Exhibit 10.2
EXECUTION VERSION
SECURITY TRUST AGREEMENT
Dated as of June 26, 2001
between
LEASE INVESTMENT FLIGHT TRUST
and
LIFT TRUST-SUB 1
and
THE ADDITIONAL GRANTORS REFERRED TO HEREIN
as the Grantors
and
BANKERS TRUST COMPANY,
as the Security Trustee and the Operating Bank
T A B L E O F C O N T E N T S
PAGE
ARTICLE I DEFINITIONS.........................................................2
SECTION 1.01 DEFINITIONS........................................2
SECTION 1.02 CONSTRUCTION AND USAGE.............................7
ARTICLE II SECURITY...........................................................7
SECTION 2.01 GRANT OF SECURITY..................................7
SECTION 2.02 SECURITY FOR OBLIGATIONS..........................10
SECTION 2.03 REPRESENTATIONS AND WARRANTIES OF THE GRANTORS....10
SECTION 2.04 GRANTORS REMAIN LIABLE............................11
SECTION 2.05 DELIVERY OF COLLATERAL............................12
SECTION 2.06 MAINTENANCE OF SECURITY TRUSTEE ACCOUNTS..........12
SECTION 2.07 THE GRANTOR AND THE ACCOUNTS......................13
SECTION 2.08 AS TO THE ASSIGNED DOCUMENTS......................14
SECTION 2.09 AS TO SECURITY COLLATERAL, BENEFICIAL
INTEREST COLLATERAL AND INVESTMENT COLLATERAL.....16
SECTION 2.10 FURTHER ASSURANCES................................17
SECTION 2.11 PLACE OF PERFECTION; RECORDS......................18
SECTION 2.12 VOTING RIGHTS; DIVIDENDS; ETC.....................18
SECTION 2.13 TRANSFERS AND OTHER ENCUMBRANCES;
ADDITIONAL SHARES OR INTERESTS....................19
SECTION 2.14 SECURITY TRUSTEE APPOINTED ATTORNEY-IN-FACT.......19
SECTION 2.15 SECURITY TRUSTEE MAY PERFORM......................20
SECTION 2.16 COVENANT TO PAY...................................20
SECTION 2.17 DELIVERY OF COLLATERAL SUPPLEMENTS................20
SECTION 2.18 ANNUAL OPINION....................................20
SECTION 2.19 SUPPLEMENTARY SECURITY TRUST AGREEMENT............20
ARTICLE III REMEDIES.........................................................21
SECTION 3.01 REMEDIES .........................................21
ARTICLE IV SECURITY INTEREST ABSOLUTE........................................22
SECTION 4.01 SECURITY INTEREST ABSOLUTE........................22
ARTICLE V THE SECURITY TRUSTEE AND THE OPERATING BANK........................22
SECTION 5.01 AUTHORIZATION AND ACTION..........................23
SECTION 5.02 ABSENCE OF DUTIES.................................23
SECTION 5.03 REPRESENTATIONS OR WARRANTIES.....................23
SECTION 5.04 RELIANCE; AGENTS; ADVICE OF COUNSEL...............23
SECTION 5.05 NO INDIVIDUAL LIABILITY...........................25
SECTION 5.06 THE OPERATING BANK................................25
ARTICLE VI SUCCESSOR TRUSTEES AND OPERATING BANK.............................25
SECTION 6.01 RESIGNATION AND REMOVAL OF SECURITY TRUSTEE.......25
SECTION 6.02 APPOINTMENT OF SUCCESSOR..........................26
SECTION 6.03 THE OPERATING BANK................................26
ARTICLE VII AGREEMENT BETWEEN SECURED PARTIES................................27
SECTION 7.01 SUBORDINATION AND PRIORITY........................27
SECTION 7.02 EXERCISE OF REMEDIES..............................27
SECTION 7.03 FURTHER AGREEMENTS OF SUBORDINATION...............28
SECTION 7.04 RIGHTS OF SUBROGATION.............................29
SECTION 7.05 FURTHER ASSURANCES OF SUBORDINATED
REPRESENTATIVES...................................30
SECTION 7.06 NO CHANGE IN RIGHTS IN COLLATERAL.................30
SECTION 7.07 WAIVER OF MARSHALLING AND SIMILAR RIGHTS..........30
SECTION 7.08 ENFORCEMENT.......................................30
SECTION 7.09 OBLIGATIONS NOT AFFECTED..........................30
SECTION 7.10 WAIVER ...........................................31
SECTION 7.11 SENIOR OBLIGATIONS AND SUBORDINATED
OBLIGATIONS UNIMPAIRED............................31
SECTION 7.12 UPON DISCHARGE OF OBLIGATIONS.....................31
SECTION 7.13 AGREEMENT OF THE SECURED PARTIES..................31
ARTICLE VIII INDEMNITY AND EXPENSES..........................................31
SECTION 8.01 INDEMNITY.........................................32
SECTION 8.02 HOLDERS' INDEMNITY................................33
SECTION 8.03 NO COMPENSATION FROM SECURED PARTIES..............33
SECTION 8.04 SECURITY TRUSTEE FEES.............................33
ARTICLE IX MISCELLANEOUS.....................................................33
SECTION 9.01 AMENDMENTS; WAIVERS; ETC..........................33
SECTION 9.02 ADDRESSES FOR NOTICES.............................34
SECTION 9.03 NO WAIVER; REMEDIES...............................35
SECTION 9.04 SEVERABILITY......................................35
SECTION 9.05 CONTINUING SECURITY INTEREST; ASSIGNMENTS.........35
SECTION 9.06 RELEASE AND TERMINATION...........................35
SECTION 9.07 CURRENCY CONVERSION...............................36
SECTION 9.08 GOVERNING LAW.....................................36
SECTION 9.09 JURISDICTION......................................36
SECTION 9.10 COUNTERPARTS......................................37
SECTION 9.11 TABLE OF CONTENTS, HEADINGS, ETC..................37
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SCHEDULES
Schedule I Pledged Stock, Pledged Beneficial Interest and Pledged Debt
Schedule II Non-Trustee Account Information
Schedule III Trade Names
Schedule IV Chief Place of Business and Chief Executive or Registered Office
EXHIBITS
Exhibit A Form of Secured Party Supplement
Exhibit B-1 Form of Collateral Supplement
Exhibit B-2 Form of Grantor Supplement
Exhibit C Form of Non-Trustee Account Letter
Exhibit D Form of Consent and Agreement
Exhibit E Form of Supplementary Security Trust Agreement
SECURITY TRUST AGREEMENT
This SECURITY TRUST AGREEMENT (this "Agreement"), dated as of
June 26, 2001, is made between LEASE INVESTMENT FLIGHT TRUST, a Delaware
statutory business trust (the "Note Issuer"), LIFT TRUST-SUB 1, a Delaware
statutory business trust (the "Bridge Note Issuer"), the ISSUER SUBSIDIARIES
listed on the signature pages of, or who otherwise become grantors under, this
Agreement (together with the Note Issuer and the Bridge Note Issuer, the
"Grantors") and BANKERS TRUST COMPANY, a New York banking corporation ("Bankers
Trust").
PRELIMINARY STATEMENTS:
(1) The Note Issuer, the Bridge Note Issuer and Bankers Trust
have entered into the Indenture pursuant to which the Bridge Note Issuer is
issuing the Bridge Notes, the Note Issuer is issuing the Notes and Bankers Trust
has been appointed the Trustee.
(2) Prior to the Effective Time, the Bridge Note Issuer is the
owner of (i) all of the beneficial interest (the "Pledged Beneficial Interest")
in certain Issuer Subsidiaries and all of the outstanding shares of capital
stock of the other Issuer Subsidiaries (the "Pledged Stock"), all as described
in the attached Schedule I and in any Collateral Supplement or Grantor
Supplement and (ii) the indebtedness of certain Issuer Subsidiaries (the
"Pledged Debt"), all as described in the attached Schedule I and in any
Collateral Supplement or Grantor Supplement and upon the occurrence of the
Effective Time, the Note Issuer will be the owner of the Pledged Beneficial
Interest, the Pledged Stock and the Pledged Debt.
(3) The Issuer Subsidiaries are or may from time to time be
parties to lease and sub-lease contracts and servicing agreements with respect
to the Initial Aircraft, and they may enter into lease and sub-lease contracts
and servicing agreements with respect to Additional Aircraft.
(4) The Note Issuer and the Issuer Subsidiaries may from time
to time grant additional security for the benefit of the Secured Parties.
(5) It is a condition precedent to the issuance of the Bridge
Notes by the Bridge Note Issuer and to the issuance of the Notes by the Note
Issuer, that each Grantor grant the security interests required by this
Agreement.
(6) Each Grantor will derive substantial direct and indirect
benefit from the issuance of the Bridge Notes, the Notes and from the Related
Documents.
(7) Bankers Trust is willing to act as the Security Trustee
and the Operating Bank under this Agreement.
NOW, THEREFORE, in consideration of the premises, each Grantor
hereby agrees with the Security Trustee for its benefit and the benefit of the
other Secured Parties as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. (a) CERTAIN DEFINED TERMS. For the
purposes of this Agreement, the following terms have the meanings indicated
below:
"Account Collateral" has the meaning specified in Section
2.01.
"Account Letters" has the meaning specified in Section
2.07(a).
"Additional Grantor" has the meaning specified in Section
9.01.
"Agreed Currency" has the meaning specified in Section 9.07.
"Agreement" has the meaning specified in the recital of
parties to this Agreement.
"Agreement Collateral" means, collectively, the Assigned
Agreement Collateral, the Lease Collateral and the Servicing Collateral.
"Aircraft Purchase Collateral" has the meaning specified in
Section 2.01.
"Aircraft Purchase Collateral Provider" means any of or, in
its plural form, two or more of the Sellers and any seller of any Additional
Aircraft.
"Assigned Agreements" has the meaning specified in Section
2.01
"Assigned Agreement Collateral" has the meaning specified in
Section 2.01.
"Assigned Documents" means, collectively, the Assigned
Agreements, the Assigned Leases, the Service Provider Documents included in the
Servicing Collateral and the Acquisition Agreements included in the Aircraft
Purchase Collateral.
"Assigned Leases" has the meaning specified in Section 2.01.
"Bankers Trust" has the meaning specified in the recital of
parties to this Agreement.
"Bankers Trust Fee Letter" means the fee agreement dated as of
June, 2001 between the Note Issuer and Bankers Trust.
"Beneficial Interest Collateral" has the meaning specified in
Section 2.01.
"Bridge Note Issuer" has the meaning specified in the recital
of the parties to the Agreement.
"Certificated Security" means a certificated security (as
defined in Section 8-102(a)(4) of the UCC) other than a Government Security.
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"Collateral" has the meaning specified in Section 2.01.
"Collateral Supplement" means a supplement to this Agreement
in substantially the form attached as Exhibit B-1 executed and delivered by a
Grantor.
"Effective Time" means the time of the issuance of the Initial
Notes under the Indenture being the time of authentication and delivery thereof
by the Security Trustee to the initial Holders thereof.
"Government Security" means any security issued or guaranteed
by the United States of America or an agency or instrumentality thereof that is
maintained in book-entry on the records of the Federal Reserve Bank of New York
and is subject to Revised Book-Entry Rules.
"Grantors" has the meaning specified in the recital of parties
to this Agreement.
"Grantor Supplement" means a supplement to this Agreement in
substantially the form attached as Exhibit B-2 executed and delivered by an
Issuer Group Member.
"Indenture" means the Trust Indenture dated as of June 26,
2001 between the Note Issuer, the Bridge Note Issuer, the Administrative Agent
and the Trustee.
"Indenture Obligations" means, in respect of any class of
Notes, all obligations of the Issuer under and in respect of such class of Notes
including all obligations of the Issuer to make payments of principal of,
interest on (including Registration Step-Up Interest, Maturity Step-Up Interest,
Additional Interest and interest following the filing of a petition initiating
any proceeding referred to in Section 7.03(a)) and premium, if any, on such
class of Notes, all obligations to pay any fees, expenses or other amounts under
or in respect of such class of Notes, the Indenture or any Related Document in
respect of such class of Notes, and all obligations in respect of any amendment,
modification, extension, renewal or refinancing of such class of Notes.
"Instrument" means any "instrument" as defined in Section
9-105(1)(i) of the UCC.
"Investment Collateral" has the meaning specified in Section
2.01.
"Issuer" means prior to the Effective Time, the Bridge Note
Issuer and from and after the Effective Time, the Note Issuer.
"Lease Assignment Documents" means, in respect of any Assigned
Lease, (a) any agreement providing for the novation thereof to substitute, or
the assignment thereof to, an Issuer Group Member as the lessor, (b) any
agreement or instrument supplemental to this Agreement for the purpose of
effecting and/or perfecting the assignment of, and the grant of a lien upon,
such Assigned Lease in favor the Security Trustee under any Applicable Law
(other than the law of the State of New York), (c) any notice provided to the
lessee thereof of the assignment thereof
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pursuant to this Agreement and/or such supplement, (d) any acknowledgment of
such assignment by such lessee and (e) any undertaking of quiet enjoyment given
by the Security Trustee in respect thereof.
"Lease Collateral" has the meaning specified in Section 2.01.
"Non-Trustee Account Banks" has the meaning specified in
Section 2.07.
"Non-Trustee Account Collateral" has the meaning specified in
Section 2.01.
"Note Issuer" has the meaning specified in the recital of
parties to this Agreement.
"Obligor" has the meaning specified in Section 2.07.
"Operating Bank" means the Person acting, at the time of
determination, as the operating bank under this Agreement. The initial Operating
Bank is Bankers Trust.
"Owner Trustee Fee Agreement" means the fee agreement between
the Owner Trustee and the Note Issuer.
"Pledged Beneficial Interest" has the meaning specified in the
preliminary statements to this Agreement.
"Pledged Debt" has the meaning specified in the preliminary
statements to this Agreement.
"Pledged Stock" has the meaning specified in the preliminary
statements to this Agreement.
"Received Currency" has the meaning specified in Section 9.07.
"Relevant Collateral" has the meaning specified in Section
2.09(a).
"Revised Book-Entry Rules" means 31 C.F.R. ss. 357 (Treasury
bills, notes and bonds); 12 C.F.R. ss. 615 (book-entry securities of the Farm
Credit Administration); 12 C.F.R. ▇▇.▇▇. 910 and 912 (book-entry securities of
the Federal Home Loan Banks); 24 C.F.R. ss. 81 (book-entry securities of the
Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation); 12 C.F.R. ss. 1511 (book-entry securities of the Resolution
Funding Corporation); 31 C.F.R. ss. 354 (book-entry securities of the Student
Loan Marketing Association); and any substantially comparable book-entry rules
of any other Federal agency or instrumentality.
"Secured Collateral Provider" means any of or, in its plural
form, all of the Secured Service Providers, Secured Swap Providers, Secured
Credit Facility Providers and Aircraft Purchase Collateral Providers.
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"Secured Collateral Provider Document" means any of or, in its
plural form, all of the Service Provider Documents, Swap Agreements, Credit
Facilities and Acquisition Agreements.
"Secured Credit Facility" means any Eligible Credit Facility
in respect of which the provider has delivered to the Security Trustee a Secured
Party Supplement.
"Secured Credit Facility Obligations" means the obligations of
the Issuer now or hereafter existing under any Secured Credit Facilities to
Secured Credit Facility Providers.
"Secured Credit Facility Provider" means the provider of any
Secured Credit Facility.
"Secured Obligations" means, collectively, the Indenture
Obligations with respect to all classes of Notes, the Secured Service Provider
Obligations, the Additional Servicer Amounts, the Secured Credit Facility
Obligations and the Secured Swap Provider Obligations.
"Secured Party" means any of or, in the plural form, all of
the Security Trustee, each other Secured Service Provider, each Holder, each
Secured Credit Facility Provider and each Secured Swap Provider.
"Secured Party Supplement" means a supplement to this
Agreement in substantially the form attached as Exhibit A executed and delivered
to the Security Trustee by a Service Provider, a Swap Provider or a Secured
Credit Facility Provider.
"Secured Service Provider" means any of the Security Trustee,
the Trustee, the Operating Bank, the Servicer, the Administrative Agent, the
Reference Agent, the Financial Advisor, the Capital Markets Advisor and each
other provider (including any Authorized Agent) of a Secured Service Provider
Document.
"Secured Service Provider Document" means any of any Service
Provider Document listed under clause (a) of the definition of that term and any
other service agreement entered into by an Issuer Group Member in accordance
with the Indenture in respect of which the counterparty has executed and
delivered to the Security Trustee a Secured Party Supplement.
"Secured Service Provider Obligations" means, collectively,
the obligations now or hereafter existing of any Issuer Group Member to a
Service Provider under a Secured Service Provider Document other than the
Additional Servicer Amounts.
"Secured Swap Agreement" means a Swap Agreement in respect of
which the Swap Provider has executed and delivered to the Security Trustee a
Secured Party Supplement.
"Secured Swap Provider" means the Swap Provider of a Secured
Swap Agreement.
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"Secured Swap Provider Obligations" means the obligations of
the Issuer now or hereafter existing under the Secured Swap Agreements.
"Securities Account" means a securities account as defined in
Section 8-501(a) of the UCC maintained in the name of the Security Trustee as
"entitlement holder" (as defined in Section 8-102(a)(7) of the UCC) on the books
and records of the Operating Bank or another Securities Intermediary in the
State of New York.
"Securities Intermediary" means any "securities intermediary"
of the Security Trustee as defined in 31 C.F.R. Section 357.2 or Section
8-102(a)(14) of the UCC.
"Security Collateral" has the meaning specified in Section
2.01(a).
"Security Trustee" means the Person appointed, at the time of
determination, as the security trustee under this Agreement. The initial
Security Trustee is Bankers Trust.
"Security Trustee Account" means any Account other than a
Non-Trustee Account.
"Senior Creditors" means the Secured Parties to whom the
Senior Obligations are owed.
"Senior Obligations" means, with respect to any Secured
Obligation (other than Secured Service Provider Obligations and all Secured
Credit Facility Obligations that constitute Expenses), all other Obligations the
payment of which constitute a Prior Ranking Amount.
"Senior Representative" means the Controlling Party.
"Service Provider Documents" means (a) the Administrative
Agency Agreement, the Trust Agreement (with respect to the obligations of the
Issuer to the Owner Trustee), the Indenture (with respect to the obligations of
the Issuer to the Trustee), the Reference Agency Agreement, the Servicing
Agreement, the Financial Advisory Agreement, the Capital Markets Advisory
Agreement, the Bankers Trust Fee Agreement, the Owner Trustee Fee Agreement and
this Agreement (with respect to the obligations of the Grantors to the Security
Trustee and the Operating Bank) and (b) any other service agreement entered into
by any Issuer Group Member pursuant to the Indenture.
"Subordinated Creditors" means, at any time, the holders and
owners of Subordinated Obligations.
"Subordinated Obligations" means (a) with respect to the
Secured Service Provider Obligations and Secured Credit Facility Obligations
that constitute Expenses, all other Obligations and (b) with respect to any
other Secured Obligations, all Obligations as to which the payment of such
Secured Obligation constitutes a Prior Ranking Amount.
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"Subordinated Representative" means, at any time, any trustee
or representative of any holders or owners (or, in the absence of any such
person, such holders and owners) of any Secured Obligations other than the
Senior Representative at such time.
"Supplementary Security Trust Agreement" means the
Supplementary Security Trust between the grantors referred to therein and the
Security Trustee, substantially in the form attached as Exhibit E to this
Agreement.
"UCC" means the Uniform Commercial Code as in effect on the
date of determination in the State of New York; provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than New York,
"UCC" means the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions of this Agreement relating to such perfection or
effect of perfection or non-perfection. If, as is anticipated on the date
hereof, the provisions of Article 9 of the UCC used in this Agreement are
legislatively modified, upon such modifications becoming effective, the
references in this Agreement to "Section 9-105(1)(i)", "Section 9-115(1)(f)" and
"Section 9-105" of the UCC will each be taken to mean "Section 9-102" of the UCC
and the references in this Agreement to "Section 9-504(i)(c)" and "Section
9-505(2)" of the UCC shall be taken to mean "Section 9-615" and "Section 9-620"
of the UCC, respectively.
"Uncertificated Security" means an uncertificated security (as
defined in Section 8-102(a)(18) of the UCC) other than a Government Security.
(b) TERMS DEFINED IN THE INDENTURE. For all purposes of this
Agreement, all capitalized terms used, but not defined in, this Agreement shall
have the respective meanings assigned to such terms in the Indenture.
SECTION 1.02 CONSTRUCTION AND USAGE. The conventions of
construction and usage set forth in Section 1.02 of the Indenture are hereby
incorporated by reference in this Agreement.
