Purchase Agreement, to exercise in the Owner's name all rights
and powers of the buyer under the Purchase Agreement (other than to amend,
modify or waive any of the warranties or indemnities contained therein, except
in the exercise of the Owner's reasonable business judgment) and to retain any
recovery or benefit resulting from the enforcement of any warranty or indemnity
under the Purchase Agreement; and provided, further, that, notwithstanding the
occurrence or continuation of an Indenture Event of Default, the Indenture
Trustee shall not enter into any amendment of the Purchase Agreement which would
increase the obligations of the Owner thereunder or in any way affect the right
and interest of Owner under the Purchase Agreement to the extent not assigned
hereunder.
HABENDUM CLAUSE
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the benefit
and security of the Indenture Trustee and the Noteholders from time to time,
except as provided in Section 2.11 and Article 3 hereof, without any preference,
distinction or priority of any one Equipment Note over any other by reason of
series, priority of time of issue, sale, negotiation, date of maturity thereof
or otherwise for any reason whatsoever, and for the uses and purposes and
subject to the terms and provisions set forth in this Agreement.
1. It is expressly agreed that anything herein contained to
the contrary notwithstanding, the Owner shall remain liable under each of the
Operative Documents to which it is a party to perform all of the obligations
assumed by it thereunder, all in accordance with and pursuant to the terms and
provisions thereof, and, except as provided in the Consent and Agreement, the
Indenture Trustee and the Noteholders shall have no obligation or liability
under any of the Operative Documents to which the Owner is a party by reason of
or arising out of the assignment hereunder, nor shall the Indenture Trustee or
the Noteholders be required or obligated in any manner to perform or fulfill any
obligations of the Owner under any of the Operative Documents to which the Owner
is a party, or, except as herein expressly provided, to make any payment, or to
make any inquiry as to the nature or sufficiency of any payment received by it,
or present or file any claim, or take any action to collect or enforce the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
2. The Owner does hereby constitute the Indenture Trustee the
true and lawful attorney of the Owner, irrevocably, for good and valuable
consideration and coupled with
3
9
[Trust Indenture and Mortgage (2000-2 747-1)]
an interest and with full power of substitution with full power (in the name of
the Owner or otherwise) subject to the terms and conditions of this Agreement,
to ask, require, demand, receive, ▇▇▇ for, compound and give acquittance for any
and all moneys and claims for moneys due and to become due to the Owner under or
arising out of the Indenture Estate, to endorse any checks or other instruments
or orders in connection therewith, to file any claims or take any action or
institute any proceedings which the Indenture Trustee may deem to be necessary
or advisable in the premises as fully as the Owner itself could do; provided
that the Indenture Trustee shall not exercise any such rights except upon the
occurrence and during the continuance of an Event of Default hereunder.
3. The Owner agrees that at any time and from time to time,
upon the written request of the Indenture Trustee, the Owner 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 Indenture Trustee may reasonably
deem desirable in obtaining the full benefits of the assignment hereunder and of
the rights and powers herein granted.
4. The Owner does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants that it will not assign or pledge, so
long as the Lien of this Indenture has not been discharged in accordance with
the terms hereof, any of its rights, titles or interests hereby assigned to any
Person other than the Indenture Trustee.
5. It is hereby further agreed that any and all property
described or referred to in the granting clause hereof which is hereafter
acquired by the Owner shall ipso facto, and without any other conveyance,
assignment or act on the part of the Owner or the Indenture Trustee, become and
be subject to the Lien herein granted as fully and completely as though
specifically described herein.
IT IS HEREBY FURTHER COVENANTED AND AGREED by and among the
parties hereto as follows:
ARTICLE 1
DEFINITIONS
Section 1.01 Definitions. (a) For all purposes of this
Agreement and the other Operative Documents, except as otherwise expressly
provided or unless the context otherwise requires:
(1) each of "Owner," "Indenture Trustee," "Noteholder," "Pass
Through Trustee," "Subordination Agent," "Liquidity Provider," or any
other Person includes, without prejudice to the provisions of any
Operative Documents, any successor in interest to it and any permitted
transferee, permitted purchaser or permitted assignee of it;
(2) the terms defined in this Article 1 have the meanings
assigned to them in this Article 1, and include the plural as well as
the singular;
4
10
[Trust Indenture and Mortgage (2000-2 747-1)]
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States;
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision; and
(5) all references in this Agreement to Articles, Sections and
Exhibits refer to Articles, Sections and Exhibits of this Agreement.
(b) For all purposes of this Agreement, the following
capitalized terms have the following respective meanings:
"Acceptable Alternate Engine" means a ▇▇▇▇▇ & ▇▇▇▇▇▇▇ Model
PW4056 engine or an engine of the same or another manufacturer of equivalent or
greater value and utility (without regard to hours or cycles) as the replaced or
substituted Engine (assuming such Engine was in the condition required by the
terms of this Agreement), and suitable for installation and use on the Airframe;
provided that such engine shall (i) be of the same make, model and manufacturer
as the other engine installed on the Airframe and (ii) be an engine of a type
then being utilized by Owner on other Boeing 747-422 aircraft operated by Owner.
"Additional Insured" means the Indenture Trustee, Owner in its
capacity as lessor under any Permitted Lease, the Subordination Agent (so long
as it is the registered holder of any Equipment Note on behalf of the Pass
Through Trustees), each Pass Through Trustee (so long as it is a Noteholder),
each Liquidity Provider and each of their respective Affiliates, successors and
permitted assigns, and the respective directors, officers and employees of each
of the foregoing.
"Affiliate" with respect to a specified Person, means any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such Person. For the purposes of this
definition, "control" when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent" means any Paying Agent or Registrar.
"Aircraft" means the Airframe together with the four Engines
whether or not such Engines are installed on the Airframe or any other airframe.
"Airframe" means: (i) the Boeing Model 747-422 aircraft
(excluding Engines or engines from time to time installed thereon) specified by
United States Registration Number and Manufacturer's serial number in the
initial Indenture Supplement; (ii) any Replacement Airframe which may from time
to time be substituted pursuant to Section 5.01(a)(ii) hereof and (iii) in
either case any and all Parts which are from time to time incorporated or
installed in or attached
5
11
[Trust Indenture and Mortgage (2000-2 747-1)]
thereto or which have been removed therefrom, unless the Lien of this Agreement
shall not be applicable to such Part in accordance with Section 4.02.
"Amortization Amount" means, with respect to any Equipment
Note, as of any Payment Date, the amount set forth opposite such Payment Date on
the Amortization Schedule.
"Amortization Schedule" means, with respect to each Series of
Equipment Notes, the amortization schedule for such Series as set forth on
Exhibit ▇-▇, ▇-▇, ▇-▇, ▇-▇, or if Series D Equipment Notes are issued, B-5, as
the case may be.
"Appraisers" means, collectively, Aircraft Information
Services, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇ and Associates, Inc., AVITAS, Inc., BK Associates,
Inc. and AvSolutions Inc., or such other independent aircraft appraiser as may
be acceptable to Owner and the Indenture Trustee.
"Average Life Date" means for each Equipment Note to be
redeemed, the date which follows the redemption date by a period equal to the
Remaining Weighted Average Life at the redemption date of such Equipment Note.
"Bankruptcy Code" means the United States Bankruptcy Code,
Title 11 of the United States Code, as amended from time to time.
"Basic Pass Through Trust Agreement" means the Pass Through
Trust Agreement dated as of December 14, 2000 between Owner and Pass Through
Trustee, but does not include any Pass Through Trust Supplement.
"Bills of Sale" means, collectively, the FAA ▇▇▇▇ of Sale and
the Warranty ▇▇▇▇ of Sale.
"Business Day" means any day other than a Saturday or Sunday
or a day on which commercial banks are required or authorized to close in:
Chicago, Illinois; New York, New York; and, so long as any Equipment Note is
outstanding, the city and state in which the Indenture Trustee, the
Subordination Agent or any Pass Through Trustee has its principal place of
business or receives and disburses funds.
"Certificated Air Carrier" means a Citizen of the United
States holding an air carrier operating certificate issued by the Secretary of
Transportation pursuant to Chapter 447 of Title 49 of the United States Code,
for aircraft capable of carrying ten or more individuals or 6,000 pounds or more
of cargo or that otherwise is certified or registered to the extent required to
fall within the purview of 11 U.S.C. Section 1110 or any analogous successor
provision of the Bankruptcy Code.
"Citizen of the United States" has the meaning given such term
in Section 40102(a)(15) of Title 49 of the United States Code.
"Closing" means the closing of the transactions contemplated
by the Participation Agreement.
6
12
[Trust Indenture and Mortgage (2000-2 747-1)]
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended
through the Closing Date.
"Consent and Agreement" means the Consent and Agreement
(2000-2 747-1) dated as of the date hereof executed by the Manufacturer.
"Co-Registrar" shall have the meaning specified therefor in
Section 2.03.
"Corporate Trust Department" means the principal office of the
Indenture Trustee located at the Indenture Trustee's address for notices under
the Participation Agreement or such other office at which the Indenture
Trustee's corporate trust business shall be administered which the Indenture
Trustee shall have specified by notice in writing to Owner and each Noteholder.
"Debt Rate" means, with respect to any Series of Equipment
Notes, the rate per annum specified for such Series under the heading "Interest
Rate" in the related Exhibit B for such Series.
"Eligible Institution" means (a) the corporate trust
department of the Indenture Trustee, the Subordination Agent or any Pass Through
Trustee, as applicable, or (b) a depository institution organized under the laws
of the United States of America or any one of the States thereof or the District
of Columbia (or any U.S. branch of a foreign bank), which has a long-term
unsecured debt rating from Moody's and Standard & Poor's of at least "A-3" or
its equivalent.
"Engine" means (i) each of the four ▇▇▇▇▇ & Whitney Model
PW4056 engines listed by manufacturer's serial numbers in the initial Indenture
Supplement, whether or not from time to time installed on such Airframe or any
other airframe; (ii) any Replacement Engine which may from time to time be
substituted for any of such four engines pursuant to the terms hereof; and (iii)
in either case, any and all Parts which are from time to time incorporated or
installed in or attached to any such engine and any and all Parts removed
therefrom unless the Lien of this Agreement shall not apply to such Parts in
accordance with Section 4.02.
"Equipment Note" or "Equipment Notes" means any equipment note
or notes issued under this Agreement, including each of the Series A-1, Series
A-2, Series B, Series C and, if Series D Equipment Notes are issued, Series D
Equipment Notes issued hereunder, substantially in the form of Exhibit ▇-▇, ▇-▇
or A-3, as applicable, hereto as such form may be varied pursuant to the terms
hereof and any and all Equipment Notes issued in replacement or exchange
therefor in accordance with the provisions hereof.
"Event of Loss" with respect to the Aircraft, Airframe or any
Engine means any of the following events with respect to such property: (i) the
loss of such property or of the use thereof due to the destruction of or damage
to such property which renders repair uneconomic or which renders such property
permanently unfit for normal use by Owner for any reason whatsoever; (ii) any
damage to such property which results in an insurance settlement with respect to
such property on the basis of a total loss, or a constructive or compromised
total loss;
7
13
[Trust Indenture and Mortgage (2000-2 747-1)]
(iii) the theft or disappearance of such property, or the confiscation,
condemnation, or seizure of, or requisition of title to, or use of, such
property by any governmental or purported governmental authority (other than a
requisition for use by the U.S. Government or any government of registry of the
Aircraft or any agency or instrumentality thereof), which in the case of any
event referred to in this clause (iii) shall have resulted in the loss of title
or possession of such property by Owner for a period in excess of 180
consecutive days; (iv) as a result of any law, rule, regulation, order or other
action by the FAA or other governmental body of the government of registry of
the Aircraft having jurisdiction, use of such property in the normal course of
the business of air transportation shall have been prohibited for a period in
excess of 180 consecutive days, unless Owner, prior to the expiration of such
180-day period, shall have undertaken and shall be diligently carrying forward,
in a manner that does not discriminate against the Aircraft, all steps which are
necessary or desirable to permit the normal use of such property by Owner, and
Owner, within two years from the time of grounding, shall have conformed at
least one such aircraft in its fleet to the requirements of any such law, rule,
regulation, order or other action and commenced regular commercial use of the
same in such jurisdiction; (v) the requisition for use by any government of
registry of the Aircraft (other than the U.S. government) or any instrumentality
or agency thereof, which shall have occurred during the Term and shall have
continued for more than two years; and (vi) any divestiture of title to an
Engine treated as an Event of Loss pursuant to Section 5.02 hereof. An Event of
Loss with respect to the Aircraft shall be deemed to have occurred if an Event
of Loss occurs with respect to the Airframe.
"Expenses" means any and all liabilities, obligations, losses,
damages, penalties, claims (including, but not limited to, negligence, strict or
absolute liability, liability in tort and liabilities arising out of the
violations of laws or regulatory requirements of any kind), actions, suits,
costs, expenses and disbursements (including reasonable legal fees and
expenses).
"FAA ▇▇▇▇ of Sale" means an FAA AC Form 8050-2 ▇▇▇▇ of sale
executed by Manufacturer in favor of Owner and dated the date of delivery of the
Aircraft from Manufacturer to Owner pursuant to the terms of the Purchase
Agreement.
"Federal Aviation Act" means part A of subtitle VII of title
49, United States Code.
"Federal Aviation Administration" and "FAA" mean the United
States Federal Aviation Administration and any successor agency or agencies
thereto.
"Fundamental Documents" means, collectively, the Operative
Documents and the Pass Through Documents.
"Indemnitee" means (i) State Street and the Indenture Trustee
and each separate or additional trustee appointed pursuant to this Agreement,
(ii) the Subordination Agent, (iii) the Paying Agent, (iv) each Pass Through
Trustee, (v) each Liquidity Provider, (vi) each Noteholder, and, in each case,
each of their respective affiliates, successors and permitted assigns and each
of their respective directors, officers, employees, agents and servants.
8
14
[Trust Indenture and Mortgage (2000-2 747-1)]
"Indenture Default" means any event which is, or after notice
or passage of time, or both, would be, an Indenture Event of Default.
"Indenture Estate" shall have the meaning specified therefor
in the Granting Clause hereof.
"Indenture Event of Default" shall have the meaning specified
therefor in Article 8.
"Indenture Indemnitee" means (i) the Indenture Trustee in its
individual capacity and as Indenture Trustee, (ii) each separate or additional
trustee appointed pursuant to this Agreement, (iii) the Subordination Agent,
(iv) each Liquidity Provider, (v) each Pass Through Trustee, and (vi) each of
the respective directors, officers, employees, agents and servants of the
persons described in clauses (i) through (v) inclusive above.
"Indenture Supplement" means a supplement to this Agreement in
the form of Exhibit D hereto.
"Indenture Trustee" means State Street and each other Person
which may from time to time be acting as Indenture Trustee in accordance with
the provisions of this Agreement.
"Insured Amount" has the meaning specified therefor on Exhibit
C.
"Intercreditor Agreement" means that certain Intercreditor
Agreement among the Pass Through Trustees, the Liquidity Providers and the
Subordination Agent, dated as of December 14, 2000; provided that, for purposes
of any obligation of Owner, no amendment, modification or supplement to, or
substitution or replacement of, such Intercreditor Agreement shall be effective
unless consented to by Owner.
"Interest Payment Date" means April 1, 2001 and each April 1
and October 1 of each year thereafter.
"Issuance Date" means, with respect to each Series of
Equipment Notes, the date such Equipment Notes are issued by the Owner pursuant
to the terms hereof.
"Lien" means any mortgage, pledge, lien, charge, encumbrance,
lease, exercise of rights, security interest or claim.
"Liquidity Facilities" means the four (4) Revolving Credit
Agreements (consisting of a separate Revolving Credit Agreement with each
Liquidity Provider with respect to each of the Class A-1 Trust, Class A-2 Trust,
the Class B Trust and the Class C Trust) between the Subordination Agent, as
borrower, and a Liquidity Provider, each dated as of December 14, 2000; provided
that, for purposes of any obligation of Owner, no amendment, modification or
9
15
[Trust Indenture and Mortgage (2000-2 747-1)]
supplement to, or substitution or replacement of, any such Liquidity Facility
shall be effective unless consented to by Owner.
"Liquidity Providers" means Westdeutsche Landesbank
Girozentrale, acting through its New York branch, as the Liquidity Provider
under the Class A-1 Liquidity Facility, Class A-2 Liquidity Facility, the Class
B Liquidity Facility and the Class C Liquidity Facility (as such terms are
defined in the Intercreditor Agreement) or any successor thereto.
"Loss Payee Amount" has the meaning specified therefor on
Exhibit C.
"Loss Payment Date" shall have the meaning specified in
Section 5.01(a).
"Majority in Interest of Noteholders" means as of a particular
date of determination and subject to Section 2.6 of the Intercreditor Agreement,
the holders of a majority in aggregate unpaid principal amount of all Equipment
Notes outstanding as of such date (excluding any Equipment Notes held by Owner,
Indenture Trustee or any Affiliate of any such party or any interests of Owner
therein unless all Equipment Notes shall be held by any such entity or an
Affiliate thereof); provided that for the purposes of directing any action or
casting any vote or giving any consent, waiver or instruction hereunder, any
Noteholder of an Equipment Note or Equipment Notes may allocate, in such
Noteholder's sole discretion, any fractional portion of the principal amount of
such Equipment Note or Equipment Notes in favor of or in opposition to any such
action, vote, consent, waiver or instruction.
"Make-Whole Amount" means, with respect to each Equipment
Note, an amount (as determined by an independent investment banker of national
standing selected by Owner) equal to the excess, if any, determined under the
following calculation:
(1) the present value of the remaining scheduled payments
of principal and interest from the determination date
to maturity of such Equipment Note computed by
discounting the payments on a semi-annual basis on
each Payment Date (assuming a 360-day year of twelve
30-day months) using a discount rate equal to the
Treasury Yield, minus
(2) the outstanding principal amount of such Equipment
Note plus accrued interest to the date of
determination.
For purposes of determining the Make-Whole Amount, the "Treasury Yield" means,
at the date of determination with respect to any Equipment Note, the interest
rate (expressed as a semi-annual equivalent and as a decimal and, in the case
of United States Treasury bills, converted to a bond equivalent yield)
determined to be the annual rate equal to the semi-annual yield to maturity for
United States Treasury securities maturing on the Average Life Date of such
Equipment Note and trading in the public securities markets either as determined
by interpolation between most recent weekly average yield to maturity for two
series of United States Treasury securities trading in the public securities
markets, (1) one maturing as close as possible to, but earlier than, the
10
16
[Trust Indenture and Mortgage (2000-2 747-1)]
Average Life Date of such Equipment Note and (2) the other maturing as close as
possible to, but later than, the Average Life Date of such Equipment Note, in
each case as published in the most recent H.15(519) or, if a weekly average
yield to maturity for United States Treasury securities maturing on the Average
Life Date of such Equipment Note is reported in the most recent H.15(519), the
weekly average yield to maturity as published in such H.15(519). As used in the
definition of "Treasury Yield", "H.15(519)" means, the weekly statistical
release designated as such, or any successor publication, published by the Board
of Governors of the Federal Reserve System. The date of determination of
Make-Whole Amount is the third (3rd) Business Day prior to the applicable
payment date. The "most recent H.15(519)" means the H.15(519) published prior to
the close of business on the third Business Day prior to the applicable payment
or redemption date.
"Manufacturer" means The Boeing Company, and its successors
and assigns.
"Minimum Liability Insurance Amount" has the meaning specified
therefor on Exhibit C.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. (or any
successor thereto).
"Non-U.S. Person" means any Person other than a United States
person, as defined in Section 7701(a)(30) of the Code.
"Note Purchase Agreement" has the meaning specified for the
term "Note Purchase Agreement" in the Intercreditor Agreement.
"Noteholder" means a person in whose name an Equipment Note is
registered on the Register (including, so long as it holds any Series A-1,
Series A-2, Series B, Series C or, if Series D Equipment Notes are issued and
financed by a Pass Through Trustee, Series D Equipment Notes issued hereunder,
the Subordination Agent on behalf of the Pass Through Trustee under the
applicable Pass Through Trust Agreement pursuant to the provisions of the
Intercreditor Agreement).
"Operative Documents" means this Agreement, the Participation
Agreement, the Consent and Agreement, the Purchase Agreement (to the extent
assigned pursuant hereto), Bills of Sale, the Equipment Notes and the initial
Indenture Supplement.
"Owner" means United Air Lines, Inc., a Delaware corporation
and its successors and permitted assigns.
"Participation Agreement" means the Participation Agreement
(2000-2 747-1) dated as of the date hereof among Owner, the Pass Through
Trustees, the Subordination Agent and the Indenture Trustee.
11
17
[Trust Indenture and Mortgage (2000-2 747-1)]
"Parts" means all appliances, parts, components, instruments,
appurtenances, accessories, furnishings, seats and other equipment of whatever
nature (other than (a) complete Engines or engines, and (b) any Passenger
Convenience Equipment), that may from time to time be installed or incorporated
in or attached or appurtenant to the Airframe or any Engine.
"Pass Through Certificates" means any of the credit enhanced
pass through certificates issued pursuant to any of the Pass Through Trust
Agreements.
"Pass Through Documents" means the Pass Through Trust
Agreements, the Intercreditor Agreement, the Note Purchase Agreement and the
Liquidity Facilities.
"Pass Through Trust" means each of the ▇-▇, ▇-▇, ▇, ▇ and, if
Series D Equipment Notes are issued and financed by a Pass Through Trustee, the
D pass through trusts created pursuant to the related Pass Through Trust
Agreement.
"Pass Through Trust Agreements" means each of the ▇-▇, ▇-▇, ▇,
▇ and, if Series D Equipment Notes are issued and financed by a Pass Through
Trustee, the D Pass Through Trust Supplements, together in each case with the
Basic Pass Through Trust Agreement, each dated as of December 14, 2000 and
entered into by and between the Owner and a Pass Through Trustee.
"Pass Through Trust Supplement" shall have the meaning
specified for the term "Trust Supplement" in the Basic Pass Through Trust
Agreement.
"Pass Through Trustee" means State Street in its capacity as
trustee under each Pass Through Trust Agreement, and such other Person that may
from time to time be acting as successor trustee under any such Pass Through
Trust Agreement.
"Passenger Convenience Equipment" means severable components
or systems installed on or affixed to the Airframe that are used to provide
individual telecommunications or electronic entertainment to passengers aboard
the Aircraft, if and for so long as such equipment shall be owned by, or shall
be subject to a security interest, license or other interest of, another Person
(other than any Affiliate of Owner) in accordance with the provisions of Section
4.02(d) hereof.
"Past Due Rate" means, with respect to any Equipment Note, the
rate per annum equal to 1% over the Debt Rate as in effect for such Equipment
Note.
"Paying Agent" means any Person acting as Paying Agent
hereunder pursuant to Section 2.03.
"Payment Date" means, with respect to each Series of Equipment
Notes, each Payment Date listed on the Amortization Schedule for such Series of
Equipment Notes set forth
12
18
[Trust Indenture and Mortgage (2000-2 747-1)]
in Exhibit ▇-▇, ▇-▇, ▇-▇, ▇-▇ or, if Series D Equipment Notes are issued, B-5,
as the case may be.
"Permitted Air Carrier" means any Certificated Air Carrier or
any air carrier principally domiciled in a country listed on Exhibit E hereto.
"Permitted Investment" means (a) investments in obligations
of, or guaranteed by, the United States Government having maturities no later
than 90 days following the date of such investment; (b) investments in open
market commercial paper of any corporation incorporated under the laws of the
United States of America or any state thereof with a short-term unsecured debt
rating issued by Moody's and Standard & Poor's of at least "A-1" and "P-1,"
respectively, having maturities no later than 90 days following the date of such
investment; or (c) investments in negotiable certificates of deposit, time
deposits, banker's acceptances, commercial paper or other direct obligations of,
or obligations guaranteed by, commercial banks organized under the laws of the
United States or of any political subdivision thereof (or any U.S. branch of a
foreign bank) with issuer ratings of at least "B/C" by Thomson Bankwatch, having
maturities no later than 90 days following the date of such investment;
provided, however, that : (x) all Permitted Investments that are bank
obligations shall be denominated in U.S. dollars; and (y) the aggregate amount
of Permitted Investments at any one time that are bank obligations issued by any
one bank shall not be in excess of 5% of such bank's capital and surplus;
provided further that (1) any investment of the types described in clauses (a),
(b) and (c) above may be made through a repurchase agreement in commercially
reasonable form with a bank or other financial institution qualifying as an
Eligible Institution so long as such investment is held by a third party
custodian also qualifying as an Eligible Institution, (2) all such investments
set forth in clauses (a), (b) and (c) above mature no later than the Business
Day preceding the next Interest Payment Date and (3) the Indenture Trustee is
hereby authorized in making or disposing of any Permitted Investment to deal
with itself (in its individual capacity) or with any one or more of its
affiliates, whether it or such affiliates are acting as an agent of the
Indenture Trustee or for any third person or dealing as principal for its own
account; and provided further, that in the case of any Permitted Investment
issued by a domestic branch of a foreign bank, the income from such investment
shall be from sources within the United States for purposes of the Code.
"Permitted Lien" means (i) the rights of Owner as herein
provided (including the rights of any Permitted Lessee under a Permitted Lease),
and any other rights of Owner or any other Person existing pursuant to the
Operative Documents, (ii) Liens attributable to the Indenture Trustee (both in
its capacity as trustee under this Agreement and in its individual capacity),
any Pass Through Trustee (in its individual capacity, as Noteholder and as
trustee under the Pass Through Trust Agreements) or the Subordination Agent (in
its individual capacity, as registered holder of the Equipment Notes on behalf
of the Pass Through Trustees and as agent under the Intercreditor Agreement),
(iii) Liens for Taxes of Owner (or any Permitted Lessee) either not yet due or
being contested in good faith by appropriate proceeding so long as such
proceedings do not involve any material risk of the sale, forfeiture or loss of
the Airframe or any Engine or any interest thereon, (iv) materialmen's,
mechanics', workmen's, repairmen's, employees' or other like liens arising in
the ordinary course of Owner's or any Permitted Lessee's business securing
obligations that are not overdue for a period of more than 60 days or
13
19
[Trust Indenture and Mortgage (2000-2 747-1)]
are being contested in good faith by appropriate proceedings so long as during
such 60-day period there is not, or such proceedings do not involve, any
material risk of the sale, forfeiture or loss of the Airframe or any Engine or
any interest therein, (v) Liens arising out of any judgment or award against
Owner (or any Permitted Lessee), unless there exists a material risk of the
sale, forfeiture or loss of the Airframe or any Engine or any interest therein
or unless the judgment secured shall not, within 60 days after the entry
thereof, have been discharged, vacated, reversed or execution thereof stayed
pending appeal or shall not have been discharged, vacated or reversed within 60
days after the expiration of such stay, and (vi) any other Lien with respect to
which Owner (or any Permitted Lessee) shall have provided a bond, cash
collateral or other security in an amount and under terms reasonably
satisfactory to the Indenture Trustee.
"Permitted Lease" means a lease permitted under Section
4.01(b) hereof.
"Permitted Lessee" means the lessee under a Permitted Lease.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Purchase Agreement" means the agreement between Owner and the
Manufacturer relating to the purchase by Owner of the Aircraft, as originally
executed or as modified, amended or supplemented in accordance with the terms
thereof, but only insofar as the foregoing relates to the Aircraft.
"Rating Agencies" has the meaning specified for such term in
the Intercreditor Agreement.
"Record Date" for the interest or Amortization Amount payable
on any Equipment Note on any Interest Payment Date or Payment Date (other than
the maturity date) for such Equipment Note, as the case may be, means the
calendar day (whether or not a Business Day) which is 15 calendar days prior to
the related Interest Payment Date or Payment Date.
"Redemption Date" means the date on which the Equipment Notes
are to be redeemed or purchased pursuant to Section 6.01(a) or (b), as the case
may be, as specified in the notice delivered pursuant to Section 6.02 hereof.
"Redemption Price"shall have the meaning specified therefor in
Section 6.01(b).
"Register" shall have the meaning specified therefor in
Section 2.03.
"Registrar" means any person acting as Registrar hereunder
pursuant to Section 2.03.
14
20
[Trust Indenture and Mortgage (2000-2 747-1)]
"Remaining Weighted Average Life" means, on the redemption
date for an Equipment Note which is being redeemed, the number of days equal to
the quotient obtained by dividing (a) the sum of the products obtained by
multiplying (i) the amount of each then remaining installment of principal,
including the payment due on the maturity date of such Equipment Note, by (ii)
the number of days from and including the redemption date to but excluding the
scheduled payment date of such principal installment; by (b) the then unpaid
principal amount of such Equipment Note.
"Replacement Airframe" means any airframe substituted for an
airframe in accordance with Section 5.01(a)(ii) hereof.
"Replacement Engine" means any engine substituted for an
Engine in accordance with Sections 4.01(d), 5.01(a)(ii) or 5.01(b) hereof.
"SEC" means the Securities and Exchange Commission.
"Secured Obligations" shall have the meaning specified
therefor in the Granting Clause hereof.
"Senior Noteholder" is defined in Section 2.11(c) hereof.
"Series" means any of Series A-1, Series A-2, Series B, Series
C and, if issued, Series D.
"Series A-1" or "Series A-1 Equipment Notes" means Equipment
Notes issued hereunder and designated as "Series A-1", in the original principal
amount and maturities and bearing interest as specified in Exhibit B-1.
"Series A-2" or "Series A-2 Equipment Notes" means Equipment
Notes issued hereunder and designated as "Series A-2", in the original principal
amount and maturities and bearing interest as specified in Exhibit B-2.
"Series B" or "Series B Equipment Notes" means Equipment Notes
issued hereunder and designated as "Series B", in the original principal amount
and maturities and bearing interest as specified in Exhibit B-3.
"Series C" or "Series C Equipment Notes" means Equipment Notes
issued hereunder and designated as "Series C", in the original principal amount
and maturities and bearing interest as specified in Exhibit B-4.
"Series D" or "Series D Equipment Notes" means, if Series D
Equipment Notes are issued, the Equipment Notes issued hereunder and designated
as "Series D", in the original principal amount and maturities and bearing
interest as specified in Exhibit B-5.
15
21
[Trust Indenture and Mortgage (2000-2 ▇▇▇-▇)]
"▇▇▇▇▇ ▇▇▇▇▇▇" means State Street Bank and Trust Company of
Connecticut, National Association.
"Standard & Poor's" means Standard & Poor's Ratings Services,
a Division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. (or any successor thereto).
"Subordination Agent" means State Street, as subordination
agent under the Intercreditor Agreement, or any successor thereto.
"Taxes" means any and all present or future fees (including,
without limitation, license, documentation and registration fees), taxes
(including, without limitation, gross or net income, gross or net receipts,
sales, rental, use, turnover, value added, property (tangible and intangible),
excise and stamp taxes), licenses, levies, imposts, duties, recording charges or
fees, charges, assessments, or withholdings of any nature whatsoever, together
with any assessments, penalties, fines, additions to tax and interest thereon
(each, individually, a "Tax").
"Trust Indenture and Mortgage" or "this Agreement" or "this
Indenture" means this Trust Indenture and Mortgage (2000-2 747-1), as the same
may from time to time be supplemented, amended or modified.
"Trustee's Liens" shall have the meaning specified therefor in
Section 9.10.
"United States" or "U.S." means the United States of America.
"United States Government" means the federal government of the
United States or any instrumentality or agency thereof.
"Warranty ▇▇▇▇ of Sale" means a full warranty ▇▇▇▇ of sale
executed by the Manufacturer in favor of Owner and dated the date of delivery of
the Aircraft to Owner pursuant to the terms of the Purchase Agreement.
"Wet Lease" means any arrangement whereby Owner (or any
Permitted Lessee) agrees to furnish the Airframe and Engines or engines
installed thereon to a third party pursuant to which such Airframe and Engines
or engines (i) shall remain in the operational control of Owner (or such
Permitted Lessee) and (ii) shall be maintained, insured and otherwise used and
operated in accordance with the provisions hereof.
16
22
[Trust Indenture and Mortgage (2000-2 747-1)]
ARTICLE 2
THE EQUIPMENT NOTES; OTHER OBLIGATIONS
Section 2.01 Equipment Notes; Title and Terms. The Equipment
Notes shall be issued in four separate series (or, if Series D Equipment Notes
are issued, five separate series) designated as Series A-1, Series A-2, Series
B, Series C and, if issued, Series D, shall be dated the applicable Issuance
Date with respect to such Series, and shall be in the maturities and principal
amounts and shall bear interest as specified in Exhibit ▇-▇, ▇-▇, ▇-▇, ▇-▇ or,
if Series D Equipment Notes are issued, B-5, as the case may be. Each Series
▇-▇, ▇▇▇▇▇▇ ▇-▇, Series B and Series C Equipment Note shall be issued to the
Subordination Agent as nominee for the Pass Through Trustee under the applicable
Pass Through Trust Agreement. The Issuance Date for the Series A-1, Series A-2,
Series B and Series C Equipment Notes will be the Closing Date.
Each Series of Equipment Notes shall bear interest at the Debt
Rate for such Series (calculated on the basis of a year of 360 days comprised of
30-day months) on the unpaid principal amount thereof from time to time
outstanding, payable in arrears on each Interest Payment Date until maturity.
The principal of the Series A-1 and Series D Equipment Notes shall be payable in
installments, on each Payment Date, in amounts equal to the Amortization Amount
for such Payment Date. The principal of the Series A-2, Series B and Series C
Equipment Notes shall be payable in one installment on April 1, 2011, October 1,
2009 and October 1, 2005 respectively. Notwithstanding the foregoing, the final
payment made under each Equipment Note shall be in an amount sufficient to
discharge in full the unpaid principal amount and all accrued and unpaid
interest on, and any other amounts due under, such Equipment Note. Each
Equipment Note shall bear interest at the Past Due Rate (calculated on the basis
of a year of 360 days comprised of 30-day months) on any part of the principal
amount, Make-Whole Amount, if any, and, to the extent permitted by applicable
law, interest and any other amounts payable thereunder not paid when due for any
period during which the same shall be overdue, in each case for the period the
same is overdue. Amounts shall be overdue if not paid when due (whether as
stated maturity, by acceleration or otherwise). Notwithstanding anything to the
contrary contained herein, if any date on which a payment under any Equipment
Note becomes due and payable is not a Business Day, then such payment shall not
be made on such scheduled date but shall be made on the next succeeding Business
Day and, if such payment is made on such next succeeding Business Day, no
additional interest shall accrue on the amount of such payment during such
extension.
The Equipment Notes are not redeemable or subject to purchase
prior to maturity except as provided in this Agreement.
Section 2.02 Execution and Authentication. (a) Equipment Notes
shall be executed on behalf of the Owner by the manual or facsimile signature of
one of its authorized officers.
(b) If any officer of the Owner executing an Equipment Note no
longer holds that office at the time such Equipment Note is executed on behalf
of the Owner, such Equipment Note shall be valid nevertheless.
17
23
[Trust Indenture and Mortgage (2000-2 747-1)]
(c) At any time and from time to time after the execution of
the Equipment Notes, the Owner may deliver such Equipment Notes to the Indenture
Trustee for authentication and, subject to the provisions of Section 2.10, the
Indenture Trustee shall authenticate the Equipment Notes by manual signature
upon written orders of the Owner. Equipment Notes shall be authenticated on
behalf of the Indenture Trustee by any authorized officer or signatory of the
Indenture Trustee.
(d) An Equipment Note shall not be valid or obligatory for any
purpose or entitled to any security or benefit hereunder until executed on
behalf of the Owner by the manual or facsimile signature of an officer of the
Owner as provided in Section 2.02(a) and until authenticated on behalf of the
Indenture Trustee by the manual signature of an authorized officer or signatory
of the Indenture Trustee as provided in Section 2.02(c). Such signatures shall
be conclusive evidence that such Equipment Note has been duly executed,
authenticated and issued under this Agreement.
Section 2.03 Registrar and Paying Agent. The Indenture Trustee
shall maintain an office or agency where the Equipment Notes may be presented
for registration of transfer or for exchange (the "Registrar") and an office or
agency where (subject to Sections 2.04 and 2.08) the Equipment Notes may be
presented for payment or for exchange (the "Paying Agent"). The Registrar shall
keep a register (the "Register") with respect to the Equipment Notes and to
their transfer and exchange and the payments of Amortization Amounts thereon, if
any. The Indenture Trustee may appoint one or more co-registrars (the
"Co-Registrars") and one or more additional Paying Agents for the Equipment
Notes and the Indenture Trustee may terminate the appointment of any
Co-Registrar or Paying Agent at any time upon written notice. The term
"Registrar" includes any Co-Registrar. The term "Paying Agent" includes any
additional Paying Agent.
The Indenture Trustee shall initially act as Registrar and
Paying Agent.
Section 2.04 Transfer and Exchange. At the option of the
Noteholder thereof, Equipment Notes may be exchanged for an equal aggregate
principal amount of other Equipment Notes of the same Series, maturity and type
and of any authorized denominations or transferred upon surrender of the
Equipment Notes to be exchanged or transferred at the principal corporate trust
office of the Indenture Trustee, or at any office or agency maintained for such
purpose pursuant to Section 2.03. Whenever any Equipment Notes are so
surrendered for exchange, the Owner shall execute, and the Indenture Trustee
shall authenticate and deliver, the replacement Equipment Notes, in the same
aggregate principal amount, Series and dated the same date as the Equipment Note
or Equipment Notes being replaced which the Noteholder making the exchange is
entitled to receive.
All Equipment Notes issued upon any registration of transfer
or exchange of Equipment Notes shall be the valid obligations of the Owner,
evidencing the same obligations, and entitled to the same security and benefits
under this Agreement, as the Equipment Notes surrendered upon such registration
of transfer or exchange.
18
24
[Trust Indenture and Mortgage (2000-2 747-1)]
Every Equipment Note presented or surrendered for registration
of transfer or exchange shall (if so required by the Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in form satisfactory
to the Registrar duly executed by, the Noteholder thereof or his attorney duly
authorized in writing. Indenture Trustee may require such evidence reasonably
satisfactory to it as to the compliance of any such transfer with the Securities
Act, and the securities laws of any applicable state. Each initial Noteholder
and each transferee of an Equipment Note, by its acceptance of an Equipment
Note, agrees to be bound by and comply with the provisions of the Participation
Agreement, this Indenture, the Note Purchase Agreement and each other
Fundamental Document applicable to a Noteholder.
The Indenture Trustee shall make a notation on each new
Equipment Note of the amount of all payments of Amortization Amount previously
made on the old Equipment Note or Equipment Notes with respect to which such new
Equipment Note is issued and the date to which interest on such old Equipment
Note or Equipment Notes has been paid. Interest shall be deemed to have been
paid on such new Equipment Note to the date on which interest shall have been
paid on such old Equipment Note, and all payments of the Amortization Amount
marked on such new Equipment Note, as provided above, shall be deemed to have
been made thereon.
No service charge shall be made to a Noteholder for any
registration of transfer or exchange of Equipment Notes, but the Registrar may,
as a condition to any transfer or exchange hereunder, require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Equipment Notes.
The Registrar shall not be required to register the transfer
of or to exchange any Equipment Note called for redemption or purchase pursuant
to such Section 6.01 or 6.02.
Section 2.05 Noteholder Lists; Ownership of Equipment Notes.
(a) The Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Noteholders, which list shall be available to the Owner or its
representative for inspection. If the Indenture Trustee is not the Registrar,
the Registrar shall be required to furnish to the Indenture Trustee
semi-annually on or before each Interest Payment Date, and at such other times
as the Indenture Trustee may request in writing, a list, in such form and as of
such date as the Indenture Trustee may reasonably require, containing all the
information in the possession or control of the Registrar as to the names and
addresses of the Noteholders.
(b) Ownership of the Equipment Notes shall be proved by the
Register kept by the Registrar. Prior to due presentment for registration of
transfer of any Equipment Note, the Owner, the Indenture Trustee, the Paying
Agent and the Registrar may deem and treat the Person in whose name any
Equipment Note is registered as the absolute owner of such Equipment Note for
the purpose of receiving payment of principal (including, subject to the
provisions herein regarding the applicable Record Dates, Amortization Amounts)
of, Make-Whole Amount, if any, and interest on such Equipment Note and for all
other purposes whatsoever, whether or not such
19
25
[Trust Indenture and Mortgage (2000-2 747-1)]
Equipment Note is overdue, and none of the Owner, the Indenture Trustee, the
Paying Agent or the Registrar shall be affected by notice to the contrary.
Section 2.06 Mutilated, Destroyed, Lost or Stolen Equipment
Notes. If any Equipment Note shall become mutilated, destroyed, lost or stolen,
the Owner shall, upon the written request of the Noteholder of such Equipment
Note, issue and execute, and the Indenture Trustee shall authenticate and
deliver, in replacement thereof, as applicable, a new Equipment Note of the same
Series and having the same maturity, payable to the same Noteholder in the same
principal amount and dated the same date as the Equipment Note so mutilated,
destroyed, lost or stolen. If the Equipment Note being replaced has become
mutilated, such Equipment Note shall be surrendered to the Indenture Trustee. If
the Equipment Note being replaced has been destroyed, lost or stolen, the
Noteholder of such Equipment Note shall furnish to the Owner and the Indenture
Trustee such security or indemnity as may be required by it to save the Owner
and the Indenture Trustee harmless and evidence satisfactory to the Owner and
the Indenture Trustee of the destruction, loss or theft of such Equipment Note
and of the ownership thereof.
Section 2.07 Cancellation. The Registrar and any Paying Agent
shall forward to the Indenture Trustee all Equipment Notes surrendered to them
for replacement, redemption, registration of transfer, exchange or payment. The
Indenture Trustee shall cancel all Equipment Notes surrendered for replacement,
redemption, registration of transfer, exchange, payment or cancellation and
shall destroy canceled Equipment Notes.
Section 2.08 Payment on Equipment Notes. The principal amount
of, interest on, Make-Whole Amount, if any, and other amounts due under each
Equipment Note or hereunder will be payable in Dollars by wire transfer of
immediately available funds not later than 11:00 a.m., Chicago, Illinois time,
on the due date of payment to the Indenture Trustee at the Corporate Trust
Department for distribution among the Noteholders in the manner provided herein.
The Owner shall not have any responsibility for the distribution of such payment
to any Noteholder. Notwithstanding the foregoing or any provision in any
Equipment Note to the contrary, the Indenture Trustee will use reasonable
efforts to pay or cause to be paid, if so directed in writing by any Noteholder
(with a copy to the Owner), all amounts paid by the Owner hereunder or such
holder's Equipment Note or Equipment Notes to such holder or a nominee therefor
(including all amounts distributed pursuant to Article 3 of this Agreement) by
transferring, or causing to be transferred, by wire transfer of immediately
available funds in Dollars, prior to 1:00 p.m., Chicago, Illinois time, on the
due date of payment, to an account maintained by such holder with a bank located
in the continental United States the amount to be distributed to such holder,
for credit to the account of such holder maintained at such bank. If the
Indenture Trustee shall fail to make any such payment as provided in the
immediately foregoing sentence after its receipt of funds at the place and prior
to the time specified above, the Indenture Trustee, in its individual capacity
and not as trustee, agrees to compensate such holders for loss of use of funds
at the federal funds rate until such payment is made and the Indenture Trustee
shall be entitled to any interest earned on such funds until such payment is
made. Any payment made hereunder shall be made free and clear of and without
deduction for or on account of all wire and like charges without any presentment
or surrender of any Equipment Note, except that,
20
26
[Trust Indenture and Mortgage (2000-2 747-1)]
in the case of the final payment in respect of any Equipment Note, such
Equipment Note shall be surrendered to the Indenture Trustee for cancellation
promptly after such payment. Notwithstanding any other provision of this
Agreement to the contrary, the Indenture Trustee shall not be required to make,
or cause to be made, wire transfers as aforesaid prior to the first Business Day
on which it is practicable for the Indenture Trustee to do so in view of the
time of day when the funds to be so transferred were received by it if such
funds were received after 11:00 a.m., Chicago, Illinois time, at the place of
payment.
Section 2.09 Termination of Interest in the Indenture Estate.
No Noteholder or Indenture Indemnitee shall have any further interest in, or
other right with respect to, the Indenture Estate when and if the principal
amount of, Make-Whole Amount, if any, and interest on all Equipment Notes held
by such Noteholder and all other sums payable to such Noteholder or Indenture
Indemnitee, as the case may be, hereunder, under such Equipment Notes and under
the other Operative Documents shall have been paid in full.
Section 2.10 Withholding Taxes. The Indenture Trustee, as
agent for the Owner, shall exclude and withhold at the appropriate rate from
each payment of principal amount of, interest on, Make-Whole Amount, if any, and
other amounts due hereunder or under each Equipment Note (and such exclusion and
payment of withholding tax shall constitute payment in respect of such Equipment
Note) any and all United States withholding taxes applicable thereto as required
by law. The Indenture Trustee agrees to act as such withholding agent and, in
connection therewith, whenever any present or future United States taxes or
similar charges are required to be withheld with respect to any amounts payable
hereunder or in respect of the Equipment Notes, to withhold such amounts and
timely pay the same to the appropriate authority in the name of and on behalf of
the Noteholders, that it will file any necessary United States withholding tax
returns or statements when due, and that as promptly as possible after the
payment thereof (but in no event later than 30 days after the due date thereof)
it will deliver to each Noteholder (with a copy to the Owner) appropriate
receipts and a U.S. Treasury Form 1042- S and Form 8109 or Form 8109-B (or
similar form at any relevant time in effect) showing the payment thereof,
together with such additional documentary evidence as any such Noteholder may
reasonably request from time to time.