ARTICLE II
SECURITY
SECTION 2.01 GRANT OF SECURITY. To secure the Secured
Obligations, each Grantor hereby assigns and pledges to the Security Trustee for
its benefit and the benefit of the Secured Parties (except, with respect to any
Secured Collateral Provider Documents under clause (h), clause (i) or clause (j)
below, the related Secured Collateral Provider), and hereby grants to the
Security Trustee for its benefit and the benefit of the Secured Parties (except,
with respect to any Secured Collateral Provider Documents under clause (h),
clause (i) or clause (j) below, the related Secured Collateral Provider) a
security interest in, all of such Grantor's right, title and interest in and to
the following (collectively, the "Collateral"):
(a) with respect to each Grantor, all of the following (the
"Security Collateral"):
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(i) the Pledged Stock and the certificates representing such
Pledged Stock, and all dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Stock;
(ii) the Pledged Debt, all the instruments evidencing the
Pledged Debt, and all interest, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Debt;
(iii) all additional shares of the capital stock of any Issuer
Group Member from time to time acquired by such Grantor in any manner, including
the capital stock of any Issuer Group Member that may be formed from time to
time, and all certificates, if any, representing such additional shares of the
capital stock and all dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all such additional shares; and
(iv) all additional indebtedness from time to time owed to
such Grantor by any Issuer Group Member and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness;
(b) with respect to each Grantor, all of the following (the
"Beneficial Interest Collateral"):
(i) the Pledged Beneficial Interests, all certificates, if
any, from time to time representing all of such Grantor's right, title and
interest in the Pledged Beneficial Interest, any contracts and instruments
pursuant to which any such Pledged Beneficial Interests are created or issued
and all distributions, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Beneficial Interest; and
(ii) all of such Grantor's right, title and interest in all
additional beneficial interests in any Issuer Group Member from time to time
acquired by such Grantor in any manner, including the beneficial interests in
any Issuer Group Member that may be formed from time to time, and all
certificates, if any, from time to time representing such additional beneficial
interests and all distributions, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all such additional beneficial interests;
(c) with respect to each Grantor, all of the following
(collectively, the "Non-Trustee Account Collateral"):
(i) all of the Non-Trustee Accounts in such Grantor's name,
all funds or any other interest held or required by the terms of the Indenture
to be held in, and all certificates and instruments, if any, from time to time
representing or evidencing, such Non-Trustee Accounts;
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(ii) all notes, certificates of deposit, deposit accounts,
checks and other instruments from time to time hereafter delivered to or
otherwise possessed by the Security Trustee for or on behalf of such Grantor in
substitution for or in addition to any or all of the then existing Non-Trustee
Account Collateral; and
(iii) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing Non-Trustee
Account Collateral;
(d) with respect to each Grantor, all right of such Grantor in
and to each Security Trustee Account at any time or from time to time
established and all cash, investment property, Permitted Account Investments,
other Investments, securities, instruments or other property (including all
"financial assets" within the meaning of Section 8-102(a)(9) of the UCC) at any
time or from time to time credited to any such Security Trustee Account
(collectively, the "Account Collateral");
(e) all other "investment property" (as defined in Section
9-115(1)(f) of the UCC) of each Grantor including written notification of the
following (the "Investment Collateral"):
(i) all Permitted Account Investments made or acquired from or
with the proceeds of any Non-Trustee Account Collateral of such Grantor from
time to time and all certificates and instruments, if any, from time to time
representing or evidencing such Permitted Account Investments; and
(ii) all interest, dividends, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the then existing Investment Collateral;
(f) with respect to the Issuer, all of the following (the
"Assigned Agreement Collateral"):
(i) all of such Grantor's right, title and interest in and to
all security assignments, cash deposit agreements and other security agreements
executed in its favor by any Issuer Subsidiary, in each case as such agreements
may be amended or otherwise modified from time to time (collectively, the
"Assigned Agreements"); and
(ii) all of such Grantor's right, title and interest in and to
all deposit accounts, all funds or other property held in such deposit accounts,
all certificates and instruments, if any, from time to time representing or
evidencing such deposit accounts and all other property of whatever nature, in
each case pledged, assigned or transferred to it or mortgaged or charged in its
favor pursuant to any Assigned Agreement;
(g) with respect to each Grantor, all of such Grantor's right,
title and interest in and to all Leases to which such Grantor is or may from
time to time be party and any leasing arrangements among Issuer Group Members
with respect to such Leases (all such Leases, the "Assigned Leases"), including
(i) all rights of such Grantor to receive moneys due and to become
9
due under or pursuant to such Assigned Leases, (ii) all rights of such Grantor
to receive proceeds of any insurance, indemnity, warranty or guaranty with
respect to such Assigned Leases, (iii) claims of such Grantor for damages
arising out of or for breach or default under such Assigned Leases, (iv) all
rights under any such Assigned Lease with respect to any subleases of the
Aircraft subject to such Assigned Lease and (v) the right of such Grantor to
terminate such Assigned Leases and to compel performance of, and otherwise to
exercise all remedies under, any Assigned Lease, whether arising under such
Assigned Leases or by statute or at law or in equity (the "Lease Collateral");
(h) with respect to each Grantor, all of such Grantor's right,
title and interest in and to all Service Provider Documents (the "Servicing
Collateral");
(i) with respect to each Grantor, all of such Grantor's right,
title and interest in and to all Acquisition Agreements (the "Aircraft Purchase
Collateral");
(j) with respect to each Grantor, all of such Grantor's right,
title and interest in and to all Credit Facilities not consisting of a Cash
Collateral Account and Swap Agreements and all rights to administer, draw upon
and otherwise deal with each such Credit Facility and to administer and
otherwise deal with each such Swap Agreement;
(k) with respect each Grantor, all of such Grantor's right,
title and interest in and to the personal property identified in a Grantor
Supplement or a Collateral Supplement executed and delivered by such Grantor to
the Security Trustee; and
(l) all proceeds of any and all of the foregoing Collateral
(including proceeds that constitute property of the types described in
subsections (a), (b), (c), (d), (e), (f), (g), (h), (i), (j) and (k) of this
Section 2.01);
provided that the Collateral shall not include Excluded Payments.
SECTION 2.02 SECURITY FOR OBLIGATIONS. This Agreement secures
the payment and performance of all Secured Obligations of the Grantors to each
Secured Party (subject to the subordination provision of this Agreement and the
Indenture) and shall be held by the Security Trustee in trust for the Secured
Parties. Without limiting the generality of the foregoing, this Agreement
secures the payment of all amounts that constitute part of the Secured
Obligations and would be owed by any Grantor to any Secured Parties but for the
fact that Secured Obligations are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving such
Grantor.
SECTION 2.03 REPRESENTATIONS AND WARRANTIES OF THE GRANTORS.
Each Grantor represents and warrants as of the date of this Agreement, and as of
each subsequent Closing Date and each Delivery Date on which such Grantor
accepts an Aircraft, as follows:
(a) The Grantors are the legal and beneficial owner of the
Collateral free and clear of any Encumbrance (other than Permitted
Encumbrances), other than that of this Agreement. No effective financing
statement or other instrument similar in effect covering all or
10
any part of the Collateral is on file in any recording office, except such as
may have been filed in favor of the Security Trustee relating to Collateral.
(b) This Agreement creates a valid and (upon the taking of the
actions required hereby) perfected security interest in the Collateral as
security for the Secured Obligations, subject in priority to no other
Encumbrances (other than Permitted Encumbrances), and all filings and other
actions necessary or desirable to perfect and protect such security interest
have been (or in the case of future Collateral will be) duly taken.
(c) No Grantor has any trade names except as set forth on
Schedule III hereto.
(d) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by such Grantor of the assignment and security interest granted hereby,
(ii) for the execution, delivery or performance of this Agreement by such
Grantor or (iii) for the perfection or maintenance of the pledge, assignment and
security interest created hereby, except for the filing of financing and
continuation statements under the Uniform Commercial Code.
(e) The chief place of business and chief executive or
registered office of such Grantor and the office where such Grantor keeps
records of the Collateral are located at the address specified opposite the name
of such Grantor on the attached Schedule IV.
(f) The Pledged Stock constitutes the percentage of the issued
and outstanding shares of capital stock of the issuers thereof indicated on the
attached Schedule I. The Pledged Beneficial Interests constitute the percentage
of the beneficial interest of the issuer thereof indicated on Schedule I hereto.
(g) The Pledged Stock and the Pledged Beneficial Interest have
been duly authorized and validly issued and are fully paid up and nonassessable.
The Pledged Debt has been duly authorized, authenticated or issued and
delivered, is the legal, valid and binding obligation of each obligor thereunder
and is not in default.
(h) A true and complete copy of each Assigned Agreement in
effect on the Initial Closing Date has been delivered to the Security Trustee.
Each Assigned Document upon its inclusion in the Collateral will have been duly
authorized, executed and delivered by the relevant Grantors, will be in full
force and effect and will be binding upon and enforceable against all parties
thereto in accordance with their terms.
SECTION 2.04 GRANTORS REMAIN LIABLE. Anything contained herein
to the contrary notwithstanding, (a) each Grantor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Security Trustee of any of its rights hereunder shall not release any Grantor
from any of its duties or obligations under the contracts and agreements
11
included in the Collateral and (c) no Secured Party shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall any Secured Party be obligated to perform
any of the obligations or duties of any Grantor under the contracts and
agreements included in the Collateral or to take any action to collect or
enforce any claim for payment assigned under this Agreement.
SECTION 2.05 DELIVERY OF COLLATERAL. All certificates or
instruments representing or evidencing any Collateral (other than Account
Collateral) shall be delivered to and held by or on behalf of the Security
Trustee in New York and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to evidence the security interests
granted thereby. The Security Trustee shall have the right, at any time in its
discretion and without notice to any Grantor, to transfer to or to register in
the name of the Security Trustee or any of its nominees any or all of the
Pledged Stock and Pledged Beneficial Interest, subject only to the revocable
rights specified in Section 2.12(a). In addition, the Security Trustee shall
have the right at any time to exchange certificates or instruments representing
or evidencing any Collateral (other than Account Collateral) for certificates or
instruments of smaller or larger denominations. To the extent that any Assigned
Lease constitutes chattel paper (as defined in Section 9-105 of the UCC), the
Grantors shall cause the original of such Assigned Lease to be delivered to the
Security Trustee promptly (and in any case no later than ten days) after the
execution and delivery of such Assigned Lease by all its parties.
SECTION 2.06 MAINTENANCE OF SECURITY TRUSTEE ACCOUNTS.
(a) Bankers Trust hereby agrees to act as the Operating Bank
under this Agreement. Upon the execution of this Agreement and from time to time
thereafter as called for by Section 3.01 of the Indenture, the Operating Bank
shall establish and maintain on the books and records of its office specified in
Section 9.02 and maintain in the name of the Security Trustee each respective
Security Trustee Account (as an Eligible Account) to be established on the
Initial Closing Date or on such other time. If, at any time, any Security
Trustee Account ceases to be an Eligible Account, the Operating Bank shall,
within 10 Business Days thereafter, establish a new Security Trustee Account
having the same characteristics or such other Account and transfer all property
related to such old Account to such new Account. The Operating Bank also agrees
to cooperate with any replacement Operating Bank as to the transfer of any
property in, or records relating to, any Security Trust Account maintained by
it. Except as a Secured Party in accordance with the provisions of this
Agreement, Bankers Trust waives any claim or lien against any Account it may
have, by operation of law or otherwise, for any amount owed to it by any
Grantor.
(b) The Operating Bank hereby agrees that (i) each Security
Trustee Account will be and will be maintained as a Securities Account of which
it is the Securities Intermediary and in respect of which the Security Trustee
is the "entitlement holder" (as defined in Section 8-102(a)(7) of the UCC) of
the "securities entitlement" (as defined in Section 8-102(a)(17) of the UCC)
with respect to each "financial asset" (as defined in Section 8-102(a)(9) of the
UCC) credited to such Account, (ii) all Collections and other cash required to
be deposited in any such Account and Permitted Account Investments and all other
property acquired with cash credited to any such Account will be credited to
such Account, (iii) all items of property (whether cash,
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investment property, Permitted Account Investments, other investments,
securities, instruments or other property credited to each Security Trustee
Account will be treated as a "financial asset" (as defined in Section
8-102(a)(9) of the UCC) under Article 8 of the UCC, (iv) its "securities
intermediary's jurisdiction" (as defined in Section 8-110(e) of the UCC) with
respect to each Account is the State of New York and (v) all securities,
instruments and other property in order or registered from and credited to any
Security Trustee Account shall be payable to or to the order of, or registered
in the name of, the Operating Bank or shall be indorsed to the Operating Bank or
in blank, and in no case whatsoever shall any financial asset credited to any
Security Trustee Account be registered in the name of any Grantor, payable to or
to the order of any Grantor or specially indorsed to any Grantor except to the
extent the foregoing have been specially endorsed by a Grantor to the Operating
Bank or in blank. The Operating Bank acknowledges that the Security Trustee has
appointed the Administrative Agent pursuant to the Administrative Agency
Agreement, as its agent for, among other things, dealings with respect to the
Security Trustee Accounts; the Operating Bank agrees that, until otherwise
notified in writing by the Security Trustee, the Operating Bank will follow the
written directions and instructions of the Administrative Agent, as the agent
for the Security Trustee, to the extent it is required to follow those of the
Security Trustee except that, with respect to withdrawals from any Note Account,
the Operating Bank agrees that it will follow the directions and instructions of
the Trustee, as the agent for the Security Trustee (the Security Trustee hereby
appointing the Trustee as its agent for such purpose).
(c) The Security Trustee agrees that it will hold (and will
indicate clearly in the books and records that it holds) its "security
entitlement" to the "financial asset" credited to each Security Trustee Account
in trust (i) to the extent of any Segregated Funds in the Lessee Funded Account,
for the benefit of the relevant Lessees, (ii) in the case of any Cash Collateral
Account for any class or subclass of Notes, for the benefit of the Holders of
such Notes and (to the extent so provided, if at all, in the Indenture or in the
Controlling Trustees' Resolution establishing such Credit Facility) each
provider of a Credit Facility the proceeds of which funded such Cash Collateral
Account, (iii) in the case of any Aircraft Purchase Account, for the Secured
Parties and, to the extent set forth in Section 3.05(a) of the Indenture, the
seller or sellers under any applicable Acquisition Agreement, (iv) in the case
of the Bridge Note Account, for the benefit of the Holders of the Bridge Notes
and (v) in the case of any other Security Trustee Account, for the benefit of
the Secured Parties (but subject to the subordination provisions hereof).
SECTION 2.07 THE GRANTOR AND THE ACCOUNTS. So long as any
Secured Obligations remain unpaid:
(a) No Grantor shall establish any Account except to the
extent that it is entitled, pursuant to the Indenture and in compliance with
this Section 2.07, to establish one or more Non-Trustee Accounts. Except to the
extent that such payment is required by the payee thereof (and is permitted by
the Indenture) to be deposited in a Non-Trustee Account, each Grantor shall
instruct each Person obligated at any time to make any payment to such Grantor
for any reason (an "Obligor") to make such payment to the appropriate Rental
Account.
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(b) With respect to each Non-Trustee Account to be established
or established by any Grantor:
(i) Each Grantor shall maintain each Non-Trustee Account (as
an Eligible Account) in its name only with Eligible Institutions ("Non-Trustee
Account Banks") that have entered into letter agreements in substantially the
form of Exhibit C hereto (or made such other arrangements as are acceptable to
the Security Trustee) with such Grantor and the Security Trustee (the "Account
Letters").
(ii) Each Grantor shall immediately instruct each Obligor to
make any payment not required, as provided in Section 2.07(a), to be made to a
Security Trustee Account to a Non-Trustee Account meeting the requirements of
Section 2.07(b)(i).
(iii) Upon any termination of any Account Letter or other
agreement with respect to the maintenance of a Non-Trustee Account by any
Grantor or any Non-Trustee Account Bank, such Grantor shall immediately notify
all Obligors that were making payments to such Non-Trustee Account to make all
future payments to another Non-Trustee Account meeting the requirements of
Section 2.07(b)(i). Subject to the terms of any Lease, upon request by the
Security Trustee, each Grantor shall, and if prohibited from so doing by the
terms of any Lease, shall use its best efforts to seek the consent of the
relevant Lessee to, terminate any or all of its Non-Trustee Accounts, in which
case Section 2.07(a) shall apply.
SECTION 2.08 AS TO THE ASSIGNED DOCUMENTS. (a) Upon the
inclusion of any Assigned Document (other than an Assigned Lease) in the
Collateral, the relevant Grantor will deliver to the Security Trustee a consent,
in substantially the form of Exhibit D and executed by each party to such
Assigned Document (other than any Grantor) or (where the terms of such Assigned
Document expressly provide for a consent to its assignment for security purposes
to substantially the same effect as Exhibit D) will give due notice to each such
other party to such Assigned Document of its assignment pursuant to this
Agreement. Upon the inclusion of any Assigned Lease in the Collateral, the
relevant Grantor will deliver to the Security Trustee (i) in the case of any
Assigned Lease that is an Initial Lease such consents, acknowledgments and/or
notices as are provided for in the related Lease Assignment Documents and (ii)
in the case of any other Assigned Lease such consents, acknowledgments and/or
notices as are necessary or customary under the terms of such Assigned Lease and
under the Applicable Law of the jurisdiction governing such Assigned Lease and
the jurisdiction in which the relevant lessee is principally located in order to
effect and perfect the assignment of, and grant of a lien upon, such Assigned
Lease pursuant to this Agreement and/or to assure the payment of all Rental
Payments under such Assigned Lease to the appropriate Account in accordance with
the terms of the Indenture. Upon the request of any Grantor, the Security
Trustee (solely in its capacity as such) will execute such undertakings of quiet
enjoyment in favor of the lessee under any Assigned Lease as are (in the case of
any Assigned Lease that is an Initial Lease) provided for in the Lease
Assignment Documents or as are (in the case of any other Assigned Lease)
substantially to the same effect as such undertakings.
(b) Upon (i) the inclusion of any Assigned Document in the
Collateral or (ii) the amendment or replacement of any Assigned Document or the
entering into of any new Assigned
14
Document, the relevant Grantor will deliver a copy thereof to the Security
Trustee and will take such other action as may be necessary or desirable to
perfect the lien of this Agreement as to such Assigned Document.
(c) Each Grantor shall, at its expense but subject to Section
2.08(e), Section 3.01(c), the Indenture and (in the case of any Assigned Lease)
the Servicing Agreement:
(i) perform and observe all the terms and provisions of the
Assigned Documents to be performed or observed by it, enforce the Assigned
Documents in accordance with their terms and take all such action to such end as
may be from time to time requested by the Security Trustee; and
(ii) furnish to the Security Trustee promptly upon receipt
copies of all notices, requests and other documents received by such Grantor
under or pursuant to the Assigned Documents, and from time to time, (A) furnish
to the Security Trustee such information and reports regarding the Collateral as
the Security Trustee may reasonably request and (B) upon request of the Security
Trustee make to each other party to any Assigned Document such demands and
requests for information and reports or for action as such Grantor is entitled
to make thereunder.
(d) Each Grantor will, at its expense and upon the request of
any Secured Service Provider, pursue for the benefit of such Secured Service
Provider any claim that such Secured Service Provider has under any Assigned
Document for indemnity or otherwise.
(e) So long as no Default Notice shall have been delivered to
the Issuer and no Acceleration Default shall have occurred and be continuing,
and notwithstanding any provision to the contrary in this Agreement, each
Grantor shall be entitled, to the exclusion of the Security Trustee but subject
always to the terms of the Indenture (x) to exercise and receive, directly or
indirectly through one or more agents, including the Servicer, any of the
claims, rights, powers, privileges, remedies and other benefits under, pursuant
to, with respect to or arising out of the Assigned Documents and (y) to take any
action or to not take any action, directly or indirectly through one or more
agents, including the Servicer, related to the Assigned Documents and the
lessees or counterparties thereunder, including entering into, amending,
supplementing, terminating, performing, enforcing, compelling performance of,
exercising all remedies (whether arising under any Assigned Document or by
statute or at law or in equity or otherwise) under, exercising rights, elections
or options or taking any other action under or in respect of, granting or
withholding notices, waivers, approvals and consents in respect of, receiving
all payments under, dealing with any credit support or collateral security in
respect of, or taking any other action in respect of, the Assigned Documents and
contacting or otherwise having any dealings with any lessee or counterparty
thereunder; provided, however, (i) whether or not a Default Notice has been
delivered or an Acceleration Default has occurred, all amounts payable under
each Assigned Document (including all Rental Payments under each Assigned Lease)
shall be paid directly to the appropriate Account in accordance with the terms
of the Indenture, (ii) so long as any Assigned Lease remains in effect (and
without limiting the authority of the Servicer under the express terms of the
Servicing Agreement), no Grantor will abrogate any right, power or privilege
granted expressly in favor of the Security Trustee or the Trustee under any
Lease
15
Assignment Document and (ii) upon the delivery of a Default Notice to the Issuer
or during the continuance of an Acceleration Default, all such rights of each
Grantor shall cease, and, subject to Section 3.01(c), all such rights shall
become vested in the Security Trustee, which shall thereupon have the sole
right, subject to Section 3.01(c), to exercise or refrain from exercising such
rights.
SECTION 2.09 AS TO SECURITY COLLATERAL, BENEFICIAL INTEREST
COLLATERAL AND INVESTMENT COLLATERAL. (a) All Security Collateral, Beneficial
Interest Collateral and Investment Collateral (the "Relevant Collateral") shall
be delivered to the Security Trustee as follows:
(i) in the case of each Certificated Security or Instrument,
by (A) causing the delivery of such Certificated Security or Instrument to the
Security Trustee in the State of New York, registered in the name of the
Security Trustee or duly endorsed by an appropriate person to the Security
Trustee or in blank and, in each case, held by the Security Trustee in the State
of New York, or (B) if such Certificated Security or Instrument is registered in
the name of any Securities Intermediary on the books of the issuer thereof or on
the books of any securities intermediary of any Securities Intermediary, by
causing such Securities Intermediary to continuously credit by book entry such
Certificated Security or Instrument to a Securities Account maintained by such
Securities Intermediary in the name of the Security Trustee and confirming to
the Security Trustee that it has been so credited;
(ii) in the case of each Uncertificated Security, by (A)
causing such Uncertificated Security to be continuously registered on the books
of the issuer thereof in the name of the Security Trustee or (B) if such
Uncertificated Security is registered in the name of a Securities Intermediary
on the books of the issuer thereof or on the books of any securities
intermediary of a Securities Intermediary, by causing such Securities
Intermediary to continuously credit by book entry such Uncertificated Security
to a Securities Account maintained by such Securities Intermediary in the name
of the Security Trustee and confirming to the Security Trustee that it has been
so credited; and
(iii) in the case of each Government Security registered in
the name of any Securities Intermediary on the books of the Federal Reserve Bank
of New York or on the books of any securities intermediary of such Securities
Intermediary, by causing such Securities Intermediary to continuously credit by
book entry such security to the Securities Account maintained by such Securities
Intermediary in the name of the Security Trustee and confirming to the Security
Trustee that it has been so credited.
(b) Each of the Issuer and the Security Trustee hereby
represents, with respect to the Relevant Collateral, that it has not entered
into, and hereby agrees that it will not enter into, any agreement (i) with any
of the other parties hereto or any Securities Intermediary specifying any
jurisdiction other than the State of New York as any Securities Intermediary's
jurisdiction in connection with any Securities Account with any Securities
Intermediary referred to in Section 2.09(a) for purposes of 31 C.F.R. Section
357.11(b), Section 8-110(e) of the UCC or any similar state or Federal law, or
(ii) with any other person relating to such account pursuant to which it has
agreed that any Securities Intermediary may comply with entitlement orders made
by such
16
person. The Security Trustee represents that it will, by express agreement with
each Securities Intermediary, provide for each item of property constituting
Relevant Collateral held in and credited to the Securities Account, including
cash, to be treated as a "financial asset" within the meaning of Section
8-102(a)(9) of the UCC for the purposes of Article 8 of the UCC.
(c) Without limiting the foregoing, the Issuer and the
Security Trustee agree, and the Security Trustee shall cause each Securities
Intermediary, to take such different or additional action as may be required
based upon any Opinion of Counsel received pursuant to Section 2.18 in order to
maintain the perfection and priority of the security interest of the Security
Trustee in the Relevant Collateral in the event of any change in applicable law
or regulation, including Articles 8 and 9 of the UCC and regulations of the U.S.
Department of the Treasury governing transfers of interests in Government
Securities.