If a Noteholder which is a Non-U.S. Person has furnished to
the Indenture Trustee a properly completed, accurate and currently effective
U.S. Internal Revenue Service Form ▇-▇ ▇▇▇, ▇-▇ IMY, W-8 ECI or W-8 EXP (or such
successor form or forms as may be required by the United States Treasury
Department) for the calendar year in which the payment hereunder or under the
Equipment Note(s) held by such Noteholder is made (but prior to the making of
such payment), and has not notified the Indenture Trustee of the withdrawal or
inaccuracy of such form prior to the date of such payment (and the Indenture
Trustee has no reason to believe that any information set forth in such form is
inaccurate), the Indenture Trustee shall withhold only the amount, if any,
required by law (after taking into account any applicable exemptions properly
claimed by the Noteholder) to be withheld from payments hereunder or under the
Equipment Notes held by such Noteholder in respect of United States federal
income tax (and such payment of withholding tax shall constitute payment in
respect of such Equipment Note). If a Noteholder
21
27
[Trust Indenture and Mortgage (2000-2 747-1)]
which is a U.S. Person has furnished to the Indenture Trustee a properly
completed, accurate and currently effective U.S. Internal Revenue Service Form
W-9, if applicable, prior to a payment hereunder or under the Equipment Notes
held by such Noteholder, no amount shall be withheld from payments in respect of
United States federal income tax. If any Noteholder has notified the Indenture
Trustee that any of the foregoing forms or certificates is withdrawn or
inaccurate, or if such Noteholder has not filed a form claiming an exemption
from United States withholding tax which is applicable to any relevant period in
which a payment is made or if the Code or the regulations thereunder or the
administrative interpretation thereof is at any time after the date hereof
amended to require such withholding of United States federal income taxes from
payments under the Equipment Notes held by such Noteholder, the Indenture
Trustee agrees to withhold from each payment due to the relevant Noteholder
withholding taxes at the appropriate rate under law and will, on a timely basis
as more fully provided above, deposit such amounts with an authorized depository
and make such returns, statements, receipts and other documentary evidence in
connection therewith as required by law.
Owner shall not have any liability for the failure of the
Indenture Trustee to withhold taxes in the manner provided for herein or for any
false, inaccurate or untrue evidence provided by any Noteholder hereunder.
Section 2.11 Subordination. (a) The Indenture Trustee and, by
acceptance of its Equipment Notes of any Series, each Noteholder of such Series,
hereby agree that no payment or distribution shall be made on or in respect of
the Secured Obligations owed to such Noteholder of such Series, including any
payment or distribution of cash, property or securities after the commencement
of a proceeding of the type referred to in Section 8.01(e) or (f) hereof, except
as expressly provided in Article 3 hereof.
(b) By the acceptance of its Equipment Notes of any Series
(other than Series A-1 and Series A-2), each Noteholder of such Series agrees
that in the event that such Noteholder, in its capacity as a Noteholder, shall
receive any payment or distribution on any Secured Obligations in respect of
such Series which it is not entitled to receive under this Section 2.11 or
Article 3 hereof, it will hold any amount so received in trust for the Senior
Noteholder (as defined in Section 2.11(c) hereof) and will forthwith turn over
such payment to the Indenture Trustee in the form received to be applied as
provided in the Article 3 hereof.
(c) As used in this Section 2.11, the term "Senior Noteholder"
shall mean (i) the Noteholders of Series A-1 and Series A-2 until the Secured
Obligations in respect of Series A-1 and Series A-2 Equipment Notes have been
paid in full, (ii) after the Secured Obligations in respect of Series A-1 and
Series A-2 Equipment Notes have been paid in full, the Noteholders of Series B
until the Secured Obligations in respect of Series B Equipment Notes have been
paid in full, (iii) after the Secured Obligations in respect of Series A-1,
Series A-2 and Series B Equipment Notes have been paid in full, the Noteholders
of Series C until the Secured Obligations in respect of Series C Equipment Notes
have been paid in full, and (iv) after the Secured Obligations in respect of
Series ▇-▇, ▇▇▇▇▇▇ ▇-▇, Series B and Series C Equipment Notes have been paid in
full, and if any Series D Equipment Notes have been issued, the Noteholders of
22
28
[Trust Indenture and Mortgage (2000-2 747-1)]
Series D Equipment Notes; provided, however, that in the event that a Series of
Equipment Notes shall be redeemed pursuant to the provisions of Section 6.01(b),
the amounts received by the Indenture Trustee in connection with such redemption
shall be applied in accordance with the provisions of Section 3.02(b)
notwithstanding anything contained in this Section 2.11 to the contrary.
Section 2.12 Certain Agreements Regarding Liquidity
Facilities. Without duplication of amounts paid by the Owner under the
Participation Agreement or the other Fundamental Documents, the Owner agrees to
pay to the Indenture Trustee for distribution in accordance with Section 3.04
hereof: (i) an amount equal to the fees payable to the relevant Liquidity
Provider under the related Fee Letter (as defined in the Intercreditor Agreement
as originally in effect or as amended with the consent of the Owner) multiplied
by a fraction the numerator of which shall be the sum of the then outstanding
aggregate principal amount of the Series A-1 Equipment Notes, Series A-2
Equipment Notes, Series B Equipment Notes and Series C Equipment Notes and the
denominator of which shall be the sum of the then outstanding aggregate
principal amount of all "Series A-1 Notes", "Series A-2 Notes," "Series B Notes"
and "Series C Notes" (each as defined in the Intercreditor Agreement); (ii) (x)
the amount equal to interest on any Downgrade Advance (other than any Applied
Downgrade Advance) payable under Section 3.07 of each Liquidity Facility minus
Investment Earnings from such Downgrade Advance multiplied by (y) the fraction
specified in the foregoing clause (i); (iii) (x) the amount equal to interest on
any Non-Extension Advance (other than any Applied Non-Extension Advance) payable
under Section 3.07 of each Liquidity Facility minus Investment Earnings from
such Non-Extension Advance multiplied by (y) the fraction specified in the
foregoing clause (i); (iv) (x) any amounts owed to the Liquidity Providers by
the Subordination Agent as borrower under Section 3.01 (other than in respect of
an Unpaid Advance, an Applied Non-Extension Advance or Applied Downgrade
Advance), 3.02, 3.03 (other than in respect of an Unpaid Advance, an Applied
Non-Extension Advance or Applied Downgrade Advance), 7.05 or 7.07 of each
Liquidity Facility (or similar provisions of any succeeding Liquidity Facility)
multiplied by (y) the fraction specified in the foregoing clause (i); (v) if any
payment default shall have occurred and be continuing with respect to interest
on any Series A-1 Equipment Note, Series A-2 Equipment Notes, Series B Equipment
Note or Series C Equipment Note, (x) the excess, if any, of (1) the sum of (x)
the amount equal to interest on any Unpaid Advance, an Applied Non-Extension
Advance or Applied Downgrade Advance payable under Section 3.07 of each
Liquidity Facility plus (y) any other amounts payable in respect of such Unpaid
Advance, Applied Non-Extension Advance or Applied Downgrade Advance under
Section 3.01, 3.03 or 3.09 of the applicable Liquidity Facility over (2) the sum
of Investment Earnings from any Final Advance plus any amount of interest at the
Past Due Rate actually payable (whether or not in fact paid) by the Owner on the
overdue scheduled interest on the Equipment Notes in respect of which such
Unpaid Advance, Applied Non-Extension Advance or Applied Downgrade Advance was
made, multiplied by (y) a fraction the numerator of which shall be the then
aggregate overdue amounts of interest on the Series A-1 Equipment Notes, Series
A-2 Equipment Notes, Series B Equipment Notes and Series C Equipment Notes
(other than interest becoming due and payable solely as a result of acceleration
of any such Equipment Notes) and the denominator of which shall be the then
aggregate overdue amounts of interest on all "Series A-1 Notes",
23
29
[Trust Indenture and Mortgage (2000-2 747-1)]
"Series A-2 Notes", "Series B Notes" and "Series C Notes" (each as defined in
the Intercreditor Agreement) (other than interest becoming due and payable
solely as a result of acceleration of any such "Notes"); (vi) (x) the amount
equal to all compensation and reimbursement of expenses, disbursements and
advances payable by Owner under the Pass Through Trust Agreements multiplied by
(y) the fraction specified in the foregoing clause (i); and (vii) (x) the amount
equal to all compensation and reimbursement of expenses and disbursements
payable to the Subordination Agent under the Intercreditor Agreement except with
respect to any income or franchise taxes incurred by the Subordination Agent in
connection with the transactions contemplated by the Intercreditor Agreement
multiplied by (y) the fraction specified in the foregoing clause (i). For
purposes of this paragraph, the terms "Applied Downgrade Advance", "Applied
Non-Extension Advance", "Downgrade Advance", "Final Advance", "Investment
Earnings" and "Unpaid Advance" shall have the meanings specified in each
Liquidity Facility or the Intercreditor Agreement referred to therein.
ARTICLE 3
RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS
Section 3.01 Basic Distributions. Except as otherwise provided
in Section 3.03 hereof, each periodic payment of principal or interest on the
Equipment Notes received by the Indenture Trustee shall be promptly distributed
in the following order of priority:
First, (i) so much of such payment as shall be required to pay in
full the aggregate amount of the payment or payments of
principal amount and interest (as well as any interest on any
overdue principal amount and, to the extent permitted by
applicable law, on any overdue interest) then due under all
Series A-1 Equipment Notes and all Series A-2 Equipment Notes
shall be distributed to each Noteholder of Series A-1
Equipment Notes and Series A-2 Equipment Notes ratably,
without priority of one over the other, in the proportion that
the amount of such payment or payments then due under all
Series A-1 Equipment Notes and all Series A-2 Equipment Notes
held by such Noteholder bears to the aggregate amount of the
payments then due under all Series A-1 Equipment Notes and all
Series A-2 Equipment Notes;
(ii) after giving effect to paragraph (i) above, so much of
such payment remaining as shall be required to pay in full the
aggregate amount of the payment or payments of principal
amount and interest (as well as any interest on any overdue
principal amount and, to the extent permitted by applicable
law, on any overdue interest) then due under all Series B
Equipment Notes shall be distributed to each Noteholder of
Series B Equipment Notes ratably, without priority of one over
the other, in the proportion that the amount of such payment
or payments then due under all Series B Equipment Notes held
by such Noteholder bears to the aggregate amount of the
payments then due under all Series B Equipment Notes;
24
30
[Trust Indenture and Mortgage (2000-2 747-1)]
(iii) after giving effect to paragraph (ii) above, so much of
such payment remaining as shall be required to pay in full the
aggregate amount of the payment or payments of principal
amount and interest (as well as any interest on any overdue
principal amount and, to the extent permitted by applicable
law, on any overdue interest) then due under all Series C
Equipment Notes shall be distributed to each Noteholder of
Series C Equipment Notes ratably, without priority of one over
the other, in the proportion that the amount of such payment
or payments then due under all Series C Equipment Notes held
by such Noteholder bears to the aggregate amount of the
payments then due under all Series C Equipment Notes; and
Second, if any Series D Equipment Notes have been issued, so much of
such payment remaining as shall be required to pay in full the
aggregate amount of the payment or payments of principal
amount and interest (as well as any interest on any overdue
principal amount and, to the extent permitted by applicable
law, on any overdue interest) then due under all Series D
Equipment Notes shall be distributed to each Noteholder of
Series D Equipment Notes ratably, without priority of one over
the other, in the proportion that the amount of such payment
or payments then due under all Series D Equipment Notes held
by such Noteholder bears to the aggregate amount of the
payments then due under all Series D Equipment Notes; and
Third, the balance, if any, of such installment remaining thereafter
shall be distributed to the Owner.
Section 3.02 Event of Loss; Optional Redemption. (a) Except as
otherwise provided in Section 3.03 hereof, any payments received by the
Indenture Trustee pursuant to Section 6.01(a) following an Event of Loss with
respect to the Aircraft shall be applied to the Secured Obligations by applying
such funds in the following order of priority:
First, (i) to reimburse the Indenture Trustee and the Noteholders for
any reasonable costs or expenses incurred in connection with
such redemption for which they are entitled to reimbursement,
or indemnity by Owner, under the Operative Documents and then
(ii) to pay any other amounts then due (except as provided in
clauses "Second" and "Third" below) to the Indenture Trustee,
the Noteholders and the other Indenture Indemnitees under this
Indenture, the Participation Agreement, the Equipment Notes or
any other Fundamental Document;
Second, (i) to pay the amounts specified in paragraph (i) of clause
"First" of Section 3.01 hereof;
(ii) after giving effect to paragraph (i) above, to pay the
amounts specified in paragraph (ii) of clause "First" of
Section 3.01 hereof; and
25
31
[Trust Indenture and Mortgage (2000-2 747-1)]
(iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "First" of
Section 3.01 hereof;
Third, if any Series D Equipment Notes have been issued, to pay the
amounts specified in clause "Second" of Section 3.01 hereof;
and
Fourth, the balance, if any, of such installment remaining thereafter
shall be distributed to the Owner.
provided, however, that if a Replacement Airframe or Replacement Engine shall be
substituted for the Airframe or Engine subject to such Event of Loss as provided
in Section 5.01 hereof, any insurance, condemnation or similar proceeds which
result from such Event of Loss and are paid over to the Indenture Trustee shall
be held by the Indenture Trustee as permitted by Section 5.01 hereof (provided
that such moneys shall be invested as provided in Section 9.04 hereof) as
additional security for the obligations of Owner under the Operative Documents
and such proceeds (and such investment earnings), to the extent not theretofore
applied as provided herein, shall be released to the Owner at the Owner's
written request upon the release of such Airframe or Engine and the replacement
thereof as provided herein.
No Make-Whole Amount shall be due and payable on the Equipment
Notes as a consequence of a prepayment under this Section 3.02(a).
(b) Except as otherwise provided in Section 3.03 hereof, any
payments received by the Indenture Trustee in connection with an optional
redemption of any Series of the Equipment Notes pursuant to Section 6.01(b)
shall be applied to redemption of such Series of Equipment Notes and to all
other Secured Obligations due and owing the holders of such Series by applying
such funds in the following order of priority:
First, to reimburse the Indenture Trustee and the holders of such
Series for any reasonable costs or expenses incurred in
connection with such redemption for which they are entitled to
reimbursement or indemnity by Owner under the Operative
Documents;
Second, so much of such payment as shall be required to pay in full
the aggregate amount of the payment or payments of principal
amount and interest (as well as any interest on any overdue
principal amount and, to the extent permitted by applicable
law, on any overdue interest) then due under such Series of
Equipment Notes and all other Secured Obligations due and
owing to the holders of such Series of Equipment Notes shall
be distributed to the holders of such Series ratably, without
priority of one over the other, in the proportion that the
amount of such payment or payments then due under all
Equipment Notes of such Series held by such Noteholders bears
to the aggregate amount of the payments then due under all
Equipment Notes of such Series; and
26
32
[Trust Indenture and Mortgage (2000-2 747-1)]
Third, the balance, if any, of such installment remaining thereafter
shall be distributed to the Owner.
Section 3.03 Payments After Indenture Event of Default.
Except as otherwise provided in Section 3.04 hereof, all
payments received and amounts held or realized by the Indenture Trustee
(including any amounts realized by the Indenture Trustee from the exercise of
any remedies pursuant to Article 8 hereof) after an Indenture Event of Default
shall have occurred and be continuing and after the declaration specified in
Section 8.02 hereof, as well as all payments or amounts then held by the
Indenture Trustee as part of the Indenture Estate, shall be promptly distributed
by the Indenture Trustee in the following order of priority:
First, so much of such payments or amounts as shall be required to
(i) reimburse the Indenture Trustee or State Street for any
Tax (except to the extent resulting from a failure of the
Indenture Trustee to withhold taxes pursuant to Section 2.10
hereof), expense or other loss (including, without limitation,
all amounts to be expended at the expense of, or charged upon
the proceeds of, the Indenture Estate pursuant to Section 8.03
hereof) incurred by the Indenture Trustee or State Street (to
the extent not previously reimbursed), the expenses of any
sale, or other proceeding, reasonable attorneys' fees and
expenses, court costs, and any other expenditures incurred or
expenditures or advances made by the Indenture Trustee, State
Street, the Noteholders in the protection, exercise or
enforcement of any right, power or remedy or any damages
sustained by the Indenture Trustee, State Street or any
Noteholder, liquidated or otherwise, upon such Event of
Default shall be applied by the Indenture Trustee as between
itself, State Street and the Noteholders in reimbursement of
such expenses and any other expenses for which the Indenture
Trustee, State Street or the Noteholders are entitled to
reimbursement under any Operative Document and (ii) pay all
other amounts payable to the Indenture Indemnitees hereunder
and under the Participation Agreement, as applicable (other
than amounts specified in clauses "Second" through "Fourth"
below); and ------ ------ in the case the aggregate amount to
be so distributed is insufficient to pay as aforesaid, then
ratably, without prior of one over the other, in proportion to
the amounts owed each hereunder and under the Participation
Agreement;
Second, so much of such payments or amounts remaining as shall be
required to reimburse the then existing or prior Noteholders
for payments made pursuant to Section 9.06 hereof (to the
extent not previously reimbursed), shall be distributed to
such then existing or prior Noteholders ratably, without
priority of one over the other, in accordance with the amount
of the payment or payments made by each such then existing or
prior Noteholder pursuant to said Section 9.06 hereof;
Third, (i) so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid principal amount
of all Series A-1 Equipment Notes and
27
33
[Trust Indenture and Mortgage (2000-2 747-1)]
all Series A-2 Equipment Notes, and the accrued but unpaid
interest and other amounts due thereon and all other Secured
Obligations owed in respect of the Series A-1 Equipment Notes
and Series A-2 Equipment Notes to the date of distribution,
shall be distributed to the Noteholders of Series A-1
Equipment Notes and Series A-2 Equipment Notes, and in case
the aggregate amount so to be distributed shall be
insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the proportion that
the aggregate unpaid principal amount of all Series A-1
Equipment Notes and all Series A-2 Equipment Notes held by
each Noteholder plus the accrued but unpaid interest and other
amounts due hereunder or thereunder to the date of
distribution, bears to the aggregate unpaid principal amount
of all Series A-1 Equipment Notes and all Series A-2 Equipment
Notes held by all such Noteholders plus the accrued but unpaid
interest and other amounts due thereon to the date of
distribution;
(ii) after giving effect to paragraph (i) above, so much of
such payments or amounts remaining as shall be required to pay
in full the aggregate unpaid principal amount of all Series B
Equipment Notes, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations in
respect of the Series B Equipment Notes to the date of
distribution, shall be distributed to the Noteholders of
Series B Equipment Notes, and in case the aggregate amount so
to be distributed shall be insufficient to pay in full as
aforesaid, then ratably, without priority of one over the
other, in the proportion that the aggregate unpaid principal
amount of all Series B Equipment Notes held by each Noteholder
plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to
the aggregate unpaid principal amount of all Series B
Equipment Notes held by all such Noteholders plus the accrued
but unpaid interest and other amounts due thereon to the date
of distribution; and
(iii) after giving effect to paragraph (ii) above, so much of
such payments or amounts remaining as shall be required to pay
in full the aggregate unpaid principal amount of all Series C
Equipment Notes, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations in
respect of the Series C Equipment Notes to the date of
distribution, shall be distributed to the Noteholders of
Series C Equipment Notes, and in case the aggregate amount so
to be distributed shall be insufficient to pay in full as
aforesaid, then ratably, without priority of one over the
other, in the proportion that the aggregate unpaid principal
amount of all Series C Equipment Notes held by each Noteholder
plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to
the aggregate unpaid principal amount of all Series C
Equipment Notes held by all such Noteholders plus the accrued
but unpaid interest and other amounts due thereon to the date
of distribution;
28
34
[Trust Indenture and Mortgage (2000-2 747-1)]
Fourth, if any Series D Equipment Notes have been issued, so much of
such payments or amounts remaining as shall be required to pay
in full the aggregate unpaid principal amount of all Series D
Equipment Notes, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations in
respect of the Series D Equipment Notes to the date of
distribution, shall be distributed to the Noteholders of
Series D Equipment Notes, and in case the aggregate amount so
to be distributed shall be insufficient to pay in full as
aforesaid, then ratably, without priority of one over the
other, in the proportion that the aggregate unpaid principal
amount of all Series D Equipment Notes held by each Noteholder
plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to
the aggregate unpaid principal amount of all Series D
Equipment Notes held by all such Noteholders plus the accrued
but unpaid interest and other amounts due thereon to the date
of distribution; and
Fifth, the balance, if any, of such payments or amounts remaining
thereafter shall be distributed to the Owner.
No Make-Whole Amount shall be payable in connection with an
Indenture Event of Default or distributable under this Section 3.03.
Section 3.04 Certain Payments.
(a) Any payments received by the Indenture Trustee for which
no provision as to the application thereof is made in this Agreement and for
which such provision is made in any other Fundamental Document shall be applied
forthwith to the purpose for which such payment was made in accordance with the
terms of such other Fundamental Document.
(b) Notwithstanding anything to the contrary contained in this
Article 3, the Indenture Trustee will distribute promptly upon receipt any
indemnity payment received by it from the Owner in respect of the Indenture
Trustee in its individual capacity, any Noteholder or any other Indenture
Indemnitee, in each case whether or not pursuant to Section 5(b) of the
Participation Agreement, directly to the Person entitled thereto, except that
any payment under Section 2.12 shall be distributed to the Subordination Agent
to be distributed in accordance with the terms of the Intercreditor Agreement.
Section 3.05 Other Payments.
Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made elsewhere in this Agreement or
in any other Fundamental Document or in the Confirmation shall be distributed by
the Indenture Trustee to the extent received or realized at any time prior to
payment of all Secured Obligations, in the order of priority specified in
Section 3.01 hereof, and after payment in full of all amounts then due in
accordance with Section 3.01 in the manner provided in clause "Fifth" of Section
3.03 hereof.
29
35
[Trust Indenture and Mortgage (2000-2 747-1)]
Section 3.06 Payments to Owner.
Any amounts distributed hereunder by the Indenture Trustee to
the Owner shall be paid to the Owner (within the time limits contemplated by
Section 2.08) by wire transfer of funds of the type received by the Indenture
Trustee at such office and to such account or accounts of the Owner as shall be
designated by notice from the Owner to the Indenture Trustee from time to time.
ARTICLE 4
COVENANTS OF OWNER
So long as the Airframe or any Engine is subject to the Lien
of this Agreement, the Owner covenants and agrees as follows:
Section 4.01 Registration, Maintenance and Operation;
Possession and Permitted Leases; Insignia.
(a) (1) Registration and Maintenance. The Owner, at its own
cost and expense, shall (or shall cause any Permitted Lessee to): (i) on or
prior to the Closing Date, cause the Aircraft to be duly registered in its name,
and, subject to subparagraph (3) of this Section 4.01(a), to remain duly
registered in its name under the Federal Aviation Act; (ii) maintain, service,
repair, and overhaul (or cause to be maintained, serviced, repaired, and
overhauled) the Aircraft (and any engine which is not an Engine but which is
installed on the Aircraft) (x) so as at all times to keep the Aircraft in as
good an operating condition, ordinary wear and tear excepted, as may be
necessary to enable the airworthiness certification for the Aircraft to be
maintained in good standing at all times (other than during temporary periods of
storage in accordance with applicable regulations) under (I) the Federal
Aviation Act, except when all of Owner's Boeing Model 747-422 aircraft (powered
by engines of the same type as those with which the Airframe shall be equipped
at the time of such grounding) registered in the United States have been
grounded by the FAA unless such grounding was caused by the failure of Owner to
maintain, service, repair and overhaul the Aircraft in accordance with the terms
hereof, or (II) the applicable laws of any other jurisdiction in which the
Aircraft may then be registered from time to time, except when all of Owner's
Boeing Model 747-422 aircraft (powered by engines of the same type as those with
which the Airframe shall be equipped at the time of such grounding) registered
in such jurisdiction have been grounded by the aeronautical authority of such
jurisdiction unless such grounding was caused by the failure of Owner to
maintain, service, repair and overhaul the Aircraft in accordance with the terms
hereof and (y) in substantially the same manner as Owner (or any Permitted
Lessee) maintains, services, repairs or overhauls similar aircraft operated by
Owner (or Permitted Lessee) in similar circumstances and without discriminating
against the Aircraft; and (iii) maintain or cause to be maintained all records,
logs and other materials required to be maintained in respect of the Aircraft by
the FAA or the applicable regulatory agency or body of any other jurisdiction in
which the Aircraft may then be registered.
30
36
[Trust Indenture and Mortgage (2000-2 747-1)]
(2) Operation. Owner will not (or permit any Permitted Lessee
to) maintain, use, service, repair, overhaul or operate the Aircraft in
violation of any material law or any rule, regulation, treaty, order or
certificate of any government or governmental authority (domestic or
foreign) having jurisdiction, or in violation of any airworthiness
certificate, license or registration relating to the Aircraft issued by
any such authority, except that, (i) Owner or any Permitted Lessee may
contest in good faith the validity or application of any such law,
rule, regulation, order, certificate, license, registration or
violation in any reasonable manner which does not materially adversely
affect the Lien of this Agreement and (ii) Owner shall not be in
default under, or required to take any action set forth in, this
sentence if it is not possible for Owner to comply with the laws of a
jurisdiction other than the United States (or other jurisdiction in
which the Aircraft is registered) because of a conflict with the
applicable laws of the United States (or such jurisdiction where the
Aircraft is registered). If the indemnities or insurance specified in
Section 4.03(f), or some combination thereof in amounts equal to
amounts required by Section 4.03(f), have not been obtained, Owner will
not operate the Aircraft, or permit any Permitted Lessee to operate the
Aircraft, in or to any area excluded from coverage by any insurance
required to be maintained by the terms of Section 4.03; provided,
however, that the failure of Owner to comply with the provisions of
this sentence shall not give rise to an Indenture Event of Default
where such failure is attributable to a hijacking, medical emergency,
equipment malfunction, weather conditions, navigational error or other
isolated extraordinary event beyond the control of Owner and Owner is
taking all reasonable steps to remedy such failure as soon as is
reasonably practicable.
(3) Reregistration. Subject to the terms and conditions of
Section 6(a) of the Participation Agreement, the Owner may at any time
cause the Aircraft to be re-registered under the laws of another
country.
(b) Possession and Permitted Leases. Owner will not, without
the prior written consent of Indenture Trustee, lease or otherwise in any manner
deliver, transfer or relinquish possession of the Airframe or any Engine or
install or permit any Engine to be installed on any airframe other than the
Airframe; provided that, so long as such action shall not deprive the Indenture
Trustee of the perfected Lien of this Agreement on the Airframe or any Engine,
Owner may, without the prior written consent of Indenture Trustee:
(i) subject the Airframe and the Engines or engines
then installed thereon to normal interchange agreements or any Engine
to normal pooling or similar arrangements, in each case customary in
the airline industry and entered into by Owner (or any Permitted
Lessee) in the ordinary course of its business with any air carrier;
provided, that (A) no such agreement or arrangement contemplates or
requires the transfer of title to the Airframe, and (B) if Owner's
title to any Engine shall be divested under any such agreement or
arrangement, such divestiture shall be deemed to be an Event of Loss
with respect to such Engine and the Owner shall (or shall cause any
Permitted Lessee to) comply with Section 5.01(b) hereof in respect
thereof;
31
37
[Trust Indenture and Mortgage (2000-2 747-1)]
(ii) deliver possession of the Airframe or any Engine
to the manufacturer thereof or to any other Person for testing,
service, repair, maintenance or overhaul work on the Airframe or Engine
or any Part of any thereof or for alterations or modifications in or
additions to such Airframe or Engine to the extent required or
permitted by the terms hereof;
(iii) install an Engine on an airframe owned by Owner
(or any Permitted Lessee) which airframe is free and clear of all
Liens, except: (A) Permitted Liens and Liens which apply only to the
engines (other than Engines), appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment (other than
Parts) installed on such airframe (but not to the airframe as an
entirety), (B) the rights of third parties under interchange agreements
which would be permitted under clause (i) above, provided that Owner's
title to such Engine shall not be divested as a result thereof and (C)
mortgage Liens or other security interests, provided, that (as regards
this clause (C)), such mortgage Liens or other security interests
effectively provide that such Engine shall not become subject to the
lien of such mortgage or security interest, notwithstanding the
installation thereof on such airframe;
(iv) install an Engine on an airframe leased to Owner
(or any Permitted Lessee) or purchased by Owner (or any Permitted
Lessee) subject to a conditional sale or other security agreement,
provided that (x) such airframe is free and clear of all Liens, except:
(A) the rights of the parties to the lease or conditional sale or other
security agreement covering such airframe, or their assignees, and (B)
Liens of the type permitted by subparagraph (iii) of this Section
4.01(b) and (y) such lease, conditional sale or other security
agreement effectively provides that such Engine shall not become
subject to the Lien of such lease, conditional sale or other security
agreement, notwithstanding the installation thereof on such airframe;
(v) install an Engine on an airframe owned by Owner
(or any Permitted Lessee), leased to Owner (or any Permitted Lessee) or
purchased by Owner (or any Permitted Lessee) subject to a conditional
sale or other security agreement under circumstances where neither
subparagraph (iii) nor subparagraph (iv) of this Section 4.01(b) is
applicable, provided that any divestiture of title to such Engine
resulting from such installation shall be deemed an Event of Loss with
respect to such Engine and Owner shall (or shall cause any Permitted
Lessee to) comply with Section 5.01(b) hereof in respect thereof,
Indenture Trustee not intending hereby to waive any right or interest
it may have to or in such Engine under applicable law until compliance
by Owner with such Section 5.01(b);
(vi) to the extent permitted by Section 4.02(b)
hereof, subject any appliances, Parts or other equipment owned by the
Owner and removed from the Airframe or any Engine to any pooling
arrangement referred to in Section 4.02(b) hereof;
32
38
[Trust Indenture and Mortgage (2000-2 747-1)]
(vii) transfer (or permit any Permitted Lessee to
transfer) possession of the Airframe or any Engine to the United States
of America or any instrumentality or agency thereof pursuant to the
Civil Reserve Air Fleet Program so long as Owner (or any Permitted
Lessee) shall promptly notify Indenture Trustee (x) upon transferring
possession of the Airframe or any Engine to the United States of
America or any agency or instrumentality thereof pursuant to the Civil
Reserve Air Fleet Program and (y) of the name and the address of the
Contracting Office Representative for the Military Airlift Command of
the United States Air Force to whom notice must be given pursuant to
Section 15 hereof;
(viii) transfer possession of the Airframe or any
Engine to the United States of America or any instrumentality or agency
thereof pursuant to a lease, contract or other instrument, a copy of
which shall be provided to the Indenture Trustee; or
(ix) so long as no Indenture Default under Section
8.01(a), (e) or (f) hereof or any Indenture Event of Default shall have occurred
and be continuing, lease the Aircraft, Airframe or any Engine to (1) a
Certificated Air Carrier, (2) any other Permitted Air Carrier, or (3) any other
Person; provided that (A) no such lease shall be permitted to a lessee that is
subject to a proceeding or final order under applicable bankruptcy, insolvency
or reorganization laws on the date the lease is entered into, (B) in the case of
a lease under subclause (2) or (3) above, on the date of such lease, the United
States and the country in which such lessee is domiciled and principally located
maintain diplomatic relations (which for purposes of this clause (ix) shall
include Taiwan and any other country that is similarly situated) and (C) in the
case only of a lease to any Person under subclause (3) above, the Indenture
Trustee receives at the time of such lease an opinion of counsel to the effect
that there exist no possessory rights in favor of the lessee under the laws of
such lessee's country which would, upon bankruptcy or insolvency of or other
default by the Owner or the lessee, prevent the return of such Engine or
Airframe and such Engine or engine to the Indenture Trustee in accordance with
and when permitted by the terms of Section 8.03 upon the exercise by the
Indenture Trustee of its remedies pursuant to such Section.
The rights of any Permitted Lessee or other transferee (other
than a transferee where the transfer is of an Engine which is deemed an Event of
Loss) shall be subject and subordinate to, all the terms of this Agreement (and
any Permitted Lease shall expressly state that it is so subject and
subordinate), including, without limitation, the Indenture Trustee's right to
repossess the Aircraft and to void any lease upon such repossession, and Owner
shall remain primarily liable for the performance of all of the terms of this
Agreement, and the terms of any such Permitted Lease shall not permit any
Permitted Lessee to take any action not permitted to be taken by Owner in this
Agreement with respect to the Aircraft. No pooling agreement, Permitted Lease or
other relinquishment of possession of the Airframe or any Engine shall in any
way discharge or diminish any of Owner's obligations to the Indenture Trustee
under this Agreement or constitute a waiver of Indenture Trustee's rights or
remedies hereunder. The Indenture Trustee agrees, for the benefit of Owner (and
any Permitted Lessee) and for the benefit of any mortgagee or other holder of a
security interest in any engine owned by Owner (or any Permitted Lessee),
33
39
[Trust Indenture and Mortgage (2000-2 747-1)]
any lessor of any engine other than an Engine leased to Owner (or any Permitted
Lessee) and any conditional vendor of any engine other than an Engine purchased
by Owner (or any Permitted Lessee) subject to a conditional sale agreement or
any other security agreement, that no interest shall be created under this
Agreement in any engine so owned, leased or purchased and that neither the
Indenture Trustee nor its successors or assigns will acquire or claim, as
against Owner (or any Permitted Lessee) or any such mortgagee, lessor or
conditional vendor or other holder of a security interest or any successor or
assignee of any thereof, any right, title or interest in such engine as the
result of such engine being installed on the Airframe; provided, however, that
such agreement of Indenture Trustee shall not be for the benefit of any lessor
or secured party of an airframe leased to Owner (or any Permitted Lessee) or
purchased by Owner (or any Permitted Lessee) subject to a conditional sale or
other security agreement or for the benefit of any mortgagee or any other holder
of a security interest in an airframe owned by Owner (or any Permitted Lessee),
on which airframe Owner (or any Permitted Lessee) then proposes to install an
Engine, unless such lessor, conditional vendor, other secured party or mortgagee
has expressly agreed (which agreement may be contained in such lease,
conditional sale or other security agreement or mortgage) that neither it nor
its successors or assigns will acquire, as against Indenture Trustee, any right,
title or interest in an Engine as a result of such Engine being installed on
such airframe. Owner shall provide the Indenture Trustee and the Rating Agencies
with a copy of any Permitted Lease or any instrument evidencing a transfer
pursuant to paragraph (viii) of this Section 4.01(b), in either case having a
term of more than one (1) year, as promptly as practicable after entering into
such Permitted Lease or other transfer.
Any Wet Lease or similar arrangement under which Owner
maintains operational control of the Aircraft shall not constitute a delivery,
transfer or relinquishment of possession for purposes of this Section 4.01. The
Indenture Trustee acknowledges that any consolidation or merger of Owner or
conveyance, transfer or lease of all or substantially all of Owner's assets
permitted by the Operative Documents shall not be prohibited by this Section
4.01.
(c) Insignia. On or prior to the Closing Date, or as soon
thereafter as practicable, Owner agrees to affix and maintain (or cause to be
affixed and maintained) in the cockpit of the Airframe adjacent to the
registration certificate therein and on each Engine a nameplate bearing the
inscription:
Mortgaged To
State Street Bank and Trust Company
of Connecticut, National Association, as Indenture Trustee
(such nameplate to be replaced, if necessary, with a nameplate reflecting the
name of any successor Indenture Trustee, in each case as permitted under the
Operative Documents).
Except as above provided, Owner will not allow the name of any
Person to be placed on the Airframe or on any Engine as a designation that might
be interpreted as a claim of
34
40
[Trust Indenture and Mortgage (2000-2 747-1)]
ownership; provided, that nothing herein contained shall prohibit Owner (or any
Permitted Lessee) from placing its customary colors and insignia on the Airframe
or any Engine.
(d) Substitution of Engines. The Owner may at any time, at no
cost to the Indenture Trustee, replace any Engine subjected to the Lien hereof
by causing an Acceptable Alternate Engine to be substituted for such Engine
hereunder in accordance with the provisions of Section 5.01(b) hereof to the
same extent as if an Event of Loss has occurred with respect to such Engine.
Section 4.02 Replacement and Pooling of Parts; Alterations,
Modifications and Additions.
(a) Replacement of Parts. Owner, at its own cost and expense,
will promptly replace or cause to be replaced all Parts which may from time to
time become worn out, lost, stolen, destroyed, seized, confiscated, damaged
beyond repair or permanently rendered unfit for use for any reason whatsoever,
except as otherwise provided in Section 4.02(c). In addition, the Owner (or any
Permitted Lessee) may, at its own cost and expense, remove in the ordinary
course of maintenance, service, repair, overhaul or testing, any Parts, whether
or not worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond
repair or permanently rendered unfit for use for, provided that the Owner (or
any Permitted Lessee), except as otherwise provided in paragraph (c) of this
Section 4.02, will, at its own cost and expense, replace such Parts as promptly
as practicable. All replacement Parts shall be owned by Owner free and clear of
all Liens (except Permitted Liens, pooling arrangements permitted by Section
4.02(b) hereof and replacement Parts temporarily installed on an emergency
basis) and shall be in as good operating condition as, and shall have a value
and utility substantially equal to, the Parts replaced assuming such replaced
Parts were in the condition and repair required to be maintained by the terms
hereof. Except as provided in Section 4.02(c), all Parts at any time removed
from the Airframe or any Engine shall remain subject to the Lien of this
Agreement, no matter where located, until such time as such Parts shall be
replaced by Parts which meet the requirements for replacement Parts specified
above. Immediately upon any replacement Part becoming incorporated or installed
in or attached to the Airframe or any Engine, without further act (subject only
to Permitted Liens and any pooling arrangement permitted by Section 4.02(b)
hereof and except replacement Parts temporarily installed on an emergency
basis), (i) such replacement Part shall become subject to the Lien of this
Agreement and be deemed a Part for all purposes hereof to the same extent as the
Parts originally incorporated or installed in or attached to the Airframe or
such Engine and (ii) the replaced Part shall be free and clear of all rights of
the Indenture Trustee and shall no longer be deemed a Part hereunder. Upon
request of Owner, the Indenture Trustee shall execute and deliver to Owner such
documents as may be reasonably required to evidence the release of any replaced
Part from the Lien of this Indenture.
(b) Pooling of Parts. Any Part removed from the Airframe or
any Engine as provided in Section 4.02(a) hereof may be subjected by Owner (or
any Permitted Lessee) to a pooling arrangement of the type which is permitted by
Section 4.01(b)(i) hereof; provided, that the Part replacing such removed Part
shall be incorporated or installed in or attached to such
35
41
[Trust Indenture and Mortgage (2000-2 747-1)]
Airframe or Engine in accordance with Section 4.02(a) as promptly as practicable
after the removal of such removed Part. In addition, any replacement Part when
incorporated or installed in or attached to the Airframe or an Engine in
accordance with such Sections may be owned by any third party subject to such a
pooling arrangement, provided, that Owner (or any Permitted Lessee), at its
expense, as promptly thereafter as practicable, either (i) causes such
replacement Part to become subject to the Lien of this Agreement, free and clear
of all Liens other than Permitted Liens or (ii) replaces such replacement Part
with a further replacement Part owned by Owner (or any Permitted Lessee) which
shall become subject to the Lien of this Agreement, free and clear of all Liens
other than Permitted Liens.
(c) Alterations, Modifications and Additions. Owner, at its
own expense, will make (or cause to be made) such alterations and modifications
in and additions to the Airframe and Engines as may be required to be made from
time to time so as to meet the applicable standards of the FAA or of any
regulatory agency or body of any jurisdiction in which the Aircraft may then be
registered; provided, however, that, Owner or any Permitted Lessee may, in good
faith, and by appropriate proceedings contest the validity or application of any
such law, rule, regulation or order in any reasonable manner which does not
materially adversely affect the Lien of this Agreement. In addition, Owner (or
any Permitted Lessee), at its own expense, may from time to time make such
alterations and modifications in and additions to the Airframe or any Engine as
Owner (or any Permitted Lessee) may deem desirable in the proper conduct of its
business, including removal of Parts which Owner (or any Permitted Lessee) deems
to be obsolete or no longer suitable or appropriate for use on the Airframe or
such Engine (such parts, "Obsolete Parts"); provided that no such alteration,
modification, removal or addition diminishes the condition or airworthiness of
the Airframe or such Engine, or materially diminishes the value, utility or, in
regard to the Airframe, remaining useful life of the Airframe or such Engine
below the condition, airworthiness, value, utility or, in regard to the
Airframe, remaining useful life thereof immediately prior to such alteration,
modification, removal or addition assuming the Airframe or such Engine was then
in the condition required to be maintained by the terms of this Agreement. In
addition, the value (but not the utility, condition or airworthiness) of the
Airframe or any Engine may be reduced by the value, if any, of Obsolete Parts
which shall have been removed. All Parts incorporated or installed in or
attached or added to the Airframe or an Engine as the result of such alteration,
modification or addition (except those parts which are excluded from the
definition of Parts or which may be removed by Owner pursuant to the next
sentence) (the "Additional Parts") shall, without further act, become subject to
the Lien of this Agreement. Notwithstanding the foregoing sentence, Owner (or
any Permitted Lessee), may, at its own expense, at any time, so long as no
Indenture Event of Default shall have occurred and be continuing, remove or
suffer to be removed any Additional Part, provided that such Additional Part (i)
is in addition to, and not in replacement of or substitution for, any Part
originally incorporated or installed in or attached to such Airframe or any
Engine at the time of delivery thereof hereunder or any Part in replacement of
or substitution for any such Part, (ii) is not required to be incorporated or
installed in or attached or added to the Airframe or any Engine pursuant to the
terms of Section 4.01 hereof or the first sentence of this paragraph (c) and
(iii) can be removed from the Airframe or such Engine without diminishing the
condition, airworthiness, value or utility of the Airframe or such Engine which
the Airframe or such Engine
36
42
[Trust Indenture and Mortgage (2000-2 747-1)]
would have had at such time had such alteration, modification or addition not
occurred. Upon the removal thereof as provided above, such Additional Part shall
no longer be deemed to be subject to the Lien of this Agreement or part of the
Airframe or Engine from which it was removed. Upon request of Owner, the
Indenture Trustee shall execute and deliver to Owner such documents as may be
reasonably required to evidence the release of any Additional Part from the Lien
of this Indenture.
(d) Certain Matters Regarding Passenger Convenience Equipment.
Owner may at any time and from time to time install on the Airframe Passenger
Convenience Equipment that is (i) owned by another Person and leased to Owner,
(ii) sold to Owner by another Person subject to a conditional sale contract or
other retained security interest, (iii) leased to Owner pursuant to a lease
which is subject to a security interest in favor of another Person or (iv)
installed on the Aircraft subject to a license granted to Owner by another
Person, and in any such case the Indenture Trustee will not acquire or claim, as
against any such other Person, any right, title or interest in any such
Passenger Convenience Equipment solely as a result of its installation on the
Airframe.
Section 4.03 Insurance.
(a) Public Liability and Property Damage Insurance. (1) Except
as provided in clause (2) of this Section 4.03(a), and subject to self-insurance
to the extent permitted by Section 4.03(d) hereof, Owner will carry or cause to
be carried with respect to the Aircraft at its or any Permitted Lessee's expense
(i) comprehensive airline liability (including, without limitation, passenger,
contractual, bodily injury, and property damage liability) insurance (exclusive
of manufacturer's product liability insurance and including, without limitation,
aircraft war risk and hijacking insurance, if and to the extent the same is
maintained by Owner (or Permitted Lessee) with respect to other aircraft owned
or leased, and operated by Owner (or Permitted Lessee) on the same routes) and
(ii) cargo liability insurance, (A) in an amount not less than the greater of
(x) the amounts of comprehensive airline liability insurance from time to time
applicable to aircraft owned or leased and operated by Owner of the same type as
the Aircraft and (y) the Minimum Liability Insurance Amount, (B) of the type and
covering the same risks as from time to time are applicable to aircraft owned or
leased and operated by Owner of the same type as the Aircraft, and (C) which is
maintained in effect with insurers of recognized reputation and responsibility;
provided, however, that Owner need not maintain cargo liability insurance, or
may maintain such insurance in an amount less than the Minimum Liability
Insurance Amount, as long as the amount of cargo liability insurance, if any,
maintained with respect to the Aircraft is the same as the cargo liability
insurance, if any, maintained for other Boeing Model 747-422 aircraft owned or
leased, and operated by Owner.
(2) During any period that the Airframe or an Engine, as the
case may be, is on the ground and not in operation, Owner may carry or
cause to be carried as to such non-operating property, in lieu of the
insurance required by clause (1) above, and subject to the
self-insurance to the extent permitted by Section 4.03(d) hereof,
insurance by insurers of recognized reputation and responsibility
otherwise conforming with the
37
43
[Trust Indenture and Mortgage (2000-2 747-1)]
provisions of clause (1) except that (A) the amounts of coverage shall
not be required to exceed the amounts of comprehensive airline
liability insurance from time to time applicable to property owned or
leased by Owner of the same type as such non-operating property and
which is on the ground and not in operation; and (B) the scope of the
risks covered and the type of insurance shall be the same as from time
to time shall be applicable to property owned or leased by Owner of the
same type as such non-operating property and which is on the ground and
not in operation.
(b) Insurance Against Loss or Damage to the Aircraft. (1)
Except as provided in clause (2) of this Section 4.03(b), and subject to the
provisions of Section 4.03(d) hereof permitting self-insurance, Owner shall
maintain or cause to be maintained in effect, at its or any Permitted Lessee's
expense, with insurers of recognized reputation and responsibility, all-risk
aircraft hull insurance covering the Aircraft and fire and extended coverage and
all-risk aircraft hull insurance covering Engines and Parts while temporarily
removed from the Aircraft and not replaced by similar components (including,
without limitation, aircraft war risk and governmental confiscation and
expropriation (other than by the government of registry of the Aircraft) and
hijacking insurance, if and to the extent the same is maintained by Owner (or
any Permitted Lessee) with respect to other aircraft owned or leased, and
operated by Owner (or such Permitted Lessee) on the same routes); provided, that
such insurance shall at all times while the Aircraft is subject to this
Agreement be for an amount (taking into account self-insurance to the extent
permitted by Section 4.03(d) hereof) not less than the Insured Amount for the
Aircraft; and provided further, that subject to compliance with Section 4.03(d)
hereof, such all-risk property damage insurance covering Engines and Parts while
temporarily removed from the Airframe or an airframe of (in the case of Parts)
an Engine need be obtained only to the extent available at reasonable cost (as
reasonably determined by Owner). In the case of a loss with respect to an engine
(other than an Engine) installed on the Airframe in circumstances which do not
constitute an Event of Loss with respect to the Airframe, the Indenture Trustee
shall promptly remit any payment made to it of any insurance proceeds in respect
of such loss to Owner or any other third party that is entitled to receive such
proceeds.