SECTION 2.10 FURTHER ASSURANCES. (a) Each Grantor agrees that
from time to time, at the expense of such Grantor, such Grantor shall promptly
execute and deliver all further instruments and documents, and take all further
action (including under the laws of any foreign jurisdiction), that may be
necessary or desirable, or that the Security Trustee may request, in order to
perfect and protect any pledge, assignment or security interest granted or
purported to be granted hereby or to enable the Security Trustee to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor shall: (i) ▇▇▇▇
conspicuously each of its records pertaining to the Collateral with a legend,
indicating that such Collateral is subject to the security interest granted
hereby; (ii) if any Collateral shall be evidenced by a promissory note or other
instrument or chattel paper, deliver and pledge to the Security Trustee
hereunder such note or instrument or chattel paper duly indorsed and accompanied
by duly executed instruments of transfer or assignment; (iii) execute and file
such financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Security
Trustee may request, in order to perfect and preserve the pledge, assignment and
security interest granted or purported to be granted hereby and (iv) execute,
file, record, or register such additional documents and supplements to this
Agreement, including any further assignments, security agreements, pledges,
grants and transfers, as may be required by or desirable under the laws of any
foreign jurisdiction, or as the Security Trustee may request, to create, attach,
perfect, validate, render enforceable, protect or establish the priority of the
security interest and lien of this Agreement.
(b) Each Grantor hereby authorizes the Security Trustee to
file one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Collateral without the signature of such
Grantor where permitted by law. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.
(c) Each Grantor shall furnish or cause to be furnished to the
Security Trustee from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as the Security Trustee may reasonably request, all in reasonable
detail; provided that, to the extent that (in the case of any Assigned Lease)
such statements, schedules or reports (or the data needed to prepare them) can
be obtained
17
only from the Servicer, no Grantor shall be required to obtain any such
statements, schedules, reports or data beyond those to which it is entitled
under the Servicing Agreement.
(d) Each Grantor shall, immediately upon the organization or
acquisition by such Grantor of any Issuer Subsidiary, cause such Issuer
Subsidiary to enter into a Grantor Supplement.
SECTION 2.11 PLACE OF PERFECTION; RECORDS. Each Grantor shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral at the location therefor
specified in Schedule IV or, upon 30 days' prior written notice to the Security
Trustee, at such other locations in a jurisdiction where all actions required by
Section 2.03(e) shall have been taken with respect to the Collateral. Each
Grantor shall hold and preserve such records and shall permit representatives of
the Security Trustee at any time during normal business hours to inspect and
make abstracts from such records, all at the sole cost and expense of such
Grantor.
SECTION 2.12 VOTING RIGHTS; DIVIDENDS; ETC. (a) So long as no
Default Notice shall have been delivered to the Issuer and no Acceleration
Default shall have occurred and be continuing:
(i) Each of the Grantors shall be entitled to exercise any and
all voting and other consensual rights pertaining to all or any part of the
Security Collateral and Beneficial Interest Collateral pledged by such Grantor
for any purpose not inconsistent with the terms of this Agreement, the charter
documents of such Grantor or the Indenture; provided, however, that such Grantor
shall not exercise or shall refrain from exercising any such right if in its
judgment such action would have a material adverse effect on the value of all or
any part of the Security Collateral or the Beneficial Interest Collateral; and
(ii) The Security Trustee shall execute and deliver (or cause
to be executed and delivered) to such Grantor all such proxies and other
instruments as such Grantor may reasonably request in writing and provide for
the purpose of enabling such Grantor to exercise the voting and other rights
that it is entitled to exercise pursuant to Section 2.12(a)(i).
(b) Whether or not any Default or Event of Default shall have
occurred, any and all distributions, dividends and interest paid in respect of
the Security Collateral and Beneficial Interest Collateral pledged by such
Grantor, including any and all (i) distributions, dividends and interest paid or
payable other than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or in exchange for,
such Security Collateral or Beneficial Interest Collateral; (ii) distributions,
dividends and other distributions paid or payable in cash in respect of such
Security Collateral or Beneficial Interest Collateral in connection with a
partial or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in surplus; and (iii) cash paid, payable or
otherwise distributed in respect of principal of, or in redemption of, or in
exchange for, such Security Collateral or Beneficial Interest Collateral shall
be paid into the Collections Account or shall be forthwith delivered to the
Security Trustee, as applicable and, if received by such Grantor, shall be
received in trust for the benefit of the Security Trustee, be segregated from
the other property or
18
funds of such Grantor and be forthwith paid to the Collections Account or
delivered to the Security Trustee in the same form as so received (with any
necessary indorsement).
(c) Upon the delivery of a Default Notice to the Issuer or any
Issuer Subsidiary or during the continuance of an Acceleration Default, all
rights of each Grantor to exercise or refrain from exercising the voting and
other consensual rights that it would otherwise be entitled to exercise pursuant
to Section 2.12(a)(i) and 2.12(a)(ii) shall cease, and all such rights shall
thereupon become vested in the Security Trustee, which shall thereupon have the
sole right to exercise or refrain from exercising such voting and other
consensual rights.
SECTION 2.13 TRANSFERS AND OTHER ENCUMBRANCES; ADDITIONAL
SHARES OR INTERESTS. (a) No Grantor shall (i) sell, assign (by operation of law
or otherwise) or otherwise dispose of, or grant any option with respect to, any
of the Collateral or (ii) create or suffer to exist any Encumbrance upon or with
respect to any of the Collateral of such Grantor, in the case of clause (i) or
(ii) other than the pledge, assignment and security interest created by this
Agreement and as otherwise provided herein, in the Indenture or in the Servicing
Agreement.
(b) Except as otherwise provided pursuant to Section 5.02(l)
of the Indenture, the Issuer Subsidiaries shall not, and the Issuer shall not
permit the Issuer Subsidiaries to, issue, deliver or sell any shares, interests,
participations or other equivalents. Any beneficial interest or capital stock or
other securities or interests issued in respect of or in substitution for the
Pledged Stock or the Pledged Beneficial Interest shall be issued or delivered
(with any necessary endorsement) to the Security Trustee.
SECTION 2.14 SECURITY TRUSTEE APPOINTED ATTORNEY-IN-FACT. Each
Grantor hereby irrevocably appoints the Security Trustee such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time in the Security
Trustee's discretion, to take any action and to execute any instrument that the
Security Trustee may deem necessary or advisable to accomplish the purposes of
this Agreement, including:
(a) to ask for, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection included in the Collateral;
(c) to file any claims or take any action or institute any
proceedings that the Security Trustee may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Security Trustee with respect to any of the Collateral; and
(d) to execute and file any financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, in order to perfect (except in the case of the
Security Collateral provided pursuant to Section 2.01(i)) and preserve the
pledge, assignment and security interest granted hereby;
19
provided that the Security Trustee's exercise of any such power shall be subject
to Section 2.08(e) and Section 3.01(c).
SECTION 2.15 SECURITY TRUSTEE MAY PERFORM. If any Grantor
fails to perform any agreement contained in this Agreement, the Security Trustee
may (but shall not be obligated to) itself perform, or cause performance of,
such agreement, and the expenses of the Security Trustee incurred in connection
with doing so shall be payable by the Grantors.
SECTION 2.16 COVENANT TO PAY. Each Grantor covenants with the
Security Trustee (for the benefit of the Security Trustee and the Secured
Parties) that it will pay or discharge any monies and liabilities whatsoever
that are now, or at any time hereafter may be, due, owing or payable by such
Grantor in any currency, actually or contingently, solely and/or jointly, and/or
severally with another or others, as principal or surety on any account
whatsoever pursuant to the Service Provider Documents, the Indenture, the Notes,
the Secured Credit Facilities and the Secured Swap Agreements in accordance with
their terms. If no Default Notice has been delivered and no Acceleration Default
is continuing, all such payments shall be made in accordance with Section
3.08(a) of the Indenture; if a Default Notice has been declared or an
Acceleration Default is continuing, all such payments shall be made in
accordance with Section 3.08(b) of the Indenture.
SECTION 2.17 DELIVERY OF COLLATERAL SUPPLEMENTS. Upon (a) the
acquisition by any Grantor of any Relevant Collateral or (b) the establishment
of any Non-Trustee Account, each relevant Grantor shall concurrently execute and
deliver to the Security Trustee a Collateral Supplement duly completed with
respect to such Collateral and shall take such steps with respect to the
perfection of such Collateral as are called for by this Agreement for Collateral
of the same type; provided that the foregoing shall not be construed to impair
or otherwise derogate from any restriction on any such action in any Related
Document and provided, further that the failure of any Grantor to deliver any
Collateral Supplement as to any such Collateral shall not impair the lien of
this Agreement as to such Collateral.
SECTION 2.18 ANNUAL OPINION. Upon each anniversary of the
Initial Closing Date, the Issuer shall cause to be delivered to the Security
Trustee an Opinion of Counsel to the effect that there has not been adopted
during the preceding year any change of New York law that would require the
taking of any action in order to maintain the perfection or priority of the lien
of this Agreement on the Collateral or, if there has been such a change, setting
forth the actions so to be taken. The Issuer agrees to take all such actions as
may be indicated in any such opinion, except that, as provided in Section
2.09(c), the Security Trustee shall take any such actions as may be required
with respect to any Securities Intermediary.
SECTION 2.19 SUPPLEMENTARY SECURITY TRUST AGREEMENT. On the
Initial Closing Date, the Security Trustee shall enter into the Supplementary
Security Trust Agreement.
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ARTICLE III
REMEDIES
SECTION 3.01 REMEDIES. Upon delivery of a Default Notice
pursuant to Section 4.02 of the Indenture or if any Acceleration Default under
the Indenture shall have occurred and be continuing:
(a) The Security Trustee may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein, all
the rights and remedies of a secured party upon default under the UCC (whether
or not the UCC applies to the affected Collateral) and also may (i) require any
Grantor to, and such Grantor hereby agrees that it shall at its expense and upon
request of the Security Trustee forthwith, assemble all or part of the
Collateral as directed by the Security Trustee and make it available to the
Security Trustee at a place to be designated by the Security Trustee that is
reasonably convenient to both parties and (ii) without notice except as
specified below, sell or cause the sale of the Collateral or any part thereof in
one or more parcels at public or private sale, at any of the Security Trustee's
offices or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Security Trustee may deem commercially reasonable. Each
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to such Grantor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. The Security Trustee shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The Security
Trustee may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Security Trustee in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral may, in the discretion of the Security Trustee, be held
by the Security Trustee as collateral for, and/or then or at any time thereafter
applied in whole or in part by the Security Trustee for the benefit of the
Secured Parties against, all or any part of the Secured Obligations in
accordance with Article VII of this Agreement and Articles III and X of the
Indenture. Any surplus of such cash or cash proceeds held by the Security
Trustee and remaining after payment in full of all the Secured Obligations shall
be paid over to the relevant Grantors or whomsoever may be lawfully entitled to
receive such surplus. Any amount received for any sale or sales conducted in
accordance with the terms of this Section 3.01 shall be deemed conclusive and
binding on the Issuer, each Grantor and the Secured Parties.
(c) Notwithstanding any provision in this Agreement to the
contrary, so long as the Servicer is acting in such capacity with respect to any
Lease pursuant to the provisions of the Servicing Agreement, the Security
Trustee as assignee of the Issuer agrees not to take any action constituting
Services (as defined in the Servicing Agreement and is otherwise subject to the
terms of the Servicing Agreement when acting thereunder in place of any Grantor,
except (subject to Section 2.08(e)) to the extent the Issuer would then be
entitled to take such action under the express terms of the Servicing Agreement.
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(d) The Security Trustee may enforce the Supplementary
Security Trust Agreement in accordance with its terms and the Permitted
Beneficial Notes referred to therein in accordance with their respective terms
and the Permitted Beneficial Notes referred to therein in accordance with their
respective terms.
ARTICLE IV
SECURITY INTEREST ABSOLUTE
SECTION 4.01 SECURITY INTEREST ABSOLUTE. A separate action or
actions may be brought and prosecuted against each Grantor to enforce this
Agreement, irrespective of whether any action is brought against any other
Grantor or whether any other Grantor is joined in any such action or actions.
All rights of the Security Trustee and the security interest and lien granted
under, and all obligations of each Grantor under, this Agreement shall be
absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of any Related
Document, Assigned Document, Credit Facility or Swap Agreement or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, the
security for, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from any
Related Document, Assigned Document, Credit Facility or Swap Agreement or any
other agreement or instrument relating thereto;
(c) any taking, exchange, release or non-perfection of the
Collateral or any other collateral or taking, release or amendment or waiver of
or consent to departure from any guaranty, for all or any of the Secured
Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Secured Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Grantors;
(e) any change, restructuring or termination of the corporate
structure or existence of any Grantor; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Grantor or a third-party grantor of
a security interest or a Person deemed to be a surety.
ARTICLE V
THE SECURITY TRUSTEE
AND THE OPERATING BANK
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SECTION 5.01 AUTHORIZATION AND ACTION. (a) Each Secured Party
by its acceptance of the benefits of this Agreement hereby appoints and
authorizes Bankers Trust as the initial Security Trustee to take such action as
trustee on behalf of the Secured Parties and to exercise such powers and
discretion under this Agreement and the other Related Documents as are
specifically delegated to the Security Trustee by the terms of this Agreement
and of the Related Documents, and no implied duties and covenants shall be
deemed to arise against the Security Trustee.
(b) The Security Trustee accepts such appointment and agrees
to perform the same but only upon the terms of this Agreement and agrees to
receive and disburse all moneys received by it in accordance with the terms of
this Agreement. The Security Trustee in its individual capacity shall not be
answerable or accountable under any circumstances, except for its own willful
misconduct or gross negligence (or simple negligence in the handling of funds or
breach of any of its representations or warranties set forth in this Agreement)
and the Security Trustee shall not be liable for any action or inaction of any
Grantor or any other parties to any of the Related Documents.
SECTION 5.02 ABSENCE OF DUTIES. The powers conferred on the
Security Trustee under this Agreement with respect to the Collateral are solely
to protect its interest in this Agreement and shall not impose any duty upon it
to exercise any such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by it under this
Agreement, the Security Trustee shall have no duty as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
any Secured Party has or is deemed to have knowledge of such matters, or as to
the taking of any necessary steps to preserve or perfect rights against any
parties or any other rights pertaining to any Collateral. The Security Trustee
shall have no duty to ascertain or inquire as to the performance or observance
of any covenants, conditions or agreements on the part of any Grantor or Lessee.
SECTION 5.03 REPRESENTATIONS OR WARRANTIES. The Security
Trustee does not make and shall not be deemed to have made any representation or
warranty as to the validity, legality or enforceability of this Agreement, any
other Related Document or any other document or instrument or as to the
correctness of any statement contained in any thereof, or as to the validity or
sufficiency of any of the pledge and security interests granted hereby, except
that the Security Trustee in its individual capacity hereby represents and
warrants (a) that each such specified document to which it is a party has been
or will be duly executed and delivered by one of its officers who is and will be
duly authorized to execute and deliver such document on its behalf, and (b) this
Agreement is the legal, valid and binding obligation of Bankers Trust,
enforceable against Bankers Trust in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally.
SECTION 5.04 RELIANCE; AGENTS; ADVICE OF COUNSEL. (a) The
Security Trustee shall incur no liability to anyone as a result of acting upon
any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties. The
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Security Trustee may accept a copy of a resolution of the board or other
governing body of any party to this Agreement or any Related Document, certified
by the Secretary or an Assistant Secretary thereof or other duly authorized
Person of such party as duly adopted and in full force and effect, as conclusive
evidence that such resolution has been duly adopted by said board or other
governing body and that the same is in full force and effect. As to any fact or
matter the manner of ascertainment of which is not specifically described in
this Agreement, the Security Trustee shall be entitled to receive and may for
all purposes hereof conclusively rely on a certificate, signed by an officer of
any duly authorized Person, as to such fact or matter, and such certificate
shall constitute full protection to the Security Trustee for any action taken or
omitted to be taken by it in good faith in reliance thereon. The Security
Trustee shall furnish to each Service Provider upon request such information and
copies of such documents as the Security Trustee may have and as are necessary
for such Service Provider to perform its duties under the applicable Related
Documents. The Security Trustee shall assume, and shall be fully protected in
assuming, that each other party to this Agreement is authorized by its
constitutional documents to enter into this Agreement and to take all action
permitted to be taken by it pursuant to the provisions of this Agreement, and
shall not inquire into the authorization of such party with respect thereto.
(b) The Security Trustee may execute any of the powers
hereunder or perform any duties under this Agreement either directly or by or
through agents, including financial advisors, or attorneys or a custodian or
nominee, and the Security Trustee shall not be responsible for any misconduct or
negligence on the part of, or for the supervision of, any such agent, attorney,
custodian or nominee appointed with due care by it hereunder.
(c) The Security Trustee may consult with counsel and any
opinion of counsel or any advice of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it under this Agreement in good faith and in accordance with such
advice or opinion of counsel.
(d) The Security Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or in relation
hereto, at the request, order or direction of any of the Secured Parties,
pursuant to the provisions of this Agreement, unless such Secured Party shall
have offered to the Security Trustee reasonable security or indemnity
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby.
(e) The Security Trustee shall not be required to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that the repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it, and none of the provisions contained in this Agreement shall in
any event require the Security Trustee to perform, or be responsible or liable
for the manner of performance of, any obligations of the Issuer or the
Administrative Agent under any of the Related Documents.
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(f) The Security Trustee shall not be liable for any Costs,
Taxes or the selection of Permitted Account Investments or for any investment
losses resulting from Permitted Account Investments.
(g) When the Security Trustee incurs expenses or renders
services in connection with an exercise of remedies specified in Section 3.01 or
during a proceeding described in Section 7.03(a), such expenses (including the
fees and expenses of its counsel) and the compensation for such services are
intended to constitute expenses of administration under any bankruptcy law or
law relating to creditors' rights generally.
(h) The Security Trustee shall not be charged with knowledge
of an Event of Default unless a Responsible Officer of the Security Trustee
obtains actual knowledge of such event or the Security Trustee receives written
notice of such event from any of the Secured Parties or the Administrative
Agent.
(i) The Security Trustee shall have no duty to monitor the
performance of the Issuer, the Administrative Agent or any other party to the
Related Documents, nor shall it have any liability in connection with the
appointment of the Administrative Agent, or the malfeasance or nonfeasance by
such parties. The Security Trustee shall have no liability in connection with
compliance by the Issuer, the Administrative Agent or any lessee under a Lease
with statutory or regulatory requirements related to the Collateral, any
Aircraft or any Lease. The Security Trustee shall not make or be deemed to have
made any representations or warranties with respect to the Collateral, any
Aircraft or any Lease or the validity or sufficiency of any assignment or other
disposition of the Collateral, any Aircraft or any Lease.
SECTION 5.05 NO INDIVIDUAL LIABILITY. Neither Bankers Trust
nor the Security Trustee shall have any individual liability in respect of all
or any part of the Secured Obligations, and all shall look, subject to the lien
and priorities of payment provided herein and in the Indenture, only to the
property of the Grantors for payment or satisfaction of the Secured Obligations.
SECTION 5.06 THE OPERATING BANK. The Operating Bank shall be
entitled to the immunities and privileges of the Security Trustee under Sections
5.03 and 5.04(a), (e) and (g). The Operating Bank agrees to perform its duties
hereunder in accordance with the requirements of, and subject to the limitations
of the duties of, a Securities Intermediary under the UCC.
ARTICLE VI
SUCCESSOR TRUSTEES
AND OPERATING BANK
SECTION 6.01 RESIGNATION AND REMOVAL OF SECURITY TRUSTEE. The
Security Trustee may resign at any time without cause by giving at least 30
days' prior written notice to the Issuer and the Senior Representative. The
Senior Representative may at any time remove the Security Trustee without cause
by an instrument in writing delivered to the Secured Parties and the Security
Trustee. No termination of this Agreement by the Security Trustee or the Senior
Representative pursuant to this Section 6.01 shall become effective prior to the
date of
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appointment by the Senior Representative of a successor Security Trustee and the
acceptance of such appointment by such successor Security Trustee.
SECTION 6.02 APPOINTMENT OF SUCCESSOR. (a) In the case of the
resignation or removal of the Security Trustee, the Senior Representative, on
behalf of the Secured Parties, shall promptly appoint a successor Security
Trustee. If a successor Security Trustee shall not have been appointed and
accepted its appointment hereunder within 60 days after the Security Trustee
gives notice of resignation as to such class or subclass, the retiring Security
Trustee or the Secured Parties may petition any court of competent jurisdiction
for the appointment of a successor Security Trustee. Any successor Security
Trustee so appointed by such court shall immediately and without further act be
superseded by any successor Security Trustee appointed as provided in the first
sentence of this paragraph within one year from the date of the appointment by
such court.
(b) Any successor Security Trustee shall execute and deliver
to the Secured Parties an instrument accepting such appointment. Upon the
acceptance of any appointment as Security Trustee hereunder, a successor
Security Trustee, upon the execution and filing or recording of such financing
statements, or amendments thereto, and such amendments or supplements to this
Agreement, and such other instruments or notices, as may be necessary or
desirable, or as the Senior Trustee may request, in order to continue the
perfection (if any) of the liens granted or purported to be granted hereby,
shall succeed to and become vested with all the rights, powers, discretion,
privileges and duties of the retiring Security Trustee, and the retiring
Security Trustee shall be discharged from its duties and obligations under this
Agreement and the other Related Documents. The retiring Security Trustee shall
take all steps necessary to transfer all Collateral in its possession and all
its control over the Collateral to the successor Security Trustee. After any
retiring Security Trustee's resignation or removal hereunder as to any actions
taken or omitted to be taken by it while it was Security Trustee, the provisions
of all of Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Security Trustee under this Agreement.
(c) Each Security Trustee shall be an Eligible Institution, if
there be such an institution willing, able and legally qualified to perform the
duties of a Security Trustee hereunder.
(d) Any corporation into which the Security Trustee may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Security
Trustee shall be a party, or any corporation to which substantially all the
business of the Security Trustee may be transferred, shall be the Security
Trustee under this Agreement without further act.
SECTION 6.03 THE OPERATING BANK. If at any time the Person
acting as the Operating Bank is no longer the Security Trustee, the Security
Trustee shall so notify the Administrative Agent and the Issuer, and the
Security Trustee shall cause the Administrative Agent to establish and maintain
the Security Trustee Accounts with the Person then acting as the Security
Trustee as provided in the Administrative Agency Agreement and the Person then
26
acting as the Security Trustee shall assume the obligations of the Operating
Bank under this Agreement.
ARTICLE VII
AGREEMENT BETWEEN SECURED PARTIES
SECTION 7.01 SUBORDINATION AND PRIORITY. (a) Notwithstanding
the date, manner or order of attachment or perfection (if any) or the
description of any collateral or security interests, liens, claims or
encumbrances covered or granted by Section 2.01, each Subordinated
Representative agrees that the respective rights and interest of the
Subordinated Creditors in the Collateral are and shall be subordinate, to the
extent and in the manner hereinafter and in Articles III and X of the Indenture
set forth, to all rights and interest of the Senior Creditors in the Collateral,
and that the Senior Creditors shall have at all times interests prior and senior
to that of the Subordinated Creditors in all Collateral until the payment in
full of all Senior Obligations owed to such Senior Creditors.