All losses will be adjusted by Owner with the insurers;
provided, however, that during a period when any Indenture Event of Default
shall have occurred and be continuing, Owner shall not agree to any such
adjustment without the consent of the Indenture Trustee. As between the
Indenture Trustee and Owner, it is agreed that all proceeds of insurance
maintained in compliance with the preceding paragraph and received as the result
of the occurrence of an Event of Loss will be applied as follows:
(x) if such payments are received with respect to the
Airframe (or the Airframe and the Engines installed thereon), (i)
unless such property is replaced pursuant to the last paragraph of
Section 5.01(a) hereof, such payments shall be applied in reduction of
Owner's obligation to pay such amounts payable under Section 5.01(a)
hereof, if not already paid by Owner, or, if already paid by Owner,
shall be applied to reimburse Owner for its payment of such amounts
payable under Section 5.01(a) hereof, and the balance, if any, of such
payments remaining thereafter will be paid over to, or
38
44
[Trust Indenture and Mortgage (2000-2 747-1)]
retained by, Owner (or if directed by Owner, any Permitted Lessee); or
(ii) if such property is replaced pursuant to Section 5.01(a) hereof,
such payments shall be paid over to, or retained by, Owner (or if
directed by Owner, any Permitted Lessee), provided that Owner shall
have fully performed or, concurrently therewith, will fully perform the
terms of Section 5.01(a) hereof with respect to the Event of Loss for
which such payments are made; and
(y) if such payments are received with respect to an
Engine under the circumstances contemplated by Section 5.01(b) hereof,
such payments shall be paid over to, or retained by, Owner (or if
directed by Owner, any Permitted Lessee), provided that either (i) such
payments are less than the Loss Payee Amount or (ii) Owner shall have
fully performed or, concurrently therewith, will fully perform the
terms of Section 5.01(b) hereof with respect to the Event of Loss for
which such payments are made.
(2) During any period that the Aircraft is on the ground and
not in operation, Owner may carry or cause to be carried, in lieu of the
insurance required by clause (1) above, and subject to the self-insurance to the
extent permitted by Section 4.03(d) hereof, insurance otherwise conforming with
the provisions of said clause (1) except that the scope of the risks and the
type of insurance shall be the same as from time to time applicable to aircraft
owned or leased by Owner of the same type as the Aircraft similarly on the
ground and not in operation, provided that, subject to the self-insurance to the
extent permitted by Section 4.03(d) hereof, Owner shall maintain insurance
against risk of loss or damage to the Aircraft in an amount at least equal to
the Insured Amount of the Aircraft during such period that the Aircraft is on
the ground and not in operation.
(c) Reports, etc. Owner will furnish, or cause to be
furnished, to the Indenture Trustee on or before the Closing Date, and each
annual renewal of the applicable insurances, a report, signed by AON Risk
Services of Illinois, Inc. or any other independent firm of insurance brokers
reasonably acceptable to the Indenture Trustee which brokers may be in the
regular employ of Owner (the "Insurance Brokers"), describing in reasonable
detail the hull and liability insurance (and property insurance for detached
engines and parts) then carried and maintained with respect to the Aircraft and
stating the opinion of such firm that such insurance complies with the terms
hereof; provided that all information contained in the foregoing report shall
not be made available by the Indenture Trustee to anyone except (A) to any
Noteholder's or to prospective and permitted transferees of Indenture Trustee's
or any Noteholder's interest or its respective counsel, independent certified
public accountants, independent insurance brokers or other agents, who agree to
hold such information confidential, (B) to the Indenture Trustee's counsel or
independent certified public accountants, independent insurance brokers or other
agents who agree to hold such information confidential, (C) as may be required
by any statute, court or administrative order or decree or governmental ruling
or regulation, or (D) as may be necessary for purposes of protecting the
interest of any such Person or for enforcement of this Agreement by the
Indenture Trustee; provided, further, that any and all disclosures permitted by
clauses (C) or (D) above shall be made only to the extent necessary to meet the
specific requirements or needs of the Persons to whom such disclosures are
hereby permitted. Owner
39
45
[Trust Indenture and Mortgage (2000-2 747-1)]
will cause such Insurance Broker to agree to advise the Indenture Trustee in
writing of any act or omission on the part of Owner of which it has knowledge
and which might invalidate or render unenforceable, in whole or in part, any
insurance on the Aircraft and to advise the Indenture Trustee in writing at
least 30 days (7 days in the case of war risk and allied perils coverage) prior
to the cancellation or material adverse change of any insurance maintained
pursuant to this Section 4.03; provided that if the notice period specified
above is not reasonably obtainable, the Insurance Broker shall provide for as
long a period of prior notice as shall then be reasonably obtainable. In the
event that Owner or any Permitted Lessee shall fail to maintain or cause to be
maintained insurance as herein provided, the Indenture Trustee or Pass Through
Trustee may, at its sole option, but shall be under no duty to, provide such
insurance and, in such event, Owner shall, upon demand, reimburse the Indenture
Trustee or Pass Through Trustee for the cost thereof to the Indenture Trustee or
Pass Through Trustee, as the case may be; provided, however, that no exercise by
the Indenture Trustee or Pass Through Trustee, as the case may be, of said
option shall affect the provisions of this Agreement, including the provisions
that failure by Owner to maintain the prescribed insurance shall constitute an
Event of Default.
(d) Self-Insurance. Owner may self-insure the risks required
to be insured against pursuant to this Section 4.03 under a program applicable
to all aircraft (whether owned or leased) in Owner's fleet, but in no case shall
the aggregate amount of such self-insurance in regard to Sections 4.03(a) and
4.03(b) hereof exceed for any calendar year, with respect to all of the aircraft
(whether owned or leased) in Owner's fleet (including, without limitation, the
Aircraft) the lesser of (A) the highest replacement value of any single aircraft
in Owner's fleet or (B) 1-1/2% of the average aggregate insurable value (during
the preceding calendar year) of all aircraft (including, without limitation, the
Aircraft) on which Owner carries insurance. In addition to the foregoing right
to self-insure, Owner (and any Permitted Lessee) may self-insure, to the extent
of any applicable mandatory minimum per aircraft (or, if applicable, per annum
or other period) the hull or liability insurance deductible imposed by the
aircraft hull or liability insurer.
(e) Additional Insurance by Owner. Owner (and any Permitted
Lessee) may at its own expense carry insurance with respect to its interest in
the Aircraft in amounts in excess of that required to be maintained by this
Section 4.03; 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 Owner pursuant to this Agreement.
(f) Indemnification by Government in Lieu of Insurance.
Notwithstanding any provisions of this Section 4.03 requiring insurance, the
Indenture Trustee agrees to accept, in lieu of insurance against any risk with
respect to the Aircraft, indemnification from, or insurance provided by, the
United States Government, against such risk in an amount which, when added to
the amount of insurance against such risk maintained by Owner (or any Permitted
Lessee) shall be at least equal to the amount of insurance against such risk
otherwise required by this Section 4.03 (taking into account self-insurance
permitted by Section 4.03(d) hereof).
40
46
[Trust Indenture and Mortgage (2000-2 747-1)]
(g) Terms of Insurance Policies. Any policies carried in
accordance with Sections 4.03(a) and 4.03(b) hereof covering the Aircraft, and
any policies taken out in substitution or replacement for any such policies, (A)
shall name the Additional Insureds as additional insureds, or, if appropriate
(but subject to clause (H) below), loss payees, as their respective interests
may appear (but without imposing on any such party liability to pay premiums
with respect to such insurance), (B) may provide for self-insurance to the
extent permitted in Section 4.03(d) hereof, (C) shall provide that if the
insurers cancel such insurance for any reason whatever, or if the same is
allowed to lapse for non-payment of premium or if any material change is made in
the insurance which adversely affects the interest of any Additional Insured,
such lapse, cancellation or change shall not be effective as to any Additional
Insured for thirty days (seven days in the case of war risk and allied perils
coverage) after receipt by such Additional Insured of written notice by such
insurers of such lapse, cancellation or change; provided, however, that if any
notice period specified above is not reasonably obtainable, such policies shall
provide for as long a period of prior notice as shall then be reasonably
obtainable, (D) shall provide that in respect of the respective interests of
each Additional Insured in such policies the insurance shall not be invalidated
by any action or inaction of Owner (or any Permitted Lessee) or any other Person
and shall insure the respective interests of the Additional Insureds, as they
appear, regardless of any breach or violation of any warranty, declaration or
condition contained in such policies by Owner (or any Permitted Lessee) or by
any other Person, (E) shall be primary without any right of contribution from
any other insurance which is carried by any Additional Insured, (F) shall
expressly provide that all of the provisions thereof, except the limits of
liability, shall operate in the same manner as if there were a separate policy
covering each insured, (G) shall waive any right of the insurers to set-off or
counterclaim or any other deduction, whether by attachment or otherwise, in
respect of any liability of any Additional Insured, and (H) shall provide that
(i) in the event of a loss involving the Aircraft, Airframe, or an Engine for
which proceeds are in excess of the Loss Payee Amount, the proceeds in respect
of such loss up to the amount of the Insured Amount for the Aircraft shall be
payable to the Indenture Trustee, it being understood and agreed that in the
case of any payment to the Indenture Trustee otherwise than in respect of an
Event of Loss, the Indenture Trustee shall, upon receipt of evidence reasonably
satisfactory to it that the damages giving rise to such payment shall have been
repaired or that such payment shall then be required to pay for repairs then
being made, pay the amount of such payment, and any interest or income earned
thereon in accordance with Section 9.04 hereof, to Owner or its order, and (ii)
the entire amount of any such loss for which proceeds are equal to or less than
the Loss Payee Amount or the amount of any proceeds of any such loss in excess
of the Insured Amount for the Aircraft shall be paid to Owner or its order
unless a Section 8.01(a)(i), 8.01(e) or 8.01(f) Indenture Default or any
Indenture Event of Default shall have occurred and be continuing and the
insurers have been notified thereof by the Indenture Trustee in which case such
proceeds shall be payable to the Indenture Trustee.
(h) Application of Payments During Existence of Certain
Indenture Events of Default. Any amount referred to in this Section 4.03 which
is payable to or retainable by Owner (or any Permitted Lessee) shall not be paid
to or retained by Owner (or any Permitted Lessee) if at the time of such payment
or retention an Indenture Default of the type described in Section 8.01(a)(i),
8.01(e) or 8.01(f) or any Indenture Event of Default shall have occurred and
41
47
[Trust Indenture and Mortgage (2000-2 747-1)]
be continuing, but shall be held by or paid over to Indenture Trustee as
security for the obligations of Owner under this Agreement and applied against
Owner's obligations hereunder as and when due. At such time as there shall not
be continuing any such Indenture Default or Indenture Event of Default, such
amount shall be paid to Owner to the extent not previously applied in accordance
with the preceding sentence.
Section 4.04 Inspection. At reasonable times not more often
than once in any twelve (12) month period, and upon at least 20 days prior
written notice to Owner (provided however that if an Indenture Event of Default
shall have occurred and be continuing, any such inspection shall be at
reasonable times without any limit on the number of times and upon at least 5
days prior written notice to Owner), the Indenture Trustee or its respective
authorized representatives may inspect the Aircraft and inspect and make copies
of the books and records of Owner and any Permitted Lessee required to be
maintained by the FAA or the regulatory agency or body of another jurisdiction
in which the Aircraft is then registered relating to the maintenance of the
Aircraft (at the Indenture Trustee's risk and expense) and shall keep any
information or copies obtained thereby confidential and shall not disclose the
same to any Person, except (A) to the Pass Through Trustees and to prospective
and permitted transferees of any Pass Through Trustee's or the Indenture
Trustee's interest (and such prospective and permitted transferee's counsel,
independent insurance advisors or other agents) who agree to hold such
information confidential, (B) to any Pass Through Trustee's or the Indenture
Trustee's counsel, independent insurance advisors or other agents who agree to
hold such information confidential, (C) as may be required by any statute, court
or administrative order or decree or governmental ruling or regulation, and (D)
as may be necessary for purposes of protecting the interest of any such Person
or for enforcement of this Agreement by the Indenture Trustee; provided,
however, that any and all disclosures permitted by clauses (C) and (D) above
shall be made only to the extent necessary to meet the specific requirements or
needs of Persons for whom such disclosures are hereby permitted. Any such
inspection of the Aircraft shall be subject to Owner's safety and security rules
applicable at the location of the Aircraft, shall be a visual, walk-around
inspection of the interior and exterior of the Aircraft and shall not include
opening any panels, bays or the like without the express consent of Owner
(except in connection with a heavy maintenance visit when a panel, bay or the
like is scheduled or required to be opened), which consent Owner may in its sole
discretion withhold; provided that no exercise of such inspection right shall
interfere with the normal operation or maintenance of the Aircraft by, or the
business of, Owner (or any Permitted Lessee). The Indenture Trustee shall have
no duty to make any such inspection and shall incur no liability or obligation
by reason of not making any such inspection.
42
48
[Trust Indenture and Mortgage (2000-2 747-1)]
ARTICLE 5
EVENT OF LOSS
Section 5.01 (a) Event of Loss with Respect to the Aircraft.
Upon the occurrence of an Event of Loss with respect to the Airframe or the
Airframe and the Engines and/or engines then installed thereon, Owner shall (1)
forthwith (and in any event, within fifteen days after such occurrence) give the
Indenture Trustee written notice of such Event of Loss and (2) within 90 days
after such occurrence, give the Indenture Trustee written notice of its election
to perform one of the following options (it being understood that the failure to
give such notice shall be deemed to be an election of the option set forth in
clause (i) below):
(i) Not later than the earlier of (x) the first
Business Day next succeeding the 120th day following the occurrence of
such Event of Loss or (y) the first Business Day that is at least three
Business Days after receipt by the loss payee of the insurance proceeds
with respect to such Event of Loss (but not earlier than the first
Business Day next succeeding the 65th day following the occurrence of
such Event of Loss) (the applicable day being the "Loss Payment Date"),
Owner shall, to the extent not paid to the Indenture Trustee as
insurance proceeds, pay or cause to be paid to the Indenture Trustee an
amount sufficient to satisfy the Owner's obligations under Section
6.01(a)(i) and to redeem the Notes as provided in Section 6.01(a)(ii);
or
(ii) Not later than the first Business Day next
succeeding the 120th day following the occurrence of such Event of
Loss, Lessee shall substitute an aircraft or an airframe or an airframe
and one or more engines, as the case may be, in accordance with the
terms hereof, provided that if (A) an Indenture Event of Default (other
than as a direct result of such Event of Loss) shall have occurred and
be continuing as of such election date or (B) Lessee shall have elected
to make a substitution under this clause (ii) and shall fail for any
reason to make such substitution in accordance with the terms hereof,
then Lessee shall make the payments required by clause (i) above on
such date.
At such time as Lessor shall have received the sum of the
amounts specified in clause (i) above, the Indenture Trustee shall release from
the Lien of this Agreement the Aircraft by executing and delivering to the Owner
all documents and instruments as the Owner may reasonably request to evidence
such release.
The Owner's right to substitute a Replacement Airframe and
Replacement Engines, if any, as provided in Section 5.01(a)(ii) shall be subject
to the fulfillment, at the Owner's sole cost and expense, to conditions
precedent:
(i) on the date when the Replacement Airframe and Replacement
Engines, if any, is subjected to the Lien of this Agreement (such date
being referred to in this Section 5.01 as the "Replacement Closing
Date"), the following documents shall have been duly authorized,
executed and delivered by the respective party or parties thereto and
shall be in full force and effect, and an executed counterpart of each
thereof (or, in the case of the FAA ▇▇▇▇ of Sale and full warranty ▇▇▇▇
of sale referred to below, a photocopy thereof) shall have been
delivered to the Indenture Trustee:
43
49
[Trust Indenture and Mortgage (2000-2 747-1)]
(A) an Indenture Supplement covering the Replacement
Airframe and Replacement Engines, if any, which shall have
been duly filed for recordation pursuant to the Federal
Aviation Act or such other applicable law of such jurisdiction
other than the United States in which the Replacement Airframe
and Replacement Engines, if any, are to be registered in
accordance with Section 4.01(a)(3), as the case may be;
(B) an FAA ▇▇▇▇ of Sale (or a comparable document, if
any, of another aviation authority, if applicable) covering
the Replacement Airframe and Replacement Engines, if any,
executed by the former owner thereof in favor of the Owner;
(C) a full warranty (as to title) ▇▇▇▇ of sale,
covering the Replacement Airframe and Replacement Engines, if
any, executed by the former owner thereof in favor of the
Owner (or, at the Owner's option, other evidence of the
Owner's ownership of such Replacement Airframe and Replacement
Engines, if any, reasonably satisfactory to the Indenture
Trustee); and
(D) Uniform Commercial Code financing statements (or
any similar statements or other documents required to be filed
or delivered pursuant to the laws of the jurisdiction in which
the Replacement Airframe and Replacement Engines, if any, may
be registered in accordance with Section 4.01(a)(3)) as are
deemed necessary or desirable by counsel for the Indenture
Trustee to protect the security interests of the Indenture
Trustee in the Replacement Airframe and Replacement Engines,
if any;
(ii) the Replacement Airframe shall be of the same or an
improved make and model as the Airframe replaced and each Replacement
Engine shall be an Acceptable Alternate Engine, and the Replacement
Airframe and Replacement Engines, if any, have a value and utility
(with respect to Engines, without regard to hours or cycles) at least
equal to, and be in as good operating condition and repair as, the
Airframe and any Engines replaced (assuming that such Airframe and
Engines were in the condition required by the terms hereby) as
evidenced by a certificate of an aircraft engineer (who may be an
employee of the Owner) or an appraisal from an independent aircraft
appraiser;
(iii) the Indenture Trustee (acting directly or by
authorization to its special counsel) shall have received satisfactory
evidence as to the compliance with Section 4.03 with respect to the
Replacement Airframe and Replacement Engines, if any;
(iv) the Indenture Trustee at the expense of the Owner, shall
have received (acting directly or by authorization to its special
counsel) (A) an opinion of counsel to Owner (which may be Owner's
General Counsel), addressed to the Indenture Trustee, to the effect
that the Replacement Airframe and Replacement Engine, if any, has or
have duly been made subject to the Lien of this Agreement, that all
required action has been
44
50
[Trust Indenture and Mortgage (2000-2 747-1)]
taken in order to maintain, and such action shall maintain, the
effectiveness and priority (to the extent the same existed immediately
prior to the occurrence of such Event of Loss, assuming the Owner was
in compliance with all relevant terms hereof) of the security interests
in the Airframe, the Engines and title thereto created by this
Agreement and that the protections afforded to the Indenture Trustee by
Section 1110 of the Bankruptcy Code will not be less than such
protections immediately prior to the occurrence of such Event of Loss
(assuming the Owner was in compliance with all relevant terms hereof)
and (B) an opinion of qualified FAA counsel (or counsel in any
jurisdiction outside the United States where the Aircraft may be
registered in accordance with Section 4.01(a)(3)), addressed to the
Indenture Trustee, as to, in the case of FAA counsel, the due
recordation of the Indenture Supplement and all other documents or
instruments the recordation of which is necessary to perfect and
protect the rights of the Indenture Trustee in the Replacement Airframe
and Replacement Engines, if any, or, in the case of counsel in another
jurisdiction, the taking of all action necessary in such jurisdiction
for such purposes; and
(v) the Indenture Trustee (acting directly or by authorization
to special counsel) shall have received an officer's certificate of
Owner stating that, in the opinion of the signer, all conditions
precedent provided for in this Section 5.01(a) relating to such
replacement have been complied with.
Upon satisfaction of all conditions to such substitution, (x)
the Indenture Trustee shall execute and deliver to the Owner such documents and
instruments, prepared at the Owner's expense, as the Owner shall reasonably
request to evidence the release of such replaced Airframe and Engines, if any,
and rights related thereto from the Lien of this Agreement, (y) the Indenture
Trustee shall assign to the Owner all claims it may have against any other
Person relating to any Event of Loss giving rise to such substitution and (z)
the Owner shall receive all insurance proceeds and proceeds in respect of any
Event of Loss giving rise to such replacement. For all purposes hereof, the
property so substituted shall after such transfer be deemed to be subjected to
the Lien of this Agreement and shall be deemed an "Aircraft," "Airframe" and
"Engine," as the case may be, as defined herein.
(b) Event of Loss with Respect to an Engine. Upon the
occurrence of an Event of Loss with respect to an Engine under circumstances in
which there has not occurred an Event of Loss with respect to the Airframe,
Owner shall forthwith (and in any event, within fifteen days after such
occurrence) give the Indenture Trustee written notice thereof and shall, within
120 days after the occurrence of such Event of Loss, substitute an Acceptable
Alternate Engine free and clear of all Liens (other than Permitted Liens) in as
good an operating condition as, the Engine subject to such Event of Loss and
cause such Acceptable Alternate Engine to be subjected to the Lien of this
Agreement. The Owner's right to make a replacement hereunder shall be subject to
the fulfillment (which may be simultaneous with such replacement) of the
following conditions precedent at the Owner's sole cost and expense and the
Indenture Trustee agrees to cooperate with the Owner to the extent necessary to
enable it to timely satisfy such conditions:
45
51
[Trust Indenture and Mortgage (2000-2 747-1)]
(i) the following documents shall be duly authorized, executed
and delivered by the respective party or parties thereto, and an
executed counterpart of each shall be delivered to the Indenture
Trustee:
(A) an Indenture Supplement covering the Replacement
Engine, which shall have been duly filed for recordation
pursuant to the Federal Aviation Act or such other applicable
law of the jurisdiction other than the United States in which
the Aircraft of which such Engine is a part is registered in
accordance with Section 4.01(a)(3), as the case may be;
(B) a full warranty ▇▇▇▇ of sale (as to title)
covering the Replacement Engine, executed by the former owner
thereof in favor of the Owner (or, at the Owner's option,
other evidence of the Owner's ownership of such Replacement
Engine, reasonably satisfactory to the Indenture Trustee); and
(C) Uniform Commercial Code financing statements
covering the security interests created by this Agreement (or
any similar statements or other documents required to be filed
or delivered pursuant to the laws of the jurisdiction in which
such Aircraft may be registered) as are deemed necessary or
desirable by counsel for the Indenture Trustee to protect the
security interests of the Indenture Trustee in the Replacement
Engine;
(ii) the Owner shall cause to be delivered to the Indenture
Trustee, if requested by it, an opinion of counsel (which may be
Owner's General Counsel) to the effect that the Lien of this Agreement
continues to be in full force and effect with respect to the
Replacement Engine; and
(iii) the Owner shall deliver to the Indenture Trustee an
officer's certificate stating that in the opinion of such signer, all
conditions precedent provided for in this Section 5.01(b) relating to
such replacement have been complied with.
Upon satisfaction of all conditions to such substitution, (x)
the Indenture Trustee shall execute and deliver to the Owner such documents and
instruments, prepared at the Owner's expense, as the Owner shall reasonably
request to evidence the release of such replaced Engine from the Lien of this
Agreement, (y) the Indenture Trustee shall assign to the Owner all claims it may
have against any other Person relating to any Event of Loss giving rise to such
substitution and (z) the Owner shall receive all insurance proceeds and proceeds
in respect of any Event of Loss giving rise to such replacement. For all
purposes hereof, each such replacement engine shall, after such conveyance, be
deemed to be subjected to the Lien of this Agreement and shall be deemed an
"Engine."