(b) For the purposes of this Agreement, no Senior Obligations
shall be deemed to have been paid in full until and unless the Senior
Representative in respect of such Senior Obligations shall have received payment
in full in cash of such Senior Obligations.
(c) Notwithstanding anything contained herein to the contrary,
payments from any property (or the proceeds thereof) deposited in the
Defeasance/Redemption Account or the Refinancing Account pursuant to Section
3.10(a) or Article XI of the Indenture and payments covered by Section 3.12 and
3.13 of the Indenture shall not be subordinated to the prior payment of any
Senior Creditors in respect of any Senior Obligations or subject to any other
restrictions set forth in this Article VII and Article X of the Indenture, and
none of the Holders shall be obligated to pay over any payments from any such
property to the Security Trustee or any other creditor of any of the Grantors.
SECTION 7.02 EXERCISE OF REMEDIES. (a) Until the date on which
all the Senior Obligations shall have been paid in full, the Senior
Representative, in its sole discretion and to the exclusion of the Subordinated
Representatives, shall have, whether or not any default under the Indenture
shall have occurred and be continuing and both before and after the commencement
of any proceeding referred to in Section 7.03(a), the sole and exclusive right
(as between the Senior Representative, on the one hand, and the Subordinated
Representatives, on the other) to direct the Security Trustee to take all action
with respect to the Collateral, including the right to exercise or direct voting
or other consensual rights, to foreclose or forebear from foreclosure in respect
of the Collateral and to accept the Collateral in full or partial satisfaction
of any Senior Obligation, all in accordance with the terms of this Agreement.
The Subordinated Representatives agree that, until the Senior Obligations have
been paid in full, the only right of the Subordinated Creditors under this
Agreement is for the Subordinated Obligations to be secured by the Collateral
for the period and to the extent provided for herein and to receive a share of
the proceeds of the Collateral, if any.
(b) The Subordinated Representatives agree that, so long as
any of the Senior Obligations shall remain unpaid, they and the Subordinated
Creditors will not commence, or join
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with any creditor other than the Security Trustee and the Senior Creditors in
commencing, any enforcement, collection, execution, levy or foreclosure
proceeding with respect to the Collateral or proceeds of Collateral. Upon
request by the Senior Representative, the Subordinated Representatives and the
Subordinated Creditors will, at the expense of the Issuer, join in enforcement,
collection, execution, levy or foreclosure proceedings and otherwise cooperate
fully in the maintenance of such proceedings by the Security Trustee, including
by executing and delivering all such consents, pleadings, releases and other
documents and instruments as the Security Trustee may reasonably request in
connection therewith, it being understood that the conduct of such proceedings
shall at all times be under the exclusive control of the Security Trustee.
(c) The Subordinated Representatives agree, upon written
request by the Senior Representative, to release the liens and security
interests in favor of the Subordinated Creditors in any Collateral and to
execute and deliver all such directions, consents, pleadings, releases and other
documents and instruments as the Senior Representative may reasonably request in
connection therewith, upon any sale, lease, transfer or other disposition of
such Collateral or part thereof in accordance with, or for application of
proceeds pursuant to, Section 7.01(a).
(d) The Subordinated Representatives agree that neither they
nor any Subordinated Creditors will contest, or bring (or join in) any action or
proceeding for the purpose of contesting, the validity, perfection or priority
of, or seeking to avoid, the rights of the Senior Representative or the Senior
Creditors in or with respect to the Collateral.
SECTION 7.03 FURTHER AGREEMENTS OF SUBORDINATION. The
Subordinated Representatives agree as follows:
(a) Upon any distribution of all or any of the Collateral or
proceeds of Collateral to creditors of any Grantor upon the dissolution,
winding-up, liquidation, arrangement, reorganization, adjustment, protection,
relief, or composition of such Grantor or its debts, whether in any bankruptcy,
insolvency, arrangement, reorganization, receivership, relief or similar
proceedings or upon an assignment for the benefit of creditors or any other
marshalling of the assets and liabilities of such Grantor, or otherwise, any
distribution of any kind of Collateral or proceeds of Collateral that otherwise
would be deliverable upon or with respect to the Subordinated Obligations shall
be delivered directly to the Security Trustee for application (in the case of
cash) to or as collateral (in the case of non-cash property or securities) for
the payment or prepayment of the Senior Obligations until the Senior Obligations
shall have been paid in full.
(b) If any proceeding referred to in Section 7.03(a) is
commenced by or against any Grantor,
(i) the Security Trustee is hereby irrevocably authorized and
empowered (in its own name or in the name of the Secured Parties or otherwise),
but shall have no obligation, to demand, ▇▇▇ for, collect and receive every
distribution referred to in subsection (a) above and give acquittance therefor
and to file claims and proofs of claim and take such other action (including
enforcing this Agreement) as it may deem necessary or advisable, or as the
Senior
28
Representative may direct, for the exercise or enforcement of any of the rights
or interests of the Senior Creditors hereunder; and
(ii) the Subordinated Representatives shall duly and promptly
take such action, at the expense of the Issuer, as the Senior Representative may
request (A) to collect Collateral and proceeds of Collateral for the account of
the Senior Creditors and to file appropriate claims or proofs of claim in
respect of Collateral and proceeds of Collateral, (B) to execute and deliver to
the Security Trustee such powers of attorney, assignments, or other instruments
as the Senior Representative may request in order to enable it to enforce any
and all claims with respect to the Collateral and proceeds of Collateral and (C)
to collect and receive any and all payments or distributions that may be payable
or deliverable upon or with respect to the Collateral or proceeds of Collateral.
Without limiting the generality of any of the foregoing, if any proceeding
referred to in Section 7.03(a) is commenced by or against any Grantor, the
Subordinated Creditors shall, upon written demand from the Senior Representative
or the Security Trustee, file such claims in such proceeding as the Senior
Representative or the Security Trustee, as applicable, shall request in such
written demand or any subsequent written demand provided in connection
therewith; provided however, that should one or more Subordinated Creditors fail
to comply fully with any such demand within thirty (30) days of receipt by such
Subordinated Creditor of the relevant demand, such Subordinated Creditor (by
holding its respective Notes) shall be deemed to have irrevocably appointed the
Security Trustee its attorney-in-fact to file and prosecute any such claim and
to dispose of any proceeds of such filing or prosecution in accordance with the
terms hereof and of the other Related Documents.
(c) All payments or distributions upon or with respect to the
Collateral or proceeds of Collateral that are received by the Subordinated
Representatives or the Subordinated Creditors contrary to the provisions of this
Agreement shall be received for the benefit of the Senior Creditors, shall be
segregated from other funds and property held by the Subordinated
Representatives or the Subordinated Creditors and shall be forthwith paid over
to the Security Trustee in the same form as so received (with any necessary
indorsement) to be applied (in the case of cash) to or held as collateral (in
the case of non-cash property or securities) for the payment or prepayment of
the Senior Obligations in accordance with the terms thereof.
(d) The Senior Representative is hereby authorized to demand
specific performance of this Agreement at any time when any of the Subordinated
Representatives or the Subordinated Creditors shall have failed to comply with
any of the provisions of this Agreement applicable to them. The Subordinated
Representatives hereby irrevocably waive, on their own behalf and on behalf of
the Subordinated Creditors, any defense based on the adequacy of a remedy at law
that might be asserted as a bar to such remedy of specific performance.
SECTION 7.04 RIGHTS OF SUBROGATION. The Subordinated
Representatives agree that no payment or distributions to the Senior
Representative or the Senior Creditors pursuant to the provisions of this
Agreement shall entitle any Subordinated Representative or any Subordinated
Creditor to exercise any rights of subrogation in respect thereof until all
Obligations constituting Senior Obligations with respect to such Person shall
have been paid in full.
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SECTION 7.05 FURTHER ASSURANCES OF SUBORDINATED
REPRESENTATIVES. Each of the Subordinated Representatives shall, at the expense
of the Issuer, at any time and from time to time promptly execute and deliver
all further instruments and documents, and take all further action, that the
Senior Representative or the Security Trustee may reasonably request, in order
to protect any right or interest granted or purported to be granted hereby or to
enable the Senior Representative and the Security Trustee to exercise and
enforce their rights and remedies hereunder.
SECTION 7.06 NO CHANGE IN RIGHTS IN COLLATERAL. The
Subordinated Representatives and the Subordinated Creditors will not sell,
assign, pledge, encumber or otherwise dispose of any of their rights in the
Collateral as such or in proceeds of Collateral as such, without the prior
written consent of the Senior Representative. Nothing in this Section 7.06 shall
limit the right of any Subordinated Creditor to transfer any Subordinated
Obligation including any Note.
SECTION 7.07 WAIVER OF MARSHALLING AND SIMILAR RIGHTS. Each of
the Subordinated Representatives waives, on its own behalf and on behalf of the
Subordinated Creditors, to the fullest extent permitted by applicable law, any
requirement regarding, and agrees not to demand, request, plead or otherwise
claim the benefit of, any marshalling, appraisement, valuation or other similar
right with respect to the Collateral that may otherwise be available under
applicable law or any other similar rights a junior creditor or junior secured
creditor may have under applicable law.
SECTION 7.08 ENFORCEMENT. Each of the Subordinated
Representatives agrees that this Agreement shall be enforceable against it and
the Subordinated Creditors under all circumstances, including in any proceeding
referred to in Section 7.03(a).
SECTION 7.09 OBLIGATIONS NOT AFFECTED. All rights and
interests of the Senior Representative, the Senior Creditors and the Security
Trustee hereunder, and all agreements and obligations of the Subordinated
Representatives under this Agreement, shall remain in full force and effect
irrespective of:
(a) any lack of validity or enforceability of this Agreement,
any Assigned Document, Note, Secured Credit Facility or Secured Swap Agreement
or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, the
security for, or in any other term of, all or any of the Senior Obligations, or
any other amendment or waiver of or any consent to any departure from this
Agreement, any Service Provider Document, Note, Secured Credit Facility or
Secured Swap Agreement or any other agreement or instrument relating thereto;
(c) any taking, exchange, release or non-perfection of the
Collateral or any other collateral, or any release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the Senior
Obligations; or
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(d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Subordinated Representatives, the
Subordinated Creditors, a subordinated creditor or a secured subordinated
creditor or a Person deemed to be a surety.
This Agreement shall continue to be effective or shall be revived or reinstated,
as the case may be, if at any time any payment of any of the Senior Obligations
is rescinded or must otherwise be returned by any Senior Creditor upon the
insolvency, bankruptcy or reorganization of any Grantor, or otherwise, all as
though such payment had not been made.
SECTION 7.10 WAIVER. The Subordinated Representatives hereby
waive, on their own behalf and on behalf of the Subordinated Creditors, to the
fullest extent permitted by law, any right under Section 9-504(1)(c) of the N.Y.
Uniform Commercial Code to application of the proceeds of disposition (other
than as contemplated by this Agreement), any right to notice and objection under
Section 9-505(2) of the N.Y. Uniform Commercial Code and promptness, diligence,
notice of acceptance and any other notice with respect to any of the Senior
Obligations and this Agreement and any requirement that the Security Trustee
protect, secure, perfect or insure any security interest or lien hereunder or
otherwise or any Collateral or any other property subject thereto or exhaust any
right or take any action against the Grantors or any other person or entity or
any Collateral or any other collateral.
SECTION 7.11 SENIOR OBLIGATIONS AND SUBORDINATED OBLIGATIONS
UNIMPAIRED. Nothing in this Agreement shall impair (a) as between the Issuer and
any Secured Party, the obligations of the Issuer to such Secured Party,
including the Senior Obligations and the Subordinated Obligations or (b) as
between the Senior Creditors and the Subordinated Creditors, the provisions
relating to the priority of payments in the Indenture; provided that it is
understood that the enforcement of rights and remedies against the Collateral
shall be subject to the terms of this Agreement.
SECTION 7.12 UPON DISCHARGE OF OBLIGATIONS. Upon the payment
in full of the Senior Obligations in respect of which it is acting as Senior
Representative, the Security Trustee shall, without any further action on its
part, be relieved of any obligation under this Agreement with respect to such
discharged Senior Obligations and this Agreement shall continue in effect as an
agreement among the remaining Secured Parties.
SECTION 7.13 AGREEMENT OF THE SECURED PARTIES. Prior to the
date which is one year and one day after the payment in full of the Notes, each
Secured Party agrees by signing the Secured Party Supplement that in respect of
amounts due to any Secured Party hereunder not to directly or indirectly take
any action against the Issuer or any Issuer Subsidiary, seeking to adjudicate
any of them as bankrupt or insolvent; seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of
its debt under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors; or seeking the entry of an order for relief of the
appointment of a receiver, trustee or other similar official for either all or
any substantial part of its property.
ARTICLE VIII
INDEMNITY AND EXPENSES
31
SECTION 8.01 INDEMNITY. (a) The Issuer shall indemnify the
Security Trustee (and its officers, directors, employees and agents) for, and
hold it harmless against, any loss, liability or expense (including reasonable
legal fees and expenses) incurred by it without negligence or bad faith on its
part in connection with the acceptance or administration of this Agreement and
its duties hereunder (including, when the Security Trustee is performing the
same in place of the Administrative Agent, the performance of the Bank Account
Managerial Services), including the costs and expenses of defending itself
against any claim or liability and of complying with any process served upon it
or any of its officers in connection with the exercise or performance of any of
its powers or duties hereunder and hold it harmless against, any loss, liability
or reasonable expense incurred without negligence or bad faith on its part. The
Security Trustee shall notify the Issuer promptly of any claim asserted against
the Security Trustee for which it may seek indemnity; provided, however, that
failure to provide such notice shall not invalidate any right to indemnity
hereunder. The Issuer shall defend the claim and the Security Trustee shall
cooperate in the defense. The Security Trustee may have separate counsel and the
Issuer shall pay reasonable fees and expenses of such counsel. The Issuer need
not pay for any settlements made without its consent; provided that such consent
shall not be unreasonably withheld or delayed. The Issuer need not reimburse any
expense or indemnity against any loss or liability incurred by the Security
Trustee through negligence or bad faith. For the avoidance of doubt, in the
event the Security Trustee is providing any of the Bank Account Managerial
Services in place of the Administrative Agent, each of its expenses related
thereto shall be deemed to be an "Expense" for purposes of the Related
Documents.
(b) The Issuer shall upon demand pay to the Security Trustee
the amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that the Security Trustee
may incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from or
other realization upon, any of the Collateral, (iii) the exercise or enforcement
of any of the rights of the Security Trustee or any other Secured Party against
any Grantor hereunder, (iv) the failure by any Grantor to perform or observe any
of the provisions hereof, or (v) without limiting any of the foregoing, the
Security Trustee's performance of the Bank Account Managerial Services in place
of the Administrative Agent.
(c) The Issuer shall indemnify the Operating Bank (and its
officers, directors, employees and agents) for, and hold it harmless against,
any loss, liability or expense (including reasonable legal fees and expenses)
incurred by it without negligence (determined with reference to reasonable
commercial standards applicable to Securities Intermediaries) or bad faith on
its part in connection with its duties hereunder, including the costs and
expenses of defending itself against any claim or liability and of complying
with any process served upon it or any of its officers in connection with the
exercise or performance of any of its powers or duties hereunder and hold it
harmless against, any loss, liability or reasonable expense incurred without
negligence (determined with reference to reasonable commercial standards
applicable to Securities Intermediaries) or bad faith on its part. The Operating
Bank shall notify the Issuer promptly of any claim asserted against the
Operating Bank for which it may seek indemnity; provided, however, that failure
to provide such notice shall not invalidate any right to indemnity hereunder.
The Issuer shall defend the claim and the Operating Bank shall cooperate in the
defense. The Operating Bank may have separate counsel and the Issuer shall pay
reasonable fees
32
and expenses of such counsel. The Issuer need not pay for any settlements made
without its consent; provided that such consent shall not be unreasonably
withheld or delayed. The Issuer need not reimburse any expense or indemnity
against any loss or liability incurred by the Operating Bank through negligence
(as so determined) or bad faith.
SECTION 8.02 HOLDERS' INDEMNITY. The Security Trustee shall be
entitled to be indemnified (subject to the limitations and requirements
described in Section 8.01 MUTATIS MUTANDIS) by the Senior Creditors to the sole
satisfaction of the Security Trustee before proceeding to exercise any right or
power under this Agreement at the request or direction of the Senior
Representative.
The provisions of Section 8.01 and this Section 8.02 shall
survive the termination of this Agreement or the earlier resignation or removal
of the Security Trustee.
SECTION 8.03 NO COMPENSATION FROM SECURED PARTIES. Each of the
Security Trustee and the Operating Bank agrees that it shall have no right
against the Secured Parties for any fee as compensation for its services in such
capacity.
SECTION 8.04 SECURITY TRUSTEE FEES. In consideration of the
Security Trustee's performance of the services provided for under this
Agreement, the Issuer shall pay to the Security Trustee an annual fee set forth
under a separate agreement between the Issuer and the Security Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 AMENDMENTS; WAIVERS; ETC. (a) No amendment or
waiver of any provision of this Agreement, and no consent to any departure by
any party from the provisions of this Agreement, shall in any event be effective
unless the same shall be in writing and signed by each Service Provider, the
Senior Representative and, in the event the Subordinate Creditors are adversely
affected thereby, the Subordinated Representative, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No failure on the part of the Security Trustee to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. In executing and delivering any amendment or modification to this
Agreement, the Security Trustee shall be entitled to (i) an Opinion of Counsel
stating that such amendment is authorized and permitted pursuant to the
Indenture and this Agreement and complies with the terms thereof and hereof and
(ii) an Officer's Certificate stating that all conditions precedent to the
execution, delivery and performance of such amendment have been satisfied in
full. The Security Trustee may, but shall have no obligation to, execute and
deliver any amendment or modification which would affect its duties, powers,
rights, immunities or indemnities hereunder.
(b) Upon the execution and delivery by any Person of a Grantor
Supplement, (i) such Person shall be referred to as an "Additional Grantor" and
shall be and become a Grantor hereunder, and each reference in this Agreement to
"Grantor" shall also mean and be a reference to such Additional Grantor, (ii)
Annexes I, II, III and IV attached to each Grantor Supplement
33
shall be incorporated into, become a part of and supplement Schedules I, II, III
and IV, respectively, and the Security Trustee may attach such Annexes as
supplements to such Schedules; and each reference to such Schedules shall be a
reference to such Schedules as so supplemented and (iii) such Additional Grantor
shall be a Grantor for all purposes under this Agreement and shall be bound by
the obligations of the Grantors hereunder.
(c) Upon the execution and delivery by a Grantor of a
Collateral Supplement, Annexes I and II to each Collateral Supplement shall be
incorporated into, become a part of and supplement Schedules I and II,
respectively, and the Security Trustee may attach such Annexes as supplements to
such Schedules; and each reference to such Schedules shall be a reference to
such Schedules as so supplemented.
SECTION 9.02 ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing (including telecopier)
and mailed, telecopied or delivered to the intended recipient at its address
specified, as follows:
For each Grantor:
Lease Investment Flight Trust
c/o Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
For the Security Trustee:
Bankers Trust Company
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency
Services, Structured Finance Team
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
For the Operating Bank:
Bankers Trust Company
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency
Services, Structured Finance Team
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
34
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this Section 9.02. Each such notice shall be effective (a) upon receipt when
sent through the mails, registered or certified mail, return receipt requested,
postage prepaid, with such receipt to be effective the date of delivery
indicated on the return receipt, or (b) one Business Day after delivery to an
overnight courier, or (c) on the date personally delivered to an authorized
officer of the party to which sent, or (d) on the date transmitted by legible
telecopier transmission with a confirmation of receipt.
SECTION 9.03 NO WAIVER; REMEDIES. No failure on the part of
the Security Trustee to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION 9.04 SEVERABILITY. If any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired.
SECTION 9.05 CONTINUING SECURITY INTEREST; ASSIGNMENTS.
Subject to Section 9.06(c), this Agreement shall create a continuing security
interest in the Collateral and shall (a) remain in full force and effect until
the earlier of the payment in full in cash of the Secured Obligations and the
circumstances specified in Section 9.06(c), (b) be binding upon each Grantor,
its successors and assigns and (c) inure, together with the rights and remedies
of the Security Trustee hereunder, to the benefit of the Secured Parties and
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing subsection (c), any Secured Party may assign or
otherwise transfer all or any portion of its rights and obligations under any
Related Document to which it is a party in accordance with the terms thereof to
any other Person or entity, and such other Person or entity shall thereupon
become vested with all the rights in respect thereof granted to such Secured
Party herein or otherwise.
SECTION 9.06 RELEASE AND TERMINATION. (a) Upon any sale,
lease, transfer or other disposition of any item of Collateral in accordance
with the terms of the Indenture, the Security Trustee will, at the Issuer's
expense, execute and deliver to the Grantor of such item of Collateral such
documents as such Grantor shall reasonably request and provide to the Security
Trustee to evidence the release of such item of Collateral from the assignment
and security interest granted hereby.
(b) Except as otherwise provided in Section 9.06(c), upon the
payment in full in cash of the Secured Obligations, the pledge, assignment and
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the Grantors. Upon any such termination, the Security
Trustee will, at the Issuer's expense, execute and deliver to each relevant
Grantor such documents as such Grantor shall prepare and reasonably request to
evidence such termination.
(c) If at any time all Notes have been defeased pursuant to
Article XI of the Indenture, the pledge, assignment and security interest in the
Pledged Stock shall be released and
35
the certificates or other instruments representing or evidencing any of the
Collateral held by the Security Trustee shall be returned to the Issuer and the
Security Trustee shall, at the expense of the Issuer, execute and deliver to the
Issuer such documents as the Issuer shall prepare and reasonably request to
evidence such termination.
SECTION 9.07 CURRENCY CONVERSION. If any amount is received or
recovered by the Security Trustee in a currency (the "Received Currency") other
than the currency in which such amount was expressed to be payable (the "Agreed
Currency"), then the amount in the Received Currency actually received or
recovered by the Security Trustee, to the extent permitted by law, shall only
constitute a discharge of the relevant Grantor to the extent of the amount of
the Agreed Currency which the Security Trustee was or would have been able in
accordance with its or his normal procedures to purchase on the date of actual
receipt or recovery (or, if that is not practicable, on the next date on which
it is so practicable), and, if the amount of the Agreed Currency which the
Security Trustee is or would have been so able to purchase is less than the
amount of the Agreed Currency which was originally payable by the relevant
Grantor, such Grantor shall pay to the Security Trustee such amount as it shall
determine to be necessary to indemnify the Security Trustee against any Loss
sustained by it as a result (including the cost of making any such purchase and
any premiums, commissions or other charges paid or incurred in connection
therewith) and so that, to the extent permitted by law, (i) such indemnity shall
constitute a separate and independent obligation of each Grantor distinct from
its obligation to discharge the amount which was originally payable by such
Grantor and (ii) shall give rise to a separate and independent cause of action
and apply irrespective of any indulgence granted by the Security Trustee and
continue in full force and effect notwithstanding any judgment, order, claim or
proof for a liquidated amount in respect of the amount originally payable by any
Grantor or any judgment or order and no proof or evidence of any actual loss
shall be required.