(c) Application of Payments from Governmental Authorities for
Requisition of Title, etc. Any payments (other than insurance proceeds the
application of which is provided for in Section 4.03) received at any time by
the Indenture Trustee or by Owner from any
46
52
[Trust Indenture and Mortgage (2000-2 747-1)]
governmental authority or other Person with respect to an Event of Loss, other
than a requisition for use by the United States Government or other government
of registry of the Aircraft or any instrumentality or agency of any thereof not
constituting an Event of Loss, will be applied as follows:
(i) if payments are received with respect to the Airframe (or
the Airframe and any Engine or engines then installed thereon), (A)
unless the same are replaced pursuant to Section 5.01(a), such payments
as shall not exceed the amounts payable under Section 5.01(a) hereof
required to be paid by Owner pursuant to Section 5.01(a), shall be
applied in reduction of Owner's obligation to pay the amounts payable
under Section 5.01(a) hereof, if not already paid by Owner, or, if
already paid by Owner, shall be applied to reimburse Owner for its
payment of such amounts, and following the foregoing application, the
balance, if any, of such payments shall be paid over to, or retained
by, Owner; or (B) if such property is replaced pursuant to Section
5.01(a), such payments shall be paid over to or retained by, Owner;
provided, that Owner shall have fully performed or, concurrently
therewith, will fully perform the terms of the last paragraph of
Section 5.01(a) with respect to the Event of Loss for which such
payments are made; and
(ii) if such payments are received with respect to an Engine
under circumstances contemplated by Section 5.01(b) hereof, such
payments shall be paid over to, or retained by, Owner, provided that
either (x) such payments are less than the Loss Payee Amount or (y)
Owner shall have fully performed, or concurrently therewith will
perform, the terms of Section 5.01(b) with respect to the Event of Loss
for which such payments are made.
(d) Requisition for Use of the Aircraft by the United States
Government or Government of Registry of the Aircraft. In the event of the
requisition for use of the Airframe and the Engines or engines installed on the
Airframe by the United States Government or any other government of registry of
the Aircraft or any instrumentality or agency of any thereof, Owner shall
promptly notify the Indenture Trustee of such requisition, and all of Owner's
obligations under this Agreement with respect to the Aircraft shall continue to
the same extent as if such requisition had not occurred; provided, that during
any period the Aircraft is not in the possession or control of Owner, Owner's
obligations hereunder, other than payment and insurance obligations, shall
continue only to the extent it is feasible for Owner to comply with such
obligations. All payments received by the Indenture Trustee or Owner from such
government for the use of such Airframe and Engines or engines shall be paid
over to, or retained by, Owner (or, if directed by Owner, any Permitted Lessee).
(e) Requisition for Use of an Engine by the United States
Government or the Government of Registry of the Aircraft. In the event of the
requisition for use of an Engine by the United States Government or any other
government of registry of the Aircraft or any agency or instrumentality of any
thereof (other than in the circumstances contemplated by subsection (d)), Owner
shall replace (or cause any Permitted Lessee to replace) such Engine hereunder
and
47
53
[Trust Indenture and Mortgage (2000-2 747-1)]
Indenture Trustee and Owner (or Permitted Lessee as the case may be) shall
comply with the terms of Section 5.01(b) hereof to the same extent as if an
Event of Loss had occurred with respect to such Engine. Upon compliance with
Section 5.01(b) hereof, any payments received by Indenture Trustee or Owner from
such government with respect to such requisition shall be paid over to, or
retained by Owner.
(f) Application of Payments During Existence of Certain
Indenture Defaults and Events of Default. Any amount referred to in this Section
5.01 which is payable to or retainable by Owner (or any Permitted Lessee) shall
not be paid to or retained by Owner (or any Permitted Lessee) if at the time of
such payment or retention an Indenture Default of the type described in Section
8.01(a)(i), 8.01(e) or 8.01(f) or any Indenture Event of Default shall have
occurred and be continuing, but shall be held by or paid over to Indenture
Trustee as security for the obligations of Owner (or such Permitted Lessee)
under this Agreement and applied against Owner's obligations hereunder as and
when due. At such time as there shall not be continuing any such Indenture Event
of Default, such amount shall be paid to Owner to the extent not previously
applied in accordance with the preceding sentence.
Section 5.02 Liens. The Owner will not directly or indirectly
create, incur, assume or suffer to exist any Lien on or with respect to the
Airframe on any Engine or any interest therein, except Permitted Liens. The
Owner shall promptly, at its own expense, take such action as may be necessary
to duly discharge (by bonding or otherwise) any Lien other than a Permitted Lien
arising at any time.
ARTICLE 6
REDEMPTION OF EQUIPMENT NOTES
Section 6.01 Redemption of Equipment Notes upon Certain
Events.
(a) Event of Loss. If there shall be an Event of Loss to the
Aircraft or Airframe and the Aircraft or Airframe is not replaced pursuant to
Section 5.01(a)(ii), then each outstanding Equipment Note shall be redeemed in
whole at a price (the "6.01(a) Redemption Price") equal to 100% of the
outstanding principal amount of such Equipment Note, together with accrued and
unpaid interest thereon to but excluding the applicable Redemption Date. No
Make-Whole Amount shall be payable in connection with a redemption under this
Section 6.01.
(b) Voluntary Redemptions of Equipment Notes. Each of the
Series A-1, Series A-2, Series B and Series C Equipment Notes may be redeemed by
the Owner on any date, upon notice as specified in Section 6.02, and in such
event, each outstanding Equipment Note of such Series shall be redeemed in whole
at a price (the "6.01(b) Redemption Price", and together with the 6.01(a)
Redemption Price, the "Redemption Price") equal to 100% of the outstanding
principal amount of such Equipment Note, together with accrued and unpaid
interest thereon to but excluding the applicable Redemption Date plus Make-Whole
Amount, if any, payable with respect thereto; provided, however, that the
Equipment Notes of any Series may not be redeemed
48
54
[Trust Indenture and Mortgage (2000-2 747-1)]
unless the Rating Agencies shall have provided Ratings Confirmation; provided
further that such Ratings Confirmation need not be obtained in connection with
the redemption of all Series of Equipment Notes.
Section 6.02 Notice of Redemption to Noteholders. Irrevocable
notice of redemption shall be given by first-class mail, postage prepaid, mailed
not less than 15 nor more than 60 days prior to the Redemption Date, to each
Noteholder of Equipment Notes to be redeemed or purchased, at such Noteholder's
address appearing in the Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the applicable basis for determining the applicable
Redemption Price;
(3) that on the Redemption Date, the applicable Redemption
Price will become due and payable upon each such Equipment Note, and
that interest on Equipment Notes shall cease to accrue on and after
such Redemption Date; and
(4) the place or places where such Equipment Notes are to be
surrendered for payment of the applicable Redemption Price.
Notice of redemption of Equipment Notes to be redeemed shall be given by the
Indenture Trustee.
Section 6.03 Deposit of Redemption Price. On or before the
Redemption Date, the Owner shall to the extent an amount equal to the Redemption
Price for the Equipment Notes to be redeemed on the Redemption Date shall not
then be held in the Indenture Estate, deposit or cause to be deposited with the
Indenture Trustee or the Paying Agent by 11:00 a.m., Chicago time, in
immediately available funds the applicable Redemption Price of the Equipment
Notes to be redeemed on the Redemption Date, together with accrued interest
thereon and, in the case of a redemption pursuant to Section 6.01(b), Make-Whole
Amount, if any.
Section 6.04 Equipment Notes Payable on Redemption Date.
Notice of redemption or purchase having been given as aforesaid, the Equipment
Notes shall, on the applicable Redemption Date, become due and payable at the
Corporate Trust Department of the Indenture Trustee or at any office or agency
maintained for such purposes pursuant to Section 2.03, and from and after such
Redemption Date (unless there shall be a default in the deposit of the
applicable Redemption Price, accrued interest or Make-Whole Amount, if any,
pursuant to Section 6.03) any Equipment Notes then outstanding shall cease to
bear interest or be deemed to be outstanding for any purpose. Upon surrender of
any such Equipment Note for redemption in accordance with said notice such
Equipment Note shall be paid at the Redemption Price.
49
55
[Trust Indenture and Mortgage (2000-2 747-1)]
If any Equipment Note called for redemption shall not be so
paid upon surrender thereof for redemption, the principal amount thereof shall,
until paid, continue to bear interest from the applicable Redemption Date at the
interest rate applicable to such Equipment Note.
ARTICLE 7
MATTERS CONCERNING UNCLAIMED MONIES
Section 7.01 Repayment of Monies for Equipment Note Payments
Held by the Indenture Trustee. Any money held by the Indenture Trustee or any
Paying Agent in trust for any payment in respect of any Secured Obligation,
including without limitation any money deposited pursuant to Section 6.03 or
Article 10 and remaining unclaimed for two years after the due date for such
payment, shall, subject to applicable escheatment laws, be paid to the Owner.
The Noteholders of any outstanding Equipment Notes shall thereafter, as
unsecured general creditors, look only to the Owner for payment thereof, and all
liability of the Indenture Trustee or any such Paying Agent with respect to such
trust money shall thereupon cease; provided that the Indenture Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Owner cause to be mailed to each such Noteholder notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of mailing, any unclaimed balance of such
money then remaining will be repaid to the Owner as provided herein.
ARTICLE 8
DEFAULTS AND REMEDIES
Section 8.01 Indenture Events of Default. The following events
shall constitute "Indenture Events of Default" under this Agreement (whether any
such event shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) Owner shall fail to pay (i) any amount of interest on,
Make-Whole Amount, if any, or principal of any Equipment Note when due
and payable (whether upon redemption or purchase, final maturity,
acceleration or otherwise) and such failure shall continue unremedied
for 10 Business Days after such amount shall have become due and
payable or (ii) any other amount payable by Owner hereunder or under
the Participation Agreement when due and payable and such failure shall
continue unremedied for more than 20 Business Days after receipt by
Owner of written notice from the Indenture Trustee; or
(b) Owner shall fail to carry and maintain on or with respect
to the Aircraft (or cause to be carried and maintained) insurance
required to be maintained in accordance
50
56
[Trust Indenture and Mortgage (2000-2 747-1)]
with the provisions of Section 4.03 hereof; provided that such lapse or
cancellation shall not constitute an Indenture Event of Default until
the earlier of (i) 30 days after receipt by the Indenture Trustee of
written notice of such lapse or cancellation or (ii) the date that such
lapse or cancellation is effective as to the Indenture Trustee; or
(c) Owner shall have failed to perform or observe (or caused
to be performed and observed) in any material respect any other
covenant or agreement to be performed or observed by it under any
Operative Document, and such failure shall continue unremedied for a
period of 60 days after receipt by Owner of written notice thereof from
Indenture Trustee; provided, however, that if Owner shall have
undertaken to cure any such failure and, notwithstanding the reasonable
diligence of Owner in attempting to cure such failure, such failure is
not cured within said 60-day period there shall exist no Indenture
Event of Default under this Section 8.01 so long as Owner is proceeding
with due diligence to cure such failure and such failure is in fact
cured within 360 days; or
(d) any representation or warranty made by Owner herein or in
any Operative Document shall prove to have been incorrect in any
material respect at the time made and shall remain material at the time
in question; provided, however, such incorrectness shall constitute a
default hereunder only if such incorrectness shall continue uncured for
a period of 60 days after the receipt by Owner of a written notice from
(x) Indenture Trustee or (y) subject to Section 2.6 of the
Intercreditor Agreement, holders of 25% in outstanding principal amount
of Equipment Notes in each case advising Owner of the existence of such
incorrectness; or
(e) the commencement of an involuntary case or other
proceeding in respect of Owner in an involuntary case under the federal
bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law
in the United States or seeking the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of Owner or for all or substantially all of its property, or
seeking the winding-up or liquidation of its affairs and the
continuation of any such case or other proceeding undismissed or
unstayed for a period of ninety (90) consecutive days or an order for
relief under Chapter 11 of the Bankruptcy Code with respect to Owner as
debtor or any other order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction appointing, without
the consent of Owner, a receiver, trustee or liquidator of Owner, or
for all or substantially all of its property, or sequestering of all or
substantially all of the property of Owner and any such order, judgment
or decree or appointment or sequestration shall be final or shall
remain in force undismissed, unstayed or unvacated for a period of
ninety (90) days after the date of entry thereof; or
(f) the commencement by Owner of a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or
any other applicable federal or state bankruptcy, insolvency or other
similar law in the United States, or the consent by Owner to the
appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official)
of Owner or for all or
51
57
[Trust Indenture and Mortgage (2000-2 747-1)]
substantially all of its property, or the making by Owner of any
assignment for the benefit of creditors or Owner shall take any
corporate action to authorize any of the foregoing.
provided, however, that, notwithstanding anything to the contrary contained in
this Section 8.01, any failure of Owner to perform or observe any covenant,
condition, agreement or any error in a representation or warranty shall not
constitute an Indenture Event of Default if such failure or error is caused
solely by reason of any event that constitutes an Event of Loss so long as Owner
is continuing to comply with all of the terms of Section 5.01 hereof.
Section 8.02 Acceleration; Rescission and Annulment. If an
Indenture Event of Default under Section 8.01(e) or 8.01(f) shall have occurred
and is continuing, then the principal of the all Equipment Notes, together with
accrued but unpaid interest thereon, and all other amounts due thereunder and
hereunder shall immediately become due and payable without presentment, demand,
protest or notice, all of which are hereby waived, and if any other Indenture
Event of Default occurs and is continuing, the Indenture Trustee may (and shall,
subject to Section 2.6 of the Intercreditor Agreement, upon receipt of a written
demand therefor from the holders of 25% in outstanding principal amount of the
Equipment Notes), by notice to the Owner declare the principal of all the
Equipment Notes to be immediately due and payable. Upon such declaration, the
principal of all Equipment Notes together with accrued interest thereon from the
date in respect of which interest was last paid hereunder to the date payment of
such principal has been made or duly provided for, without Make-Whole Amount. At
any time after such declaration and prior to the sale or disposition of the
Indenture Estate, the Indenture Trustee may (and shall upon receipt of a written
demand therefor from a Majority in Interest of Noteholders) by notice to the
Owner, rescind any such declaration and thereby annul its consequences if (i) an
amount sufficient to pay all principal on any Equipment Notes which have become
due otherwise than by such declaration and any interest thereon and interest due
or past due, if any, and all sums due and payable to the Indenture Trustee have
been deposited with the Indenture Trustee, (ii) the rescission would not
conflict with any judgment or decree and (iii) all existing Indenture Defaults
and Indenture Events of Default under this Agreement have been cured or waived
except nonpayment of principal of, or interest on, the Equipment Notes that has
become due solely because of such acceleration. No such rescission shall affect
any subsequent default or impair any right consequent thereon.
Section 8.03 Other Remedies Available to Indenture Trustee.
(a) After an Indenture Event of Default shall have occurred and so long as such
Indenture Event of Default shall be continuing, then and in every such case the
Indenture Trustee, as holder of a security interest in the Aircraft or Engines
may, and when required pursuant to the provisions of Article 9 shall, exercise,
any or all of the rights and powers and pursue any and all of the remedies
accorded to a secured party under applicable law, may recover judgment in its
own name as Indenture Trustee against the Indenture Estate and may take
possession of all or any part of the Indenture Estate and may exclude the Owner
and all Persons claiming under any of them wholly or partly therefrom; provided,
however, that during any period when possession of the Aircraft has been
transferred to and the Aircraft is subject to the Civil Reserve Air Fleet
Program in accordance with the provisions of Section 4.01(b) hereof and in
possession of the United States
52
58
[Trust Indenture and Mortgage (2000-2 747-1)]
Government or an agency or instrumentality of the United States, the Indenture
Trustee shall not, on account of any Indenture Event of Default, be entitled to
do any of the following set forth in this Section 8.03 in such manner as to
limit the Owner's control under this Agreement (or any Permitted Lessee's
control under any Permitted Lease) of any Airframe or any Engines installed
thereon, unless at least sixty (60) days' (or such lesser period as may then be
applicable under the Air Mobility Command program of the United States
Government) written notice of default hereunder shall have been given by the
Indenture Trustee by registered or certified mail to the Owner (and any
Permitted Lessee) with a copy addressed to the Contracting Office Representative
for the Air Mobility Command of the United States Air Force under any contract
with the Owner (or any Permitted Lessee) relating to the Aircraft; provided,
further, that the Indenture Trustee shall give the Owner thirty (30) days' prior
written notice of its intention to sell the Aircraft.
(b) After an Indenture Event of Default shall have occurred
and so long as such Indenture Event of Default shall be continuing, the
Indenture Trustee may, if at the time such action may be lawful and always
subject to compliance with any mandatory legal requirements, either with or
without taking possession, and either before or after taking possession and
without instituting any legal proceedings whatsoever, and having first given
notice of such sale by registered mail to the Owner, at least 30 days prior to
the date of such sale, and any other notice which may be required by law, sell
and dispose of the Indenture Estate, or any part thereof, or interest therein,
at public auction or private sale, in one lot as an entirety or in separate
lots, and either for cash or on credit and on such terms as the Indenture
Trustee may determine, and at any place (whether or not it be the location of
the Indenture Estate or any part thereof) and time designated in the notice
above referred to; provided, however, that, notwithstanding any provision herein
to the contrary, the Indenture Trustee may not provide the notice provided for
above of its intention to sell any of the Indenture Estate or exercise remedies
against the Indenture Estate seeking to deprive the Owner of its rights therein
unless a declaration of acceleration has been made pursuant to Section 8.02 or
the Equipment Notes have otherwise theretofore become due and payable through
redemption or otherwise. Any such sale or sales may be adjourned from time to
time by announcement at the time and place appointed for such sale or sales, or
for any such adjourned sale or sales, without further notice, and the Indenture
Trustee and the Noteholder or Noteholders of any Equipment Notes, or any
interest therein, may bid and become the purchaser at any such sale and each
Noteholder shall be entitled at any sale to credit against any purchase price
bid at such sale by such Noteholder all or any part of the unpaid Secured
Obligations owing to such Noteholder secured by the Lien of this Agreement (in
the case of such Noteholder, only to the extent that such unpaid Secured
Obligation would have been paid to such Noteholder pursuant to Article III
hereof if such purchase price were paid in cash and this sentence, other than
this parenthetical, was not given effect). The Indenture Trustee may exercise
such right without possession or production of the Equipment Notes or proof of
ownership thereof, and as representative of the Noteholders may exercise such
right without notice to the Noteholders or including the Noteholders as parties
to any suit or proceeding relating to foreclosure of any property in the
Indenture Estate.
53
59
[Trust Indenture and Mortgage (2000-2 747-1)]
(c) If an Indenture Event of Default has occurred and is
continuing, the Indenture Trustee shall also be entitled to pursue all or any
part of the Indenture Estate wherever it may be found and may enter any of the
premises of the Owner or any other Person wherever the Indenture Estate may be
or be supposed to be and search for the Indenture Estate and take possession of
any item of the Indenture Estate pursuant to this Section 8.03(c). The Indenture
Trustee may, from time to time, at the expense of the Indenture Estate, make all
such expenditures for maintenance, insurance, repairs, replacements,
alterations, additions and improvements to and of the Indenture Estate, as it
may deem proper. In each such case, the Indenture Trustee shall have the right
to maintain, use, insure, operate, store, lease, control or manage the Indenture
Estate, and to carry on business and exercise all rights and powers of the Owner
relating to the Indenture Estate as the Indenture Trustee shall deem
appropriate, including the right to enter into any and all such agreements with
respect to the maintenance, use, insurance, operation, storage, leasing, control
or management of the Indenture Estate or any part thereof. The Indenture Trustee
shall be entitled to collect and receive directly all tolls, rents, issues,
profits, products, revenues or other income pursuant to this Section 8.03(c). In
accordance with the terms of this Section 8.03(c), such tolls, rents, issues,
profits, products, revenues and other income shall be applied to pay the
expenses of using, operating, storing, leasing, controlling or managing the
Indenture Estate, and of all maintenance, insurance, repairs, replacements,
alterations, additions and improvements, and to make all payments which the
Indenture Trustee may be required or may elect to make, if any, for taxes,
assessments, insurance or other proper charges upon the Indenture Estate or any
part thereof (including the employment of engineers and accountants to examine,
inspect and make reports upon the properties and books and records of the
Owner), and all other payments which the Indenture Trustee may be required or
authorized to make under any provision of this Agreement, including this Section
8.03(c), as well as just and reasonable compensation for the services of the
Indenture Trustee, and of all persons properly engaged and employed by the
Indenture Trustee.
If an Indenture Event of Default occurs and is continuing and
the Indenture Trustee shall have obtained possession of or title to the
Aircraft, the Indenture Trustee shall not be obligated to use or operate the
Aircraft or cause the Aircraft to be used or operated directly or indirectly by
itself or through agents or other representatives or to lease, license or
otherwise permit or provide for the use or operation of the Aircraft by any
other Person unless (i) the Indenture Trustee shall have been able to obtain
insurance in kinds, at rates and in amounts satisfactory to it in its discretion
to protect the Indenture Estate and the Indenture Trustee, as trustee and
individually, against any and all liability for loss or damage to the Aircraft
and for public liability and property damage resulting from use or operation of
the Aircraft and (ii) funds are available in the Indenture Estate to pay for all
such insurance or, in lieu of such insurance, the Indenture Trustee is furnished
with indemnification from the Noteholders or any other Person upon terms and in
amounts satisfactory to the Indenture Trustee in its discretion to protect the
Indenture Estate and the Indenture Trustee, as trustee and individually, against
any and all such liabilities.
(d) Subject to Sections 8.03(b), the Indenture Trustee may
proceed to protect and enforce this Agreement and the Equipment Notes by suit or
suits or proceedings in equity, at
54
60
[Trust Indenture and Mortgage (2000-2 747-1)]
law or in bankruptcy, and whether for the specific performance of any covenant
or agreement herein contained or in execution or aid of any power herein
granted; or for foreclosure hereunder, or for the appointment of a receiver or
receivers for the Indenture Estate or any part thereof, or for the recovery of
judgment for the indebtedness secured by the Lien created under this Agreement
or for the enforcement of any other proper, legal or equitable remedy available
under applicable law.
(e) Each and every right, power and remedy herein given to the
Indenture Trustee specifically or otherwise in this Agreement shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time and as often in
such order as may be deemed expedient by the Indenture Trustee, and the exercise
or the beginning of the exercise of any power or remedy shall not be construed
to be a waiver of the right to exercise at the same time or thereafter any other
right, power or remedy. No delay or omission by the Indenture Trustee in the
exercise of any right, remedy or power or in pursuing any remedy shall impair
any such right, power or remedy or be construed to be a waiver of any default on
the part of the Owner or to be an acquiescence therein.
(f) Notwithstanding anything contained herein to the contrary,
so long as the Subordination Agent (acting on behalf of the Pass Through
Trustees) or any Pass Through Trustee is a Noteholder, the Indenture Trustee is
not authorized or empowered to acquire title to the Indenture Estate, or to take
any action with respect to any of the Indenture Estate so acquired by it, if
such acquisition or action would cause any Pass Through Trust to fail to qualify
as a "grantor trust" for federal income tax purposes.
Section 8.04 Waiver of Existing Defaults. A Majority in
Interest of Noteholders by notice to the Indenture Trustee may waive on behalf
of the Noteholders an existing Indenture Default or Indenture Event of Default
and its consequences except (i) an Indenture Default or Indenture Event of
Default in the payment of the principal of or interest on any Equipment Note or
(ii) in respect of a covenant or provision hereof which pursuant to Section
11.02 can not be amended or modified without the consent of each Noteholder
affected thereby.
Section 8.05 Control by Majority. Except as otherwise
expressly provided herein (but subject always to the provisions of the
Intercreditor Agreement), a Majority in Interest of Noteholders may direct the
time, method and place of conducting any proceeding for any remedy available to
the Indenture Trustee or exercising any trust or power conferred on it by this
Agreement. However, the Indenture Trustee may refuse to follow any direction
that conflicts with law or this Agreement that would subject the Indenture
Trustee to personal liability.
55
61
[Trust Indenture and Mortgage (2000-2 747-1)]
Section 8.06 Rights of Noteholders to Receive Payment.
Notwithstanding any other provision of this Agreement (but subject always to the
provisions of the Intercreditor Agreement) the right of any Noteholder to
receive payment of principal of, Make-Whole Amount, if any, and interest on such
Equipment Note on or after the respective due dates expressed in such Equipment
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Noteholder.
Section 8.07 Indenture Trustee May File Proofs of Claim. The
Indenture Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee and the Noteholders allowed in any judicial proceedings relating to the
Owner, its creditors, or its property.
ARTICLE 9
INDENTURE TRUSTEE
Section 9.01 Duties of Indenture Trustee. (a) The Indenture
Trustee may refuse to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it against any loss, liability or expense.
(b) Subject to the provisions of Sections 2.08 and 9.04, the
Indenture Trustee shall not be liable for interest on any money received except
as otherwise provided in any other Operative Document. Money held in trust by
the Indenture Trustee need not be segregated from other funds except to the
extent required by law.
Section 9.02 Rights of Indenture Trustee. (a) The Indenture
Trustee may rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. The Indenture Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting,
it may consult with counsel or require an officer's certificate or an opinion of
counsel from the Owner after which it will take such action or refrain from
acting as it deems appropriate. The Indenture Trustee shall not be liable for
any action it takes or omits to take in good faith and in accordance herewith in
reliance on a resolution of the Board of Directors of the Owner, the written
advice of counsel skilled in the area for which such advice is sought acceptable
to the Owner and the Indenture Trustee, officer's certificate or opinions of
counsel provided by the Owner.
(c) The Indenture Trustee may act through agents and shall not
be responsible for the misconduct or negligence of any such agent appointed with
due care; provided that, no such agents shall be appointed by the Indenture
Trustee without the consent of the Owner, such consent not to be unreasonably
withheld.
56
62
[Trust Indenture and Mortgage (2000-2 747-1)]
(d) The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be authorized or
within its rights or powers.
(e) If an Indenture Event of Default under this Agreement has
occurred and is continuing, the Indenture Trustee shall exercise its rights and
powers under this Agreement, and shall use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
(f) The Indenture Trustee, in its individual capacity, shall
not be answerable or accountable under any circumstances, except (i) for its own
willful misconduct or gross negligence (other than for the handling of funds,
for which the standard of accountability shall be willful misconduct or
negligence).
(g) Except in accordance with written instructions furnished
in accordance with the terms of this Agreement, the Indenture Trustee shall have
no duty (i) to see any recording or filing of this Indenture or any other
document, or to see to the maintenance of any such registration, recording or
filing, (ii) to see to the payment or discharge of any lien or encumbrance of
any kind against any part of the Indenture Estate, or (iii) to ascertain or
inquire as to the performance or observance of any of the Owner's covenants in
this Agreement.
(h) The Indenture Trustee, in its individual or trust
capacities, does not make, nor shall it be deemed to have made, any
representation or warranty as to the validity, legality or enforceability of
this Indenture or any other Operative Documents or as to the correctness of any
statement contained in any thereof, except for the representations and
warranties of the Indenture Trustee, in each case expressly made in this
Indenture or in the Operative Documents.
Section 9.03 Individual Rights of Indenture Trustee. The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Equipment Notes and may otherwise deal with the Owner or an
Affiliate of the Owner or a subsidiary of the Owner with the same rights it
would have if it were not the Indenture Trustee. Any Agent may do the same with
like rights.
Section 9.04 Funds May Be Held by Indenture Trustee or Paying
Agent; Investments. Any monies (including without limitation for purpose of this
Section 9.04 Permitted Investments constituting the proceeds of the maturity,
sale or other disposition of any Permitted Investment) held by the Indenture
Trustee or the Paying Agent hereunder as part of the Indenture Estate, until
paid out by the Indenture Trustee or the Paying Agent as herein provided, (i)
subject to clause (ii) below, may be carried by the Indenture Trustee or the
Paying Agent on deposit with itself or on deposit to its account with any bank,
trust company or national banking association incorporated or doing business
under the laws of the United States of America or one of the States thereof
having combined capital and surplus and retained earnings of at least
$75,000,000, and neither the Indenture Trustee nor the Paying Agent shall have
any liability for interest upon any such monies except as otherwise agreed in
writing or (ii) at any time and from time to time, at the request of the Owner,
shall be invested and reinvested in Permitted
57
63
[Trust Indenture and Mortgage (2000-2 747-1)]
Investments as specified in such request (if such investments are reasonably
available for purchase) and sold, in any case at such prices, including accrued
interest or its equivalent, as are set forth in such request, and such Permitted
Investments shall be held by the Indenture Trustee in trust as part of the
Indenture Estate until so sold; provided that the Owner shall upon demand pay to
the Indenture Trustee the amount of any loss realized upon maturity, sale or
other disposition of any such Permitted Investment and be entitled to receive
from the Indenture Trustee, and the Indenture Trustee shall promptly pay to the
Owner, any profit, income, interest, dividend or gain realized upon maturity,
sale or other disposition of any Permitted Investment. The Indenture Trustee
shall not be responsible for any losses on any investments or sales of Permitted
Investments made pursuant to the procedure specified in this Section 9.04 other
than by reason of its willful misconduct or gross negligence. All Permitted
Investments held by the Indenture Trustee or the Paying Agent pursuant to this
Section 9.04 shall either be (a) registered in the name of, payable to the order
of, or specially indorsed to, the Indenture Trustee or the Paying Agent, as the
case may be, or (b) held in an Eligible Account. For purposes of this Section
9.04, "Eligible Account" means an account established by and with an Eligible
Institution at the request of the Indenture Trustee or the Paying Agent, as the
case may be, which institution agrees, for all purposes of the applicable
Uniform Commercial Code ("UCC") including Article 8 thereof, that (a) such
account shall be a "securities account" (as defined in Section 8-501 of the
UCC), (b) all property (other than cash) credited to such account shall be
treated as a "financial asset" (as defined in Section 8-102(9) of the UCC), (c)
the Indenture Trustee or the Paying Agent, as the case may be, shall be the
"entitlement holder" (as defined in Section 8-102(7) of the UCC) in respect of
such account, (d) the Eligible Institution will comply with all entitlement
orders issued by the Indenture Trustee or the Paying Agent, as the case may be,
to the exclusion of the Owner, and (e) the "securities intermediary
jurisdiction" (under Section 8-110(e) of the UCC) shall be the State of
Illinois. For purposes of this Section 9.04, "Eligible Institution" means the
corporate trust department of (a) State Street, acting solely in its capacity as
a "securities intermediary" (as defined in Section 8-102(14) of the UCC), or (b)
a depository institution organized under the laws of the United States of
America or any one of the states thereof or the District of Columbia (or any
U.S. branch of a foreign bank), which has a long-term unsecured debt rating from
Moody's and Standard & Poor's of at least A-3 or its equivalent.
Section 9.05 Notice of Defaults. If an Indenture Default or
Indenture Event of Default under this Agreement occurs and is continuing and the
Indenture Trustee has actual knowledge of same, the Indenture Trustee shall (i)
promptly send written notice thereof to the Owner and (ii) within 90 days after
the occurrence of an Indenture Event of Default, mail to each Noteholder notice
of all uncured Indenture Events of Default under this Agreement. Except in the
case of a default in the payment of the principal of, Make-Whole Amount, if any,
or interest on any Equipment Note, the Indenture Trustee shall be protected in
withholding the notice required under clause (ii) above if and so long as the
executive committee or trust committee of directors of the Indenture Trustee
and/or other responsible officers thereof in good faith determines that
withholding such notice is in the best interests of the Noteholders.
58
64
[Trust Indenture and Mortgage (2000-2 747-1)]
Section 9.06 Compensation and Indemnity. The Indenture Trustee
shall not be required to take any action or refrain from taking any action under
Section 9.05 (other than the first sentence thereof) or Article 8 hereof unless
the Indenture Trustee shall have been indemnified to its reasonable satisfaction
against any liability, cost or expense (including counsel fees) which may be
incurred in connection therewith pursuant to a written agreement with one or
more Noteholders. The Indenture Trustee agrees that it shall look solely to the
Noteholders for the satisfaction of any indemnity (except expenses, costs or
other amounts specified under clause "First" of Section 3.03 hereof) owed to it
pursuant to this Section 9.06. The Indenture Trustee shall not be under any
obligation to take any action under this Agreement or any other Operative
Document and nothing herein or therein shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur the risk of any financial
ability in the performance of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. The
Indenture Trustee shall not be required to take any action under Section 9.05
(other than the first sentence thereof) or Article 8 hereof, nor shall any other
provision of this Agreement or any other Operative Document be deemed to impose
a duty on the Indenture Trustee to take any action, if the Indenture Trustee
shall have been advised by counsel that such action is contrary to the terms
hereof or is otherwise contrary to law.
Section 9.07 Replacement of Indenture Trustee. (a) The
resignation or removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee shall become effective only upon the successor
Indenture Trustee's acceptance of appointment as provided in this Section.
(b) The Indenture Trustee may resign by giving at least 30
days' prior written notice to the Owner. A Majority in Interest of Noteholders
may remove the Indenture Trustee by giving at least 30 days' prior written
notice to the Indenture Trustee and the Owner and may appoint a successor
Indenture Trustee for such Equipment Notes with the Owner's consent. The Owner
may remove the Indenture Trustee at any time no Indenture Default under Section
8.01(a), (e) or (f) or any Indenture Event of Default shall have occurred and be
continuing, if the Owner determines in its reasonable business judgment that
such removal would be appropriate or if:
(1) the Indenture Trustee fails to comply with Section 9.09;
(2) the Indenture Trustee is adjudged a bankrupt or an
insolvent;
(3) a receiver or public officer takes charge of the Indenture
Trustee or its property; or
(4) the Indenture Trustee becomes incapable of acting.
(c) If a vacancy exists in the office of Indenture Trustee for
any reason, the Owner shall promptly appoint a successor Indenture Trustee.
59
65
[Trust Indenture and Mortgage (2000-2 747-1)]
(d) If a successor Indenture Trustee does not take office
within 30 days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee, the Owner or a Majority in Interest of Noteholders
may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.
(e) If the Indenture Trustee fails to comply with Section
9.09, any Noteholder may petition any court of competent jurisdiction for the
removal of such Indenture Trustee and the appointment of a successor Indenture
Trustee.
(f) A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee and to the
Owner. Thereupon, the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the retiring Indenture Trustee for which the
successor Indenture Trustee is to be acting as Indenture Trustee under this
Agreement. The retiring Indenture Trustee shall promptly transfer all property
and all books and records relating to the administration of the Indenture Estate
held by it as Indenture Trustee to the successor Indenture Trustee. The
Indenture Trustee shall give notice of each appointment of a successor Indenture
Trustee to the Noteholders, by mailing written notice of such event by
first-class mail to the Noteholders.
Section 9.08 Successor Indenture Trustee, Agents by Merger,
etc. If the Indenture Trustee or any Agent consolidates with, merges or converts
into, or transfers all or substantially all of its corporate trust business
assets to, another corporation, the successor corporation, without any further
act, shall be the successor Indenture Trustee or Agent, as the case may be.
Section 9.09 Eligibility; Disqualification. This Agreement
shall at all times have an Indenture Trustee which (i) shall have a combined
capital and surplus of at least $75,000,000 or (ii) shall have a combined
capital and surplus in excess of $7,500,000 and the obligations of which,
whether now in existence or hereafter incurred, are fully and unconditionally
guaranteed by a corporation organized and doing business under the laws of the
United States, any State or Territory thereof or of the District of Columbia and
having a combined capital and surplus of at least $75,000,000, and which, in any
case, shall be a Citizen of the United States. If such corporation publishes
reports of conditions at least annually, pursuant to law or to the requirements
of Federal, State, Territorial, or District of Columbia supervising or examining
authority, then for the purposes of this Section 9.09, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of conditions so published.
In case at any time the Indenture Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.09, the Indenture
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.07.
60
66
[Trust Indenture and Mortgage (2000-2 747-1)]
Section 9.10 Trustee's Liens. The Indenture Trustee in its
individual capacity agrees that it will at its own cost and expense promptly
take such action as may be necessary to duly discharge and satisfy in full all
Liens ("Trustee's Liens") on the Indenture Estate which are either (i)
attributable to the Indenture Trustee in its individual capacity and which are
unrelated to the transactions contemplated by the Operative Documents, or (ii)
which are attributable to the Indenture Trustee as trustee hereunder or in its
individual capacity and which arise out of acts or omissions which are not
expressly contemplated by this Agreement.
ARTICLE 10
TERMINATION OF TRUST INDENTURE
Section 10.01 Termination of Trust Indenture. Upon (or at any
time after):
(x) payment in full of the outstanding principal amount of,
Make-Whole Amount, if any, and interest on and all other amounts due under all
Equipment Notes and provided that all other Secured Obligations due to the
Noteholders and the other Indenture Indemnitees shall have been satisfied or
paid in full; or
(y) receipt of the confirmation of the Rating Agencies and
after there has been irrevocably deposited (except as provided in Section 10.04)
with the Indenture Trustee as funds in trust, specifically pledged as security
for, and dedicated solely to, the benefit of the Noteholders, (1) money in an
amount, or (2) Permitted Investments which, through the payment of interest and
principal in respect thereof in accordance with their terms, will provide (not
later than one Business Day before the due date of any payment referred to below
in this paragraph) money in an amount, or (3) a combination of money and
Permitted Investments referred to in the foregoing clause (2), sufficient, in
the opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Indenture Trustee, to pay in full the outstanding principal amount of,
Make-Whole Amount, if any, and interest on the Equipment Notes on the dates such
amounts are due (including as a result of redemption in respect of which
irrevocable notice has been given to the Indenture Trustee on or prior to the
date of such deposit); provided, however, that
(A) upon the making of the deposit referred to above in this
clause (y), the right of the Owner to cause the redemption of Equipment
Notes (except a redemption in respect of which irrevocable notice has
theretofore been given) shall terminate;
(B) the Owner has delivered to the Indenture Trustee an
officer's certificate and an opinion of counsel (both counsel and
opinion to be reasonably acceptable to the Indenture Trustee) to the
effect that after the Closing Date there has been published by the
Internal Revenue Service a ruling to the effect that Noteholders will
not recognize income, gain or loss for Federal income tax purposes as a
result of the exercise by the Owner of its option under Clause (y) of
this Section 10.01 and will be subject to Federal
61
67
[Trust Indenture and Mortgage (2000-2 747-1)]
income tax on the same amount and in the same manner and at the same
times, as would have been the case if such option had not been
exercised;
(C) all other amounts then due and payable hereunder have been
paid; and
(D) the Owner has delivered to the Indenture Trustee an
officer's certificate and an opinion of counsel, each stating that all
conditions precedent provided for relating to the satisfaction and
discharge of this Agreement contemplated by this Section 10.01 have
been complied with;
the Owner shall direct the Indenture Trustee to execute and deliver to or as
directed in writing by the Owner an appropriate instrument releasing the
Aircraft and the Engines and all other property included in the Indenture Estate
from the Lien of this Agreement and the Indenture Trustee shall execute and
deliver such instrument as aforesaid; provided, however, that this Agreement and
the trusts created hereby shall earlier terminate and this Agreement shall be of
no further force or effect upon any sale or other final disposition by the
Indenture Trustee of all property constituting part of the Indenture Estate and
the final distribution by the Indenture Trustee of all monies or other property
or proceeds constituting part of the Indenture Estate in accordance with the
terms hereof. Except as aforesaid otherwise provided, this Agreement and the
trusts created hereby shall continue in full force and effect in accordance with
the terms hereof.
Section 10.02 Survival of Certain Obligations. Notwithstanding
the provisions of Section 10.01, the obligations of the Indenture Trustee
contained in Sections 2.01 through 2.12, Section 7.01, Section 9.10, Section
10.03 and Section 10.04, and the other rights, duties, immunities and privileges
hereunder of the Indenture Trustee shall survive.
Section 10.03 Monies to Be Held in Trust. All moneys and
Permitted Investments deposited with the Indenture Trustee pursuant to Section
10.01 shall be held in trust and applied by it, in accordance with the
provisions of the Equipment Notes and this Agreement, to the payment either
directly or through any Paying Agent, as the Indenture Trustee may determine, to
the Noteholders, of principal, Make-Whole Amount, if any, and interest, as
applicable, but such money need not be segregated from other funds except to the
extent required by law.
Section 10.04 Monies to Be Returned to Owner. The Indenture
Trustee and any Paying Agent shall promptly pay or return to the Owner upon
request of the Owner any money or Permitted Investments held by them at any time
that are not required for the payment of the amounts described above in Section
10.03 on the Equipment Notes for which money or Permitted Investments have been
deposited pursuant to Section 10.01.
62
68
[Trust Indenture and Mortgage (2000-2 747-1)]
ARTICLE 11
AMENDMENTS AND WAIVERS
Section 11.01 Amendments to this Agreement Without Consent of
the Noteholders. The Owner and the Indenture Trustee may enter into one or more
agreements supplemental hereto without the consent of any Noteholder or any
other Person for any of the following purposes:
(1) to correct any mistake or cure any ambiguity, defect or
inconsistency herein or in the Equipment Notes or to make any change
not inconsistent with the provisions hereof; provided that such change
does not adversely affect the interests of any Noteholder;
(2) to evidence the succession of another party as the Owner
in accordance with the terms of the Participation Agreement or to
evidence (in accordance with Article 9) the succession of a new trustee
hereunder, the removal of the trustee hereunder or the appointment of
any co-trustee or co-trustees or any separate or additional trustee or
trustees;
(3) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee or to make any other
provisions with respect to matters or questions arising hereunder so
long as such action shall not adversely affect the interests of the
Noteholders;
(4) to correct or amplify the description of any property at
any time subject to the Lien of this Agreement or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subject to the Lien of this Agreement or to subject to
the Lien of this Agreement the Airframe or Engines or airframe or
engines substituted for the Airframe or Engines in accordance herewith;
(5) to add to the covenants of the Owner, for the benefit of
the Noteholders, or to surrender any rights or power herein conferred
upon the Owner;
(6) to add to the rights of the Noteholders;
(7) to provide for the issuance of Series D Equipment Notes
and to make changes relating thereto, provided that the Series D
Equipment Notes are issued in accordance with the terms hereof, the
Participation Agreement and the Intercreditor Agreement;
63
69
[Trust Indenture and Mortgage (2000-2 747-1)]
(8) to provide for the re-issuance of any Series of Equipment
Notes that has previously been prepaid pursuant to Section 6.01(b),
provided that such Series of Equipment Notes is issued in accordance
with the Series hereof; and
(9) to include on the Equipment Notes any legend as may be
required by applicable law.
Section 11.02 Amendments to this Agreement with Consent of
Noteholders. (a) With the written consent of a Majority in Interest of
Noteholders, the Owner and the Indenture Trustee may enter into such
supplemental agreements to add any provisions to or to change or eliminate any
provisions of this Agreement or of any such supplemental agreements or to modify
the rights of the Noteholders; provided, however, that, an amendment under this
Section 11.02 may not without the consent of each of the Noteholders of the
applicable Series of Equipment Notes and, in the case of the Series A-1, Series
A-2, Series B Equipment Notes or Series C Equipment Notes, the applicable
Liquidity Provider:
(1) reduce the principal amount of, Make-Whole Amount, if any,
or any installment of interest on, such Series of Equipment Notes; or
(2) change the date on which any principal amount of, any
Amortization Amount payable with respect to, Make-Whole Amount, if any,
or interest on such Series of Equipment Notes, is due or payable; or
(3) with respect to each Series of Equipment Notes, create any
Lien on the Indenture Estate prior to or pari passu with the Lien
thereon under this Agreement except such as are permitted by this
Agreement, or deprive any Noteholder of the benefit of the Lien on the
Indenture Estate created by this Agreement; or
(4) with respect to such Series of Equipment Notes, reduce the
percentage in principal amount of the outstanding Equipment Notes, the
consent of whose Noteholders is required for any such supplemental
agreement, or the consent of whose Noteholders is required for any
waiver (of compliance with certain provisions of this Agreement or of
certain defaults hereunder or their consequences) provided for in this
Agreement; or
(5) make any change in Article 3, Article 6, Section 8.01
(except to add Indenture Events of Default) or this Section 11.02(a).
(b) It is not necessary under this Section 11.02 for the
Noteholders to consent to the particular form of any proposed supplemental
agreement, but it is sufficient if they consent to the substance thereof.
(c) Promptly after the execution by the Owner and the
Indenture Trustee of any supplemental agreement pursuant to the provisions of
this Section 11.02, the Indenture Trustee shall transmit by first-class mail a
notice, setting forth in general terms the substance of
64
70
[Trust Indenture and Mortgage (2000-2 747-1)]
such supplemental agreement, to all Noteholders, as the names and addresses of
such Noteholders appear on the Register. Any failure of the Indenture Trustee to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental agreement.
Section 11.03 Revocation and Effect of Consents. Until an
amendment or waiver becomes effective, a consent to it by a Noteholder is a
continuing consent by the Noteholder and every subsequent Noteholder, even if
notation of the consent is not made on any Equipment Note. However, any such
Noteholder or subsequent Noteholder may revoke the consent as to his Equipment
Note if the Indenture Trustee receives the notice of revocation before the date
the amendment or waiver becomes effective. After an amendment or waiver becomes
effective, it shall bind every Noteholder affected by such amendment or waiver.
Section 11.04 Notation on or Exchange of Equipment Notes. The
Indenture Trustee may place an appropriate notation about an amendment or waiver
on any Equipment Note thereafter executed. The Indenture Trustee in exchange for
such Equipment Notes may execute new Equipment Notes that reflect the amendment
or waiver.
Section 11.05 Indenture Trustee Protected. The Indenture
Trustee need not sign any supplemental agreement that adversely affects its
rights.
Section 11.06 Amendments, Waivers, etc. of Other Operative
Documents. (a) Subject to Section 11.01, without the consent of a Majority in
Interest of Noteholders, the respective parties to the Participation Agreement
may not modify, amend or supplement such agreement, or give any consent, waiver,
authorization or approval thereunder, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions thereof or of
modifying in any manner the rights of the respective parties thereunder;
provided, however, that, without the consent of the Indenture Trustee or any
Noteholder, the Participation Agreement may be modified, amended or supplemented
in order to cure any ambiguity, to correct or supplement any provisions thereof
which may be defective or inconsistent with any other provision thereof or of
any provision of this Agreement, or to make any other provision with respect to
matters or questions arising thereunder or under this Agreement which shall not
be inconsistent with the provisions of this Agreement, provided the making of
any such other provision shall not adversely affect the interests of the
Noteholders.
Section 11.07 Notices to Liquidity Providers. Any request made
to any Noteholder for consent to any amendment or supplement pursuant to this
Article 11 shall be promptly furnished by the Indenture Trustee to each
Liquidity Provider at its address set forth in the Intercreditor Agreement.