SECTION 9.08 GOVERNING LAW. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 9.09 JURISDICTION. (a) Each of the parties hereto
irrevocably agrees that the courts of New York shall have jurisdiction to hear
and determine any suit, action or proceeding, and to settle any disputes, which
may arise out of or in connection with this Agreement and, for such purposes,
irrevocably submits to the jurisdiction of such courts. Each of the parties
hereto irrevocably waives any objection which it might now or hereafter have to
the federal U.S. or New York State courts located in New York, New York being
nominated as the forum to hear and determine any suit, action or proceeding, and
to settle any disputes, which may arise out of or in connection with this
Agreement and agrees not to claim that any such court is not a convenient or
appropriate forum. Each of the parties hereby appoints CT Corporation System,
with an office on the date hereof at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇, as its agent to receive on its behalf and on behalf of its property,
service of copies of the summons and any other process that may be served in any
such action or proceeding.
(b) Each of the parties hereto hereby consents generally in
respect of any legal action or proceeding arising out of or in connection with
this Agreement to the giving of any
36
relief or the issue of any process in connection with such action or proceeding,
including the making, enforcement or execution against any property whatsoever
(irrespective of its use or intended use) of any order or judgment which may be
made or given in such action or proceeding.
SECTION 9.10 COUNTERPARTS. This Agreement may be executed in
two or more counterparts by the parties hereto, and each such counterpart shall
be considered an original and all such counterparts shall constitute one and the
same instrument.
SECTION 9.11 TABLE OF CONTENTS, HEADINGS, ETC. The Table of
Contents and headings of the Articles and Sections of this Agreement have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms and provisions
hereof.
37
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by its representative or officer
thereunto duly authorized as of the date first above written.
LEASE INVESTMENT FLIGHT TRUST
By Wilmington Trust Company, not in its
individual capacity but solely as the
Owner Trustee
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Financial Services Officer
LIFT TRUST-SUB 1
By Wilmington Trust Company, not in its
individual capacity but solely as the owner
trustee
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Financial Services Officer
BANKERS TRUST COMPANY,
as the Operating Bank and the Security
Trustee
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
38
LIFT CEA CHINA, LLC
By: LIFT Trust-Sub 1, as member
By: Wilmington Trust Company, not in its
individual capacity but solely as the
owner trustee
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Administrative Account Manager
LIFT CANADA, LLC
By: LIFT Trust-Sub 1, as member
By: Wilmington Trust Company, not in its
individual capacity but solely as the
owner trustee
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Administrative Account Manager
LIFT GF UK, LLC
By: LIFT Trust-Sub 1, as member
By: Wilmington Trust Company, not in its
individual capacity but solely as the
owner trustee
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Administrative Account Manager
LIFT ARIZONA, LLC
By: LIFT Trust-Sub 1, as member
By: Wilmington Trust Company, not in its
individual capacity but solely as the
owner trustee
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Administrative Account Manager
LIFT MISSOURI, LLC
By: LIFT Trust-Sub 1, as member
By: Wilmington Trust Company, not in its
individual capacity but solely as the
owner trustee
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Administrative Account Manager
LIFT A2K UK, LLC
By: LIFT Trust-Sub 1, as member
By: Wilmington Trust Company, not in its
individual capacity but solely as the
owner trustee
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Administrative Account Manager
MD82 AIRCRAFT LEASING I CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
MD82 AIRCRAFT LEASING II CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
MD82 AIRCRAFT LEASING III CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
A320 AIRCRAFT LEASING IX CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
A320 AIRCRAFT LEASING X CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
SCHEDULE I
SECURITY TRUST AGREEMENT
PLEDGED STOCK
Certificate Number of Percentage of
Stock Issuer Par Value No(s). Shares Outstanding Shares
------------ --------- ------ ------ ------------------
MD82 Aircraft Leasing I Corporation None 1 1500 100%
MD82 Aircraft Leasing II Corporation None 1 1500 100%
MD82 Aircraft Leasing III Corporation None 1 1500 100%
A320 Aircraft Leasing IX Corporation None 1 1500 100%
A320 Aircraft Leasing X Corporation None 1 1500 100%
PLEDGED BENEFICIAL INTERESTS
Percentage of
Issuer Certificate No. Beneficial Interest
------ --------------- -------------------
LIFT Trust-Sub 1 1 100%
Lease Investment Flight Trust 1 100%
LIFT CEA China, LLC 1 100%
LIFT Canada, LLC 1 100%
LIFT GF UK, LLC 1 100%
LIFT Arizona, LLC 1 100%
LIFT Missouri, LLC 1 100%
LIFT A2K UK, LLC 1 100%
PLEDGED DEBT
Debt Issuer Description of Debt Date
----------- ------------------- ----
None
SCHEDULE II
SECURITY TRUST AGREEMENT
NON-TRUSTEE ACCOUNT INFORMATION
NAME AND ADDRESS NAME AND ADDRESS OF NON-TRUSTEE
OF BANK ACCOUNT HOLDER ACCOUNT NUMBER
------- -------------- --------------
None
SCHEDULE III
SECURITY TRUST AGREEMENT
TRADE NAMES
None
SCHEDULE IV
SECURITY TRUST AGREEMENT
Chief Executive Office, Chief Place of
Name of Grantor Business and Registered Office
--------------- ------------------------------
Lease Investment Flight Trust c/o Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
LIFT Trust-Sub 1 c/o Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
LIFT CEA CHINA, LLC c/o Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
LIFT CANADA, LLC c/o Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
LIFT GF UK, LLC c/o Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
LIFT ARIZONA, LLC c/o Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
LIFT MISSOURI, LLC c/o Wilmington Trust Company
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Attention: Corporate Trust Administration
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LIFT A2K UK, LLC c/o Wilmington Trust Company
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Attention: Corporate Trust Administration
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EXHIBIT A
SECURITY TRUST AGREEMENT
FORM OF SECURED PARTY SUPPLEMENT
Bankers Trust Company, as the Security Trustee
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ [Date]
Attention: Corporate Trust and Agency
Services-Structured Finance Team
Re: Security Trust Agreement, dated as of June 26, 2001
Reference is made to the Security Trust Agreement, dated as of June 26, 2001
(the "Security Trust Agreement"), between
LEASE INVESTMENT FLIGHT TRUST, a
Delaware statutory business trust organized under the laws of the State of
Delaware (the "Note Issuer"), LIFT TRUST-SUB 1, a Delaware statutory business
trust organized under the laws of the State of Delaware (the "Bridge Note
Issuer"), the ISSUER SUBSIDIARIES listed on the signature pages of, or who
otherwise become grantors under, the Security Trust Agreement (together with the
Issuer, the "Grantors") and BANKERS TRUST COMPANY, a New York banking
corporation ("Bankers Trust"). Capitalized terms used herein and not otherwise
defined herein have the meanings assigned to them in the Security Trust
Agreement.
The undersigned hereby:
1. confirms that attached hereto is a true and complete copy
of the _________ Agreement, between the Issuer and the undersigned, dated as of
____ [(the "Credit Facility Agreement"), which Credit Facility Agreement
constitutes a [Primary] [Secondary] [Tertiary] [Subordinated] Credit Facility
under the Indenture] [a "Service Provider Document"][a "Swap Agreement"] [FOR
SWAPS ENTITLED TO SENIOR SWAP PAYMENTS ADD: payments under which constitute
Senior Swap Payments under and as defined in the Indenture, entitled to the
priority of payments specified in Section 3.08(a)(ii) and 3.08(b)(iii) of the
Indenture];
2. confirms that it has received a copy of the Security Trust
Agreement and such other documents and information as it deems appropriate to
make a decision to enter into this Secured Party Supplement;
3. confirms that, upon delivery of this Secured Party
Supplement, each reference in the Security Trust Agreement to a "Secured Party"
shall also mean and be a reference to the
undersigned and the undersigned accepts the benefits of the Security Trust
Agreement subject to the terms and provisions thereof (including Article VII
thereof);
4. in its capacity as a Secured Party, appoints and authorizes
the Security Trustee to take any and all actions in respect of the Collateral as
are delegated to the Security Trustee by the terms of the Security Trust
Agreement, together with any such powers and discretion as are reasonably
incidental thereto;
5. in its capacity as a Secured Party, confirms its agreement
to the limitations and qualifications of the Security Trustee's obligations set
forth in Article V of the Security Trust Agreement; and
6. confirms that this Secured Party Supplement shall in all
respects be governed by, and construed in accordance with, the laws of the State
of New York, including all matters of construction, validity and performance.
Very truly yours,
[SECURED PARTY]
By:
-------------------------------
Name:
Title:
Acknowledged and Agreed to
as of the date first above written:
BANKERS TRUST COMPANY,
not in its individual capacity, but
solely as the Security Trustee
By
------------------------------------------
Name:
Title:
2
EXHIBIT B-1
SECURITY AGREEMENT SUPPLEMENT
[FORM OF COLLATERAL SUPPLEMENT]
Bankers Trust Company, as the Security Trustee
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ [Date]
Attention: Corporate Trust and Agency
Services-Structured Finance Team
Re: Security Trust Agreement, dated as of June 26, 2001
Ladies and Gentlemen:
Reference is made to the Security Trust Agreement, dated as of June 26, 2001
(the "Security Trust Agreement"), between
LEASE INVESTMENT FLIGHT TRUST, a
Delaware statutory business trust organized under the laws of the State of
Delaware (the "Note Issuer"), LIFT TRUST-SUB 1, a Delaware statutory business
trust organized under the laws of the State of Delaware (the "Bridge Note
Issuer"), the ISSUER SUBSIDIARIES listed on the signature pages of, or who
otherwise become grantors under, the Security Trust Agreement (together with the
Issuer, the "Grantors") and BANKERS TRUST COMPANY, a New York banking
corporation ("Bankers Trust"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Security Trust
Agreement.
The undersigned hereby delivers, as of the date first above
written, the attached Annexes I and II pursuant to Section 2.17 of the Security
Trust Agreement.
The undersigned Guarantor hereby confirms that the property
included in the attached Annexes constitutes part of the Collateral and hereby
makes each representation and warranty set forth in Section 2.03 of the Security
Trust Agreement (as supplemented by the attached Annexes).
Attached are (i) an Account Letter in substantially the form
of Exhibit C to the Security Trust Agreement from each Non-Trustee Account Bank
at which each Non-Trustee Account included in the foregoing Collateral is
maintained, (ii) where required with respect to any Assigned Document (other
than an Assigned Lease) included in the foregoing Collateral, a Consent and
Agreement in substantially the form of Exhibit D to the Security Trust Agreement
from the counterparty thereto or, with respect to any Assigned Lease included in
the foregoing Collateral, such consents, acknowledgements and/or notices as are
called for under Section 2.08(a) of the Security Trust Agreement and (iii) duly
completed copies of Annexes I and II hereto.
This Collateral Supplement shall in all respects be governed
by, and construed in accordance with, the laws of the State of New York,
including all matters of construction, validity and performance.
Very truly yours,
LIFT TRUST-SUB 1
By Wilmington Trust Company,
not in its individual capacity
but solely as the owner trustee
By
-----------------------------
Name:
Title:
Acknowledged and agreed to as of the date first above written:
BANKERS TRUST COMPANY,
not in its individual capacity, but
solely as the Security Trustee
By:
-----------------------------------------
Name:
Title:
ANNEX I
SECURITY AGREEMENT SUPPLEMENT
PLEDGED STOCK
Percentage of
Stock Issuer Par Value Certificate No(s). Number of Shares Outstanding Shares
------------ --------- ------------------ ---------------- ------------------
PLEDGED BENEFICIAL INTERESTS
Percentage of
Issuer Certificate No. Beneficial Interest
------ --------------- -------------------
PLEDGED DEBT
Debt Issuer Description of Debt Date
----------- ------------------- ----
ANNEX II
SECURITY AGREEMENT SUPPLEMENT
NON-TRUSTEE ACCOUNT INFORMATION
NAME AND ADDRESS NAME AND ADDRESS OF NON-TRUSTEE
OF BANK ACCOUNT HOLDER ACCOUNT NUMBER
------- -------------- --------------
EXHIBIT B-2
SECURITY TRUST AGREEMENT
[FORM OF GRANTOR SUPPLEMENT]
Bankers Trust Company, as the Security Trustee
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ [Date]
Attention: Corporate Trust and Agency
Services-Structured Finance Team
Re: Security Trust Agreement, dated as of June 26, 2001
Ladies and Gentlemen:
Reference is made to the Security Trust Agreement, dated as of June 26, 2001
(the "Security Trust Agreement"), between
LEASE INVESTMENT FLIGHT TRUST, a
Delaware statutory business trust organized under the laws of the State of
Delaware (the "Note Issuer"), LIFT TRUST-SUB 1, a Delaware statutory business
trust organized under the laws of the State of Delaware (the Bridge Note
Issuer"), the ISSUER SUBSIDIARIES listed on the signature pages of, or who
otherwise become grantors under, the Security Trust Agreement (together with the
Issuer, the "Grantors") and BANKERS TRUST COMPANY, a New York banking
corporation ("Bankers Trust"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Security Trust
Agreement.
The undersigned hereby agrees, as of the date first above
written, to become a Grantor under the Security Trust Agreement as if it were an
original party thereto and agrees that each reference in the Security Trust
Agreement to "Grantor" shall also mean and be a reference to the undersigned.
To secure the Secured Obligations, the undersigned Grantor
hereby assigns and pledges to the Security Trustee for its benefit and the
benefit of the Secured Parties (except, with respect to any Secured Collateral
Provider Documents under clause (h), clause (i) or clause (j) below the related
Secured Collateral Provider), and hereby grants to the Security Trustee for its
benefit and the benefit of the Secured Parties (except, with respect to any
Secured Collateral Provider Documents under clause (h), clause (i) or clause (j)
below the related Secured Collateral Provider) a security interest in, all of
its right, title and interest in and to:
(a) all of the following (the "Security Collateral"):
(i) the Pledged Stock identified on the attached Annex 1 and
the certificates representing such Pledged Stock, and all dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Pledged Stock;
(ii) the Pledged Debt identified on the attached Annex 1 and
all instruments evidencing such Pledged Debt, and all interest, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Pledged Debt;
(iii) all additional shares of capital stock of any Issuer
Group Member from time to time acquired by such Grantor in any manner, including
the capital stock of any Issuer Group Member that may be formed from time to
time, and all certificates, if any, representing such additional shares of the
capital stock and all dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all such additional shares; and
(iv) all additional indebtedness from time to time owed to
such Grantor by any Issuer Group Member and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness;
(b) all of the following (the "Beneficial Interest
Collateral"):
(i) the Pledged Beneficial Interests identified on the
attached Annex 1, all certificates, if any, from time to time representing all
of such Grantor's right, title and interest in such Pledged Beneficial
Interests, any contracts and instruments pursuant to which any such Pledged
Beneficial Interests are created or issued and all distributions, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Pledged Beneficial Interest; and
(ii) all of such Grantor's right, title and interest in all
additional beneficial interests from time to time acquired by such Grantor in
any manner including the beneficial interests in any Issuer Group Member that
may be formed from time to time, and, all certificates, if any, from time to
time representing such additional beneficial interests and all distributions,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all such
additional beneficial interests;
(c) all of the following (collectively, the "Non-Trustee
Account Collateral"):
(i) all of the Non-Trustee Accounts in such Grantor's name,
all funds or any other interest held or required by the terms of the Indenture
to be held in, and all certificates and instruments, if any, from time to time
representing or evidencing, such Non-Trustee Accounts;
(ii) all notes, certificates of deposit, deposit accounts,
checks and other instruments from time to time hereafter delivered to or
otherwise possessed by the Security Trustee for or on behalf of such Grantor in
substitution for or in addition to any or all of the then existing Non-Trustee
Account Collateral; and
(iii) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing Non-Trustee
Account Collateral;
2
(d) all right of such Grantor in and to each Security Trustee
Account at any time or from time to time established and all cash, investment
property, Permitted Account Investments, other Investments, securities,
instruments or other property (including all "financial assets" within the
meaning of Section 8.102(a)(9) of the UCC) at any time or from time credited to
any such Security Trustee Account (collectively, the "Account Collateral"):
(e) all other "investment property" (as defined in Section
9-115(1)(f) of the UCC) of such Grantor including written notification of the
following (the "Investment Collateral"):
(i) all Permitted Account Investments made or acquired from or
with the proceeds of any Non-Trustee Account Collateral of such Grantor from
time to time and all certificates and instruments, if any, from time to time
representing or evidencing such Permitted Account Investments; and
(ii) all interest, dividends, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the then existing Investment Collateral;
(f) all of the following (the "Assigned Agreement
Collateral"):
(i) all of such Grantor's right, title and interest in and to
all security assignments, cash deposit agreements and other security agreements
executed in its favor by any Issuer Subsidiary, in each case as such agreements
may be amended or otherwise modified from time to time (collectively, the
"Assigned Agreements"); and
(ii) all of such Grantor's right, title and interest in and to
all deposit accounts, all property in such deposit account, all certificates and
instruments, if any from time to time representing or evidencing such deposit
accounts and all other property of whatever nature, in each case pledged,
assigned or transferred to it or mortgaged or charged in its favor pursuant to
any Assigned Agreement;
(g) all of such Grantor's right, title and interest in and to
all Leases to which such Grantor is or may from time to time be party and any
leasing arrangements among Issuer Group Members with respect to such Leases (all
such Leases, the "Assigned Leases"), including without limitation (i) all rights
of such Grantor to receive moneys due and to become due under or pursuant to
such Assigned Leases, (ii) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to such Assigned Leases,
(iii) claims of such Grantor for damages arising out of or for breach or default
under such Assigned Leases, (iv) all rights under any such Assigned Lease with
respect to any subleases of the Aircraft subject to such Assigned Lease and (v)
the right of such Grantor to terminate such Assigned Leases and to compel
performance of, and otherwise to exercise all remedies under, any Assigned
Lease, whether arising under such Assigned Leases or by statute or at law or in
equity (the "Lease Collateral");
(h) all of such Grantor's right, title and interest in and to
all Service Provider Documents (the "Servicing Collateral");
3
(i) with respect to each Grantor, all of such Grantor's right,
title and interest in and to all Acquisition Agreements (the "Aircraft Purchase
Collateral");
(j) all of such Grantor's rights, title and interest in and to
all Credit Facilities not consisting of a Cash Collateral Account and Swap
Agreements all rights to administer, draw upon and otherwise deal with each
Credit Facility and to administer and otherwise deal with each such Swap
Agreement;
(k) all of such Grantor's right, title and interest in and to
the personal property identified in a Grantor Supplement or a Collateral
Supplement executed and delivered by such Grantor to the Security Trustee; and
(l) all proceeds of any and all of the foregoing Collateral
(including proceeds that constitute property of the types described in
subsections (a), (b), (c), (d), (e), (f), (g), (h), (i), (j) and (k) above);
The undersigned Guarantor hereby makes each representation and
warranty set forth in Section 2.03 of the Security Trust Agreement (as
supplemented by the attached Annexes) and hereby agrees to be bound as a Grantor
by all of the terms and provisions of the Security Trust Agreement. Each
reference in the Security Trust Agreement to the Pledged Stock, the Pledged
Debt, the Pledged Beneficial Interests, the Security Collateral, the Beneficial
Interest Collateral, the Non-Trustee Account Collateral, the Account Collateral,
the Investment Collateral, the Assigned Agreement, the Assigned Agreement
Collateral, the Acquisition Agreements which form part of the Aircraft Purchase
Collateral, the Acquisition Agreements, the Aircraft Purchase Collateral, the
Assigned Leases, the Service Provider Documents, the Servicing Collateral, the
Lease Collateral, the Assigned Documents and the Agreement Collateral shall be
construed to include a reference to the corresponding Collateral hereunder.
The undersigned hereby agrees, together with the Issuer,
jointly and severally to indemnify the Security Trustee, its officers,
directors, employees and agents in the manner set forth in Section 9.01 of the
Security Trust Agreement.
Attached are (i) an Account Letter in substantially the form
of Exhibit C to the Security Trust Agreement from each Non-Trustee Account Bank
at which each Non-Trustee Account included in the foregoing Collateral is
maintained, (ii) where required with respect to any Assigned Document (other
than an Assigned Lease) included in the foregoing Collateral, a Consent and
Agreement in substantially the form of Exhibit D to the Security Trust Agreement
from the counterparty thereto or, with respect to any Assigned Lease included in
the foregoing Collateral, such consents, acknowledgements and/or notices as are
called for under Section 2.08(a) of the Security Trust Agreement and (iii) duly
completed copies of Annexes I, II, III and IV hereto.
4
This Grantor Supplement shall in all respects be governed by,
and construed in accordance with, the laws of the State of New York, including
all matters of construction, validity and performance.
Very truly yours,
[NAME OF GRANTOR]
By:
------------------------
Name:
Title:
Acknowledged and agreed to as of the date first above written:
BANKERS TRUST COMPANY,
not in its individual capacity, but
solely as the Security Trustee
By:
-----------------------------------------
Name:
Title:
5
ANNEX I
SECURITY AGREEMENT SUPPLEMENT
PLEDGED STOCK
Percentage of
Stock Issuer Par Value Certificate No(s). Number of Shares Outstanding Shares
------------ --------- ------------------ ---------------- ------------------
PLEDGED BENEFICIAL INTERESTS
Percentage of
Issuer Certificate No. Beneficial Interest
------ --------------- -------------------
PLEDGED DEBT
Debt Issuer Description of Debt Date
----------- ------------------- ----
ANNEX II
SECURITY AGREEMENT SUPPLEMENT
NON-TRUSTEE ACCOUNT INFORMATION
NAME AND ADDRESS NAME AND ADDRESS OF NON-TRUSTEE
OF BANK ACCOUNT HOLDER ACCOUNT NUMBER
------- -------------- --------------
ANNEX III
SECURITY AGREEMENT SUPPLEMENT
TRADE NAMES
ANNEX IV
SECURITY AGREEMENT SUPPLEMENT
CHIEF EXECUTIVE
NAME OF GRANTOR OFFICE CHIEF PLACE OF BUSINESS REGISTERED OFFICE
--------------- ------ ----------------------- -----------------
EXHIBIT C
SECURITY TRUST AGREEMENT
FORM OF NON-TRUSTEE ACCOUNT LETTER
_______________, 2001
[Name and address
of Account Bank]
[Name of the Grantor]
Ladies and Gentlemen:
Reference is made to Account No. __________ into which certain
monies, instruments and other properties are deposited from time to time (the
"Pledged Account") maintained with you by ____________________ (the "Grantor").