65
71
[Trust Indenture and Mortgage (2000-2 747-1)]
ARTICLE 12
MISCELLANEOUS
Section 12.01 Notices. (a) Unless otherwise specifically
provided for herein, all notices required under the terms and provisions of this
Agreement shall be in English and in writing, and any such notice may be given
by hand-delivery, overnight courier service, mail, or telecopier (to be
confirmed by hand delivery, overnight courier service or mail) addressed as
indicated below and any such notice shall be effective, in the case of
hand-delivery, when delivered, in the case of overnight courier service, one
Business Day after delivery with charges paid to a courier service with
instructions for overnight delivery, in the case of mail, three Business Days
after delivery to the postal service with certified or registered mail charges
paid, and, in the case of telecopier, upon confirmed transmittal:
if to the Owner, to:
United Air Lines, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or if by overnight courier, to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
66
72
[Trust Indenture and Mortgage (2000-2 747-1)]
if to the Indenture Trustee, to:
State Street Bank and Trust
Company of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Square
Hartford, Connecticut 06103
Attention: Corporate Trust Division
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
State Street Bank and Trust Company
▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
(b) The Owner or the Indenture Trustee by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
(c) Any notice or communication to the Noteholders shall be
mailed by first-class mail to the respective addresses for the Noteholders
shown on the Register kept by the Registrar and to addresses filed with the
Indenture Trustee for other Noteholders. Failure so to mail a notice or
communication or any defect in such notice or communication shall not affect its
sufficiency with respect to other Noteholders of such Equipment Notes of that or
any other Series entitled to receive notice.
(d) If a notice or communication is mailed in the manner
provided above within the time prescribed, it is conclusively presumed to have
been duly given, whether or not the addressee receives it.
(e) If the Owner mails a notice or communication to the
Noteholders, it shall mail a copy to the Indenture Trustee and to the Paying
Agent at the same time.
Section 12.02 GOVERNING LAW. THIS AGREEMENT AND THE EQUIPMENT
NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS OF
THE STATE OF ILLINOIS.
67
73
[Trust Indenture and Mortgage (2000-2 747-1)]
Section 12.03 Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be an original but
such counterparts shall together constitute but one instrument.
* * *
68
74
[Trust Indenture and Mortgage (2000-2 747-1)]
IN WITNESS WHEREOF, the Owner and the Indenture Trustee have
caused this Trust Indenture and Mortgage to be duly executed by their respective
officers thereunto duly authorized.
UNITED AIR LINES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Title: ASSISTANT TREASURER
----------------------------
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
as Indenture Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Title: ASSISTANT VICE PRESIDENT
----------------------------
69
75
EXHIBIT A-1
to Trust Indenture
and Mortgage
FORM OF SERIES A-1 EQUIPMENT NOTES
UNITED AIR LINES, INC.
SERIES [______] EQUIPMENT NOTE DUE [_____] ISSUED IN CONNECTION
WITH THE BOEING MODEL ________ AIRCRAFT BEARING UNITED STATES
REGISTRATION NUMBER N_____.
No.______ Date: [___________,____]
Original Principal Amount Maturity Date
$____________________ _______________
Debt Rate
_____________
UNITED AIR LINES, INC., a Delaware corporation ("Owner") for
value received, hereby promises to pay to STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, as the Subordination Agent under the
Intercreditor Agreement, or registered assigns, the principal sum of
_____________________________ Dollars ($_____________) in installments, one such
installment to be due and payable on each Payment Date, each such installment to
be in an amount equal to the amount set forth in Schedule 1 hereto, together
with interest on the unpaid principal amount hereof from time to time
outstanding from and including the date hereof until such principal amount is
paid in full. Interest shall accrue at the Debt Rate (calculated on the basis of
a year of 360 days and 12 thirty day months) and shall be payable in arrears on
each Interest Payment Date and on the date this Equipment Note is paid in full.
Notwithstanding the foregoing, the final payment made on this Equipment Note
shall be in an amount sufficient to discharge in full the unpaid principal
amount and all accrued and unpaid interest on, and any other amounts due under,
this Equipment Note. Notwithstanding anything to the contrary contained herein,
if any date on which a payment under this Equipment Note becomes due and payable
is not a Business Day, then such payment shall not be made on such scheduled
date but shall be made on the next succeeding Business Day and if such payment
is made on such next succeeding Business Day no additional interest shall accrue
on the amount of such payment during such extension.
For purposes hereof, the term "Indenture" means the Trust
Indenture and Mortgage (2000-2 747-1) dated as of December 14, 2000 between the
Owner and ▇▇▇▇▇ ▇▇▇▇▇▇
▇-▇
▇▇
[Trust Indenture and Mortgage (2000-2 747-1)]
Bank and Trust Company of Connecticut, National Association (the "Indenture
Trustee"), as the same may be amended or supplemented from time to time. All
other capitalized terms used in this Equipment Note and not defined herein shall
have the respective meanings assigned in the Indenture.
This Equipment Note shall bear interest, payable on demand, at
the Past Due Rate (calculated on the basis of a year of 360 days and 12
thirty-day months) on any overdue principal amount, Make-Whole Amount, if any,
and (to the extent permitted by applicable law) any overdue interest and any
other amounts payable hereunder which are overdue, in each case for the period
the same is overdue. Amounts shall be overdue if not paid when due (whether at
stated maturity, by acceleration or otherwise).
This Equipment Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose unless this Equipment
Note has been executed on behalf of the Owner by the manual or facsimile
signature of an authorized officer of the Owner, and authenticated by the
Indenture Trustee by the manual signature of an authorized officer or signatory
of the Indenture Trustee, in each case as specified in Section 2.02 of the
Indenture.
This Equipment Note is one of the Equipment Notes referred to
in the Indenture which have been or are to be issued by the Owner pursuant to
the terms of the Indenture. Reference is made to the Indenture and all
supplements and amendments thereto (a copy of which is on file with the
Indenture Trustee at its Corporate Trust Department) for a more complete
statement of the terms and provisions thereof, including a statement of the
properties thereby conveyed, pledged and assigned, the nature and extent of the
security, the respective rights thereunder of the Owner, the Indenture Trustee
and the Noteholders of the Equipment Notes, and the terms upon which the
Equipment Notes are, and are to be, executed and delivered, as well as for a
statement of the terms and conditions of the trust created by the Indenture, to
all of which terms and conditions in the Indenture each Noteholder hereof agrees
by its acceptance of this Equipment Note.
This Equipment Note is subject to redemption, refinancing,
purchase or prepayment as provided in Article 6 of the Indenture but not
otherwise.
If an Indenture Event of Default shall occur and be
continuing, the principal amount remaining unpaid of the Equipment Notes may be
declared due and payable together with accrued interest thereon in the manner
and with the effect provided in the Indenture.
As provided in the Indenture, in certain circumstances this
Equipment Note is transferable, and upon surrender of this Equipment Note for
registration of transfer at the principal corporate trust office of the
Registrar, or at the office or agency maintained for such purpose, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Registrar duly executed by, the Noteholder or his attorney duly authorized
in writing, one or more new Equipment Notes of the same maturity and type and of
authorized
A-2
77
[Trust Indenture and Mortgage (2000-2 747-1)]
denominations and for the same aggregate principal amount will be issued to the
designated transferee or transferees.
The Equipment Notes are issuable only as registered Equipment
Notes. As provided in the Indenture and subject to certain limitations therein
set forth, Equipment Notes are exchangeable for a like aggregate principal
amount of Equipment Notes of the same series, maturity and type and of
authorized denominations, as requested by the Noteholder surrendering the same,
upon presentation thereof for such purpose at the principal corporate trust
office of the Registrar, or at an office or agency maintained for such purpose.
No service charge shall be made for any such registration of
transfer or exchange, but the Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer or exchange of this
Equipment Note, the Owner, the Indenture Trustee, the Paying Agent and the
Registrar may deem and treat the person in whose name this Equipment Note is
registered as the absolute owner hereof for the purpose of receiving payment of
the principal of and interest on this Equipment Note and for all other purposes
whatsoever whether or not this Equipment Note be overdue, and neither the Owner,
the Indenture Trustee, the Paying Agent nor the Registrar shall be affected by
notice to the contrary.
The Noteholder of this Equipment Note, by accepting the same,
(a) agrees to and shall be bound by each provision applicable to it in the
Indenture, the Note Purchase Agreement, the Participation Agreement and each
other Operative Document, (b) authorizes and directs the Indenture Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints the Indenture
Trustee his attorney-in-fact for such purpose.
AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS EQUIPMENT
NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS OF THE
STATE OF ILLINOIS.
* * *
A-3
78
[Trust Indenture and Mortgage (2000-2 747-1)]
IN WITNESS WHEREOF, the Owner has caused this Equipment Note
to be duly executed.
UNITED AIR LINES, INC.
By:
-------------------------------------
Title:
-------------------------------
A-4
79
[Trust Indenture and Mortgage (2000-2 747-1)]
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the
within-mentioned Indenture.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
as Indenture trustee
By:
----------------------------------
Authorized officer and signatory
A-5
80
[Trust Indenture and Mortgage (2000-2 747-1)]
SCHEDULE I
AMORTIZATION SCHEDULE
Payment Date Principal Amount
[SEE EXHIBIT B-1 TO INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
A-6
81
[Trust Indenture and Mortgage (2000-2 747-1)]
EXHIBIT A-2
to Trust Indenture
and Mortgage
FORM OF SERIES A-2, SERIES B AND SERIES C EQUIPMENT NOTES
UNITED AIR LINES, INC.
SERIES [______] EQUIPMENT NOTE DUE [_____] ISSUED IN CONNECTION
WITH THE BOEING MODEL ________ AIRCRAFT BEARING UNITED STATES
REGISTRATION NUMBER N_____.
No.______ Date: [___________,____]
Original Principal Amount Maturity Date
$______________________ _______________
Debt Rate
__________
UNITED AIR LINES, INC., a Delaware corporation ("Owner") for
value received, hereby promises to pay to STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, as the Subordination Agent under the
Intercreditor Agreement, or registered assigns, the principal sum of
_____________________________ Dollars ($_____________) in one installment on
___________, ____ , together with interest on the unpaid principal amount hereof
from time to time outstanding from and including the date hereof until such
principal amount is paid in full. Interest shall accrue at the Debt Rate
(calculated on the basis of a year of 360 days and 12 thirty day months) payable
in arrears on each Interest Payment Date and on the date this Equipment Note is
paid in full. Notwithstanding the foregoing, the final payment made on this
Equipment Note shall be in an amount sufficient to discharge in full the unpaid
principal amount and all accrued and unpaid interest on, and any other amounts
due under, this Equipment Note. Notwithstanding anything to the contrary
contained herein, if any date on which a payment under this Equipment Note
becomes due and payable is not a Business Day, then such payment shall not be
made on such scheduled date but shall be made on the next succeeding Business
Day and if such payment is made on such next succeeding Business Day no
additional interest shall accrue on the amount of such payment during such
extension.
A-7
82
[Trust Indenture and Mortgage (2000-2 747-1)]
For purposes hereof, the term "Indenture" means the Trust
Indenture and Mortgage (2000-2 747-1) dated as of December 14, 2000, between the
Owner and State Street Bank and Trust Company of Connecticut, National
Association (the "Indenture Trustee"), as the same may be amended or
supplemented from time to time. All other capitalized terms used in this
Equipment Note and not defined herein shall have the respective meanings
assigned in the Indenture.
This Equipment Note shall bear interest, payable on demand, at
the Past Due Rate (calculated on the basis of a year of 360 days and 12 thirty
day months) on any overdue principal amount, Make-Whole Amount, if any, and (to
the extent permitted by applicable law) any overdue interest and any other
amounts payable hereunder which are overdue, in each case for the period the
same is overdue. Amounts shall be overdue if not paid when due (whether at
stated maturity, by acceleration or otherwise).
This Equipment Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose unless this Equipment
Note has been executed on behalf of the Owner by the manual or facsimile
signature of an authorized officer of the Owner, and authenticated by the
Indenture Trustee by the manual signature of an authorized officer or signatory
of the Indenture Trustee, in each case as specified in Section 2.02 of the
Indenture.
This Equipment Note is one of the Equipment Notes referred to
in the Indenture which have been or are to be issued by the Owner pursuant to
the terms of the Indenture. Reference is made to the Indenture and all
supplements and amendments thereto (a copy of which is on file with the
Indenture Trustee at its Corporate Trust Department) for a more complete
statement of the terms and provisions thereof, including a statement of the
properties thereby conveyed, pledged and assigned, the nature and extent of the
security, the respective rights thereunder of the Owner, the Indenture Trustee
and the Noteholders of the Equipment Notes, and the terms upon which the
Equipment Notes are, and are to be, executed and delivered, as well as for a
statement of the terms and conditions of the trust created by the Indenture, to
all of which terms and conditions in the Indenture each Noteholder hereof agrees
by its acceptance of this Equipment Note.
This Equipment Note is subject to redemption, refinancing,
purchase or prepayment as provided in Article 6 of the Indenture but not
otherwise.
If an Indenture Event of Default shall occur and be
continuing, the principal amount remaining unpaid of the Equipment Notes may be
declared due and payable together with accrued interest thereon in the manner
and with the effect provided in the Indenture.
As provided in the Indenture, in certain circumstances this
Equipment Note is transferable, and upon surrender of this Equipment Note for
registration of transfer at the principal corporate trust office of the
Registrar, or at the office or agency maintained for such purpose, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Registrar duly executed by, the Noteholder or his attorney duly authorized
in
A-8
83
[Trust Indenture and Mortgage (2000-2 747-1)]
writing, one or more new Equipment Notes of the same maturity and type and of
authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees.
The Equipment Notes are issuable only as registered Equipment
Notes. As provided in the Indenture and subject to certain limitations therein
set forth, Equipment Notes are exchangeable for a like aggregate principal
amount of Equipment Notes of the same series, maturity and type and of
authorized denominations, as requested by the Noteholder surrendering the same,
upon presentation thereof for such purpose at the principal corporate trust
office of the Registrar, or at an office or agency maintained for such purpose.
No service charge shall be made for any such registration of
transfer or exchange, but the Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer or exchange of this
Equipment Note, the Owner, the Indenture Trustee, the Paying Agent and the
Registrar may deem and treat the person in whose name this Equipment Note is
registered as the absolute owner hereof for the purpose of receiving payment of
the principal of and interest on this Equipment Note and for all other purposes
whatsoever whether or not this Equipment Note be overdue, and neither the Owner,
the Indenture Trustee, the Paying Agent nor the Registrar shall be affected by
notice to the contrary.
[The indebtedness evidenced by this Equipment Note is, to the
extent and in the manner provided in the Indenture, subordinate and subject in
right of payment to the prior payment in full of the Secured Obligations (as
defined in the Indenture) in respect of the Series A-1 Equipment Notes and the
Series A-2 Equipment Notes and this Equipment Note is issued subject to such
provisions.](1) [The indebtedness evidenced by this Equipment Note is, to the
extent and in the manner provided in the Indenture, subordinate and subject in
right of payment to the prior payment in full of the Secured Obligations (as
defined in the Indenture) in respect of the Series A-1 Equipment Notes, the
Series A-2 Equipment Notes and the Series B Equipment Notes and this Equipment
Note is issued subject to such provisions.]2 The Noteholder of this Equipment
Note, by accepting the same, (a) agrees to and shall be bound by [each
provision]3 [such provisions and each other provision](1), (2) applicable to it
in the Indenture, the Note Purchase Agreement, the Participation Agreement and
each other Operative Document, (b) authorizes and directs the Indenture Trustee
on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Indenture and (c) appoints the
Indenture Trustee his attorney-in-fact for such purpose.
--------
(1) To be inserted in the case of a Series B Equipment Note.
(2) To be inserted in the case of a Series C Equipment Note.
(3) To be inserted in the case of a Series A-2 Equipment Note.
A-9
84
[Trust Indenture and Mortgage (2000-2 747-1)]
AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS EQUIPMENT
NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS OF THE
STATE OF ILLINOIS.
* * *
A-10
85
[Trust Indenture and Mortgage (2000-2 747-1)]
IN WITNESS WHEREOF, the Owner has caused this Equipment Note
to be duly executed.
UNITED AIR LINES, INC.
By:
-------------------------------------
Title:
-------------------------------
A-11
86
[Trust Indenture and Mortgage (2000-2 747-1)]
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
as Indenture Trustee
By:
------------------------------------
Authorized officer and signatory
A-12
87
[Trust Indenture and Mortgage (2000-2 747-1)]
SCHEDULE I
AMORTIZATION SCHEDULE
Payment Date Principal Amount
[SEE EXHIBIT [B-2] [B-3] [B-4] TO INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
A-13
88
[Trust Indenture and Mortgage (2000-2 747-1)]
EXHIBIT A-3
to Trust Indenture and
Mortgage
FORM OF SERIES D EQUIPMENT NOTES
[TO BE INSERTED IF ISSUED]
A-14
89
[Trust Indenture and Mortgage (2000-2 747-1)]
EXHIBIT D
to Trust Indenture
and Mortgage
TRUST INDENTURE AND MORTGAGE SUPPLEMENT (2000-2 747-1)
This TRUST INDENTURE AND MORTGAGE SUPPLEMENT (2000-2 747-1)
dated ____________, 2000 (herein called the "Indenture Supplement") between
UNITED AIR LINES, INC., a Delaware corporation (herein called the "Owner") and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association as Indenture Trustee (the "Indenture Trustee").
WITNESSETH:
WHEREAS, the Trust Indenture and Mortgage (2000-2 747-1),
dated as of December 14, 2000 (herein called the "Indenture"), between the Owner
and Indenture Trustee, provides for the execution and delivery of a supplement
thereto substantially in the form hereof, which shall particularly describe the
Aircraft, and shall specifically mortgage such Aircraft to the Indenture
Trustee; and
WHEREAS, the Indenture relates to the Airframe and Engines
described below, and a counterpart of the Indenture is attached hereto and made
a part hereof and this Indenture Supplement, together with such counterpart of
the Indenture, is being filed for recordation on the date hereof with the
Federal Aviation Administration as one document;
NOW, THEREFORE, this Indenture Supplement Witnesseth, that to
secure the prompt payment of the principal of, Make-Whole Amount, if any, and
interest on, and all other amounts due with respect to, all Equipment Notes from
time to time outstanding under the Indenture, all other amounts due under the
Indenture and to secure the performance and observance by the Owner of all the
agreements, covenants and provisions contained in the Indenture and in the other
Operative Documents to which it is a party, for the benefit of the Noteholders
and each of the Indenture Indemnitees and the prompt payment of any and all
amounts from time to time owing under the Indenture and under the Participation
Agreement by the Owner to the Noteholders and the Indenture Indemnitees (the
obligations specified above being collectively referred to herein as the
"Secured Obligations") and for the uses and purposes and subject to the terms
and provisions of the Indenture, and in consideration of the premises and of the
covenants contained in the Indenture, and of the acceptance of the Equipment
Notes by the Noteholders, and of other good and valuable consideration the
receipt and adequacy whereof are hereby acknowledged, the Owner has granted,
bargained, sold, assigned, transferred, conveyed, mortgaged, pledged and
confirmed, and does hereby grant, bargain, sell, assign, transfer, convey,
mortgage, pledge and confirm, unto the Indenture Trustee, its successors and
permitted assigns, for the security and benefit of the Noteholders and each
D-1
90
[Trust Indenture and Mortgage (2000-2 747-1)]
of the other Indenture Indemnitees from time to time, a first priority security
interest in and first priority mortgage lien on all estate, right, title and
interest of the Owner in the following described property:
AIRFRAME
One Airframe Identified as follows:
FAA
Registration Manufacturer's
Manufacturer Model Number Serial Number
------------ ----- ------------ --------------
Boeing 747-422 N119UA 28812
together with all Parts which are from time to time incorporated or installed in
or attached thereto or which have been removed therefrom, unless the Lien of the
Indenture shall not be applicable to such Part pursuant to the provisions of the
Indenture.
AIRCRAFT ENGINES
Four aircraft engines, each such engine having 750 or more rated take-off
horsepower or the equivalent thereof, whether or not such engines shall be
installed in or attached to the Airframe or any other airframe, identified as
follows:
Manufacturer's
Manufacturer Model Serial Number
------------ ----- --------------
▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ P727877
▇▇▇▇▇ & Whitney PW4056 P727878
▇▇▇▇▇ & ▇▇▇▇▇▇▇ PW4056 P727879
▇▇▇▇▇ & Whitney PW4056 P727881
in each case, together with all Parts which are from time to time incorporated
or installed in or attached thereto or which have been removed therefrom, unless
the Lien of the Indenture shall not be applicable to such Part pursuant to the
provisions of the Indenture.
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and permitted assigns, in trust for
the benefit and security of the Indenture Trustee and the Noteholders from time
to time, except as provided in Section 2.11 and Article 3 of the Indenture,
without any preference, distinction or priority of any one Equipment Note over
any other by reason of series, priority of time of issue, sale, negotiation,
date of maturity thereof or otherwise for any reason whatsoever, and for the
uses and purposes and subject to the terms and provisions set forth in the
Indenture.
D-2
91
[Trust Indenture and Mortgage (2000-2 747-1)]
This Indenture Supplement shall be construed as a supplemental
Indenture and shall form a part thereof, and the Indenture is hereby
incorporated by reference herein and is hereby ratified, approved and confirmed.
* * *
D-3
92
[Trust Indenture and Mortgage (2000-2 747-1)]
IN WITNESS WHEREOF, each of the parties hereto have caused
this Indenture Supplement to be duly executed by one of its officers, thereunto
duly authorized, on the day and year first above written.
UNITED AIR LINES, INC.
By:
----------------------------------
Title:
-------------------------------
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION
as Indenture Trustee
By:
----------------------------------
Title:
-------------------------------
D-4
93
[Trust Indenture and Mortgage (2000-2 747-1)]
EXHIBIT E
SCHEDULE OF COUNTRIES AUTHORIZED
FOR DOMICILE OF PERMITTED LESSEES
Argentina Malaysia
Australia Malta
Austria Mexico
Bahamas ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Antilles
Brazil New Zealand
British Virgin Islands Norway
Canada Paraguay
Cayman Islands People's Republic of China
Chile Philippines
Czech Republic Poland
Denmark Portugal
Ecuador Republic of China (Taiwan)
Egypt Singapore
Finland South Africa
France South Korea
Germany Spain
Greece Sweden
Grenada Switzerland
Guatemala Thailand
Hong Kong Trinidad and Tobago
Hungary United Kingdom
Iceland Uruguay
India Venezuela
Indonesia
Ireland
Italy
Jamaica
Japan
Kuwait
Liechtenstein
Luxembourg
94
[Trust Indenture and Mortgage (2000-2 747-1)]
EXHIBIT F
SCHEDULE OF COUNTRIES AUTHORIZED
FOR AIRCRAFT REGISTRATION
Argentina Malaysia
Australia Malta
Austria Mexico
Bahamas ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Antilles
Brazil New Zealand
British Virgin Islands Norway
Canada Paraguay
Cayman Islands People's Republic of China
Chile Philippines
Czech Republic Poland
Denmark Portugal
Ecuador Republic of China (Taiwan)
Egypt Singapore
Finland South Africa
France South Korea
Germany Spain
Greece Sweden
Grenada Switzerland
Guatemala Thailand
Hong Kong Trinidad and Tobago
Hungary United Kingdom
Iceland Uruguay
India Venezuela
Indonesia
Ireland
Italy
▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