Pursuant to the Security Trust Agreement, dated as of June 26, 2001 (the
"Security Trust Agreement"), between the Grantor, various other Grantors and
Bankers Trust Company, as the Operating Bank and the Security Trustee (the
"Security Trustee"). Capitalized terms used herein, unless otherwise defined
herein, have the meanings assigned to them in the Security Trust Agreement.
Pursuant to the Security Trust Agreement, the Grantor has
granted to the Security Trustee a security interest in certain property of the
Grantor, including, among other things, the following (the "Collateral"): the
Pledged Account, all funds held or required by the terms of the Indenture to be
held therein and all certificates and instruments, if any, from time to time
representing or evidencing such Pledged Account, all notes, certificates of
deposit, deposit accounts, checks and other instruments from time to time
hereafter delivered to or otherwise possessed by the Security Trustee for or on
behalf of such Grantor in substitution for or in addition to any or all of the
then existing Collateral, and all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the then existing Collateral, and
all proceeds of any and all of the foregoing Collateral. It is a condition to
the continued maintenance of the Pledged Account with you that you agree to this
letter agreement.
By signing this letter agreement, you acknowledge notice of,
and consent to the terms and provisions of, the Security Trust Agreement and
confirm to the Security Trustee that you have received no notice of any other
pledge or assignment of the Pledged Account. Further, you hereby agree with the
Security Trustee that:
(a) Notwithstanding anything to the contrary in any other
agreement relating to the Pledged Account, the Pledged Account is and will be
subject to the terms and conditions of the Security Trust Agreement, and will
henceforth be subject to written instructions only from an officer of the
Security Trustee or (unless you are otherwise notified by the Security Trustee)
from an officer of the Administrative Agent as the agent of the Security
Trustee. In the event of any conflicting instructions, those of the Security
Trustee shall prevail.
(b) You will follow your usual operating procedures for the
handling of any remittance received in the Pledged Account, including any
remittance that contains restrictive endorsements, irregularities (such as a
variance between the written and numerical amounts), undated or postdated items,
missing signatures, incorrect payees, etc.
(c) You will transfer, in same day funds, on each of your
business days, an amount equal to the credit balance of the Pledged Account
(other than any amount required to be left on deposit for local tax or other
regulatory or legal purposes) on such day to the following account (the
"Collections Account"):
[Insert address of Operating Bank and
account number of the Collections Account]
Each such transfer of funds shall neither comprise only part of a remittance nor
reflect the rounding off of any funds so transferred.
(d) All service charges and fees with respect to the Pledged
Account shall be payable by the Grantor, and deposited checks returned for any
reason shall not be charged to such account.
(e) The Security Trustee and the Administrative Agent as the
agent of the Security Trustee shall be entitled to exercise any and all rights
of the Grantor in respect of the Pledged Account in accordance with the terms of
the Security Trust Agreement, and the undersigned shall comply in all respects
with such exercise.
This letter agreement shall be binding upon you and your successors and
assigns and shall inure to the benefit of the Security Trustee, the Secured
Parties and their successors, transferees and assigns. You may terminate this
letter agreement only upon 30 days' prior written notice to the Grantor and the
Security Trustee. Upon such termination you shall close the Pledged Account and
transfer all funds in the Pledged Account to the Collections Account. After any
such termination, you shall nonetheless remain obligated promptly to transfer to
the Collections Account all funds and other property received in respect of the
Pledged Account.
2
This letter agreement shall in all respects be governed by and
construed in accordance with the laws of the State of New York, including all
matters of construction, validity and performance.
Very truly yours,
[NAME OF GRANTOR]
By:
--------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
not in its individual capacity,
but solely as the Security Trustee
By: `
----------------------------------
Name:
Title:
Acknowledged and agreed to as of
the date first above written:
[NAME OF PLEDGED ACCOUNT BANK]
By:
-----------------------------------------
Name:
Title:
3
EXHIBIT D
SECURITY TRUST AGREEMENT
FORM OF CONSENT AND AGREEMENT
_______________, 2001
[Name of the Grantor]
Ladies and Gentlemen:
Reference is made to the agreement between you and the Grantor
dated [ ] (the "Assigned Document").
Pursuant to the Security Trust Agreement, dated June 26, 2001
(the "Security Trust Agreement"), between the Grantor, certain other Grantors
and Bankers Trust Company, as the Operating Bank and the Security Trustee (the
"Security Trustee"), the Grantor has granted to the Security Trustee a security
interest in certain property of the Grantor, including, among other things, the
following (the "Collateral"): all of such Grantor's right, title and interest in
and to the Assigned Document, including without limitation all rights of such
Grantor to receive moneys due and to become due under or pursuant to the
Assigned Document, all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned
Document, claims of such Grantor for damages arising out of or for breach or
default under the Assigned Document and the right of such Grantor to terminate
the Assigned Document, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder, whether arising under the Assigned
Document or by statute or at law or in equity. Capitalized terms used herein,
unless otherwise defined herein, have the meanings assigned to them in the
Security Trust Agreement.
By signing this Consent and Agreement, you acknowledge notice
of, and consent to the terms and provisions of, the Security Trust Agreement and
confirm to the Security Trustee that you have received no notice of any other
pledge or assignment of the Assigned Document. Further, you hereby agree with
the Security Trustee that:
(a) You will make all payments to be made by you under or in
connection with the Assigned Document directly to the Collections Account or
otherwise in accordance with the instructions of the Security Trustee.
(b) The Security Trustee shall be entitled to exercise any and
all rights and remedies of the Grantor under the Assigned Document in accordance
with the terms of the Security Trust Agreement, and you will comply in all
respects with such exercise.
(c) You will not, without the prior written consent of the
Security Trustee, (i) cancel or terminate the Assigned Document or consent to or
accept any cancellation or termination thereof or (ii) amend or otherwise modify
the Assigned Document.
This Consent and Agreement shall be binding upon you and your
successors and assigns and shall inure to the benefit of the Security Trustee,
the Secured Parties and their successors, transferees and assigns.
This Consent and Agreement shall in all respects, be governed
by and construed in accordance with the laws of the State of New York, including
all matters of construction, validity and performance.
Very truly yours,
[NAME OF GRANTOR]
By:
--------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
not in its individual capacity,
but solely as the Security Trustee
By:
--------------------------------
Name:
Title:
Acknowledged and agreed to as of
the date first above written:
[NAME OF OBLIGOR]
By:
-----------------------------------------
Name:
Title:
2
EXHIBIT E
SUPPLEMENTARY SECURITY TRUST AGREEMENT
Dated as of June 26, 2001
between
GRANTORS REFERRED TO HEREIN
as the Grantors
and
BANKERS TRUST COMPANY,
as the Security Trustee and the Account Bank
T A B L E O F C O N T E N T S
PAGE
ARTICLE I DEFINITIONS.........................................................1
SECTION 1.01 DEFINITIONS........................................1
SECTION 1.02 CONSTRUCTION AND USAGE.............................4
ARTICLE II SECURITY...........................................................4
SECTION 2.01 GRANT OF SECURITY..................................4
SECTION 2.02 SECURITY FOR OBLIGATIONS...........................4
SECTION 2.03 REPRESENTATIONS AND WARRANTIES OF THE GRANTORS.....4
SECTION 2.04 GRANTORS REMAIN LIABLE.............................5
SECTION 2.05 DELIVERY OF COLLATERAL.............................5
SECTION 2.06 CLASS A CONTINGENT COLLATERAL ACCOUNT..............5
SECTION 2.07 FURTHER ASSURANCES.................................7
SECTION 2.08 PLACE OF PERFECTION; RECORDS.......................7
SECTION 2.09 TRANSFERS AND OTHER ENCUMBRANCES...................7
SECTION 2.10 SECURITY TRUSTEE APPOINTED ATTORNEY-IN-FACT........7
SECTION 2.11 SECURITY TRUSTEE MAY PERFORM.......................8
ARTICLE III REMEDIES..........................................................9
SECTION 3.01 REMEDIES 9
ARTICLE IV SECURITY INTEREST ABSOLUTE........................................10
SECTION 4.01 SECURITY INTEREST ABSOLUTE........................10
ARTICLE V THE SECURITY TRUSTEE AND THE ACCOUNT BANK..........................11
SECTION 5.01 ACTION .........................................11
SECTION 5.02 ABSENCE OF DUTIES.................................11
SECTION 5.03 REPRESENTATIONS OR WARRANTIES.....................11
SECTION 5.04 RELIANCE; AGENTS; ADVICE OF COUNSEL...............11
SECTION 5.05 NO INDIVIDUAL LIABILITY...........................13
SECTION 5.06 THE ACCOUNT BANK..................................13
ARTICLE VI SUCCESSOR TRUSTEES AND ACCOUNT BANK...............................13
SECTION 6.01 RESIGNATION AND REMOVAL...........................13
ARTICLE VII INDEMNITY AND EXPENSES...........................................13
SECTION 7.01 INDEMNITY.........................................13
ARTICLE VIII MISCELLANEOUS...................................................13
SECTION 8.01 AMENDMENTS; WAIVERS; ETC..........................13
SECTION 8.02 ADDRESSES FOR NOTICES.............................14
SECTION 8.03 NO WAIVER; REMEDIES...............................15
SECTION 8.04 SEVERABILITY......................................15
SECTION 8.05 CONTINUING SECURITY INTEREST; ASSIGNMENTS.........15
SECTION 8.06 RELEASE AND TERMINATION...........................15
SECTION 8.07 CURRENCY CONVERSION...............................15
SECTION 8.08 GOVERNING LAW.....................................16
SECTION 8.09 JURISDICTION......................................16
SECTION 8.10 COUNTERPARTS......................................16
SECTION 8.11 TABLE OF CONTENTS, HEADINGS, ETC..................16
ii
SCHEDULES
Schedule I Chief Place of Business and Chief Executive or Registered Office
EXHIBITS
Exhibit A Form of Permitted Beneficial Note
Exhibit B Form of Grantor Supplement
Supplementary Security TRUST AGREEMENT
This SUPPLEMENTAL SECURITY TRUST AGREEMENT (this "Agreement"),
dated as of June 26, 2001, is made between Grantors listed on the signature
pages of, or who otherwise become grantors under, this Agreement (collectively,
the "Grantors") and BANKERS TRUST COMPANY, a New York banking corporation
("Bankers Trust") in its capacity as the Security Trustee under the Security
Trust Agreement referred to below and as to the person acting as the Account
Bank hereunder.
PRELIMINARY STATEMENTS:
(1)
Lease Investment Flight Trust ("Note Issuer"), LIFT
Trust-Sub 1 (the "Bridge Note Issuer"), Phoenix American Financial Services,
Inc. and Bankers Trust have entered into a Trust Indenture dated as of the date
hereof (the "Indenture") pursuant to which the Bridge Note Issuer is issuing the
Bridge Notes, the Note Issuer is issuing the Notes and Bankers Trust has been
appointed the Trustee.
(2) The Note Issuer, the Bridge Note Issuer, certain other
"Grantors" referred to therein and Bankers Trust have entered into a Security
Trust Agreement dated as of the date hereof (the "Security Trust Agreement")
pursuant to which Bankers Trust has been appointed Security Trustee and the Note
Issuer, the Bridge Note Issuer and such other "Grantors" grant a security
interest in certain property in favor of the Security Trustee to secure, among
other things, the Bridge Note Issuer's and the Note Issuer's obligations under
the Bridge Notes and the Notes, respectively.
(3) The Grantors have agreed to deposit $3,000,000 into the
Class A Contingent Collateral Account as of the Effective Time.
(4) It is a condition precedent to the issuance of the Notes
by the Note Issuer, that each Grantor grant the security interests required by
this Agreement.
(5) Each Grantor will derive substantial direct and indirect
benefit from the issuance of the Bridge Notes, the Notes and from the Related
Documents.
NOW, THEREFORE, in consideration of the premises, each Grantor
hereby agrees with the Security Trustee for its benefit and the benefit of the
other Secured Parties as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. (a) CERTAIN DEFINED TERMS. For the
purposes of this Agreement, the following terms have the meanings indicated
below:
"Account Bank" means the Person acting, at the time of
determination, as the account bank under this Agreement. The initial Account
Bank is Bankers Trust.
"Account Collateral" has the meaning specified in Section
2.01.
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"Additional Grantor" has the meaning specified in Section
8.01.
"Agreed Currency" has the meaning specified in Section 8.07.
"Agreement" has the meaning specified in the recital of
parties to this Agreement.
"Bankers Trust" has the meaning specified in the recital of
parties to this Agreement.
"Bridge Note Issuer" has the meaning specified in the recital
of the parties to the Agreement.
"Certificated Security" means a certificated security (as
defined in Section 8-102(a)(4) of the UCC) other than a Government Security.
"Class A Contingent Collateral Account" has the meaning
specified in Section 2.06.
"Collateral" has the meaning specified in Section 2.01.
"Effective Time" means the time of the issuance of the Initial
Notes under the Indenture being the time of authentication and delivery thereof
by the Security Trustee to the initial Holders thereof.
"Government Security" means any security issued or guaranteed
by the United States of America or an agency or instrumentality thereof that is
maintained in book-entry on the records of the Federal Reserve Bank of New York
and is subject to Revised Book-Entry Rules.
"Grantors" has the meaning specified in the recital of parties
to this Agreement.
"Grantor Supplement" means a supplement to this Agreement in
substantially the form attached as Exhibit B.
"Indenture" has the meaning specified in the preliminary
statements of this Agreement.
"Instrument" means any "instrument" as defined in Section
9-105(1)(i) of the UCC.
"Issuer" means prior to the Effective Time, the Bridge Note
Issuer and from and after the Effective Time, the Note Issuer.
"Note Issuer" has the meaning specified in the recital of
parties to this Agreement.
"Permitted Beneficial Note" means a Permitted Beneficial Note
issued by a Beneficial Interest Certificate Holder or any other Person which
directly or indirectly owns a beneficial interest in the Note Issuer,
substantially in the form of Exhibit A hereto, and each Permitted Beneficial
Note, if any, issued in replacement or substitution therefore; provided that the
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face amount of any Permitted Beneficial Note shall not exceed 7.5% of the
initial aggregate principal amount of the Class A Notes.
"Received Currency" has the meaning specified in Section 8.07.
"Revised Book-Entry Rules" means 31 C.F.R. ss. 357 (Treasury
bills, notes and bonds); 12 C.F.R. ss. 615 (book-entry securities of the Farm
Credit Administration); 12 C.F.R. ▇▇.▇▇. 910 and 912 (book-entry securities of
the Federal Home Loan Banks); 24 C.F.R. ss. 81 (book-entry securities of the
Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation); 12 C.F.R. ss. 1511 (book-entry securities of the Resolution
Funding Corporation); 31 C.F.R. ss. 354 (book-entry securities of the Student
Loan Marketing Association); and any substantially comparable book-entry rules
of any other Federal agency or instrumentality.
"Secured Obligations" means all obligations of the Note Issuer
to make payments of principal of and interest on the Class A Notes.
"Secured Party" means the Holders of the Class A Notes.
"Securities Account" means a securities account as defined in
Section 8-501(a) of the UCC maintained in the name of the Security Trustee as
"entitlement holder" (as defined in Section 8-102(a)(7) of the UCC) on the books
and records of the Account Bank or another Securities Intermediary in the State
of New York.
"Securities Intermediary" means any "securities intermediary"
of the Security Trustee as defined in 31 C.F.R. Section 357.2 or Section
8-102(a)(14) of the UCC.
"Security Trust Agreement" has the meaning specified in the
preliminary statements to this Agreement.
"Security Trustee" means the Person appointed, at the time of
determination, as the security trustee under the Security Trust Agreement. The
initial Security Trustee is Bankers Trust.
"UCC" means the Uniform Commercial Code as in effect on the
date of determination in the State of New York; provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than New York,
"UCC" means the Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions of this Agreement relating to such perfection or
effect of perfection or non-perfection. If, as is anticipated on the date
hereof, the provisions of Article 9 of the UCC used in this Agreement are
legislatively modified, upon such modifications becoming effective, the
references in this Agreement to "Section 9-105(1)(i)", "Section 9-115(1)(f)" and
"Section 9-105" of the UCC will each be taken to mean "Section 9-102" of the UCC
and the references in this Agreement to "Section 9-504(i)(c)" and "Section
9-505(2)" of the UCC shall be taken to mean "Section 9-615" and "Section 9-620"
of the UCC, respectively.
4
"Uncertificated Security" means an uncertificated security (as
defined in Section 8-102(a)(18) of the UCC) other than a Government Security.
(b) TERMS DEFINED IN THE INDENTURE. For all purposes of this
Agreement, all capitalized terms used, but not defined in, this Agreement shall
have the respective meanings assigned to such terms in the Indenture or, if not
defined therein, the Security Trust Agreement.
SECTION 1.02 CONSTRUCTION AND USAGE. The conventions of
construction and usage set forth in Section 1.02 of the Indenture are hereby
incorporated by reference in this Agreement.
ARTICLE II
SECURITY
SECTION 2.01 GRANT OF SECURITY. To secure the Secured
Obligations, each Grantor hereby assigns and pledges to the Security Trustee for
its benefit and the benefit of the Secured Parties, and hereby grants to the
Security Trustee for its benefit and the benefit of the Secured Parties a
security interest in, all of such Grantor's right, title and interest in and to
the following (collectively, the "Collateral"):
(a) with respect to each Grantor, all right of such Grantor in
and to the Class A Contingent Collateral Account and all cash, investment
property, Permitted Account Investments, other Investments, securities,
instruments or other property (including all "financial assets" within the
meaning of Section 8-102(a)(9) of the UCC) at any time or from time to time
credited to the Class A Contingent Collateral Account (collectively, the
"Account Collateral");
(b) with respect each Grantor, all of such Grantor's right,
title and interest in and to the personal property identified in a Grantor
Supplement executed and delivered by such Grantor to the Security Trustee; and
(c) all proceeds of any and all of the foregoing Collateral
(including proceeds that constitute property of the types described in
subsections (a) and (b) of this Section 2.01).
SECTION 2.02 SECURITY FOR OBLIGATIONS. This Agreement secures
the payment and performance of all Secured Obligations to each Secured Party and
shall be held by the Security Trustee in trust for the Secured Parties. Without
limiting the generality of the foregoing, this Agreement secures the payment of
all amounts that constitute part of the Secured Obligations and would be owed to
any Secured Parties but for the fact that Secured Obligations are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving any Person.
SECTION 2.03 REPRESENTATIONS AND WARRANTIES OF THE GRANTORS.
Each Grantor represents and warrants as of the date of this Agreement as
follows:
(a) The Grantors are the legal and beneficial owners of the
Collateral free and clear of any Encumbrance (other than Permitted
Encumbrances), other than that of this Agreement. No effective financing
statement or other instrument similar in effect covering all or
5
any part of the Collateral is on file in any recording office, except such as
may have been filed in favor of the Security Trustee relating to Collateral.
(b) This Agreement creates a valid and (upon the taking of the
actions required hereby) perfected security interest in the Collateral as
security for the Secured Obligations, subject in priority to no other
Encumbrances (other than Permitted Encumbrances), and all filings and other
actions necessary or desirable to perfect and protect such security interest
have been duly taken.
(c) No Grantor has any trade names.
(d) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either (i) for the
grant by such Grantor of the assignment and security interest granted hereby,
(ii) for the execution, delivery or performance of this Agreement by such
Grantor or (iii) for the perfection or maintenance of the pledge, assignment and
security interest created hereby, except for the filing of financing and
continuation statements under the Uniform Commercial Code.
(e) The chief place of business and chief executive or
registered office of such Grantor and the office where such Grantor keeps
records of the Collateral are located at the address specified opposite the name
of such Grantor on the attached Schedule I.
SECTION 2.04 GRANTORS REMAIN LIABLE. Anything contained herein
to the contrary notwithstanding, (a) each Grantor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by the
Security Trustee of any of its rights hereunder shall not release any Grantor
from any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) no Secured Party shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall any Secured Party be obligated to perform
any of the obligations or duties of any Grantor under the contracts and
agreements included in the Collateral or to take any action to collect or
enforce any claim for payment assigned under this Agreement.
SECTION 2.05 DELIVERY OF COLLATERAL. All certificates or
instruments representing or evidencing any Collateral (other than Account
Collateral) shall be delivered to and held by or on behalf of the Security
Trustee in New York and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to evidence the security interests
granted thereby. In addition, the Security Trustee shall have the right at any
time to exchange certificates or instruments representing or evidencing any
Collateral (other than Account Collateral) for certificates or instruments of
smaller or larger denominations.
SECTION 2.06 CLASS A CONTINGENT COLLATERAL ACCOUNT.
(a) Bankers Trust hereby agrees to act as the Account Bank
under this Agreement. Upon the execution of this Agreement, the Account Bank
shall establish and
6
maintain on the books and records of its office specified in Section 8.02 and
maintain in the name of the Security Trustee a "Class A Contingent Collateral
Account" (the "Class A Contingent Collateral Account") as an Eligible Account.
If, at any time, the Class A Contingent Collateral Account ceases to be an
Eligible Account, the Account Bank shall, within 10 Business Days thereafter,
establish a new account having the same characteristics and transfer all
property related to such old Class A Contingent Collateral Account to such new
account. Upon such transfer, the new account shall become the Class A Contingent
Collateral Account. The Account Bank also agrees to cooperate with any
replacement Account Bank as to the transfer of any property in, or records
relating to, the Class A Contingent Collateral Account maintained by it. Bankers
Trust waives any claim or lien against the Class A Contingent Collateral Account
it may have, by operation of law or otherwise, for any amount owed to it by any
Grantor.
(b) The Account Bank shall invest and reinvest all amounts in
the Class A Contingent Collateral Account in Permitted Account Investments
described in clause (d) of the definition thereof from the time of receipt
thereof until such time as such amounts are required to be distributed in
accordance with the terms hereof.
(c) The Account Bank hereby agrees that (i) Class A Contingent
Collateral Account will be and will be maintained as a Securities Account of
which it is the Securities Intermediary and in respect of which the Security
Trustee is the "entitlement holder" (as defined in Section 8-102(a)(7) of the
UCC) of the "securities entitlement" (as defined in Section 8-102(a)(17) of the
UCC) with respect to each "financial asset" (as defined in Section 8-102(a)(9)
of the UCC) credited to Class A Contingent Collateral Account, (ii) all cash
required to be deposited in the Class A Contingent Collateral Account and
Permitted Account Investments and all other property acquired with cash credited
to the Class A Contingent Collateral Account will be credited to the Class A
Contingent Collateral Account, (iii) all items of property (whether cash,
investment property, Permitted Account Investments, other investments,
securities, instruments or other property credited to the Class A Contingent
Collateral Account will be treated as a "financial asset" (as defined in Section
8-102(a)(9) of the UCC) under Article 8 of the UCC, (iv) its "securities
intermediary's jurisdiction" (as defined in Section 8-110(e) of the UCC) with
respect to the Class A Contingent Collateral Account is the State of New York
and (v) all securities, instruments and other property in order or registered
from and credited to the Class A Contingent Collateral Account shall be payable
to or to the order of, or registered in the name of, the Account Bank or shall
be indorsed to the Account Bank or in blank, and in no case whatsoever shall any
financial asset credited to the Class A Contingent Collateral Account be
registered in the name of any Grantor, payable to or to the order of any Grantor
or specially indorsed to any Grantor except to the extent the foregoing have
been specially endorsed by a Grantor to the Account Bank or in blank. With
respect to withdrawals from the Class A Contingent Collateral Account, the
Account Bank agrees that it will follow the directions and instructions of the
Trustee, as the agent for the Security Trustee (the Security Trustee hereby
appointing the Trustee as its agent for such purpose).
(d) The Security Trustee agrees that it will hold (and will
indicate clearly in the books and records that it holds) its "security
entitlement" to the "financial asset" credited to the Class A Contingent
Collateral Account in trust for the benefit of the Holders of the Class A Notes.
7
SECTION 2.07 FURTHER ASSURANCES. (a) Each Grantor agrees that
from time to time, at the expense of such Grantor, such Grantor shall promptly
execute and deliver all further instruments and documents, and take all further
action (including under the laws of any foreign jurisdiction), that may be
necessary or desirable, or that the Security Trustee may request, in order to
perfect and protect any pledge, assignment or security interest granted or
purported to be granted hereby or to enable the Security Trustee to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor shall: (i) ▇▇▇▇
conspicuously each of its records pertaining to the Collateral with a legend,
indicating that such Collateral is subject to the security interest granted
hereby; (ii) if any Collateral shall be evidenced by a promissory note or other
instrument or chattel paper, deliver and pledge to the Security Trustee
hereunder such note or instrument or chattel paper duly indorsed and accompanied
by duly executed instruments of transfer or assignment; (iii) execute and file
such financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Security
Trustee may request, in order to perfect and preserve the pledge, assignment and
security interest granted or purported to be granted hereby and (iv) execute,
file, record, or register such additional documents and supplements to this
Agreement, including any further assignments, security agreements, pledges,
grants and transfers, as may be required by or desirable under the laws of any
foreign jurisdiction, or as the Security Trustee may request, to create, attach,
perfect, validate, render enforceable, protect or establish the priority of the
security interest and lien of this Agreement.
(b) Each Grantor hereby authorizes the Security Trustee to
file one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Collateral without the signature of such
Grantor where permitted by law. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law.
SECTION 2.08 PLACE OF PERFECTION; RECORDS. Each Grantor shall
keep its chief place of business and chief executive office and the office where
it keeps its records concerning the Collateral at the location therefor
specified in Schedule I or, upon 30 days' prior written notice to the Security
Trustee, at such other locations in a jurisdiction where all actions required by
Section 2.03(e) shall have been taken with respect to the Collateral. Each
Grantor shall hold and preserve such records and shall permit representatives of
the Security Trustee at any time during normal business hours to inspect and
make abstracts from such records, all at the sole cost and expense of such
Grantor.
SECTION 2.09 TRANSFERS AND OTHER ENCUMBRANCES. No Grantor
shall (i) sell, assign (by operation of law or otherwise) or otherwise dispose
of, or grant any option with respect to, any of the Collateral or (ii) create or
suffer to exist any Encumbrance upon or with respect to any of the Collateral of
such Grantor, in the case of clause (i) or (ii) other than the pledge,
assignment and security interest created by this Agreement and as otherwise
provided herein.
SECTION 2.10 SECURITY TRUSTEE APPOINTED ATTORNEY-IN-FACT. Each
Grantor hereby irrevocably appoints the Security Trustee such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time in the Security
Trustee's discretion, to take any action and to execute any
8
instrument that the Security Trustee may deem necessary or advisable to
accomplish the purposes of this Agreement, including:
(a) to ask for, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(b) to receive, indorse and collect any drafts or other
instruments and documents in connection included in the Collateral;
(c) to file any claims or take any action or institute any
proceedings that the Security Trustee may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Security Trustee with respect to any of the Collateral; and
(d) to execute and file any financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, in order to perfect and preserve the pledge,
assignment and security interest granted hereby.
SECTION 2.11 SECURITY TRUSTEE MAY PERFORM. If any Grantor
fails to perform any agreement contained in this Agreement, the Security Trustee
may (but shall not be obligated to) itself perform, or cause performance of,
such agreement, and the expenses of the Security Trustee incurred in connection
with doing so shall be payable by the Grantors.
SECTION 2.12 RELEASE FROM THE CLASS A CONTINGENT COLLATERAL
ACCOUNT. The Security Trustee shall release all or part of the amounts credited
to the Class A Contingent Collateral Account only in the following
circumstances:
(a) Prior to June 30, 2006, in full upon the issuance of a
Rating Agency Confirmation with respect thereto (a copy of which shall have been
delivered to the Security Trustee);
(b) On June 30, 2006, in full unless a Default Notice has been
issued in accordance with Section 4.02 of the Indenture or an Acceleration
Default is continuing; and/or
(c) Prior to June 30, 2006, in full or in part to the extent
that one or more Permitted Beneficial Notes have been issued and delivered to
the Security Trustee the principal amount of which shall equal $10,000 for each
$65.20 (or portion thereof) to be released from the Class A Contingent
Collateral Account.
Any amount in the Class A Contingent Collateral Account released pursuant to
clause (a) or (b) above shall be released to the Grantors as follows: each
Grantor shall be entitled to the sum of (i) its pro rata share of $3,000,000,
based upon the percentage residual interest represented by its Beneficial
Interest Certificates, MINUS (ii) any amounts theretofore received by such
Grantor from amounts released from the Class A Contingent Collateral Account
pursuant to clause (c) above PLUS (iii) any investment earnings (or MINUS any
investment losses) attributable thereto, subject to the receipt by the Security
Trustee of payment instructions from such Grantor. Any amount in the Class A
Contingent Collateral Account released pursuant to clause (c) above shall
9
be released to the Grantor which shall have issued (or whose direct or indirect
beneficial owner shall have issued) the applicable Permitted Beneficial Note,
subject to the receipt by the Security Trustee of payment instructions from such
Grantor.
Any Permitted Beneficial Note issued and delivered to the Security Trustee shall
be cancelled and returned by the Security Trustee to the issuer thereof (i) upon
the written request of such issuer, if one or more new Permitted Beneficial
Notes having the same aggregate face amount as the face amount of such Permitted
Beneficial Note shall have been delivered to the Security Trustee in accordance
with this Agreement and the Permitted Beneficial Notes to be replaced or (ii)
upon the written request of such issuer, upon the payment in full of the
principal of and accrued interest on the Class A Notes.
ARTICLE III
REMEDIES
SECTION 3.01 REMEDIES. If all, but not less than all, of the
following events shall have occurred:
(a) a Default Notice shall have been issued, an Acceleration
Default shall have occurred and be continuing or the Final Maturity Date of the
Class A-1 Notes and Class A-2 Notes shall have occurred; and
(b) the Trustee and the Security Trustee shall have exercised
remedies under the Indenture and the Related Documents, and the "Collateral" (as
defined in the Security Trust Agreement) shall have been disposed of and/or
liquidated in full;
then:
(i) if the aggregate proceeds from the liquidation and/or
disposition of such "Collateral" (the "Aggregate Disposition Proceeds") are
insufficient to repay the Outstanding Principal Balance of, and accrued interest
on, the Class A Notes in full, the Security Trustee shall transfer from the
Class A Contingent Collateral Account to the Note Account for the Class A Notes,
for application to the Outstanding Principal Balance of and accrued interest on
the Class A Notes, an amount equal to the lesser of (x) the amount of such
deficiency and (y) the amount in the Class A Contingent Collateral Account; and
(ii) if (A) the Aggregate Disposition Proceeds together with
any funds on deposit in the Class A Contingent Collateral Account are
insufficient to repay the Outstanding Principal Balance of, and accrued interest
on, the Class A Notes in full and (B) the aggregate face amount of the
outstanding Permitted Beneficial Notes shall exceed the Aggregate Disposition
Proceeds (such excess, the "Excess Note Amount"), then the Security Trustee
shall (I) make a demand of each issuer of a Permitted Beneficial Note in an
amount equal to the lesser of (x) such issuer's pro rata share amount of the
Excess Note Amount (based upon the face amount of such issuer's Permitted
Beneficial Note as compared to the aggregate face amount of all outstanding
Permitted Beneficial Notes) and (y) the face amount of such Permitted Beneficial
Note and (II) deposit the proceeds of any payment under any Permitted Beneficial
Note into the Note Account for the Class A Notes for application to the
Outstanding Principal Balance of and accrued interest on the
10
Class A Notes PROVIDED HOWEVER, that any remedies exercised shall be at the
discretion of the Security Trustee.
In no circumstances whatsoever shall a Grantor or the Grantors
have any right to recover the amount of any deposit to the Class A Contingent
Collateral Account or any withdrawal from the Class A Contingent Collateral
Account pursuant to Article III hereof whether by right of reimbursement,
subrogation, contribution, indemnification or otherwise arising by contract,
operation of law, or under the laws of partnerships, trusts, suretyships,
guarantees or fiduciaries, or under any claim of breach of trust or fiduciary
duty or otherwise, from the Note Issuer, any other Grantor, any direct or
indirect equity holders of the Note Issuer or any other Grantor, any other
issuer of the Permitted Beneficial Notes or any other persons and any such right
that may exist being fully waived.
ARTICLE IV
SECURITY INTEREST ABSOLUTE
SECTION 4.01 SECURITY INTEREST ABSOLUTE. A separate action or
actions may be brought and prosecuted against each Grantor to enforce this
Agreement, irrespective of whether any action is brought against any other
Grantor or whether any other Grantor is joined in any such action or actions.
All rights of the Security Trustee and the security interest and lien granted
under, and all obligations of each Grantor under, this Agreement shall be
absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of any Related
Document or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, the
security for, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from any
Related Document or any other agreement or instrument relating thereto;
(c) any taking, exchange, release or non-perfection of the
Collateral or any other collateral or taking, release or amendment or waiver of
or consent to departure from any guaranty, for all or any of the Secured
Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Secured Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Secured Obligations;
(e) any change, restructuring or termination of the corporate
structure or existence of any Grantor; or
(f) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Grantor or a third-party grantor of
a security interest or a Person deemed to be a surety.
11
ARTICLE V
THE SECURITY TRUSTEE
AND THE ACCOUNT BANK
SECTION 5.01 ACTION. The Security Trustee agrees to receive
and disburse all moneys received by it in accordance with the terms of this
Agreement. The Security Trustee in its individual capacity shall not be
answerable or accountable under any circumstances, except for its own willful
misconduct or gross negligence (or simple negligence in the handling of funds or
breach of any of its representations or warranties set forth in this Agreement)
and the Security Trustee shall not be liable for any action or inaction of any
Grantor or any other parties to any of the Related Documents.
SECTION 5.02 ABSENCE OF DUTIES. The powers conferred on the
Security Trustee under this Agreement with respect to the Collateral are solely
to protect its interest in this Agreement and shall not impose any duty upon it
to exercise any such powers. Except for the safe custody of any Collateral in
its possession and the accounting for moneys actually received by it under this
Agreement, the Security Trustee shall have no duty as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
any Secured Party has or is deemed to have knowledge of such matters, or as to
the taking of any necessary steps to preserve or perfect rights against any
parties or any other rights pertaining to any Collateral. The Security Trustee
shall have no duty to ascertain or inquire as to the performance or observance
of any covenants, conditions or agreements on the part of any Grantor.
SECTION 5.03 REPRESENTATIONS OR WARRANTIES. The Security
Trustee does not make and shall not be deemed to have made any representation or
warranty as to the validity, legality or enforceability of this Agreement, any
other Related Document or any other document or instrument or as to the
correctness of any statement contained in any thereof, or as to the validity or
sufficiency of any of the pledge and security interests granted hereby, except
that the Security Trustee in its individual capacity hereby represents and
warrants (a) that each such specified document to which it is a party has been
or will be duly executed and delivered by one of its officers who is and will be
duly authorized to execute and deliver such document on its behalf, and (b) this
Agreement is the legal, valid and binding obligation of Bankers Trust,
enforceable against Bankers Trust in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally.
SECTION 5.04 RELIANCE; AGENTS; ADVICE OF COUNSEL. (a) The
Security Trustee shall incur no liability to anyone as a result of acting upon
any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties. The
Security Trustee may accept a copy of a resolution of the board or other
governing body of any party to this Agreement or any Related Document, certified
by the Secretary or an Assistant Secretary thereof or other duly authorized
Person of such party as duly adopted and in full force and effect, as conclusive
evidence that such resolution has been duly adopted by said board or other
governing body and that the same is in full force and effect. As to any fact or
matter the manner of ascertainment of which is not specifically described in
this Agreement, the Security
12
Trustee shall be entitled to receive and may for all purposes hereof
conclusively rely on a certificate, signed by an officer of any duly authorized
Person, as to such fact or matter, and such certificate shall constitute full
protection to the Security Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon. The Security Trustee shall assume, and
shall be fully protected in assuming, that each other party to this Agreement is
authorized by its constitutional documents to enter into this Agreement and to
take all action permitted to be taken by it pursuant to the provisions of this
Agreement, and shall not inquire into the authorization of such party with
respect thereto.
(b) The Security Trustee may execute any of the powers
hereunder or perform any duties under this Agreement either directly or by or
through agents, including financial advisors, or attorneys or a custodian or
nominee, and the Security Trustee shall not be responsible for any misconduct or
negligence on the part of, or for the supervision of, any such agent, attorney,
custodian or nominee appointed with due care by it hereunder.
(c) The Security Trustee may consult with counsel and any
opinion of counsel or any advice of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it under this Agreement in good faith and in accordance with such
advice or opinion of counsel.
(d) The Security Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or in relation
hereto, at the request, order or direction of any of the Secured Parties,
pursuant to the provisions of this Agreement, unless such Secured Party shall
have offered to the Security Trustee reasonable security or indemnity
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby.
(e) The Security Trustee shall not be required to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that the repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it, and none of the provisions contained in this Agreement shall in
any event require the Security Trustee to perform, or be responsible or liable
for the manner of performance of, any obligations of the Issuer or the
Administrative Agent under any of the Related Documents.
(f) The Security Trustee shall not be liable for any Costs,
Taxes or the selection of Permitted Account Investments or for any investment
losses resulting from Permitted Account Investments.
(g) When the Security Trustee incurs expenses or renders
services in connection with an exercise of remedies specified in Section 3.01,
such expenses (including the fees and expenses of its counsel) and the
compensation for such services are intended to constitute expenses of
administration under any bankruptcy law or law relating to creditors' rights
generally.
(h) The Security Trustee shall not be charged with knowledge
of an Event of Default unless a Responsible Officer of the Security Trustee
obtains actual knowledge of such
13
event or the Security Trustee receives written notice of such event from any of
the Secured Parties or the Administrative Agent.
(i) The Security Trustee shall have no duty to monitor the
performance of the Issuer, the Administrative Agent or any other party to the
Related Documents, nor shall it have any liability in connection with the
appointment of the Administrative Agent, or the malfeasance or nonfeasance by
such parties.
SECTION 5.05 NO INDIVIDUAL LIABILITY. Neither Bankers Trust
nor the Security Trustee shall have any individual liability in respect of all
or any part of the Secured Obligations, and all shall look, subject to the lien
and priorities of payment provided herein and in the Indenture, only to the
property of the Grantors for payment or satisfaction of the Secured Obligations.
SECTION 5.06 THE ACCOUNT BANK. The Account Bank shall be
entitled to the immunities and privileges of the Security Trustee under Sections
5.03 and 5.04(a), (e) and (g). The Account Bank agrees to perform its duties
hereunder in accordance with the requirements of, and subject to the limitations
of the duties of, a Securities Intermediary under the UCC.
ARTICLE VI
SUCCESSOR TRUSTEES
AND ACCOUNT BANK
SECTION 6.01 RESIGNATION AND REMOVAL. The Security Trustee may
resign or be removed and, in either case, a new Security Trustee may be
appointed in accordance with Article VI of the Security Trust Agreement. If at
any time, the Person acting as the Operating Bank under the Security Trust
Agreement ceases so to act, the Person replacing such Person under the Security
Trust Agreement shall replace the Person then acting as the Account Bank under
this Agreement.
ARTICLE VII
INDEMNITY AND EXPENSES
SECTION 7.01 INDEMNITY. (a) The Security Trustee (and its
officers, directors, employees and agents) shall be indemnified to the extent,
and in the manner, set forth in Article VIII of the Security Trust Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 AMENDMENTS; WAIVERS; ETC. (a) No amendment or
waiver of any provision of this Agreement, and no consent to any departure by
any party from the provisions of this Agreement, shall in any event be effective
unless the same shall be in writing and signed by the Security Trustee and each
Grantor, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
the Security Trustee to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or
14
further exercise thereof or the exercise of any other right. In executing and
delivering any amendment or modification to this Agreement, the Security Trustee
shall be entitled to (i) an Opinion of Counsel stating that such amendment is
authorized and permitted pursuant to the Indenture and this Agreement and
complies with the terms thereof and hereof and (ii) an Officer's Certificate
stating that all conditions precedent to the execution, delivery and performance
of such amendment have been satisfied in full. The Security Trustee may, but
shall have no obligation to, execute and deliver any amendment or modification
which would affect its duties, powers, rights, immunities or indemnities
hereunder.
(b) Upon the execution and delivery by any Person of a Grantor
Supplement, (i) such Person shall be referred to as an "Additional Grantor" and
shall be and become a Grantor hereunder, and each reference in this Agreement to
"Grantor" shall also mean and be a reference to such Additional Grantor and (ii)
such Additional Grantor shall be a Grantor for all purposes under this Agreement
and shall be bound by the obligations of the Grantors hereunder.
SECTION 8.02 ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing (including telecopier)
and mailed, telecopied or delivered to the intended recipient at its address
specified, as follows:
For each Grantor:
Grand Bay Plaza
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
For the Security Trustee:
Bankers Trust Company
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency
Services, Structured Finance Team
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
For the Account Bank:
Bankers Trust Company
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency
Services, Structured Finance Team
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
15
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this Section 9.02. Each such notice shall be effective (a) upon receipt when
sent through the mails, registered or certified mail, return receipt requested,
postage prepaid, with such receipt to be effective the date of delivery
indicated on the return receipt, or (b) one Business Day after delivery to an
overnight courier, or (c) on the date personally delivered to an authorized
officer of the party to which sent, or (d) on the date transmitted by legible
telecopier transmission with a confirmation of receipt.
SECTION 8.03 NO WAIVER; REMEDIES. No failure on the part of
the Security Trustee to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION 8.04 SEVERABILITY. If any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired.
SECTION 8.05 CONTINUING SECURITY INTEREST; ASSIGNMENTS.
Subject to Sections 2.12, this Agreement shall create a continuing security
interest in the Collateral and shall (a) remain in full force and effect until
the payment in full in cash of the Secured Obligations, (b) be binding upon each
Grantor, its successors and assigns and (c) inure, together with the rights and
remedies of the Security Trustee hereunder, to the benefit of the Secured
Parties and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing subsection (c), any Secured Party may
assign or otherwise transfer all or any portion of its rights and obligations
under any Related Document to which it is a party in accordance with the terms
thereof to any other Person or entity, and such other Person or entity shall
thereupon become vested with all the rights in respect thereof granted to such
Secured Party herein or otherwise.
SECTION 8.06 RELEASE AND TERMINATION. Upon the payment in full
in cash of the Secured Obligations or upon the release in full of the Class A
Cash Collateral under Section 2.12(a) or (b) hereof, the pledge, assignment and
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the Grantors. Upon any such termination, the Security
Trustee wilL, the relevant Grantor's expense, execute and deliver to each
relevant Grantor such documents as such Grantor shall prepare and reasonably
request to evidence such termination.
SECTION 8.07 CURRENCY CONVERSION. If any amount is received or
recovered by the Security Trustee in a currency (the "Received Currency") other
than the currency in which such amount was expressed to be payable (the "Agreed
Currency"), then the amount in the Received Currency actually received or
recovered by the Security Trustee, to the extent permitted by law, shall only
constitute a discharge of the relevant Grantor to the extent of the amount of
the Agreed Currency which the Security Trustee was or would have been able in
accordance with its or his normal procedures to purchase on the date of actual
receipt or recovery (or, if that is not practicable, on the next date on which
it is so practicable), and, if the amount of the Agreed Currency which the
Security Trustee is or would have been so able to purchase is less than the
amount of the Agreed Currency which was originally payable by the relevant
Grantor,
16
such Grantor shall pay to the Security Trustee such amount as it shall determine
to be necessary to indemnify the Security Trustee against any Loss sustained by
it as a result (including the cost of making any such purchase and any premiums,
commissions or other charges paid or incurred in connection therewith) and so
that, to the extent permitted by law, (i) such indemnity shall constitute a
separate and independent obligation of each Grantor distinct from its obligation
to discharge the amount which was originally payable by such Grantor and (ii)
shall give rise to a separate and independent cause of action and apply
irrespective of any indulgence granted by the Security Trustee and continue in
full force and effect notwithstanding any judgment, order, claim or proof for a
liquidated amount in respect of the amount originally payable by any Grantor or
any judgment or order and no proof or evidence of any actual loss shall be
required.
SECTION 8.08 GOVERNING LAW. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 8.09 JURISDICTION. (a) Each of the parties hereto
irrevocably agrees that the courts of New York shall have jurisdiction to hear
and determine any suit, action or proceeding, and to settle any disputes, which
may arise out of or in connection with this Agreement and, for such purposes,
irrevocably submits to the jurisdiction of such courts. Each of the parties
hereto irrevocably waives any objection which it might now or hereafter have to
the federal U.S. or New York State courts located in New York, New York being
nominated as the forum to hear and determine any suit, action or proceeding, and
to settle any disputes, which may arise out of or in connection with this
Agreement and agrees not to claim that any such court is not a convenient or
appropriate forum.
(b) Each of the parties hereto hereby consents generally in
respect of any legal action or proceeding arising out of or in connection with
this Agreement to the giving of any relief or the issue of any process in
connection with such action or proceeding, including the making, enforcement or
execution against any property whatsoever (irrespective of its use or intended
use) of any order or judgment which may be made or given in such action or
proceeding.
SECTION 8.10 COUNTERPARTS. This Agreement may be executed in
two or more counterparts by the parties hereto, and each such counterpart shall
be considered an original and all such counterparts shall constitute one and the
same instrument.
SECTION 8.11 TABLE OF CONTENTS, HEADINGS, ETC. The Table of
Contents and headings of the Articles and Sections of this Agreement have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms and provisions
hereof.
17
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by its representative or officer
thereunto duly authorized as of the date first above written.
BANKERS TRUST COMPANY,
as the Account Bank and the Security
Trustee
By
-----------------------------------
Name:
Title:
GRANTORS:
AUTOMATIC LIFT I, LP
By: Automatic LIFT GP I, LLC, as
General Partner of Automatic
LIFT I, LP
By: Automatic Flight
Operations, LLC, as
Manager of Automatic LIFT
GP I, LLC
By:
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
18
SCHEDULE I
SECURITY TRUST AGREEMENT
Chief Executive Office, Chief Place of
Name of Grantor Business and Registered Office
--------------- ------------------------------
Automatic LIFT I, LP Address:
Attention:
Fax:
19
EXHIBIT A
SECURITY TRUST AGREEMENT
[Form of Permitted Beneficial Note]
$________________ ______________, 20__
(Face Amount)
PERMITTED BENEFICIAL NOTE
FOR VALUE RECEIVED, the undersigned (together with his, her or
its successors and permitted assigns, the "MAKER"), hereby promises to pay to
BANKERS TRUST COMPANY, a New York banking corporation, as Security Trustee, or
such holder's registered assigns (the "HOLDER"), an amount determined in
accordance with this Note not to exceed the principal sum of ____________
Dollars ($_________) in the manner described in this Note (as modified and
supplemented and in effect from time to time, the "NOTE"). All capitalized terms
not otherwise defined herein shall have the meaning given to such term in the
Supplementary Security Trust Agreement dated as of June 26, 2001 between the
"Grantors" referred to therein and Bankers Trust Company.
ARTICLE 1
PAYMENTS
Section 1.1 Payments Generally. All payments of principal to
be made by the Maker under this Note shall be made in United States Dollars, in
immediately available funds, by wire transfer to Holder, or to such other
commercial bank located in the United States of America identified in a notice
from the Holder to the Maker not later than five Business Days prior to the date
of such payment. All amounts payable under this Note shall be paid free and
clear of, and without reduction by reason of, any deduction, set-off or
counterclaim.
Section 1.2 Interest. The principal amount of this Note shall
not accrue interest and in no event shall Maker be required to pay any amount in
excess of the principal amount printed on the face of this Note.
ARTICLE 2
PAYMENT EVENT
Section 2.1 Payment Event. The occurrence of all, but not less
than all, of the following events shall constitute a "Payment Event" for the
purposes of this Note:
(a) a Default Notice shall have been issued, an Acceleration
Default shall have occurred and be continuing or the Final Maturity Date of the
Class A-1 Notes and class A-2 Notes shall have occurred;
20
(b) the Trustee and the Security Trustee shall have exercised
remedies available under the Indenture and the Related Documents, and the
"Collateral" (as defined in the Security Trust Agreement) shall have been
disposed of and/or liquidated in full;
(c) the proceeds from the liquidation and/or disposition of
such "Collateral" (the "Aggregate Disposition Amount") together with any fund on
deposit in the Class A Contingent Collateral Account are insufficient to repay
the Outstanding Principal Balance of, and accrued interest on, the Class A Notes
in full; and
(d) the aggregate face amount of the outstanding Permitted
Beneficial Notes shall exceed the Aggregate Disposition Proceeds (such excess,
the "Excess Note Amount").
Section 2.2 PAYMENT DEMAND. If a Payment Event shall occur,
the Holder may demand ("PAYMENT DEMAND"), and upon such demand Maker shall
promptly pay to Holder, the lesser of (i) the Maker's pro rata share amount of
the Excess Note Amount (based upon the face amount of this Note as compared to
the aggregate face amount of all outstanding Permitted Beneficial Notes) and
(ii) the face amount printed on the face of this Note.
ARTICLE 3
REPRESENTATIONS OF MAKER
Section 3.1 INTEREST HOLDER. The Maker hereby represents and
warrants that, as of the date of this Note, such Maker holds, directly or
indirectly, a beneficial interest in the Issuer.
Section 3.2 NET WORTH. The MAKER hereby represents and
warrants that such Maker's assets exceed the Maker's liabilities by no less than
$10 million or this Note is fully guaranteed by a Person whose assets exceed
such Person's liabilities by no less than $10 million.
ARTICLE 4
WAIVER; AMENDMENT AND RELEASE
Section 4.1 AMENDMENT. No amendment of this Note shall be
effective unless in writing and signed by the Holder and the Maker.
Section 4.2 WAIVER. No waiver of any provision of this Note
shall be effective unless in writing and signed by the Holder.
Section 4.3 RELEASE OF NOTE. Upon the request of the Maker,
this Note shall be cancelled and returned to the Maker if either of the
following events occurs:
(a) The Outstanding Principal Balance of the Class A Notes,
and any accrued and unpaid interest on the Class A Notes, shall have been paid
in full; or
21
(b) The Holder shall have received one or more Permitted
Beneficial Notes in exchange for this Note in an aggregate face amount no less
than the face amount printed on the face of this Note issued by the Maker or a
Person which represents that such Person's assets exceeds such Person's
liabilities by no less than the greater of $10,000,000 and the face amount of
the Permitted Beneficial Note issued by such Person (or that such Permitted
Beneficial Note is fully guaranteed by a Person whose assets exceed such
Person's liabilities by no less than such amount).
Article 5
General Provisions Relating to the Permitted Beneficial Note
Section 5.1. CONSENT AND AGREEMENT. The Maker hereby consents
and agrees that any Holder or Holders from time to time, with or without any
further notice to or assent from the Maker, may, without in any manner affecting
the liability of the Maker under this Note, and upon such terms and conditions
as any such Holder or Holders may deem advisable:
(a) sell, release, surrender, modify, impair, exchange or
substitute any and all property, of any nature and from whomsoever received,
held by, or for the benefit of, any such Holder as direct or indirect security
for the payment or performance of any debt, liability or obligation of the Note
Issuer or of any other person secondarily or otherwise liable for any debt,
liability or obligation of the Note Issuer on the Class A Notes; or
(b) settle, adjust or compromise any claim of the Note Issuer
against any other person secondarily or otherwise liable for any debt, liability
or obligation of the Note Issuer on the Class A Notes.
The Maker hereby ratifies and confirms any such sale, release,
surrender, modification, exchange, substitution, settlement, adjustment or
compromise and that the same shall be binding upon it, and hereby waives, to the
fullest extent permitted by law, any and all defenses, counterclaims or offsets
which it might or could have by reason thereof, it being understood that the
Maker shall at all times be bound by this Note and remain primarily liable
hereunder.
Section 5.2. WAIVER. The Maker hereby waives, except as may be
required under ARTICLE 2 hereof, to the fullest extent permitted by law:
(a) notice of acceptance of this Note by the Holder or of the
creation, renewal or accrual of any liability of the Note Issuer, present or
future, or of the reliance of such Holder upon this Note (it being understood
that every debt, liability and obligation under the Class A Notes shall
conclusively be presumed to have been created, contracted or incurred in
reliance upon the execution of this Note);
(b) demand of payment by any Holder from the Note Issuer or
any other person indebted in any manner on or for any of the debt, liabilities
or obligations under the Class A Notes; and
22
(c) presentment for the payment by any Holder or any other
person of the Class A Notes or any other instrument, protest thereof and notice
of its dishonor to any party thereto and to the Maker.
The obligations of the Maker under this Note and the rights of
any Holder to enforce such obligations by any proceedings, whether by action at
law, suit in equity or otherwise, shall not be subject to any reduction,
limitation, impairment or termination, whether by reason of any claim of any
character whatsoever or otherwise and shall not be subject to any defense,
set-off, counterclaim (other than any compulsory counterclaim), recoupment or
termination whatsoever.
Section 5.3. UNCONDITIONAL OBLIGATIONS. The obligations of the
Maker hereunder shall be binding upon the Maker and its successors and assigns,
and shall remain in full force and effect irrespective of:
(a) the genuineness, validity, regularity or enforceability of
the Class A Notes, the Security Trust Agreement and the Supplementary Trust
Agreement or any other agreement or any of the terms of any thereof, the
continuance of any obligation on the part of the Note Issuer or any other person
on or in respect of the Class A Notes or under the Security Trust Agreement, the
Supplementary Trust Agreement, the Indenture or any other agreement or the power
or authority or the lack of power or authority of the Note Issuer to issue the
Class A Notes or the Note Issuer to execute and deliver the Security Trust
Agreement, the Supplementary Trust Agreement, the Indenture or any other
agreement or of the Maker to execute and deliver this Note or to perform any of
its obligations hereunder or the existence or continuance of the Note Issuer or
any other person as a legal entity; or
(b) any default, failure or delay, willful or otherwise, in
the performance by the Note Issuer, the Maker or any other person of any
obligations of any kind or character whatsoever under the Class A Notes, the
Security Trust Agreement, the Supplementary Trust Agreement, the Indenture, this
Note or any other agreement; or
(c) any creditors' rights, bankruptcy, receivership or other
insolvency proceeding of the Note Issuer, the Maker or any other person or in
respect of the property of the Note Issuer, the Maker or any other person or any
merger, consolidation, reorganization, dissolution, liquidation, the sale of all
or substantially all of the assets of or winding up of the Note Issuer, the
Maker or any other person; or
(d) impossibility or illegality of performance on the part of
the Note Issuer, the Maker or any other person of its obligations under the
Class A Notes, the Security Trust Agreement, the Supplementary Trust Agreement,
the Indenture, this Note or any other agreements; or
(e) in respect of the Note Issuer or any other person, any
change of circumstances, whether or not foreseen or foreseeable, whether or not
imputable to the Note Issuer or any other person, or other impossibility of
performance through fire, explosion, accident, labor disturbance, floods,
droughts, embargoes, wars (whether or not declared), civil commotion, acts of
God or the public enemy, delays or failure of suppliers or carriers, inability
23
to obtain materials, action of any Federal or state regulatory body or agency,
change of law or any other causes affecting performance, or any other FORCE
MAJEURE, whether or not beyond the control of the Note Issuer or any other
person and whether or not of the kind hereinbefore specified; or
(f) any attachment, claim, demand, charge, lien, order,
process, encumbrance or any other happening or event or reason, similar or
dissimilar to the foregoing, or any withholding or diminution at the source, by
reason of any taxes, assessments, expenses, debt, obligations or liabilities of
any character, foreseen or unforeseen, and whether or not valid, incurred by or
against the Note Issuer, the Maker or any other person or any claims, demands,
charges or liens of any nature, foreseen or unforeseen, incurred by the Note
Issuer, the Maker or any other person, or against any sums payable in respect of
the Class A Notes or under the Security Trust Agreement, the Supplementary Trust
Agreement, the Indenture or this Note, so that such sums would be rendered
inadequate or would be unavailable to make the payments herein provided; or
(g) any order, judgment, decree, ruling or regulation (whether
or not valid) of any court of any nation or of any political subdivision thereof
or any body, agency, department, official or administrative or regulatory agency
of any thereof or any other action, happening, event or reason whatsoever which
shall delay, interfere with, hinder or prevent, or in any way adversely affect,
the performance by the Note Issuer, the Maker or any other person of its
respective obligations under or in respect of the Class A Notes, the Security
Trust Agreement, the Supplementary Trust Agreement, the Indenture, this Note or
any other agreement; or
(h) the failure of the Maker to receive any benefit from or as
a result of its execution, delivery and performance of this Note; or
(i) other than a Payment Demand in accordance with Section 2.2
hereof, any failure or lack of diligence in collection or protection, failure in
presentment or demand for payment, protest, notice of protest, notice of default
and of nonpayment, any failure to give notice to the Maker of failure of the
Note Issuer, the Maker or any other person to keep and perform any obligation,
covenant or agreement under the terms of the Class A Notes, the Security Trust
Agreement, the Supplemental Trust Agreement, the Indenture, this Note or any
other agreement or failure to resort for payment to the Note Issuer, the Maker
or to any other person or to any other note or to any property, security, liens
or other rights or remedies; or
(j) the acceptance of any additional security or other note,
the advance of additional money to the Note Issuer or any other person, the
renewal or extension of the Class A Notes or amendments, modifications, consents
or waivers with respect to the Class A Notes, the Security Trust Agreement, the
Supplementary Trust Agreement, the Indenture or any other agreement, or the
sale, release, substitution or exchange of any security for the Class A Notes;
or
(k) any merger or consolidation of the Note Issuer, the Maker
or any other person into or with any other person or any sale, lease, transfer
or other disposition of any of the assets of the Note Issuer, the Maker or any
other person to any other person, or any change in the ownership of any
beneficial or equity interests of the Note Issuer, the Maker or any other
person; or
24
(l) any defense whatsoever that: (i) the Note Issuer or any
other person might have to the payment of the Class A Notes (principal, premium,
if any, or interest), other than payment thereof in Federal or other immediately
available funds, or (ii) the Note Issuer or any other person might have to the
performance or observance of any of the provisions of the Class A Notes, the
Security Trust Agreement, the Supplementary Trust Agreement, the Indenture or
any other agreement, whether through the satisfaction or purported satisfaction
by the Note Issuer or any other person of its debts due to any cause such as
bankruptcy, insolvency, receivership, merger, consolidation, reorganization,
dissolution, liquidation, winding-up or otherwise, other than the defense of
indefeasible payment in full in cash of the Class A Notes; or
(m) any act or failure to act with regard to the Class A
Notes, the Security Trust Agreement, the Supplementary Trust Agreement, the
Indenture, this Note or any other agreement or anything which might vary the
risk of the Maker or any other person; or
(n) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Maker or any other person in
respect of the obligations of the Maker or other person under this Note or any
other agreement, other than the defense of indefeasible payment in full in cash
of the Class A Notes;
PROVIDED that the specific enumeration of the above-mentioned
acts, failures or omissions shall not be deemed to exclude any other acts,
failures or omissions, though not specifically mentioned above, it being the
purpose and intent of this Note and the parties hereto that the obligations of
the Maker shall be primary, absolute and unconditional and shall not be
discharged, impaired or varied except by the payment of the principal of,
premium, if any, and interest on the Class A Notes in accordance with their
respective terms whenever the same shall become due and payable as in the Class
A Notes provided, at the place specified in and all in the manner and with the
effect provided in the Class A Notes, the Security Trust Agreement, the
Supplementary Trust Agreement, the Indenture, as each may be amended or modified
from time to time. Without limiting the foregoing, it is understood that
repeated and successive demands may be made and recoveries may be had hereunder
as and when, from time to time, the Note Issuer shall default under or in
respect of the terms of the Class A Notes, the Security Trust Agreement or the
Supplementary Trust Agreement, the Indenture and that notwithstanding recovery
hereunder for or in respect of any given default or defaults by the Note Issuer
under the Class A Notes, the Security Trust Agreement or the Supplementary Trust
Agreement, the Indenture, this Note shall remain in full force and effect and
shall apply to each and every subsequent default.
Section 5.4. RECISSION. The Maker agrees that to the extent
the Note Issuer or any other person makes any payment on any Note, which payment
or any part thereof is subsequently invalidated, voided, declared to be
fraudulent or preferential, set aside, recovered, rescinded or is required to be
retained by or repaid to a trustee, receiver, or any other person under any
bankruptcy code, common law, or equitable cause, then and to the extent of such
payment, the obligation or the part thereof intended to be satisfied shall be
revived and continued in full force and effect with respect to the Maker's
obligations hereunder, as if said payment had not been made. The liability of
the Maker hereunder shall not be reduced or discharged, in whole or in part, by
any payment to any Holder from any source that is thereafter paid, returned or
refunded in whole or in part by reason of the assertion of a claim of any kind
relating thereto,
25
including, but not limited to, any claim for breach of contract, breach of
warranty, preference, illegality, invalidity, or fraud asserted by any account
debtor or by any other person.
Section 5.5. EXERCISE OF REMEDIES. No Holder shall be under
any obligation: (A) to marshal any assets in favor of the Maker or in payment of
any or all of the liabilities of the Note Issuer under or in respect of the
Class A Notes or the obligations of the Maker hereunder or (B) to pursue any
other remedy that the Maker may or may not be able to pursue themselves and that
may lighten the Maker's burden, any right to which the Maker hereby expressly
waives, it being understood, however, that the occurrence of a Payment Event is
a condition to the making of a Payment Demand.
Section 5.6. RELIEF. The Maker hereby consents in respect of
any suit, action or proceeding arising out of or in connection with this Note
for the payment and performance hereof to the giving of any relief or the issue
of any process in connection with such action or proceeding, including, without
limitation, the making, enforcement or execution against any property whatsoever
(irrespective of its use or intended use) of any order or judgment which may be
made or given in such suit, action or proceeding.
Section 5.7. IMMUNITY. To the extent that the Maker has or
hereafter may acquire any immunity from the jurisdiction of any court or from
any legal process (whether service of notice, attachment prior to judgment,
attachment in the aid of execution, execution or otherwise) with respect to
itself or its property, the Maker hereby irrevocably waives, to the fullest
extent permitted by law, such immunity in respect of its obligations under this
Note and any security for the payment and performance hereof.
Section 5.8. WAIVER. Nothing in this section shall constitute
a waiver by the Maker of any right to (i) appeal any order or judgment referred
to herein; (ii) seek any stay or reconsideration or review of any such order or
judgment; or (iii) seek any stay of execution or levy pending any appeal from,
or a suit, action or proceeding for reconsideration or review of, any such order
or judgment.
Section 5.9. REMEDIES NOT EXCLUSIVE. No remedy herein
conferred upon or reserved to any Holder is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this Note
now or hereafter existing at law or in equity. No delay or omission to exercise
any right or power accruing upon any default, omission or failure of performance
hereunder shall impair any such right or power or shall be construed to be a
waiver thereof but any such right or power may be exercised from time to time
and as often as may be deemed expedient. In order to entitle any Holder to
exercise any remedy reserved to it under the Note, it shall not be necessary for
such Holder to physically produce its Note in any proceedings instituted by it
or to give any notice, other than such notice as may be herein expressly
required.
Section 5.10. SEVERABILITY. Any provision of this Note that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
26
Section 5.11. NO RECOVERY. In no circumstances whatsoever
shall the Maker have any right to recover the amount of any payment made by the
Maker under this Note whether by right of reimbursement, subrogation,
contribution, indemnification or otherwise arising by contract, operation of
law, or under the laws of partnerships, trusts, suretyship, guaranty or
fiduciaries, or under any claim of breach of trust or fiduciary duty or
otherwise, from the Note Issuer, any Grantor, any direct or indirect equity
holders of the Note Issuer or any Grantor, any other issuer of the Permitted
Beneficial Notes or any other persons any such right that may exist being fully
waived.
Section 5.12 NOTICES. All notices and other communications in
respect of this Note (including, without limitation, any modifications of, or
requests, waivers or consents under, this Note) shall be given or made in
writing (including, without limitation, by telecopy) to the Maker or the Holder,
as the case may be, at the applicable "Address for Notices" specified on the
signature page hereof; or at such other address as shall be designated by any
such party in a notice to the other party. Except as otherwise provided in this
Note, all such communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
Section 5.13 GOVERNING LAW. This Note shall be governed by,
and construed in accordance with, the law of the State of New York without
regard to the conflicts of laws provisions thereof.
Section 5.14 TRANSFERS AND EXCHANGES. This Note is
transferable in whole or in part by the Holder and shall inure to the benefit of
the Holder and its successors and assigns in accordance with its terms.
Section 5.15 HEADINGS, ETC. The headings of the Articles and
Sections of this Note have been inserted for convenience of reference only, are
not to be considered a part hereof, and shall in no way modify or restrict any
of the terms or provisions hereof.
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IN WITNESS WHEREOF, the Maker has caused this Note to be
executed by its duly authorized officer.
[NAME]
By:
----------------------------------------
Name:
Title:
ADDRESS FOR NOTICES:
-------------------
[NAME]
[ADDRESS]
Facsimile No.: _________
Attention: ______________
28
ACKNOWLEDGEMENT BY HOLDER:
[BANKERS TRUSTS COMPANY,
as Security Trustee]
--------------------------------
ADDRESS FOR NOTICES:
-------------------
[Bankers Trust Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust and Agency
Services, Structured Finance Team]
EXHIBIT B
SECURITY TRUST AGREEMENT
[FORM OF GRANTOR SUPPLEMENT]
Bankers Trust Company, as the Security Trustee
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ [Date]
Attention: Corporate Trust and Agency
Services-Structured Finance Team
Re: Supplementary Security Trust Agreement, dated as of June 26, 2001
Ladies and Gentlemen:
Reference is made to the Supplementary Security Trust Agreement, dated as of
June 26, 2001 (the "Supplementary Security Trust Agreement"), between the
"Grantors" referred to therein (the "Grantors") and BANKERS TRUST COMPANY, a New
York banking corporation ("Bankers Trust"). Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to them in the
Supplementary Security Trust Agreement.
The undersigned hereby agrees, as of the date first above
written, to become a Grantor under the Supplementary Security Trust Agreement as
if it were an original party thereto and agrees that each reference in the
Supplementary Security Trust Agreement to "Grantor" shall also mean and be a
reference to the undersigned.
To secure the Secured Obligations, the undersigned Grantor
hereby assigns and pledges to the Security Trustee for its benefit and the
benefit of the Secured Parties, and hereby grants to the Security Trustee for
its benefit and the benefit of the Secured Parties a security interest in, all
of its right, title and interest in and to:
(a) all right of such Grantor in and to the Class A Contingent
Collateral Account and all cash, investment property, Permitted Account
Investments, other Investments, securities, instruments or other property
(including all "financial assets" within the meaning of Section 8-102(a)(9) of
the UCC) at any time or from time to time credited to the Class A Contingent
Collateral Account (collectively, the "Account Collateral");
(b) all of such Grantor's right, title and interest in and to
the personal property identified in a Grantor Supplement executed and delivered
by such Grantor to the Security Trustee; and
(c) all proceeds of any and all of the foregoing Collateral
(including proceeds that constitute property of the types described in clauses
(a) and (b) above.
2
The undersigned Guarantor hereby makes each representation and
warranty set forth in Section 2.03 of the Supplementary Security Trust Agreement
(as supplemented by the attached Annexes) and hereby agrees to be bound as a
Grantor by all of the terms and provisions of the Security Additional Trust
Agreement. Each reference in the Supplemental Trust Agreement to the Account
Collateral shall be construed to include a reference to the corresponding
Collateral hereunder.
3
This Grantor Supplement shall in all respects be governed by,
and construed in accordance with, the laws of the State of New York, including
all matters of construction, validity and performance.
Very truly yours,
[NAME OF GRANTOR]
By:
------------------------
Name:
Title:
Acknowledged and agreed to as of the date first above written:
BANKERS TRUST COMPANY,
not in its individual capacity, but
solely as the Security Trustee
By:
-----------------------------------------
Name:
Title: