Exhibit 4(b)(1)
FORM OF PASS THROUGH TRUST AGREEMENT
PASS THROUGH TRUST AGREEMENT
Dated as of [DATE]
between
UNITED AIR LINES, INC.
and
[TRUSTEE NAME],
as Trustee
TABLE OF CONTENTS
-----------------
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.....................................................2
Section 1.02 Compliance Certificates and Opinions...........................12
Section 1.03 Form of Documents Delivered to Trustee.........................13
Section 1.04 Directions of Certificateholders...............................13
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
Section 2.01 Amount Unlimited; Issuable in Series...........................15
Section 2.02 Issuance of Certificates; Acquisition of Equipment Notes.......17
Section 2.03 Acceptance by Trustee..........................................19
Section 2.04 Limitation of Powers...........................................19
ARTICLE III
THE CERTIFICATES
Section 3.01 Form, Denomination and Execution of Certificates...............20
Section 3.02 Restrictive Legends............................................20
Section 3.03 Authentication of Certificates.................................21
Section 3.04 Transfer and Exchange..........................................21
Section 3.05 Book-Entry Provisions for Global Certificate...................22
Section 3.06 [Reserved].....................................................24
Section 3.07 Mutilated, Destroyed, Lost or Stolen Certificates..............24
Section 3.08 Persons Deemed Owners..........................................25
Section 3.09 Cancellation...................................................25
Section 3.10 Temporary Certificates.........................................25
Section 3.11 Limitation of Liability for Payments...........................25
Section 3.12. CUSIP Numbers..................................................26
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ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01 Certificate Account and Special Payments Account...............26
Section 4.02 Distributions from Certificate Account and Special Payments
Account........................................................27
Section 4.03 Statements to Certificateholders...............................28
Section 4.04 Investment of Special Payment Moneys...........................29
ARTICLE V
THE COMPANY
Section 5.01 Maintenance of Corporate Existence.............................30
Section 5.02 Consolidation, Merger, etc.....................................30
ARTICLE VI
DEFAULT
Section 6.01 Events of Default..............................................31
Section 6.02. Incidents of Sale of Equipment Notes...........................32
Section 6.03 Judicial Proceedings Instituted by Trustee; Trustee May
Bring Suit.....................................................33
Section 6.04 Control by Certificateholders..................................34
Section 6.05 Waiver of Past Defaults........................................34
Section 6.06 Right of Certificateholders to Receive Payments Not to Be
Impaired.......................................................35
Section 6.07 Certificateholders May Not Bring Suit Except Under Certain
Conditions.....................................................35
Section 6.08 Remedies Cumulative............................................36
Section 6.09. Discontinuance of Proceedings..................................36
Section 6.10. Undertaking for Costs..........................................36
ARTICLE VII
THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities............................37
Section 7.02 Notice of Defaults.............................................37
Section 7.03 Certain Rights of Trustee......................................38
Section 7.04 Not Responsible for Recitals or Issuance of Certificates.......39
Section 7.05 May Hold Certificates..........................................39
Section 7.06 Money Held in Trust............................................39
Section 7.07 Compensation and Reimbursement.................................39
Section 7.08 Corporate Trustee Required; Eligibility........................40
Section 7.09 Resignation and Removal; Appointment of Successor..............41
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Section 7.10 Acceptance of Appointment by Successor.........................42
Section 7.11 Merger, Conversion, Consolidation or Succession to Business....43
Section 7.12 Maintenance of Agencies........................................43
Section 7.13 Money for Certificate Payments to Be Held in Trust.............45
Section 7.14 Registration of Equipment Notes in Name of Subordination Agent.45
Section 7.15 Representations and Warranties of Trustee......................45
Section 7.16 Withholding Taxes; Information Reporting.......................47
Section 7.17 Trustee's Liens................................................47
Section 7.18 Preferential Collection of Claims..............................47
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01 The Company to Furnish Trustee with Names
and Addresses of Certificateholders............................47
Section 8.02 Preservation of Information; Communications to
Certificateholders.............................................48
Section 8.03 Reports by Trustee.............................................48
Section 8.04 Reports by the Company.........................................48
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01 Supplemental Agreements Without Consent of Certificateholders..49
Section 9.02 Supplemental Agreements with Consent of Certificateholders.....51
Section 9.03 Documents Affecting Immunity or Indemnity......................52
Section 9.04 Execution of Supplemental Agreements...........................52
Section 9.05 Effect of Supplemental Agreements..............................52
Section 9.06 Conformity with Trust Indenture Act............................52
Section 9.07 Reference in Certificates to Supplemental Agreements...........52
ARTICLE X
AMENDMENTS TO INDENTURES AND NOTE DOCUMENTS
Section 10.01 Amendments and Supplements to Indentures and Other Note
Documents......................................................53
ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01 Termination of the Trusts......................................54
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ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Limitation on Rights of Certificateholders.....................55
Section 12.02 Certificates Nonassessable and Fully Paid......................55
Section 12.03 Notices........................................................55
Section 12.04 Governing Law..................................................56
Section 12.05 Severability of Provisions.....................................57
Section 12.06 Trust Indenture Act Controls...................................57
Section 12.07 Effect of Headings and Table of Contents.......................57
Section 12.08 Successors and Assigns.........................................57
Section 12.09 Benefits of Agreement..........................................57
Section 12.10 Legal Holidays.................................................57
Section 12.11 Counterparts...................................................57
Section 12.12 Intention of Parties...........................................58
Section 12.13 Registration of Equipment Notes in Name of Subordination
Agent..........................................................58
Section 12.14 Communication by Certificateholders with other
Certificateholders.............................................58
Section 12.15. Normal Commercial Relations....................................58
Section 12.16. No Recourse Against Others.....................................58
Schedule 1 - Indentures
Schedule 2 - Note Purchase Agreement
Exhibit A - Form of Certificate
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Reconciliation and tie between United Air Lines Pass Through Trust
Agreement, dated as of [DATE], and the Trust Indenture Act of 1939. This
reconciliation does not constitute part of the Pass Through Trust
Agreement.
Trust Indenture Act Pass Through Trust
of 1939 Section Agreement Section
--------------- -----------------
310(a)(1) 7.08
(a)(2) 7.08
312(a) 3.05; 8.01; 8.02
313(a) 8.03
314(a) 8.04(a) - (c)
(a)(4) 8.04(d)
(c)(1) 1.02
(c)(2) 1.02
(d)(1) 7.13; 11.01
(d)(2) 7.13; 11.01
(d)(3) 2.01
(e) 1.02
315(b) 7.02
316(a)(last sentence) 1.04(c)
(a)(1)(A) 6.04
(a)(1)(B) 6.05
(b) 6.06
(c) 1.04(d)
317(a)(1) 6.03
(b) 7.13
318(a) 12.06
PASS THROUGH TRUST AGREEMENT
This PASS THROUGH TRUST AGREEMENT, dated as of [DATE],
between UNITED AIR LINES, INC., a Delaware corporation, and [TRUSTEE NAME],
a [ENTITY TYPE], as Trustee, is made with respect to the formation from
time to time of separate United Air Lines Pass Through Trusts and the
issuance from time to time of separate series of Certificates representing
fractional undivided interests in the respective Trusts.
WHEREAS, from time to time the Company (this and certain
other defined terms used herein are defined in Section 1.01) may enter into
a Trust Supplement with the Trustee named therein pursuant to which such
Trustee shall declare the creation of a separate Trust for the benefit of
the Holders of the series of Certificates to be issued in respect of such
Trust, and the initial Holders of the Certificates of such series, as the
grantors of such Trust, by their respective acceptances of the Certificates
of such series, shall join in the creation of such Trust with the Trustee;
WHEREAS, all Certificates to be issued in respect of each
separate Trust shall be issued as a separate series pursuant to this
Agreement, shall evidence fractional undivided interests in such Trust and
shall have no rights, benefits or interests in respect of any other
separate Trust or the property held therein, subject, however, to the
provisions of any Intercreditor Agreement to which one or more Trusts may
be a party and to any provisions to the contrary in any applicable Trust
Supplement;
WHEREAS, from time to time, pursuant to the terms and
conditions of this Agreement with respect to each separate Trust formed
hereunder, the Trustee on behalf of such Trust shall purchase one or more
issues of Equipment Notes having the identical interest rate as, and final
maturity dates not later than the final Regular Distribution Date of, the
series of Certificates issued in respect of such Trust and, subject to the
terms of any related Intercreditor Agreement and to any terms to the
contrary in any applicable Trust Supplement, shall hold such Equipment
Notes in trust for the benefit of the Certificateholders of such Trust;
WHEREAS, to facilitate the sale of Equipment Notes to,
and the purchase of Equipment Notes by, the Trustee on behalf of each Trust
created from time to time pursuant to this Agreement, the Company has duly
authorized the execution and delivery of this Basic Agreement and each
Trust Supplement as the "issuer," as such term is defined in and solely for
purposes of the Securities Act of 1933, as amended, of the Certificates to
be issued in respect of each Trust and as the "obligor," as such term is
defined in and solely for purposes of the Trust Indenture Act of 1939, as
amended, with respect to all such Certificates and is undertaking to
perform certain administrative and ministerial duties hereunder and is also
undertaking to pay the fees and expenses of the Trustee; and
WHEREAS, this Basic Agreement, as amended or supplemented
from time to time, shall be subject to the provisions of the Trust
Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
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NOW, THEREFORE, in consideration of the mutual agreements
herein contained, and of other good and valuable consideration the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. For all purposes of this Basic Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms used herein that are defined in this
Article I have the meanings assigned to them in this Article I,
and include the plural as well as the singular;
(b) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, or
by the rules promulgated under the Trust Indenture Act, have the
meanings assigned to them therein;
(c) all references in this Basic Agreement to designated
"Articles," "Sections," "Subsections" and other subdivisions are
to the designated Articles, Sections, Subsections and other
subdivisions of this Basic Agreement;
(d) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Basic Agreement as
whole and not to any particular Article, Section, Subsection or
other subdivision; and
(e) unless the context otherwise requires, whenever the
words "including," "include" or "includes" are used herein, it
shall be deemed to be followed by the phrase "without limitation".
Additional Payments: Means a payment of Make-Whole Amount
and/or Break Amount, if any.
Affiliate: With respect to any specified Person, means
any other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with such Person.
For the purposes of this definition, "control," when used with
respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
Agent Members: Has the meaning specified in Section 3.05(a).
Agreement: Means, unless the context otherwise requires,
this Basic Agreement as supplemented by the Trust Supplement creating
a particular Trust and establishing the series of Certificates issued
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or to be issued in respect thereof, with reference to such Trust and
each series of Certificates, as this Basic Agreement as so
supplemented may be further supplemented with respect to such Trust
and such series of Certificates.
Aircraft: Means an aircraft, including engines therefor,
owned by or leased to the Company and securing one or more Equipment
Notes.
Authorized Agent: With respect to the Certificates of
any series, means any Paying Agent or Registrar for the Certificates
of such series.
Avoidable Tax: Means a state or local tax (i) upon (w)
the Trust, (x) the Trust Property, (y) Certificateholders or (z)
the Trustee for which the Trustee is entitled to seek
reimbursement from the Trust Property, and (ii) which would be
avoided if the Trustee were located in another state, or
jurisdiction within a state, within the United States. A tax shall
not be an Avoidable Tax if the Company or an Owner Trustee, if
any, shall agree to pay, and shall pay, such tax.
Basic Agreement: Means this Pass Through Trust Agreement,
as the same may from time to time be supplemented, amended or
modified, but does not include any Trust Supplement.
Break Amount: If applicable, has the meaning specified
therefor in the Indentures.
Business Day: With respect to the Certificates of any
series, means any day (x) other than a Saturday or Sunday or a day
on which commercial banks are required or authorized to close in
Chicago, Illinois, New York, New York, or, so long as any such
Certificate is outstanding, a city and state in which the Trustee
or any related Indenture Trustee maintains its Corporate Trust
Office or receives and disburses funds and (y) on which dealings
are carried on in the London interbank market.
Certificate: Means any one of the Certificates and
any such Certificates issued in exchange therefor or replacement
thereof pursuant tothis Agreement.
Certificate Account: With respect to the Certificates of any
series, means the account or accounts created and maintained for
such series pursuant to Section 4.01(a).
Certificateholder or Holder: With respect to the Certificates
of any series, means the Person in whose name a Certificate of such
series is registered in the Register for Certificates of such series.
Clearstream: Means Clearstream Banking.
Company: Means United Air Lines, Inc., a Delaware
corporation, or its successor in interest pursuant to Section 5.02, or
(only in the context of provisions hereof, if any, when
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such reference is required for purposes of compliance with the
Trust Indenture Act) any other obligor (within the meaning of the
Trust Indenture Act) with respect to the Certificates.
Controlling Party: If applicable, means the Person entitled
to act as such pursuant to the terms of the Intercreditor Agreement.
Corporate Trust Office: With respect to the Trustee or
any Indenture Trustee, means the office of such trustee in the
city at which at any particular time its corporate trust business
shall be principally administered.
Cut-off Date: With respect to the Certificates of a Trust of
any series, means the date designated as such in the related Trust
Supplement.
Definitive Certificates: Has the meaning specified in
Section 3.05(f).
Depositary: Means The Depository Trust Company, its nominees
and their respective successors.
Direction: Has the meaning specified in Section 1.04(a).
Distribution Date: With respect to the Certificates of any
series, means any Regular Distribution Date or Special Distribution
Date.
Eligible Account: Means an account established by and
with an Eligible Institution at the request of the Trustee, which
institution agrees, for all purposes of the applicable Uniform
Commercial Code ("UCC"), including Article 8 thereof, that (a)
such account shall be a "securities account" (as defined in
Section 8-501 of the UCC), (b) all property credited to such
account shall be treated as a "financial asset" (as defined in
Section 8-102(9) of the UCC), (c) the Trustee shall be the
"entitlement holder" (as defined in Section 8-102(7) of the UCC)
in respect of such account, (d) such Eligible Institution shall
comply with all entitlement orders issued by the Trustee to the
exclusion of any other Person and (e) the "securities intermediary
jurisdiction" (under Section 8-110(e) of the UCC) shall be the
State of Illinois.
Eligible Institution: Means the corporate trust
department of (a) [ELIGIBLE INSTITUTION NAME], acting solely in
its capacity as a "securities intermediary" (as defined in Section
8-102(14) of the applicable Uniform Commercial Code), or (b) a
depository institution organized under the laws of the United
States of America or any one of the states thereof or the District
of Columbia (or any U.S. branch of a foreign bank), which has a
long-term unsecured debt rating from ▇▇▇▇▇'▇ Investors Service,
Inc. and Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., of at least "A-3" or its equivalent.
Equipment Note: With respect to the Certificates of any
series, has the meaning given to "Equipment Note" in the related
Indenture.
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ERISA: Means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor federal statute.
Escrow Account: With respect to the Certificates of any
series, has the meaning specified in Section 2.02(b).
Escrowed Funds: With respect to the Trusts of any series,
has the meaning specified in Section 2.02(b).
Euroclear: Means the Euroclear System.
Event of Default: Means, in respect of any Trusts of a
series, an Indenture Default under any Indenture pursuant to which
Equipment Notes held by such Trusts were issued.
Financing Documents: With respect to any Equipment Note,
means (i) the related Note Purchase Agreement and Indenture and
(ii) in the case of any Equipment Note related to a Leased
Aircraft, the Lease relating to such Leased Aircraft.
Fractional Cumulative Interest: Means, with respect to
any outstanding Certificate of a series, the principal amount of
such Certificate divided by the aggregate principal amount of all
Certificates of such series issued pursuant to all Trust
Supplements creating Trusts of such series.
Fractional Undivided Interest: Means the fractional
undivided interest in a Trust that is evidenced by a Certificate
relating to such Trust.
Global Certificates: Has the meaning assigned to such term
in Section 3.01(c).
Indenture: With respect to any Trust, means each of the
one or more separate trust indenture and security agreements or
trust indentures and mortgages or similar agreements which relates
to an issue of Equipment Notes to be held in such Trust; as each
such indenture may be amended or supplemented in accordance with
its respective terms; and Indentures means all of such agreements.
Indenture Default: With respect to any Indenture, means any
Indenture Event of Default (as such term is defined in such Indenture).
Indenture Trustee: With respect to any Equipment Note or
the Indenture applicable thereto, means the bank or trust company
designated as indenture trustee under such Indenture, together
with any successor to such Indenture Trustee appointed pursuant
thereto.
Initial Regular Distribution Date: With respect to the
Certificates of any series, means the first Regular Distribution Date
on which a Scheduled Payment is to be made.
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Intercreditor Agreement: Means (a) any agreement by and
among the Trustee, as trustee with respect to one or more Trusts,
one or more Liquidity Providers, if applicable, and a
Subordination Agent providing, among other things, for the
distribution of payments made in respect of Equipment Notes held
by such Trusts, or (b) such other agreement or agreements
designated as an "Intercreditor Agreement" in the Trust Supplement
relating to any Trust.
Issuance Date: With respect to the Certificates of a Trust
of any series, means the date of the issuance of the Certificates of
such Trust.
Lease: Means, with respect to each Leased Aircraft, if
any, the lease between an Owner Trustee, as the lessor, and the
Company, as the lessee, referred to in the related Indenture, as
such lease may be amended, supplemented or otherwise modified in
accordance with its terms.
Leased Aircraft: Means, with respect to any Lease, each
aircraft that has been leased to United pursuant to such Lease.
Liquidity Facility: Means, with respect to the
Certificates of any series or any Equipment Notes, (a) any
revolving credit agreement, letter of credit, insurance policy,
surety bond or financial guaranty or similar facility for the
provision of liquidity support relating to the Certificates of
such series between a Liquidity Provider and a Subordination Agent
or one or more other Persons, as amended, replaced, supplemented
or otherwise modified from time to time in accordance with its
terms and, if applicable, the terms of any Intercreditor
Agreement, or (b) such other agreement or agreements designated as
a "Liquidity Facility" in the Trust Supplement relating to any
Trust.
Liquidity Provider: Means, with respect to the
Certificates of any series, a bank, insurance company, financial
institution or other Person that agrees to provide a Liquidity
Facility for the benefit of the holders of Certificates of such
series.
Make-Whole Amount: If applicable, has the meaning
specified therefor in the Indenture.
Note Documents: With respect to the Certificates of any
series, the Equipment Notes with respect to such Certificates and,
with respect to such Equipment Notes, the related Financing
Documents.
Note Purchase Agreement: Means, with respect to the
Certificates of any series, any note purchase, refunding,
participation or similar agreement providing for, among other
things, the purchase of Equipment Notes by the Trustee on behalf
of the relevant Trust; and "Note Purchase Agreements" means all
such agreements.
Officer's Certificate: Means a certificate signed, (a) in
the case of the Company, by the Chairman of the Board of Directors,
the President, any Vice President, the Secretary or
6
the Treasurer, or (b) in the case of an Owner Trustee or an
Indenture Trustee, a Responsible Officer of such Owner Trustee or
such Indenture Trustee, as the case may be.
Opinion of Counsel: Means a written opinion of legal
counsel who (a) in the case of counsel for the Company may be (i)
an attorney of the Company, (ii) ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ or (iii)
such other counsel designated by the Company and reasonably
acceptable to the Trustee and (b) in the case of counsel for any
Owner Trustee or any Indenture Trustee, may be such counsel as may
be designated by any of them whether or not such counsel is an
employee of any of them, and who shall be reasonably acceptable to
the Trustee.
Outstanding: With respect to Certificates of any series,
means, as of the date of determination, all Certificates of such
series theretofore authenticated and delivered under this
Agreement, except:
(i) Certificates of such series theretofore
canceled by the Registrar or delivered to the Trustee or the
Registrar for cancellation;
(ii) All of the Certificates of such series if
money in the full amount required to make the final
distribution with respect to such series pursuant to
Section 11.01 has been theretofore deposited with the
Trustee in trust for the Holders of the Certificates of
such series as provided in Section 4.01 pending
distribution of such money to such Certificateholders
pursuant to such final distribution payment; and
(iii) Certificates of such series in exchange
for or in lieu of which other Certificates of such series
have been authenticated and delivered pursuant to this
Basic Agreement.
Owned Aircraft: Means each aircraft owned by United.
Owner Participant: With respect to any Equipment Note
relating to a Leased Aircraft, if any, means the "Owner
Participant" as referred to in the Indenture pursuant to which
such Equipment Note is issued and any permitted successor or
assign of such Owner Participant; and Owner Participants at any
time of determination means all of the Owner Participants thus
referred to in the Indentures.
Owner Trustee: With respect to any Equipment Note
relating to a Leased Aircraft, if any, means the "Owner Trustee,"
as referred to in the Indenture pursuant to which such Equipment
Note is issued, not in its individual capacity but solely as
trustee; and Owner Trustees means all of the Owner Trustees party
to any of the Indentures.
Paying Agent: With respect to the Certificates of any series,
means the paying agent maintained and appointed for the Certificates
of such series pursuant to Section 7.12.
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Permitted Investments: Means direct obligations of the
United States of America or agencies or instrumentalities thereof
the payment of which is backed by the full faith and credit of the
United States of America and which mature in not more than 60 days
after the date of acquisition thereof or such lesser time as is
required for the distribution of any Special Payments on a Special
Distribution Date.
Person: Means any person, including any individual,
corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, trustee,
unincorporated organization, or government or any agency or
political subdivision thereof.
Pool Balance: With respect to the Certificates issued
pursuant to the Trusts of the same series, means, as of any date,
(i) the original aggregate face amount of the Certificates of such
series less (ii) the aggregate amount of all payments made in
respect of such Certificates of such series other than payments
made in respect of interest or Additional Payments thereon or
reimbursement of any costs or expenses incurred in connection
therewith. The Pool Balance as of any Distribution Date, with
respect to the Certificates of such Trusts, shall be computed
after giving effect to the payment of principal, if any, on the
Equipment Notes or other Trust Property held in such Trusts and
the distribution thereof to be made on such Distribution Date.
Pool Factor: With respect to the Certificates issued
pursuant to the Trusts of the same series, means, as of any date,
the quotient (rounded to the seventh decimal place) computed by
dividing (i) the Pool Balance of such series as at such date by
(ii) the original aggregate face amount of the Certificates of
such Trusts. The Pool Factor as of any Distribution Date, with
respect to such Trusts, shall be computed after giving effect to
the payment of principal, if any, on the Equipment Notes or other
Trust Property held in such Trusts and the distribution thereof to
be made on such Distribution Date.
Postponed Notes: Means the Equipment Notes to be held in the
Trust as to which a Postponement Notice shall have been delivered
pursuant to Section 2.02(b).
Postponement Notice: Means, with respect to any Trust or
the related series of Certificates, an Officer's Certificate of
the Company (1) requesting that the Trustee temporarily postpone
the purchase of the related Equipment Notes to a date which is
later than the Issuance Date of such series of Certificates, (2)
identifying the amount of the purchase price of each such
Equipment Note and the aggregate purchase price for all such
Equipment Notes, (3) setting forth the reasons for such
postponement and (4) with respect to each such Equipment Note,
either (a) setting or resetting a new Transfer Date (which shall
be on or prior to the applicable Cut-off Date) for payment by the
Trustee of such purchase price and issuance of the related
Equipment Note, or (b) indicating that such new Transfer Date
(which shall be on or prior to the applicable Cut-off Date) shall
be set by subsequent written notice not less than one Business Day
prior to such new Transfer Date.
Potential Purchasers: Has the meaning specified therefor in
Section 6.01(d).
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Purchasing Certificateholders: Has the meaning specified
therefor in Section 6.01(d).
Record Date: With respect to any Trust or the related
series of Certificates, means (i) for Scheduled Payments to be
distributed on any Regular Distribution Date, other than the final
distribution, with respect to such series of Certificates, the
15th day (whether or not a Business Day) preceding such Regular
Distribution Date, and (ii) for Special Payments to be distributed
on any Special Distribution Date, other than the final
distribution, with respect to such series of Certificates, the
15th day (whether or not a Business Day) preceding such Special
Distribution Date.
Register and Registrar: With respect to the Certificates
of any series, means the register maintained and the registrar
appointed for such series pursuant to Sections 3.04 and 7.12.
Registration Statement: Means the Registration Statement
of the Company which covers any of the Certificates, including
post-effective amendments, in each case including the prospectus
and prospectus supplement contained therein, all exhibits thereto
and all material incorporated by reference therein.
Regular Distribution Date: With respect to distributions
of Scheduled Payments in respect of any series of Certificates,
means each date designated as a Regular Distribution Date in this
Agreement; provided, however, that, if any such day shall not be a
Business Day, the related distribution shall be made on the next
Business Day together with additional interest accrued to such
next Business Day at the rate applicable to such series of
Certificates.
Responsible Officer: With respect to any Trustee, any
Indenture Trustee and any Owner Trustee, means any officer in the
Corporate Trust Department of the Trustee, Indenture Trustee or
Owner Trustee or any other officer customarily performing
functions similar to those performed by the persons who at the
time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and
familiarity with a particular subject.
Scheduled Payment: Means, with respect to any Equipment
Note, except to the extent otherwise provided in the applicable
Trust Supplement, (i) any payment of principal or interest on such
Equipment Note (other than any such payment that is not in fact
received by the Trustee or any Subordination Agent within five
days of the date on which such payment is scheduled to be made) or
(ii) any distribution in respect of principal or interest on such
Equipment Note to the Holders of the Certificates of any series
with funds drawn under the Liquidity Facility for such series
(other than any such payment that is not in fact received by the
Trustee or any Subordination Agent within five days of the date
upon which payment is scheduled to be made), which payment in the
case of clause (i) or clause (ii) represents an installment of
principal on such Equipment Note at the stated maturity of such
installment, or the payment of regularly scheduled interest
accrued on the unpaid principal amount of such Equipment Note, or
both; provided, however, that any payment of principal,
9
Additional Payment, if any, or interest resulting from the
redemption or purchase of any Equipment Note shall not constitute
a Scheduled Payment.
SEC: Means the Securities and Exchange Commission, as
from time to time constituted or created under the Securities
Exchange Act of 1934, as amended, or, if at any time after the
execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
Securities Act: Means the United States Securities Act of
1933, as amended from time to time, or any successor thereto.
Selling Certificateholders: Has the meaning specified
therefor in Section 6.01(d).
Special Distribution Date: With respect to the
Certificates of any series, means each date on which a Special
Payment is to be distributed as specified in this Agreement;
provided, however, that, if any such day shall not be a Business
Day, the related distribution shall be made on the next Business
Day together with additional interest accrued to such next
Business Day at the rate applicable to such series of
Certificates.
Special Payment: Means, except to the extent otherwise
provided in the applicable Trust Supplement, (i) any payment
(other than a Scheduled Payment) in respect of, or any proceeds
of, any Equipment Note held in a Trust or Trust Indenture Estate
(as defined in each Indenture), (ii) the amounts required to be
distributed pursuant to the last paragraph of Section 2.02(b), or
(iii) the amounts required to be distributed pursuant to the
penultimate paragraph of Section 2.02(b).
Special Payments Account: With respect to the
Certificates of any series, means the account or accounts created
and maintained for such series pursuant to Section 4.01(b) and the
related Trust Supplement.
Specified Investments: With respect to any Trust, means,
unless otherwise specified in the related Trust Supplement, each
of (i) direct obligations of, or obligations guaranteed by, the
United States Government or agencies thereof, (ii) open market
commercial paper of any corporation incorporated under the laws of
the United States of America or any State thereof rated at least
P-1 or its equivalent by ▇▇▇▇▇'▇ Investors Service, Inc. or at
least A-1 or its equivalent by Standard & Poor's Ratings Services,
a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., (iii) certificates
of deposit issued by commercial banks organized under the laws of
the United States or of any political subdivision thereof having a
combined capital and surplus in excess of $500,000,000 which banks
or their holding companies have a rating of A or its equivalent by
▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Ratings
Services, a division of The ▇▇▇▇▇▇- ▇▇▇▇ Companies, Inc.;
provided, however, that the aggregate amount at any one time so
invested in certificates of deposit issued by any one bank shall
not exceed 5% of such bank's capital and surplus, (iv) U.S. dollar
denominated offshore certificates of deposit
10
issued by, or offshore time deposits with, any commercial bank
described in clause (iii) or any subsidiary thereof and (v)
repurchase agreements with any financial institution having
combined capital and surplus of at least $500,000,000 with any of
the obligations described in clauses (i) through (iv) as
collateral; and, provided further, that if all of the above
investments are unavailable, the entire amount to be invested may
be used to purchase federal funds from an entity described in
clause (iii) above.
Subordination Agent: Has the meaning specified therefor in
any Intercreditor Agreement.
Substitute Aircraft: Means, with respect to any Trust,
any Aircraft of a type specified in this Agreement and, at the
election of the Company, substituted prior to the applicable
Cut-off Date, if any, pursuant to the terms of this Agreement.
Transfer Date: Has the meaning assigned to that term or
any of the terms "Delivery Date", "Funding Date" or "Closing Date"
in a Note Purchase Agreement, and in any event refers to any such
date as it may be changed from time to time in accordance with the
terms of such Note Purchase Agreement.
Triggering Event: If any, has the meaning specified therefor
in the Intercreditor Agreement.
Trust: With respect to the Certificates of any series, means
any trust of such series under this Agreement.
Trustee: Means, with respect to any particular Trust, the
institution executing this Agreement as the Trustee, or its
successor in interest, and any successor or other trustee
appointed as provided herein (it being understood that the same
institution need not act as the Trustee in respect of all of the
Trusts created pursuant to this Basic Agreement and the Trust
Supplements).
Trust Indenture Act: Except as otherwise provided in
Section 9.06, means the United States Trust Indenture Act of 1939
as in force at the date as of which this Basic Agreement was
executed.
Trust Property: Means, with respect to any Trust, except
to the extent otherwise provided in the applicable Trust
Supplement, (i) subject to any related Intercreditor Agreement,
the Equipment Notes held as the property of such Trust, all monies
at any time paid thereon and all monies due and to become due
thereunder, (ii) debt instruments issued by the Company in
accordance with the first paragraph of Section 2.02(b), (iii)
funds from time to time deposited in the related Escrow Account,
the related Certificate Account and the related Special Payments
Account and, subject to any related Intercreditor Agreement, any
proceeds from the sale by the Trustee pursuant to Article VI
hereof of any Equipment Note referred to in (i) above, (iv) all
rights of such Trust and the Trustee, on behalf of the Trust,
under any Intercreditor Agreement or Liquidity Facility,
including, without limitation,
11
all rights to receive all monies and other property payable
thereunder, and (v) all monies or other property receivable under
any Intercreditor Agreement or Liquidity Facility for such Trust.
Trust Supplement: Means an agreement supplemental hereto
pursuant to which (i) a separate Trust is created for the benefit
of the Holders of the Certificates of a series, (ii) the issuance
of the Certificates of such series representing fractional
undivided interests in such Trust is authorized and (iii) the
terms of the Certificates of such series are established, as such
agreement may from time to time be supplemented, amended or
otherwise modified.
Trustee's Lien: Has the meaning specified in Section 7.17.
Section 1.02 Compliance Certificates and Opinions. Upon any
application or request (except with respect to matters set forth
in Article II) by the Company, any Owner Trustee or any Indenture
Trustee to the Trustee to take any action under any provision of this
Basic Agreement or, in respect of the Certificates of any series,
this Agreement, the Trustee may request that the Company, such Owner
Trustee or such Indenture Trustee, as the case may be, furnish to the
Trustee (i) an Officer's Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Basic Agreement or this Agreement relating to the proposed action
have been complied with and (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any,
have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents
is specifically required by any provision of this Basic Agreement or
this Agreement relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Basic Agreement or, in
respect of the Certificates of any series, this Agreement (other than a
certificate provided pursuant to Section 8.04(d)) or any Trust Supplement
shall include:
(i) a statement that each individual signing
such certificate or opinion has read such covenant or
condition and the definitions in this Basic Agreement or
this Agreement relating thereto;
(ii) a brief statement as to the nature and scope
of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(iii) a statement that, in the opinion of each
such individual, he has made such examination or
investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether, in the opinion
of each such individual, such condition or covenant has
been complied with.
12
Section 1.03 Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or
that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters and any such Person may
certify or give an opinion as to such matters in one or several documents.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Basic Agreement or, in respect of
the Certificates of any series, this Agreement, they may, but need not, be
consolidated and form one instrument.
Section 1.04 Directions of Certificateholders. (a) Any direction,
consent, request, demand, authorization, notice, waiver or other action
provided by this Agreement in respect of the Certificates of any series to
be given or taken by Certificateholders (a "Direction") may be embodied in
and evidenced by one or more instruments of substantially similar tenor
signed by such Certificateholders in person or by an agent or proxy duly
appointed in writing; and, except as otherwise expressly provided herein,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required
pursuant to this Agreement, to the Company or any Indenture Trustee. Proof
of execution of any such instrument or of a writing appointing any such
agent or proxy shall be sufficient for any purpose of this Agreement and
conclusive in favor of the Trustee, the Company and any Indenture Trustee,
if made in the manner provided in this Section 1.04.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the certificate of any
notary public or other officer of any jurisdiction authorized to take
acknowledgments of deeds or administer oaths that the Person executing such
instrument acknowledged to him the execution thereof, or by an affidavit of
a witness to such execution sworn to before any such notary or such other
officer and where such execution is by an officer of a corporation or
association or a member of a partnership, on behalf of such corporation,
association or partnership, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other reasonable manner which
the Trustee deems sufficient.
(c) In determining whether the Certificateholders of the
requisite Fractional Cumulative Interests of Certificates of any series
Outstanding have given any Direction under this Agreement, Certificates
owned by the Company or any Affiliate thereof shall be disregarded and
deemed not to be Outstanding for purposes of any such determination. In
determining whether the Trustee shall be protected in relying upon any such
Direction, only Certificates which the Trustee knows to be so owned shall
be so disregarded. Notwithstanding the foregoing, (i) if any such Person
owns 100% of the Certificates of any series Outstanding, such Certificates
shall not be so disregarded, and (ii) if any amount of Certificates of such
series so owned by any such Person have been pledged in good faith, such
Certificates shall not be disregarded if the pledgee establishes to
13
the satisfaction of the Trustee the pledgee's right so to act with respect
to such Certificates and that the pledgee is not the Company or any
Affiliate thereof.
(d) The Company may at its option, by delivery of an
Officer's Certificate to the Trustee, set a record date to determine the
Certificateholders in respect of the Certificates of any series entitled to
give any Direction. Notwithstanding Section 316(c) of the Trust Indenture
Act, such record date shall be the record date specified in such Officer's
Certificate, which shall be a date not more than 30 days prior to the first
solicitation of Certificateholders of the applicable series in connection
therewith. If such a record date is fixed, such Direction may be given
before or after such record date, but only the Certificateholders of record
of the applicable series at the close of business on such record date shall
be deemed to be Certificateholders for the purposes of determining whether
Certificateholders of the requisite proportion of Outstanding Certificates
of such series have authorized or agreed or consented to such Direction,
and for that purpose the Outstanding Certificates of such series shall be
computed as of such record date. No such Direction by the
Certificateholders on such record date shall be deemed effective unless it
shall become effective pursuant to the provisions of this Basic Agreement
not later than one year after such record date.
(e) Any Direction by the Holder of any Certificate shall
bind the Holder of every Certificate issued upon the transfer thereof or in
exchange therefor or in lieu thereof, whether or not notation of such
Direction is made upon such Certificate.
(f) Except as otherwise provided in Section 1.04(c),
Certificates of any series owned by or pledged to any Person shall have an
equal and proportionate benefit under the provisions of this Agreement,
without preference, priority or distinction as among all of the
Certificates of such series.
(g) The Company and the Trustee may make reasonable
rules for action by or at a meeting of Certificateholders.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
Section 2.01 Amount Unlimited; Issuable in Series. (a) The
aggregate principal amount of Certificates which may be authenticated and
delivered under this Basic Agreement is unlimited. The Certificates may be
issued from time to time in one or more series and shall be designated
generally as the "Pass Through Certificates," with such further
designations added or incorporated in such title for the Certificates of
each series as specified in the related Trust Supplement. Each Certificate
shall bear upon its face the designation so selected for the series to
which it belongs. All Certificates of the same series shall be
substantially identical except that the Certificates of a series may differ
as to denomination and as may otherwise be provided in the Trust Supplement
establishing the Certificates of such series. Each series of Certificates
14
issued pursuant to this Agreement shall evidence fractional undivided
interests in the related Trust and Fractional Cumulative Interests in all
Trusts of such series and shall have no rights, benefits or interests in
respect of any Trust of any other series or the Trust Property held
therein. All Certificates of the same series shall be in all respects
equally and ratably entitled to the benefits of this Agreement without
preference, priority or distinction on account of the actual time or times
of authentication and delivery, all in accordance with the terms and
provisions of this Agreement.
(b) The following matters shall be established with
respect to the Certificates of each series issued hereunder by a Trust
Supplement executed and delivered by and between the Company and the
Trustee:
(i) the formation of the Trust as to which the
Certificates of such series represent fractional
undivided interests and its series designation (which
designation shall distinguish such Trust from each other
Trust of any other series created under this Basic
Agreement and a Trust Supplement);
(ii) the specific title of the Certificates of
such series (which title shall distinguish the
Certificates of such series from each other series of
Certificates created under this Basic Agreement and a
Trust Supplement);
(iii) any limit upon the aggregate principal
amount of the Certificates of such series which may be
authenticated and delivered (which limit shall not
pertain to Certificates authenticated and delivered upon
registration of transfer of, or in exchange for, or in
lieu of, other Certificates of the series pursuant to
Sections 3.04, 3.07 and 3.10);
(iv) the Cut-off Date with respect to the
Certificates of such series;
(v) the Regular Distribution Dates applicable to
the Certificates of such series;
(vi) the Special Distribution Dates applicable to
the Certificates of such series and the related Trust;
(vii) if other than as provided in Section
7.12(b), the Registrar or the Paying Agent for the
Certificates of such series, including any Co-Registrar
or additional Paying Agent;
(viii) if other than as provided in Section 3.01,
the denominations in which the Certificates of such series
shall be issuable;
(ix) if other than United States dollars, the
currency or currencies (including composite currencies or
currency units) in which the Certificates of such series
shall be denominated or payable;
15
(x) the specific form of the Certificates of such
series (including the interest rate applicable thereto);
(xi) a description of the Equipment Notes to be
acquired and held in the related Trust and of the related
Aircraft and the other Note Documents;
(xii) provisions with respect to the terms for
which the definitions set forth in Article I permit or
require further specification in the related Trust
Supplement;
(xiii) any restrictions (including legends) in
respect of ERISA;
(xiv) the acceptance of appointment by the
institution named to act as Trustee with respect to such
Trust, if different from the institution executing this
Basic Agreement or its successor;
(xv) whether such series will be subject to an
Intercreditor Agreement and, if so, the specific
designation of such Intercreditor Agreement and the
rights of Potential Purchasers upon the occurrence of a
Triggering Event;
(xvi) whether such series will have the benefit
of a Liquidity Facility and, if so, any terms appropriate
thereto;
(xvii) whether there will be a deposit
agreement, escrow agreement or other arrangement prior to
the delivery of one or more Aircraft or the commencement
of the Lease in respect of one or more Aircraft and, if
so, any terms appropriate thereto;
(xviii) the extent, if any, to which the Company
may acquire Certificates and deliver such Certificates or
cash to the respective Trusts and obtain the release of
Equipment Notes or other Trust Property held by such
Trusts;
(xix) if the Certificates of such series are to
be issued in bearer form, the forms thereof and any other
special terms relating thereto;
(xx) any other terms of the Certificates of such
series (which terms shall not be inconsistent with the
provisions of the Trust Indenture Act), including any
terms which may be required or advisable under Untied
States laws or regulations or advisable in connection
with the marketing of Certificates of the series.
(c) At any time and from time to time after the execution
and delivery of this Basic Agreement and a Trust Supplement forming a Trust
and establishing the terms of Certificates of a series, Certificates of
such series shall be executed, authenticated and delivered by the Trustee
to the Person or Persons specified by the Company upon request of the
Company and upon satisfaction of any conditions precedent set forth in such
Trust Supplement or in any other document to which the Trustee is a party
relating to the issuance of the Certificates of such series.
16
Section 2.02 Issuance of Certificates; Acquisition of Equipment
Notes. (a) Unless otherwise specified in the related Trust Supplement, the
Trustee is hereby directed to execute and deliver the Intercreditor
Agreement, if any, and the related Note Purchase Agreements on or prior to
the Issuance Date of the Certificates of a series, each in the form
delivered to the Trustee by the Company, and is hereby directed to and
shall, subject to the respective terms thereof, perform its obligations
thereunder. Upon request of the Company and the satisfaction of the closing
conditions specified in the related Note Purchase Agreement, the Trustee
shall execute, deliver and authenticate such Certificates equaling in the
aggregate the aggregate principal amount of the Equipment Notes to be
purchased by the Trustee pursuant to the Note Purchase Agreement on the
Transfer Date, and evidencing the entire ownership interest in the related
Trust. The Trustee shall issue and sell such Certificates, in authorized
denominations and in such Fractional Undivided Interests, so as to result
in the receipt by the Trustee of consideration in an amount equal to the
aggregate principal amount of such Equipment Notes and, concurrently
therewith, the Trustee shall purchase, pursuant to the terms and conditions
of the Note Purchase Agreement, the Equipment Notes (except Postponed
Notes, if any) at a purchase price equal to the amount of such
consideration so received. Except as provided in Sections 3.04 and 3.07,
the Trustee shall not execute, authenticate or deliver Certificates of any
series in excess of the aggregate amount specified in this Section 2.02(a).
The provisions of this Section 2.02(a) are subject to the provisions of
Section 2.02(b) below.
(b) If on or prior to the Issuance Date with respect to a
series of Certificates, the Company shall deliver to the Trustee a
Postponement Notice relating to one or more Postponed Notes, the Trustee
shall postpone the purchase of the Postponed Notes from the consideration
received from the sale of such Certificates and shall promptly deposit
funds in an amount equal to the purchase price of such Postponed Notes (the
"Escrowed Funds") into an escrow account (the "Escrow Account") with the
Trustee to be maintained as a part of the related Trust. The Escrowed Funds
so deposited shall be invested by the Trustee at the direction and risk of,
and for the benefit of, the Company in Specified Investments (i) maturing
no later than any scheduled Transfer Date relating to the Postponed Notes
or (ii) if no such Transfer Date has been scheduled, maturing on the next
Business Day, or (iii) if the Company has given notice to the Trustee that
any Postponed Notes shall not be issued or be available for purchase, with
respect to the portion of the Escrowed Funds relating to such Postponed
Notes, maturing on the next applicable Special Distribution Date, if such
investments are reasonably available for purchase. The Trustee shall make
withdrawals from the Escrow Account only as provided in this Agreement.
Upon request of the Company on one or more occasions and the satisfaction
or waiver of the closing conditions specified in the Note Purchase
Agreement on or prior to the Cut-off Date, the Trustee shall purchase the
applicable Postponed Notes with the Escrowed Funds withdrawn from the
Escrow Account.
The Trustee shall hold all Specified Investments until
the maturity thereof and shall not sell or otherwise transfer Specified
Investments. If Specified Investments held in an Escrow Account mature
prior to any applicable Transfer Date, any proceeds received on the
maturity of such Specified Investments (other than any earnings thereon)
shall be reinvested by the Trustee at the direction and risk of, and for
the benefit of, the Company in Specified Investments maturing as provided
in the preceding paragraph.
17
On the Initial Regular Distribution Date in respect of
the Certificates of any series, the Company shall pay (in immediately
available funds) to the Trustee an amount equal to (i) the sum of (A) the
interest that would have accrued on any Postponed Notes purchased on or
prior to the Initial Regular Distribution Date if such Postponed Notes had
been purchased on the Issuance Date, from and including the Issuance Date
to but excluding the date of such purchase and (B) the interest that would
have accrued on any Postponed Notes not purchased on or prior to the
Initial Regular Distribution Date (other than any Postponed Notes for which
a Special Distribution Date specified in the next paragraph has occurred on
or prior to the Initial Regular Distribution Date) if such Postponed Notes
had been purchased on the Issuance Date, from and including the Issuance
Date to but excluding the Initial Regular Distribution Date, minus (ii) the
earnings on Specified Investments received by the Trustee from and
including the later of the Issuance Date or the date preceding the Initial
Regular Distribution Date on which an amount has been paid pursuant to the
next paragraph to but excluding the Initial Regular Distribution Date. On
the second Regular Distribution Date, the Company shall pay (in immediately
available funds) to the Trustee an amount equal to (i) the interest that
would have accrued on any Postponed Notes purchased after the Initial
Regular Distribution Date and on or prior to the Cut-off Date if such
Postponed Notes had been purchased on the Initial Regular Distribution
Date, from and including the Initial Regular Distribution Date to but
excluding the date of such purchase, minus (ii) the earnings on Specified
Investments received by the Trustee from and including the later of the
Initial Regular Distribution Date or the date preceding the second Regular
Distribution Date on which an amount has been paid pursuant to either of
the next two paragraphs to but excluding the second Regular Distribution
Date. The Company shall pay to the Trustee for deposit to the relevant
Escrow Account an amount equal to any losses on such Specified Investments
as incurred.
If, in respect of the Certificates of any series, the
Company notifies the Trustee prior to the Cut-off Date that any Postponed
Notes shall not be issued or be available for purchase on or prior to the
Cut-off Date for any reason, on the next Special Distribution Date for such
Certificates occurring more than 20 days following the date of such notice
(i) the Company shall pay to the Trustee for deposit in the related Special
Payments Account, in immediately available funds, an amount equal to the
interest that would have accrued on the Postponed Notes designated in such
notice at a rate equal to the interest rate applicable to such Certificates
from and including the Issuance Date (if such Special Distribution Date
shall occur on or prior to the Initial Regular Distribution Date) or the
Initial Regular Distribution Date (if such Special Distribution Date occurs
after the Initial Regular Distribution Date) to but excluding such Special
Distribution Date and (ii) the Trustee shall transfer an amount equal to
that amount of Escrowed Funds that would have been used to purchase the
Postponed Notes designated in such notice plus the amount paid by the
Company pursuant to the preceding clause (i) to the related Special
Payments Account for distribution as a Special Payment in accordance with
the provisions hereof.
If, on the Cut-off Date, an amount equal to less than all
of the Escrowed Funds (other than Escrowed Funds referred to in the
preceding paragraph) has been used to purchase Postponed Notes, on the next
Special Distribution Date occurring more than 20 days following the Cut-off
Date (i) the Company shall pay to the Trustee for deposit in the Special
Payments Account, in immediately available funds, an amount equal to the
interest that would have accrued on the Postponed Notes originally
contemplated to be purchased with such unused Escrowed Funds (other
18
than Escrowed Funds referred to in the preceding paragraph) but not so
purchased at a rate equal to the interest rate applicable to the
Certificates from and including the Initial Regular Distribution Date to
but excluding such Special Distribution Date and (ii) the Trustee shall
transfer such unused Escrowed Funds and the amount paid by the Company
pursuant to the preceding clause (i) to such Special Payments Account for
distribution as a Special Payment in accordance with the provisions hereof.
Section 2.03 Acceptance by Trustee. The Trustee, upon the
execution and delivery of a Trust Supplement creating a Trust and issuing a
series of Certificates, acknowledges its acceptance of all right, title and
interest in and to the Equipment Notes acquired pursuant to Section 2.02
and the related Note Purchase Agreement and declares that the Trustee holds
and shall hold such right, title and interest, together with all other
property constituting the Trust Property of such Trust, for the benefit of
all then present and future Certificateholders of such series, upon the
trusts herein and in such Trust Supplement set forth. By its payment for
and acceptance of each Certificate of such series issued to it under this
Agreement, each initial Certificateholder of such series as grantor of such
Trust thereby joins in the creation and declaration of such Trust and
grants to the Trustee the powers conferred by this Agreement.
Section 2.04 Limitation of Powers. Each Trust is constituted
solely for the purpose of making the investment in the Equipment Notes
provided for in the related Trust Supplement, and, except as set forth
herein or in this Agreement, the Trustee shall not be authorized or
empowered to acquire any other investments or engage in any other
activities and, in particular, the Trustee shall not be authorized or
empowered to do anything that would cause such Trust to fail to qualify as
a "grantor trust" for federal income tax purposes (including as subject to
this restriction, acquiring any Aircraft (as defined in the respective
related Indentures) by bidding such Equipment Notes or otherwise, or taking
any action with respect to any such Aircraft once acquired).
ARTICLE III
THE CERTIFICATES
Section 3.01 Form, Denomination and Execution of Certificates. (a)
Each Certificate shall represent a fractional undivided interest in a Trust
and shall be substantially in the form set forth as Exhibit A, with such
appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Agreement and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Certificates, as evidenced by their execution of
the Certificates. Any portion of the text of any Certificate may be set
forth on the reverse thereof, with an appropriate reference thereto on the
face of the Certificate.
(b) Except as otherwise provided in the related Trust
Supplement, the Certificates of each series shall be issued only in fully
19
registered form without coupons and only in denominations of $1,000 or
integral multiples of $1,000 in excess thereof. Each Certificate shall be
dated the date of its authentication.
(c) Except as otherwise provided in the related Trust
Supplement, the Certificates of any series shall be issued initially in the
form of a single permanent global Certificate of such series in registered
form, substantially in the form set forth as Exhibit A (the "Global
Certificate"), duly executed and authenticated by the Trustee as
hereinafter provided. The Global Certificate for each series shall be
registered in the name of Cede & Co., as nominee for the Depositary, and
deposited with the Trustee, as custodian for the Depositary. The aggregate
principal amount of the Global Certificate for any series may from time to
time be increased or decreased by adjustments made on the records of the
Depositary or its nominee, or of the Trustee, as custodian for the
Depositary or its nominee, as hereinafter provided.
(d) The Definitive Certificates shall be in registered
form and shall be typed, printed, lithographed or engraved or produced by
any combination of these methods or may be produced in any other manner,
all as determined by the officers executing such Certificates, as evidenced
by their execution of such Certificates.
Section 3.02 Restrictive Legends. The Global Certificate of each
series shall also bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN
EXCHANGE FOR THIS CERTIFICATE IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 3.05 OF THE
PASS THROUGH TRUST AGREEMENT REFERRED TO HEREIN.
Section 3.03 Authentication of Certificates. (a) The Trustee shall
duly execute, authenticate and deliver Certificates of each series in
authorized denominations equaling in the aggregate the aggregate principal
amount of the Equipment Notes to be purchased by the Trustee pursuant to
the Note Purchase Agreement and evidencing the entire ownership of the
related Trust.
20
Thereafter, the Trustee shall duly execute, authenticate and deliver the
Certificates of a series as herein provided.
(b) No Certificate shall be entitled to any benefit under
this Agreement or be valid or obligatory for any purpose, unless there
appears on such Certificate a certificate of authentication substantially
in the form provided for herein executed by the Trustee by the manual
signature of one of its authorized signatories, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and
delivered hereunder.
Section 3.04 Transfer and Exchange. The Trustee shall cause to be
kept at the office or agency to be maintained by it in accordance with the
provisions of Section 7.12 a register (the "Register") for each series of
Certificates in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates
of such series and of transfers and exchanges of such Certificates as
herein provided. The Trustee shall initially be the registrar (the
"Registrar") for the purpose of registering Certificates of each series and
transfers and exchanges of such Certificates as herein provided. A
Certificateholder may transfer a Certificate by written application to the
Registrar stating the name of the proposed transferee and otherwise
complying with the terms of this Agreement, including providing a written
certificate or other evidence of compliance with any restrictions on
transfer. No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Certificateholder only upon, final
acceptance and registration of the transfer by the Registrar in the
Register. Prior to the registration of any transfer by a Certificateholder
as provided herein, the Trustee shall treat the person in whose name the
Certificate is registered as the owner thereof for all purposes, and the
Trustee shall not be affected by notice to the contrary. Furthermore, the
Depositary shall, by acceptance of a Global Certificate, agree that
transfers of beneficial interests in such Global Certificate may be
effected only through a book-entry system maintained by the Depositary (or
its agent), and that ownership of a beneficial interest in such Certificate
shall be required to be reflected in a book entry. When Certificates of a
series are presented to the Registrar with a request to register the
transfer or to exchange them for an equal aggregate Fractional Undivided
Interest of Certificates of like series of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested
if its requirements for such transactions are met. To permit registrations
of transfers and exchanges in accordance with the terms, conditions and
restrictions hereof, the Trustee shall execute and authenticate
Certificates at the Registrar's request. No service charge shall be made
for any registration of transfer or exchange of the Certificates, but the
Trustee may require payment by the transferor of a sum sufficient to cover
any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or other similar governmental
charges payable upon exchanges pursuant to Section 3.10 or 9.07).
Section 3.05 Book-Entry Provisions for Global Certificate. (a)
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Agreement with respect to any Global Certificate of
any series held on their behalf by the Depositary, or the Trustee as its
custodian, and the Depositary may be treated by the Trustee and any agent
of the Trustee as the absolute owner of such Global Certificate for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Trustee or any agent of the Trustee from giving effect
21
to any written certification, proxy or other authorization furnished by the
Depositary or shall impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Certificate. Upon the issuance of any Global
Certificate of any series, the Registrar or its duly appointed agent shall
record a nominee of the Depositary as the registered holder of such Global
Certificate.
(b) Transfers of any Global Certificate shall be limited
to transfers of such Global Certificate in whole, but not in part, to
nominees of the Depositary, its successor or such successor's nominees.
Beneficial interests in the Global Certificate of any series may be
transferred in accordance with the rules and procedures of the Depositary.
Beneficial interests in the Global Certificate of any series shall be
delivered to all beneficial owners in the form of Definitive Certificates
of such series, if (i) the Depositary notifies the Trustee that it is
unwilling or unable to continue as Depositary for such Global Certificate
and a successor depositary is not appointed by the Trustee within 90 days
of such notice, (ii) the Company, at its option, advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depositary, or (iii) an Event of Default has occurred and is continuing and
the Registrar has received a request from the Depositary to issue
Definitive Certificates.
(c) Any beneficial interest in one of the Global
Certificates of any series that is transferred to a Person who takes
delivery in the form of an interest in the other Global Certificate of such
series shall, upon such transfer, cease to be an interest in such Global
Certificate and become an interest in the other Global Certificate and,
accordingly, shall thereafter be subject to all transfer restrictions, if
any, and other procedures applicable to beneficial interests in such other
Global Certificate for as long as it remains such an interest.
(d) In connection with the transfer of the entire Global
Certificate of any series to the beneficial owners thereof pursuant to
Section 3.05(b), such Global Certificate shall be deemed to be surrendered
to the Trustee for cancellation, and the Trustee shall execute,
authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in such Global
Certificate, an equal aggregate Fractional Undivided Interest of Definitive
Certificates of like series and of authorized denominations. Neither the
Company, the Registrar, the Paying Agent nor the Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such registration instructions.
Upon the issuance of Definitive Certificates of such series, the Trustee
shall recognize the Persons in whose names the Definitive Certificates are
registered in the Register as Certificateholders hereunder. Neither the
Company nor the Trustee shall be liable if the Trustee or the Company is
unable to locate a qualified successor Depositary.
(e) [Reserved]
(f) As to the Certificates of any such series, unless and
until definitive, fully registered Certificates (the "Definitive
Certificates") have been issued pursuant to Subsection (b) above:
(1) the provisions of this Section 3.05 shall be in full
force and effect;
22
(2) the Company, the Paying Agent, the Registrar and the
Trustee may deal with the Depositary for all purposes (including the
making of distributions on the Certificates);
(3) to the extent that the provisions of this Section
3.05 conflict with any other provisions of this Agreement (other
than the provisions of any Trust Supplement expressly amending
this Section 3.05 as permitted by this Basic Agreement), the
provisions of this Section 3.05 shall control;
(4) the rights of Certificate Owners shall be exercised
only through the Depositary and shall be limited to those
established by law and agreements between such Certificate Owners
and the Agent Members; and Definitive Certificates are issued
pursuant to Subsection (b) above, the Depositary will make
book-entry transfers among the Agent Members and receive and
transmit distributions of principal, interest and premium, if any,
on the Certificates to such Agent Members;
(5) such Certificates of such series may be transferred
in whole, but not in part, and in the manner provided in Section
3.04, by the Depositary holding such Certificates to a nominee of
such Depositary, or by such Depositary to a successor Depositary
that has been selected or approved by the Company or to a nominee
of such successor Depositary; and
(6) whenever this Agreement requires or permits actions
to be taken based upon instructions or directions of
Certificateholders of such series holding Certificates of such
series evidencing a specified percentage of the Fractional
Undivided Interests in the related Trust, the Depositary shall be
deemed to represent such percentage only to the extent that it has
received instructions to such effect from Agent Members owning or
representing, respectively, such required percentage of the
beneficial interest in Certificates of such series and has
delivered such instructions to the Trustee. Neither the Company
nor the Trustee shall have any obligation to determine whether the
Depositary has in fact received any such instructions.
(g) Whenever notice or other communication to the
Certificateholders of such series is required under this Agreement, unless
and until Definitive Certificates shall have been issued pursuant to
Subsection (b) above, the Trustee shall give all such notices and
communications specified herein to be given to Certificateholders of such
series to the Depositary.
(h) Unless and until Definitive Certificates of a series
are issued pursuant to Subsection (b) above, on the Record Date prior to
each applicable Regular Distribution Date and Special Distribution Date,
the Trustee will request from the Depositary a securities position listing
setting forth the names of all Agent Members reflected on the Depositary's
books as holding interests in the Certificates on such Record Date.
(i) The registered holder of the Global Certificate of
any series may grant proxies and otherwise authorize any Person, including
Agent Members and Persons that may hold interests through Agent Members, to
take any action which a Holder is entitled to take under this Agreement or
the Certificates.
23
(j) The provisions of this Section 3.05 may be made
inapplicable to any series or may be amended with respect to any series in
the related Trust Supplement.
Section 3.06 [Reserved]
Section 3.07 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Registrar or the
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Registrar and
the Trustee such security, indemnity or bond, as may be required by them to
save each of them harmless, then, in the absence of notice to the Registrar
or the Trustee that such destroyed, lost or stolen Certificate has been
acquired by a bona fide purchaser, and provided that the requirements of
Section 8-405 of the Uniform Commercial Code in effect in any applicable
jurisdiction are met, the Trustee shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate or Certificates of like series, in
authorized denominations and of like Fractional Undivided Interest and
bearing a number not contemporaneously outstanding.
In connection with the issuance of any new Certificate under this
Section 3.07, the Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Trustee and the Registrar) connected therewith. Any duplicate Certificate
issued pursuant to this Section 3.07 shall constitute conclusive evidence
of the appropriate Fractional Undivided Interest in the related Trust, as
if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
The provisions of this Section 3.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Certificates.
Section 3.08 Persons Deemed Owners. Prior to due presentment of a
Certificate for registration of transfer, the Trustee, the Registrar and
any Paying Agent may treat the Person in whose name any Certificate is
registered (as of the day of determination) as the owner of such
Certificate for the purpose of receiving distributions pursuant to Article
IV and for all other purposes whatsoever, and none of the Trustee, the
Registrar or any Paying Agent shall be affected by any notice to the
contrary. All payments or distributions made to any such Person shall be
valid and, to the extent of the sum or sums so paid, effectual to satisfy
and discharge the liability for moneys payable on any such Certificate.
Section 3.09 Cancellation. All Certificates surrendered for
payment or transfer or exchange shall, if surrendered to the Trustee or any
agent of the Trustee other than the Registrar, be delivered to the
Registrar for cancellation and shall promptly be canceled by it. No
Certificates shall be authenticated in lieu of or in exchange for any
Certificates canceled as provided in this Section 3.09, except as expressly
permitted by this Agreement. All canceled Certificates held by the
Registrar shall be destroyed and a certification of their destruction
delivered to the Trustee.
24
Section 3.10 Temporary Certificates. Until Definitive Certificates
of any series are ready for delivery, the Trustee shall execute,
authenticate and deliver temporary Certificates of such series. Temporary
Certificates of each series shall be substantially in the form of
Definitive Certificates of such series but may have insertions,
substitutions, omissions and other variations determined to be appropriate
by the officers executing the temporary Certificates of such series, as
evidenced by their execution of such temporary Certificates. If temporary
Certificates of any series are issued, the Trustee shall cause Definitive
Certificates of like series to be prepared without unreasonable delay.
After the preparation of Definitive Certificates of such series, the
temporary Certificates shall be exchangeable for Definitive Certificates
upon surrender of such temporary Certificates at the Corporate Trust Office
of the Trustee designated for such purpose pursuant to Section 7.12,
without charge to the Certificateholder. Upon surrender for cancellation of
any one or more temporary Certificates, the Trustee shall execute,
authenticate and deliver in exchange therefor a like face amount of
Definitive Certificates of like series, in authorized denominations and of
a like Fractional Undivided Interest. Until so exchanged, the temporary
Certificates shall be entitled to the same benefits under this Agreement as
Definitive Certificates.
Section 3.11 Limitation of Liability for Payments. All payments
and distributions made to Certificateholders of any series in respect of
the Certificates of such series shall be made only from the Trust Property
of the related Trust and only to the extent that the Trustee shall have
sufficient income or proceeds from such Trust Property to make such
payments in accordance with the terms of Article IV. Each
Certificateholder, by its acceptance of a Certificate, agrees that it shall
look solely to the income and proceeds from the Trust Property of the
related Trust for any payment or distribution due to such Certificateholder
pursuant to the terms of this Agreement and that it shall not have any
recourse to the Company, the Trustee, the Indenture Trustees, the Liquidity
Providers, the Owner Trustees or the Owner Participants, except as
otherwise expressly provided herein or in any Intercreditor Agreement.
The Company is a party to this Agreement solely for purposes of
meeting the requirements of the Trust Indenture Act, and therefore shall
not have any right, obligation or liability hereunder, or under the terms
of any Trust Supplement or any Certificates (except as otherwise expressly
provided herein or therein).
Section 3.12. CUSIP Numbers. The Certificates may include "CUSIP"
numbers (if then generally in use), and if so, the Trustee may use the
CUSIP numbers in notices in respect of the Certificates; provided, however,
that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed in the notice or on the
Certificates, that reliance may be placed only on the other identification
numbers printed on the Certificates, and any such notice shall not be
affected by any defect or omission of such CUSIP numbers.
25
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01 Certificate Account and Special Payments Account. (a)
The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Certificate Account as one or more
non-interest-bearing accounts. The Trustee shall hold such Certificate
Account in trust for the benefit of the Certificateholders of such series,
and shall make or permit withdrawals therefrom only as provided in this
Agreement. On each day when a Scheduled Payment is made to the Trustee
under any Intercreditor Agreement with respect to the Certificates of such
series, the Trustee, upon receipt thereof, shall immediately deposit the
aggregate amount of such Scheduled Payment in the applicable Certificate
Account.
(b) The Trustee shall establish and maintain on behalf of
the Certificateholders of each series a Special Payments Account as one or
more accounts, which shall be non-interest bearing except as provided in
Section 4.04. The Trustee shall hold such Special Payments Account in trust
for the benefit of the Certificateholders of such series and shall make or
permit withdrawals therefrom only as provided in this Agreement or any
Intercreditor Agreement. On each day when one or more Special Payments are
made to the Trustee or the Subordination Agent, as the case may be, as
holder of the Equipment Notes issued under the related Indenture or to the
Trustee under any Intercreditor Agreement with respect to the Certificates
of such series, the Trustee, upon receipt thereof, shall immediately
deposit the aggregate amount of such Special Payments in such Special
Payments Account.
(c) The Trustee shall present (or, if applicable, cause
the Subordination Agent to present) to the related Indenture Trustee to
which an Equipment Note relates such Equipment Note on the date of its
stated final maturity or, in the case of any Equipment Note which is to be
redeemed in whole pursuant to the related Indenture, on the applicable
redemption date under such Indenture.
Section 4.02 Distributions from Certificate Account and Special
Payments Account. (a) Subject to the provisions of any Intercreditor
Agreement, on each Regular Distribution Date with respect to a series of
Certificates or as soon thereafter as the Trustee has confirmed receipt of
the payment of all or any part of the Scheduled Payments due on the
Equipment Notes held in the related Trust on such date, the Trustee shall
distribute out of the applicable Certificate Account the entire amount
deposited therein pursuant to Section 4.01(a). There shall be so
distributed to each Certificateholder of record of such series on the
Record Date with respect to such Regular Distribution Date (other than as
provided in Section 11.01 concerning the final distribution) by check
mailed to such Certificateholder, at the address appearing in the Register,
such Certificateholder's pro rata share (based on the Fractional Cumulative
Interest in the Trusts of such series held by such Certificateholder) of
the total amount in the applicable Certificate Account, except that, with
respect to Certificates registered on the Record Date in the name of the
nominee of the Depositary (initially, such nominee to be Cede & Co.), such
distribution shall be made by wire transfer in immediately available funds
to the account designated by such nominee.
26
(b) Subject to the provisions of any Intercreditor
Agreement, on each Special Distribution Date with respect to any Special
Payment with respect to a series of Certificates or as soon thereafter as
the Trustee has confirmed receipt of the Special Payments due on the
Equipment Notes held in the related Trust or realized upon the sale of such
Equipment Notes, the Trustee shall distribute out of the applicable Special
Payments Account the entire amount of such Special Payment deposited
therein pursuant to Section 4.01(b) of such Special Payment. There shall be
so distributed to each Certificateholder of record of such series on the
Record Date with respect to such Special Distribution Date (other than as
provided in Section 11.01 concerning the final distribution) by check
mailed to such Certificateholder, at the address appearing in the Register,
such Certificateholder's pro rata share (based on the Fractional Cumulative
Interest in the Trusts of such series held by such Certificateholder) of
the total amount in the applicable Special Payments Account on account of
such Special Payment, except that, with respect to Certificates registered
on the Record Date in the name of the nominee of the Depositary (initially,
such nominee to be Cede & Co.), such distribution shall be made by wire
transfer in immediately available funds to the account designated by such
nominee.
(c) The Trustee shall, at the expense of the Company,
cause notice of each Special Payment with respect to a series of
Certificates to be mailed to each Certificateholder of such series at his
address as it appears in the Register. Subject to the provisions of any
Intercreditor Agreement, in the event of redemption or purchase of
Equipment Notes held in the related Trust, such notice shall be mailed not
less than 20 days prior to the Special Distribution Date for the Special
Payment resulting from such redemption or purchase, which Special
Distribution Date shall be the date of such redemption or purchase. In the
event that the Trustee receives a notice from the Company pursuant to
Section 2.02(b) that Postponed Notes will not be purchased by the Trustee,
such notice of Special Payment shall be mailed as soon as practicable after
receipt of such notice from the Company and shall state the Special
Distribution Date for such Special Payment, which shall occur 20 days after
the date of such notice of Special Payment or (if such 20th day is not
practicable) as soon as practicable thereafter. In the event that any
Special Payment is to be made pursuant to the last paragraph of Section
2.02(b), such notice of Special Payment shall be mailed on the Cut-off Date
(or, if such mailing on the Cut-off Date is not practicable, as soon as
practicable after the Cut-off Date) and shall state the Special
Distribution Date for such Special Payment, which shall occur 20 days after
the date of such notice of Special Payment or (if such 20th day is not
practicable) as soon as practicable thereafter. In the case of any other
Special Payments, such notice shall be mailed as soon as practicable after
the Trustee has confirmed that it has received funds for such Special
Payment, stating the Special Distribution Date for such Special Payment
which shall occur not less than 20 days after the date of such notice and
as soon as practicable thereafter. Notices mailed by the Trustee shall set
forth:
(i) the Special Distribution Date and the
Record Date therefor (except as
otherwise provided in Section 11.01);
(ii) the amount of the Special Payment for each
$1,000 face amount Certificate (taking into account any
payment to be made by the Company pursuant to Section
2.02(b)) and the amount thereof constituting principal,
Additional Payments, and interest;
27
(iii) the reason for the Special Payment; and
(iv) if the Special Distribution Date is the
same date as a Regular Distribution Date for the
Certificates of such series, the total amount to be
received on such date for each $1,000 face amount
Certificate.
If the Additional Payments, if any, payable upon the redemption or purchase
of an Equipment Note has not been calculated at the time that the Trustee
mails notice of a Special Payment, it shall be sufficient if the notice
sets forth the other amounts to be distributed and states that any
Additional Payments received shall also be distributed.
If any redemption of the Equipment Notes held in any
Trust is canceled, the Trustee, as soon as possible after learning thereof,
shall cause notice thereof to be mailed to each Certificateholder of the
related series at its address as it appears on the Register.
Section 4.03 Statements to Certificateholders. (a) On each
Distribution Date with respect to a series Certificates, the Trustee shall
include with each distribution to Certificateholders of the related series
a Scheduled Payment or Special Payment, as the case may be, a statement
setting forth the following information (per $1,000 face amount Certificate
as to (i) and (ii) below):
(i) the amount of such distribution allocable
to principal and the amount
allocable to Additional Payments;
(ii) the amount of such distribution allocable
to interest; and
(iii) the Pool Balance and the Pool Factor of the
related Trust.
With respect to the Certificates registered in the name
of Cede & Co., as nominee for the Depositary, on the Record Date prior to
each Distribution Date, the Trustee shall request from the Depositary a
securities position listing setting forth the names of all Agent Members
reflected on the Depositary's books as holding interests in the
Certificates on such Record Date. On each Distribution Date, the Trustee
shall mail to each such Agent Member the statement described above and
shall make available additional copies as requested by such Agent Member
for forwarding to holders of interests in the Certificates.
(b) Within a reasonable period of time after the end of
each calendar year but not later than the latest date permitted by law, the
Trustee shall furnish to each Person who at any time during such calendar
year was a Certificateholder of record a statement containing the sum of
the amounts determined pursuant to clauses (a)(i) and (a)(ii) above with
respect to the related Trust for such calendar year or, if such Person was
a Certificateholder of record during a portion of such calendar year, for
such portion of such year, and such other items as are readily available to
the Trustee and which a Certificateholder shall reasonably request as
necessary for the purpose of such Certificateholder's preparation of its
United States federal income tax returns. With respect to Certificates
registered in the name of a Depositary or its nominee, such statement and
such other items shall be prepared on the basis of information supplied to
28
the Trustee by the Agent Members and shall be delivered by the Trustee to
such Agent Members to be available for forwarding by such Agent Members to
the holders of interests in the Certificates in the manner described in
Section 4.03(a).
Section 4.04 Investment of Special Payment Moneys. Any money
received by the Trustee pursuant to Section 4.01(b) representing a Special
Payment which is not to be promptly distributed shall, to the extent
practicable, be invested in Permitted Investments by the Trustee pending
distribution of such Special Payment pursuant to Section 4.02(b). Any
investment made pursuant to this Section 4.04 shall be in such Permitted
Investments having maturities not later than the date that such moneys are
required to be used to make the payment required under Section 4.02(b) on
the applicable Special Distribution Date and the Trustee shall hold any
such Permitted Investments until maturity. The Trustee shall have no
liability with respect to any investment made pursuant to this Section
4.04, other than by reason of the willful misconduct or negligence of the
Trustee. All income and earnings from such investments shall be distributed
on such Special Distribution Date as part of such Special Payment.
ARTICLE V
THE COMPANY
Section 5.01 Maintenance of Corporate Existence. The Company, at
its own cost and expense, shall do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence,
rights and franchises, except as otherwise specifically permitted in
Section 5.02; provided, however, that the Company shall not be required to
preserve any right or franchise if the Company shall determine that the
preservation thereof is no longer necessary or desirable in the conduct of
the business of the Company.
Section 5.02 Consolidation, Merger, etc. The Company shall not
consolidate with or merge into any other corporation or convey, transfer or
lease substantially all of its assets as an entirety to any Person unless:
(a) the corporation formed by such consolidation or into
which the Company is merged or the Person that acquires by
conveyance, transfer or lease substantially all of the assets of
the Company as an entirety shall (i) be a "citizen of the United
States" as defined in 49 U.S.C. 40102(a)(15), as amended, and (ii)
hold an air carrier operating certificate issued by the Secretary
of Transportation pursuant to Chapter 447 of Title 49 of the
United States Code, as amended, for aircraft capable of carrying
10 or more individuals or 6,000 pounds or more of cargo; if and so
long as such status is a condition of entitlement to the benefits
of Section 1110 of the Bankruptcy Reform Act of 1978, as amended
(11 U.S.C. Section 1110); and
(b) the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by
conveyance, transfer or lease substantially all of the assets of
the Company as an entirety shall execute and deliver to the
Trustee applicable to
29
the Certificates of each series an agreement in form and substance
reasonably satisfactory to the Trustee containing an assumption by
such successor corporation or Person of the due and punctual
performance and observance of each covenant and condition of this
Agreement.
Upon any consolidation or merger, or any conveyance,
transfer or lease of substantially all of the assets of the Company as an
entirety in accordance with this Section 5.02, the successor corporation or
Person formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company
under this Agreement applicable to the Certificates of each series with the
same effect as if such successor corporation or Person had been named as
the Company herein. No such conveyance, transfer or lease of substantially
all of the assets of the Company as an entirety shall have the effect of
releasing any successor corporation or Person which shall have become such
in the manner prescribed in this Section 5.02 from its liability in respect
of this Agreement, the Note Purchase Agreement and any Financing Document
applicable to the Certificates of such series to which it is a party.
The Trustee may receive an Officer's Certificate and an
Opinion of Counsel of the Company as conclusive evidence that any such
consolidation, merger, conveyance, transfer or lease and any assumption
agreement mentioned in Section 5.02(b) comply with this Section 5.02.
ARTICLE VI
DEFAULT
Section 6.01 Events of Default. (a) Exercise of Remedies. If in
respect of any Trust, any Event of Default shall occur and be continuing,
then, and in each and every case, so long as such Event of Default shall be
continuing and subject to the provisions of any Intercreditor Agreement,
the Trustee may vote all of the Equipment Notes issued under the related
Indenture and held in such Trust, and, upon the direction of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests in such Trust aggregating not less than a majority in interest in
such Trust, the Trustee shall vote not less than a corresponding majority
of such Equipment Notes in favor of directing the Indenture Trustee under
such Indenture to declare the unpaid principal amount of the Equipment
Notes then outstanding to which such Event of Default relates and accrued
interest thereon to be due and payable under, and in accordance with the
provisions of, the relevant Indenture. In addition, if an Indenture Event
of Default shall have occurred and be continuing under any Indenture,
subject to the provisions of any Intercreditor Agreement, the Trustee may
in accordance with the relevant Indenture vote the Equipment Notes held in
the Trust to which such Event of Default relates to direct the Indenture
Trustee regarding the exercise of remedies provided in such Indenture.
(b) In addition, after an Event of Default shall have
occurred and be continuing with respect to any Equipment Note, subject to
30
the provisions of any Intercreditor Agreement, the Trustee may in its
discretion, and upon the direction of the Certificateholders holding
Certificates evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in the related Trust shall, by such officer or
agent as it may appoint, sell, convey, transfer and deliver such Equipment
Note or Equipment Notes, without recourse to or warranty by the Trustee or
any Certificateholder, to any Person. In any such case, the Trustee shall
sell, assign, contract to sell or otherwise dispose of and deliver such
Equipment Note or Equipment Notes in one or more parcels at public or
private sale or sales, at any location or locations at the option of the
Trustee, all upon such terms and conditions as it may reasonably deem
advisable and at such prices as it may reasonably deem advisable, for cash.
If the Trustee so decides or is required to sell or otherwise dispose of
any Equipment Note pursuant to this Section, the Trustee shall take such of
the actions described above as it may reasonably deem most effectual to
complete the sale or other disposition of such Equipment Note, so as to
provide for the payment in full of all amounts due on the related series of
Certificates. Notwithstanding the foregoing, any action taken by the
Trustee under this Section shall not, in the reasonable judgment of the
Trustee, be adverse to the best interests of the Certificateholders of such
series.
(c) If an Intercreditor Agreement is applicable, upon the
occurrence and during the continuation of any Indenture Event of Default
under any Indenture, the Trustee may, to the extent it is the Controlling
Party at such time (as determined pursuant to the related Intercreditor
Agreement), direct the exercise of remedies as provided in such related
Intercreditor Agreement.
(d) If an Intercreditor Agreement is applicable, by
acceptance of its Certificate, each Certificateholder agrees that at any
time after the occurrence and during the continuation of a Triggering
Event, each Certificateholder of Certificates of certain series (each, a
"Potential Purchaser" and, collectively, the "Potential Purchasers") may
have certain rights to purchase the Certificates of one or more other
series, all as set forth in the Trust Supplement applicable to the
Certificates held by such Potential Purchaser. The purchase price with
respect to the Certificates of any series, and the procedure for such
purchase, shall be specified in such Trust Supplement or the applicable
Intercreditor Agreement. By acceptance of its Certificate, each
Certificateholder (each, a "Selling Certificateholder" and, collectively,
the "Selling Certificateholders") of a series that is subject to purchase
by Potential Purchasers, all as set forth in the Trust Supplement
applicable to the Certificates held by the Selling Certificateholders,
agrees that, at any time after the occurrence and during the continuance of
a Triggering Event, it will, upon payment of the applicable purchase price
by one or more Potential Purchasers (upon such purchase, a "Purchasing
Certificateholder"), forthwith sell, assign, transfer and convey to such
Purchasing Certificateholder (without recourse, representation or warranty
of any kind except for its own acts) all of the right, title, interest and
obligation of such Selling Certificateholder in this Agreement, any related
Intercreditor Agreement, any related Liquidity Facility, the related Note
Documents and all Certificates of such series held by such Selling
Certificateholder (excluding all right, title and interest under any of the
foregoing to the extent such right, title or interest is with respect to an
obligation not then due and payable as respects any action or inaction or
state of affairs occurring prior to such sale) and the Purchasing
Certificateholder shall assume all of such Selling Certificateholder's
obligations under this Agreement, any related Intercreditor Agreement, any
related Liquidity Facility and the related Note Documents. The Certificates
of such series will be deemed to be purchased on the date payment of the
purchase price is made notwithstanding the failure of any Selling
31
Certificateholder to deliver any Certificates of such series and, upon such
a purchase, (i) the only rights of the Selling Certificateholders will be
to deliver the Certificates to the Purchasing Certificateholder and receive
the purchase price for such Certificates of such series and (ii) if the
Purchasing Certificateholder shall so request, such Selling
Certificateholder will comply with all of the provisions of Section 3.04
hereof to enable new Certificates of such series to be issued to the
Purchasing Certificateholder in such denominations as it shall request. All
charges and expenses in connection with the issuance of any such new
Certificates shall be borne by the Purchasing Certificateholder.
Section 6.02. Incidents of Sale of Equipment Notes. Upon any sale
of all or any part of the Equipment Notes held in the Trust made either
under the power of sale given under this Agreement or otherwise for the
enforcement of this Agreement, the following shall be applicable:
(a) Certificateholders and Trustee May Purchase Equipment
Notes. Any Certificateholder, the Trustee in its individual or any other
capacity or any other Person may bid for and purchase any of the Equipment
Notes held in the Trust, and upon compliance with the terms of sale, may
hold, retain, possess and dispose of such Equipment Notes in their own
absolute right without further accountability.
(b) Receipt of Trustee Shall Discharge Purchaser. The
receipt of the Trustee making such sale shall be a sufficient discharge to
any purchaser for its purchase money, and, after paying such purchase money
and receiving such receipt, such purchaser or its personal representative
or assigns shall not be obliged to see to the application of such purchase
money, or be in any way answerable for any loss, misapplication
non-application thereof.
(c) Application of Moneys Received Upon Sale. Any moneys
collected by the Trustee upon any sale made either under the power of sale
given by this Agreement or otherwise for the enforcement of this Agreement
shall be applied as provided in Section 4.02. In the event that the
proceeds of such sale of Equipment Notes are less than the principal amount
of the Certificates of such series Outstanding, the Certificateholders
shall have no claim for such shortfall against the Company, the Trustee or
any other Person including the related Owner Trustee or related Owner
Participant, if any.
Section 6.03 Judicial Proceedings Instituted by Trustee; Trustee
May Bring Suit. If there shall be a failure to make payment of the
principal of, Additional Payments, if any, or interest on any Equipment
Note, or if there shall be any failure to pay Rent (as defined in the
relevant Lease) under any Lease when due and payable, then the Trustee, in
its own name and as trustee of an express trust, as holder of such
Equipment Notes, to the extent permitted by and in accordance with the
terms of any Intercreditor Agreement and the Financing Documents (subject,
in the case of Equipment Notes related to the Leased Aircraft to the rights
of the applicable Owner Trustee or Owner Participant to cure any such
failure to pay principal of, Additional Payments, if any, or interest on
any Equipment Note or to pay Rent under any Lease in accordance with the
applicable Indenture and to the rights of the Lessee under any applicable
Lease), shall be entitled and empowered to institute any suits, actions or
proceedings at law, in equity or otherwise, for the collection of the sums
so due and unpaid on such Equipment Notes or under such Lease and may
32
prosecute any such claim or proceeding to judgment or final decree with
respect to the whole amount of any such sums so due and unpaid.
All rights of action and of asserting claims under this
Agreement, or under any of the Certificates, may be prosecuted and enforced
by the Trustee without the possession of any of such Certificates or the
production thereof in any trial or other proceedings relative thereto, and
any such action or proceedings instituted by the Trustee shall be brought
in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the
Certificateholders of the related series.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this
Agreement, any Trust Supplement or any Intercreditor Agreement to which the
Trustee shall be a party) the Trustee shall be held to represent all the
Certificateholders of the related series, and it shall not be necessary to
make any such Certificateholders parties to any such proceedings.
Section 6.04 Control by Certificateholders. Subject to Section
6.03 and any Intercreditor Agreement, the Certificateholders holding
Certificates of a series evidencing Fractional Cumulative Interests
aggregating not less than a majority in interest in the Trusts of the
related series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee with
respect to such Trusts or pursuant to the terms of any Intercreditor
Agreement, or exercising any trust or power conferred on the Trustee under
this Agreement or any Intercreditor Agreement, including any right of the
Trustee as Controlling Party under any Intercreditor Agreement or as holder
of the Equipment Notes in the related Trusts, provided that:
(1) such Direction shall not in the opinion of the
Trustee be in conflict with any rule of law or with this Agreement
and would not involve the Trustee in personal liability or
expense;
(2) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Certificateholders
of such series not taking part in such Direction;
(3) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such Direction; and
(4) if an Event of Default under a related Indenture
shall have occurred and be continuing, such direction shall not
obligate the Trustee to vote more than a corresponding majority of
the related Equipment Notes held by the Trust in favor of
directing any action by the related Indenture Trustee with respect
to such Event of Default.
Section 6.05 Waiver of Past Defaults. Subject to any applicable
Intercreditor Agreement, the Certificateholders holding Certificates of a
series evidencing Fractional Cumulative Interests aggregating not less than
a majority in interest in the Trusts of such series (i) may on behalf of
all of the Certificateholders of such series waive any past Event of
33
Default hereunder or under the related Trust Supplements with respect to
such series and its consequences or (ii) if the Trustee is the Controlling
Party, may direct the Trustee to instruct the applicable Indenture Trustee
to waive any past Indenture Default, or if applicable, the corresponding
Lease default, under the related Indenture with respect to such series and
its consequences, and thereby annul any Direction given by such
Certificateholders or the Trustee to such Indenture Trustee with respect
thereto, except a default:
(1) in the deposit of any Scheduled Payment or Special
Payment under Section 4.01 or in the distribution of any payment under
Section 4.02 on the Certificates of such series;
(2) in the payment of the principal of, Additional
Payments, if any, or interest on the Equipment Notes held in the
Trusts of such series; or
(3) in respect of a covenant or provision hereof which
under Article X cannot be modified or amended without the consent
of each Certificateholder holding an Outstanding Certificate of
such series affected thereby.
Upon any such waiver, such default shall cease to exist
with respect to the Certificates of such series and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose in
respect of such series and any direction given by the Trustee on behalf of
the Certificateholders of such series to the relevant Indenture Trustee
shall be annulled with respect thereto; but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon. Upon any such waiver, the Trustee of such series shall
vote the Equipment Notes issued under the relevant Indenture to waive the
corresponding Indenture Default (and, if applicable, the corresponding
Lease default).
Section 6.06 Right of Certificateholders to Receive Payments Not
to Be Impaired. Anything in this Agreement to the contrary notwithstanding,
including Section 6.07, but subject to any applicable Intercreditor
Agreement, the right of any Certificateholder to receive distributions of
payments required pursuant to Section 4.02 on the applicable Certificates
when due, or to institute suit for the enforcement of any such payment on
or after the applicable Regular Distribution Date or Special Distribution
Date, shall not be impaired or affected without the consent of such
Certificateholder.
Section 6.07 Certificateholders May Not Bring Suit Except Under
Certain Conditions. A Certificateholder of any series shall not have the
right to institute any suit, action or proceeding at law or in equity or
otherwise with respect to this Agreement, for the appointment of a receiver
or for the enforcement of any other remedy under this Agreement, unless:
(1) such Certificateholder previously shall have given
written notice to the Trustee of a continuing Event of Default;
(2) the Certificateholders holding Certificates of such
series evidencing Fractional Cumulative Interests aggregating not
less than 25% shall have requested the
34
Trustee in writing to institute such action, suit or proceeding
and shall have offered to the Trustee indemnity as provided in
Section 7.03(e);
(3) the Trustee shall have refused or neglected to
institute such an action, suit or proceeding for 60 days after
receipt of such notice, request and offer of indemnity; and
(4) no direction inconsistent with such written request
shall have been given to the Trustee during such 60-day period by
the Certificateholders holding Certificates of such series
evidencing Fractional Cumulative Interests aggregating not less
than a majority in interest in the related Trusts.
Except to the extent provided in any applicable
Intercreditor Agreement or in any applicable Trust Supplement, it is
understood and intended that no one or more of the Certificateholders of
any series shall have any right in any manner whatsoever hereunder or under
each related Trust Supplement or under the Certificates of such series to
(i) surrender, impair, waive, affect, disturb or prejudice any property in
the Trust Property of the related Trust or the lien of any related
Indenture on any property subject thereto, or the rights of the
Certificateholders of such series or the holders of the related Equipment
Notes, (ii) obtain or seek to obtain priority over or preference with
respect to any other such Certificateholder of such series or (iii) enforce
any right under this Agreement, except in the manner herein provided and
for the equal, ratable and common benefit of all the Certificateholders of
such series subject to the provisions of this Agreement.
Section 6.08 Remedies Cumulative. Every remedy given hereunder to
the Trustee or to any of the Certificateholders of any series shall not be
exclusive of any other remedy or remedies, and every such remedy shall be
cumulative and in addition to every other remedy given hereunder or now or
hereafter given by statute, law, equity or otherwise. No delay or omission
by the Trustee or of any such Certificateholder in the exercise of any
right, remedy or power or in the pursuance of any remedy shall impair any
such right, power or remedy or be construed to be a waiver of any default
on the part of the applicable Owner Trustee, if any, or the Company, as the
case may be, or to be an acquiescence therein.
Section 6.09. Discontinuance of Proceedings. If the Trustee or any
Certificateholder of any series institutes any proceeding to enforce any
right, power or remedy under the related Trust, and such proceeding is
discontinued or abandoned for any reason or is determined adversely to the
Trustee or such Certificateholder, then and in every such case the
applicable Owner Trustee, if any, and the applicable Indenture Trustee, the
Trustee, the Certificateholders of such series and the Company shall,
subject to any determination in such proceeding, be restored to their
former positions and rights under such Trust with respect to the Trust
Property and all rights, remedies and powers of the Trustee and such
Certificateholders shall continue as if no such proceeding had been
instituted.
Section 6.10. Undertaking for Costs. All parties to this
Agreement, and each Certificateholder by acceptance of a Certificate, shall
be deemed to have agreed that, in any suit for the enforcement of any right
or remedy under this Agreement, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, a court may require any
35
party litigant in such suit to file an undertaking to pay the costs of such
suit, and may assess costs against any such party litigant, in the manner
and to the extent provided in the Trust Indenture Act or by any other
applicable law; provided, however, that neither this Section 6.10 nor the
Trust Indenture Act shall be deemed to authorize any court to require such
an undertaking or to make such an assessment in any suit instituted by the
Company.
ARTICLE VII
THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities. (a) Except
during the continuance of an Event of Default in respect of a Trust, the
Trustee undertakes to perform such duties in respect of such Trusts as are
specifically set forth in this Agreement, any applicable Intercreditor
Agreement and the Note Documents, and no implied covenants or obligations
shall be read into such agreements against the Trustee.
(b) If an Event of Default in respect of a Trust has
occurred and is continuing, the Trustee shall exercise such of the rights
and powers vested in it by this Agreement in respect of such Trust, and use
the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of its own
affairs.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(i) this Subsection shall not be construed to
limit the effect of Section 7.01(a); and
(ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent
facts.
(d) Whether or not herein expressly so provided, every
provision of this Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 7.01.
Section 7.02 Notice of Defaults. As promptly as practicable after,
and in any event within 90 days after, the occurrence of any default (as
such term is defined below) hereunder known to the Trustee, the Trustee
shall transmit by mail to the Company, any related Owner Trustees, the
related Owner Participants, the related Indenture Trustees and the
Certificateholders holding Certificates of the related series in accordance
with Section 313(c) of the Trust Indenture Act, notice of such default
hereunder known to the Trustee, unless such default shall have been cured
or waived; provided, however, that, except in the case of a default on the
payment of the principal, Additional Payments, if any, or interest on any
Equipment Note, the Trustee shall be protected in withholding
36
such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of
the Trustee in good faith determine that the withholding of such notice is
in the interests of the Certificateholders of the related series. For the
purpose of this Section 7.02 in respect of the Trusts of any series, the
term "default" means any event that is, or after notice or lapse of time or
both would become, an Event of Default in respect of such Trust or a
Triggering Event under any Intercreditor Agreement.
Section 7.03 Certain Rights of Trustee. Subject to the
provisions of Section 315 of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting in reliance upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper
or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a written description of
the subject matter thereof accompanied by an Officer's Certificate
and an Opinion of Counsel as provided in Section 1.02;
(c) whenever in the administration of this Agreement the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officer's Certificate of the Company, any
related Owner Trustee or any related Indenture Trustee;
(d) the Trustee may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement or any
Intercreditor Agreement at the Direction of any of the
Certificateholders pursuant to this Agreement or any Intercreditor
Agreement, unless such Certificateholders shall have offered to
the Trustee reasonable security or indemnity against the cost,
expenses and liabilities which might be incurred by it in
compliance with such Direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper
or document;
(g) the Trustee may execute any of the trusts or powers
under this Agreement or any Intercreditor Agreement or perform any
duties under this Agreement or any Intercreditor Agreement either
directly or by or through agents or attorneys, and the Trustee
shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it under
this Agreement or any Intercreditor Agreement;
37
(h) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the Direction of the Certificateholders holding
Certificates of any series evidencing Fractional Cumulative
Interests aggregating not less than a majority in interest in the
related Trusts relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under
this Agreement or any Intercreditor Agreement; and
(i) the Trustee shall not be required to expend or risk
its own funds in the performance of any of its duties under this
Agreement, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk is not
reasonably assured to it.
Section 7.04 Not Responsible for Recitals or Issuance of
Certificates. The recitals contained herein and in the Certificates of each
series, except the certificates of authentication, shall not be taken as
the statements of the Trustee, and the Trustee assumes no responsibility
for their correctness. Subject to Section 7.15, the Trustee makes no
representations as to the validity or sufficiency of this Basic Agreement
or any Trust Supplement, any Intercreditor Agreement, the Note Purchase
Agreement, any Equipment Notes, the Certificates of any series or any other
Financing Document, except that the Trustee hereby represents and warrants
that this Basic Agreement has been, and each Trust Supplement, any
Intercreditor Agreement, the Note Purchase Agreement and each Certificate
of each series to which such Trustee is a party shall be, executed,
authenticated and delivered by one of its officers who is duly authorized
to execute, authenticate and deliver such document on its behalf.
Section 7.05 May Hold Certificates. The Trustee, any Paying Agent,
Registrar or any of their Affiliates or any other agent in their respective
individual or any other capacity may become the owner or pledgee of
Certificates and, subject to Sections 310(b) and 311 of the Trust Indenture
Act, if applicable, may otherwise deal with the Company, any Owner Trustees
or the Indenture Trustees with the same rights it would have if it were not
Trustee, Paying Agent, Registrar or such other agent.
Section 7.06 Money Held in Trust. Money held by the Trustee or the
Paying Agent in trust hereunder or under any Trust Supplement need not be
segregated from other funds except to the extent required herein or by law
and neither the Trustee nor the Paying Agent shall have any liability for
interest upon any such moneys except as provided for herein or in the
applicable Trust Supplement.
Section 7.07 Compensation and Reimbursement. The Company agrees:
(1) to pay, or cause to be paid, to the Trustee from time
to time reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust);
38
(2) except as otherwise expressly provided herein or in
any Trust Supplement, to reimburse, or cause to be reimbursed, the
Trustee upon its request for all reasonable out- of-pocket
expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Basic Agreement
or any Trust Supplement (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be attributable
to its negligence, willful misconduct or bad faith or as may be
incurred due to the Trustee's breach of its representations and
warranties set forth in Section 7.15; and
(3) to indemnify, or cause to be indemnified, the
Trustee, solely in its individual capacity, for, and to hold it
harmless against, any loss, liability, tax (other than any tax
referred to in the next paragraph or any tax attributable to the
Trustee's compensation for serving as such), cost or expense
incurred without negligence, willful misconduct or bad faith on
its part, arising out of or in connection with the acceptance or
administration of any Trust, including the costs and expenses of
(a) defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties
hereunder or under any Trust Supplement or (b) contesting the
imposition of any such tax, except in each case for any such loss,
liability, tax, cost or expense incurred by reason of the
Trustee's breach of its representations and warranties set forth
in Section 7.15 or in any Trust Supplement or the Trustee's
failure to perform any of its obligations hereunder or under any
Trust Supplement. The Trustee shall notify the Company promptly of
any claim or tax for which it may seek indemnity. The Company
shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel with the consent of
the Company and the Company will pay the reasonable fees and
expenses of such counsel. The Company need not pay for any
settlement made or any taxes paid, in settlement or otherwise,
without its consent.
The Trustee shall be entitled to reimbursement from, and
shall have a lien prior to the Certificates of each series upon, the Trust
Property, with respect to such series or the related Trusts for any tax
incurred without negligence, bad faith or willful misconduct, on its part,
arising out of or in connection with the acceptance or administration of
such Trusts (other than any tax attributable to the Trustee's compensation
for serving as such), including any costs and expenses incurred in
contesting the imposition of any such tax. The Trustee shall notify the
Company of any claim for any tax for which it may seek reimbursement. If
the Trustee reimburses itself from the Trust Property of such Trusts for
any such tax, it shall mail a brief report within 30 days setting forth the
circumstances thereof to all Certificateholders of such series as their
names and addresses appear in the Register.
Section 7.08 Corporate Trustee Required; Eligibility. Each Trust
shall at all times have a Trustee which shall be a financial institution
unaffiliated with and independent of the Company, shall be eligible to act
as a trustee under Section 310(a) of the Trust Indenture Act and shall have
a combined capital and surplus of at least $75,000,000 (or a combined
capital and surplus in excess of $5,000,000 and the obligations of which,
whether now in existence or hereafter incurred, are fully and
unconditionally guaranteed by a corporation organized and doing business
under the laws of the United States, any state or territory thereof or of
39
the District of Columbia and having a combined capital and surplus of at
least $75,000,000). If such corporation publishes reports of conditions at
least annually, pursuant to law or to the requirements of federal, state,
territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 7.08, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of conditions so published.
In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.08 to act as
Trustee of any Trust, the Trustee shall resign immediately as Trustee of
such Trust in the manner and with the effect specified in Section 7.09. If
the Trustee has or shall acquire a conflicting interest within the meaning
of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Agreement.
Section 7.09 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee of any Trust pursuant to this Article VII shall become
effective until the acceptance of appointment by the successor Trustee
under Section 7.10.
(b) The Trustee may resign at any time as trustee of any
or all Trusts by giving prior written notice thereof to the Company, the
Authorized Agents, the related Owner Trustees and the related Indenture
Trustees. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Company, the Authorized Agents, the related
Owner Trustees, the related Indenture Trustees and the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(c) The Trustee may be removed at any time as trustee of
the Trusts of any series by Direction of the Certificateholders of the
related series holding Certificates of such series evidencing Fractional
Cumulative Interests aggregating not less than a majority in interest in
such Trusts delivered to the Trustee and to the Company, the related Owner
Trustees and the related Indenture Trustees.
(d) If at any time in respect of the Trusts of any
series:
(i) the Trustee shall fail to comply with
Section 310 of the Trust Indenture Act, if applicable,
after written request therefor by the Company or by any
Certificateholder of the related series who has been a
bona fide Certificateholder for at least six months; or
(ii) the Trustee shall cease to be eligible
under Section 7.08 and shall fail to resign after written
request therefor by the Company or by any such
Certificateholder; or
(iii) the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be
appointed
40
or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any case, (i) the Company may remove the Trustee or (ii) any
Certificateholder of the related series who has been a bona fide
Certificateholder for at least six months may, on behalf of itself and all
others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee of
such Trust.
(e) If a Responsible Officer of the Trustee shall obtain
actual knowledge of an Avoidable Tax in respect of the Trusts of any series
which has been or is likely to be asserted, the Trustee shall promptly
notify the Company and shall, within 30 days of such notification, resign
as Trustee of such Trust hereunder unless within such 30-day period the
Trustee shall have received notice that the Company has agreed to pay such
tax. Provided that there is a corporation in a jurisdiction where there are
no Avoidable Taxes that is willing to act as Trustee and is eligible under
Section 7.08, the Company shall promptly appoint a successor Trustee of
such Trusts in a jurisdiction where there are no Avoidable Taxes.
(f) If the Trustee shall resign, be removed or become
incapable of acting as trustee of the Trusts of any series or if a vacancy
shall occur in the office of the Trustee of the Trusts for any cause, the
Company shall promptly appoint a successor Trustee of such Trusts. If,
within one year after such resignation, removal or incapability, or other
occurrence of such vacancy, a successor Trustee of such Trusts shall be
appointed by Direction of the Certificateholders of the related series
holding Certificates of such series evidencing Fractional Cumulative
Interests aggregating not less than a majority in interest in such Trusts
delivered to the Company, the related Owner Trustees, the related Indenture
Trustees and the retiring Trustee, and the Company approves such
appointment, which approval shall not be unreasonably withheld, then the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee of such Trusts and supersede the
successor Trustee of such Trusts appointed as provided above. If no
successor Trustee shall have been so appointed as provided above and
accepted appointment in the manner hereinafter provided, any
Certificateholder who has been a bona fide Certificateholder of the related
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee of such Trust.
(g) The successor Trustee of the Trusts of a series shall
give notice of the resignation and removal of the Trustee and appointment
of the successor Trustee by mailing written notice of such event by
first-class mail, postage prepaid, to the Certificateholders of the related
series as their names and addresses appear in the Register. Each notice
shall include the name of such successor Trustee and the address of its
Corporate Trust Office.
Section 7.10 Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute and deliver to the
Company, the Authorized Agents, the Owner Trustees and the Indenture
Trustees and to the retiring Trustee with respect to any or all Trusts an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee with respect to such Trusts shall become
effective and such successor Trustee, without any further act,
41
deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall execute and deliver an
instrument transferring to such successor Trustee all such rights, powers
and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all Trust Property held by such retiring
Trustee in respect of such Trusts hereunder, subject nevertheless to its
lien, if any, provided for in Section 7.07. Upon request of any such
successor Trustee, the Company, the retiring Trustee and such successor
Trustee shall execute and deliver any and all instruments containing such
provisions as shall be necessary or desirable to transfer and confirm to,
and for more fully and certainly vesting in, such successor Trustee all
such rights, powers and trusts.
If a successor Trustee is appointed with respect to one
or more (but not all) Trusts, the Company, the predecessor Trustee and each
successor Trustee with respect to any Trust shall execute and deliver a
supplemental agreement hereto which shall contain such provisions as shall
be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the predecessor Trustee with respect to the Trusts as
to which the predecessor Trustee is not retiring shall continue to be
vested in the predecessor Trustee, and shall add to or change any of the
provisions of this Basic Agreement and the applicable Trust Supplements as
shall be necessary to provide for or facilitate the administration of the
Trusts hereunder by more than one Trustee.
It is understood that nothing herein or in any
supplemental agreement or Trust Supplement shall constitute any Trustee a
co-Trustee of the same Trust and that each Trustee shall be the Trustee of
one or more separate Trusts.
No institution shall accept its appointment as a Trustee
hereunder unless at the time of such acceptance such institution shall be
qualified and eligible under this Article VII.
Section 7.11 Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the 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 Trustee shall be a party,
or any corporation succeeding to all or substantially all of the corporate
trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article VII, without the execution or filing of any
paper or any further act on the part of any of the parties hereto. In case
any Certificates shall have been executed or authenticated, but not
delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
execution or authentication and deliver the Certificates so executed or
authenticated with the same effect as if such successor Trustee had itself
executed or authenticated such Certificates.
Section 7.12 Maintenance of Agencies. (a) With respect to each
series of Certificates, there shall at all times be maintained an office or
agency in the location set forth in Section 12.03 where Certificates of
such series may be presented or surrendered for registration of transfer or
for exchange, and for payment thereof and where notices and demands to or
upon the Trustee in respect of such Certificates or this Agreement may be
served; provided, however, that, if it shall be necessary that the Trustee
maintain an office or agency in another location with respect to the
Certificates of any series (e.g., the Certificates shall be represented by
42
Definitive Certificates and shall be listed on a national securities
exchange), the Trustee shall make all reasonable efforts to establish such
an office or agency. Written notice of the location of each such other
office or agency and of any change of location thereof shall be given by
the Trustee to the Company, any Owner Trustees, the Indenture Trustees (in
the case of any Owner Trustee or Indenture Trustee, at its address
specified in the Note Purchase Agreement or such other address as may be
notified to the Trustee) and the Certificateholders of such series. In the
event that no such office or agency shall be maintained or no such notice
of location or of change of location shall be given, presentations and
demands may be made and notices may be served at the Corporate Trust Office
of the Trustee.
(b) There shall at all times be a Registrar and a Paying
Agent hereunder with respect to the Certificates of each series. Each such
Authorized Agent shall be a bank or trust company, shall be a corporation
organized and doing business under the laws of the United States or any
state, with a combined capital and surplus of at least $75,000,000, or a
corporation having a combined capital and surplus in excess of $5,000,000,
the obligations of which are guaranteed by a corporation organized and
doing business under the laws of the United States or any state, with a
combined capital and surplus of at least $75,000,000, and shall be
authorized under such laws to exercise corporate trust powers, subject to
supervision by Federal or state authorities. The Trustee shall initially be
the Paying Agent and, as provided in Section 3.04, Registrar hereunder with
respect to the Certificates of each series. Each Registrar shall furnish to
the Trustee, at stated intervals of not more than six months, and at such
other times as the Trustee may request in writing, a copy of the Register
maintained by such Registrar.
(c) Any corporation into which any Authorized Agent may
be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, consolidation or conversion to which
any Authorized Agent shall be a party, or any corporation succeeding to the
corporate trust business of any Authorized Agent, shall be the successor of
such Authorized Agent hereunder, if such successor corporation is otherwise
eligible under this Section 7.12, without the execution or filing of any
paper or any further act on the part of the parties hereto or such
Authorized Agent or such successor corporation.
(d) Any Authorized Agent may at any time resign by giving
written notice of resignation to the Trustee, the Company, any related
Owner Trustees and the related Indenture Trustees. The Company may, and at
the request of the Trustee shall, at any time terminate the agency of any
Authorized Agent by giving written notice of termination to such Authorized
Agent and to the Trustee. Upon the resignation or termination of an
Authorized Agent or in case at any time any such Authorized Agent shall
cease to be eligible under this Section 7.12 (when, in either case, no
other Authorized Agent performing the functions of such Authorized Agent
shall have been appointed), the Company shall promptly appoint one or more
qualified successor Authorized Agents, reasonably satisfactory to the
Trustee, to perform the functions of the Authorized Agent which has
resigned or whose agency has been terminated or who shall have ceased to be
eligible under this Section 7.12. The Company shall give written notice of
any such appointment made by it to the Trustee, any related Owner Trustees
and the related Indenture Trustees; and in each case the Trustee shall mail
notice of such appointment to all Certificateholders of the related series
as their names and addresses appear on the Register for such series.
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(e) The Company agrees to pay, or cause to be paid, from
time to time to each Authorized Agent reasonable compensation for its
services as the Company and the Trustee may agree in writing from time to
time and to reimburse it for its reasonable expenses to the extent set
forth in Section 7.07(2).
Section 7.13 Money for Certificate Payments to Be Held in Trust.
All moneys deposited with any Paying Agent for the purpose of any payment
on Certificates shall be deposited and held in trust for the benefit of the
Certificateholders entitled to such payment, subject to the provisions of
this Section 7.13. Moneys so deposited and held in trust shall constitute a
separate trust fund for the benefit of the Certificateholders with respect
to which such money was deposited.
The Trustee may at any time, for the purpose of obtaining
the satisfaction and discharge of this Agreement or for any other purpose,
direct any Paying Agent to pay to the Trustee all sums held in trust by
such Paying Agent, such sums to be held by the Trustee upon the same trusts
as those upon which such sums were held by such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Section 7.14 Registration of Equipment Notes in Name of
Subordination Agent. Subject to the provisions of any Intercreditor
Agreement and Section 12.13, the Trustee agrees that all Equipment Notes to
be purchased by any Trust, Specified Investments, if any, to be held by the
Trustee on behalf of a Trust and Permitted Investments, if any, to be held
by the Trustee on behalf of a Trust shall be issued in the name of the
Trustee as trustee for the applicable Trust or its nominee and held by the
Trustee in trust for the benefit of the Certificateholders of such series,
or, if not so held, the Trustee or its nominee shall be reflected as the
owner of such Equipment Notes, Specified Investments or Permitted
Investments, as the case may be, in the register of the issuer of such
Equipment Notes, Specified Investments or Permitted Investments, as the
case may be. In no event shall the Trustee invest in, or hold, Equipment
Notes, Specified Investments or Permitted Investments in a manner that
would cause the Trustee not to have the ownership interest in (or a
securities entitlement with respect to) such Equipment Notes, Specified
Investments or Permitted Investments under the applicable provisions of the
Uniform Commercial Code in effect where the Trustee holds such Equipment
Notes, Specified Investments or Permitted Investments or other applicable
law then in effect.
Section 7.15 Representations and Warranties of Trustee. The
Trustee hereby represents and warrants that:
(a) the Trustee is a national banking association
organized and validly existing in good standing under the Federal laws
of the United States;
(b) the Trustee has full power, authority and legal right
to execute, deliver, and perform this Basic Agreement, the Trust
Supplements, the Certificates, any Intercreditor Agreement and the
Note Purchase Agreements and has taken all necessary action to
authorize the execution, delivery and performance by it of this
Basic Agreement, the Trust
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Supplements, the Certificates, any Intercreditor Agreement and the
Note Purchase Agreements;
(c) the execution, delivery and performance by the
Trustee of this Basic Agreement, the Trust Supplements, the
Certificates, any Intercreditor Agreement and the Note Purchase
Agreements (i) shall not violate any provision of United States
federal law or the law of the state of the United States where it
is located governing the banking and trust powers of the Trustee
or any order, writ, judgment, or decree of any court, arbitrator
or governmental authority applicable to the Trustee or any of its
assets, (ii) shall not violate any provision of the articles of
association or by-laws of the Trustee, and (iii) shall not violate
any provision of, or constitute, with or without notice or lapse
of time, a default under, or result in the creation or imposition
of any lien on any properties included in the Trust Property of
any Trust pursuant to the provisions of any mortgage, indenture,
contract, agreement or other undertaking to which it is a party,
which violation, default or lien could reasonably be expected to
have an adverse effect on the Trustee's performance or ability to
perform its duties hereunder or thereunder or on the transactions
contemplated herein or therein;
(d) the execution, delivery and performance by the
Trustee of this Basic Agreement, the Trust Supplements, the
Certificates, any Intercreditor Agreement and the Note Purchase
Agreements shall not require the authorization, consent, or
approval of, the giving of notice to, the filing or registration
with, or the taking of any other action in respect of, any
governmental authority or agency of the United States or the State
of the United States where it is located regulating the banking
and corporate trust activities of the Trustee;
(e) this Basic Agreement, the Trust Supplements, the
Certificates, any Intercreditor Agreement and the Note Purchase
Agreements have been or shall be duly executed and delivered by
the Trustee and constitute or upon such execution and delivery
shall constitute the legal, valid, and binding agreements of the
Trustee, enforceable against it in accordance with their
respective terms, provided that enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and
(ii) general principles of equity; and
(f) the statements made by it in a Statement of
Eligibility on Form T-1 supplied or to be supplied to the Company
in connection with the registration of any Certificates are and
will be true and accurate subject to the qualifications set forth
therein; and that such statement complies and will comply in all
material respects with the requirements of the Trust Indenture Act
and the Securities Act.
The representation and warranties set forth above shall
be deemed to be made by the Trustee on each Issuance Date, except as
otherwise provided in the applicable Trust Supplement.
45
Section 7.16 Withholding Taxes; Information Reporting. As to the
Certificates of any series, the Trustee, as trustee of the related grantor
trust created by this Agreement, shall exclude and withhold from each
distribution of principal, Additional Payments, if any, and interest and
other amounts due under this Agreement or under the Certificates of such
series any and all withholding taxes applicable thereto as required by law.
The Trustee agrees to act as such withholding agent and, in connection
therewith, whenever any present or future taxes or similar charges are
required to be withheld with respect to any amounts payable in respect of
the Certificates of such series, to withhold such amounts and timely pay
the same to the appropriate authority in the name of and on behalf of the
Certificateholders of such series, that it shall file any necessary
withholding tax returns or statements when due, and that, as promptly as
possible after the payment thereof, it shall deliver to each such
Certificateholder appropriate documentation showing the payment thereof,
together with such additional documentary evidence as such
Certificateholders of such series may reasonably request from time to time.
The Trustee agrees to file any other information reports as it may be
required to file under United States law.
Section 7.17 Trustee's Liens. The Trustee in its individual
capacity agrees that it shall, in respect of each Trust created by this
Agreement, at its own cost and expense promptly take any action as may be
necessary to duly discharge and satisfy in full any mortgage, pledge, lien,
charge, encumbrance, security interest or claim ("Trustee's Liens") on or
with respect to the Trust Property of such Trust which is attributable to
the Trustee either (i) in its individual capacity and which is unrelated to
the transactions contemplated by this Agreement, any applicable
Intercreditor Agreement, the Note Purchase Agreement or the Note Documents,
or (ii) as Trustee hereunder or in its individual capacity and which arises
out of acts or omissions which are not contemplated by this Agreement.
Section 7.18 Preferential Collection of Claims. The Trustee shall
comply with Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship listed in Section 311(b) of the Trust Indenture Act.
If the Trustee shall resign or be removed as Trustee, it shall be subject
to Section 311(a) of the Trust Indenture Act to the extent provided
therein.
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01 The Company to Furnish Trustee with Names and
Addresses of Certificateholders. The Company shall furnish to the Trustee
within 15 days after each Record Date with respect to a Scheduled Payment,
and at such other times as the Trustee may request in writing within 30
days after receipt by the Company of any such request, a list, in such form
as the Trustee may reasonably require, of all information in the possession
or control of the Company as to the names and addresses of the
Certificateholders of each series, in each case as of a date not more than
15 days prior to the time such list is furnished; provided, however, that
so long as the Trustee is the sole Registrar for such series, no such list
need be furnished; and provided, further, that no such list need be
furnished for so long as a copy of the Register is being furnished to the
Trustee pursuant to Section 7.12.
46
Section 8.02 Preservation of Information; Communications to
Certificateholders. The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Certificateholders of
each series contained in the most recent list furnished to the Trustee as
provided in Section 7.12 or Section 8.01, as the case may be, and the names
and addresses of Certificateholders of each series received by the Trustee
in its capacity as Registrar, if so acting. The Trustee may destroy any
list furnished to it as provided in Section 7.12 or Section 8.01, as the
case may be, upon receipt of a new list so furnished.
Section 8.03 Reports by Trustee. Within 60 days after May 15 of
each year commencing with the first full year following the issuance of any
series of Certificates, the Trustee shall transmit to the
Certificateholders of each series, as provided in Section 313(c) of the
Trust Indenture Act, a brief report dated as of such May 15, if required by
Section 313(a) of the Trust Indenture Act. The Trustee shall also transmit
to Certificateholders such reports, if any, as may be required pursuant to
Section 313(b) of the Trust Indenture Act at the times and in the manner
provided pursuant thereto and to Section 313(c) thereof.
Section 8.04 Reports by the Company. The Company shall:
(a) file with the Trustee, within 30 days after the
Company is required to file the same with the SEC, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may from time to time by
rules and regulations prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if
the Company is not required to file information, documents or reports
pursuant to either of such sections, then to file with the Trustee and the
SEC, in accordance with rules and regulations prescribed by the SEC, such
of the supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may be
prescribed in such rules and regulations;
(b) file with the Trustee and the SEC, in accordance with
the rules and regulations prescribed by the SEC, such additional
information, documents and reports with respect to compliance by the
Company with the conditions and covenants of the Company provided for in
this Agreement, as may be required by such rules and regulations,
including, in the case of annual reports, if required by such rules and
regulations, certificates or opinions of independent public accountants;
(c) transmit to all Certificateholders, in the manner and
to the extent provided in Section 313(c) of the Trust Indenture Act such
summaries of any information, documents and reports required to be filed by
the Company pursuant to Sections 8.04(a) and (b) as may be required by
rules and regulations prescribed by the SEC; and
(d) furnish to the Trustee, not less often than annually,
a brief certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants of
the Company under this Agreement (it being understood that for purposes of
47
this Section 8.04(d), such compliance shall be determined without regard to
any period of grace or requirement of notice provided under this
Agreement).
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.01 Supplemental Agreements Without Consent of
Certificateholders. Without the consent of the Certificateholders of any
series, the Company may (but shall not be required to), and the Trustee
(subject to Section 9.03) shall, at the Company's request, at any time and
from time to time, enter into one or more agreements supplemental hereto
or, if applicable, to any Intercreditor Agreement, the Note Purchase
Agreement or any Liquidity Facility in form reasonably satisfactory to the
Trustee, for any of the following purposes:
(1) to provide for the formation of a Trust, the
issuance of a series of Certificates and the other matters contemplated by
Section 2.01(b);
(2) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the covenants of
the Company contained herein or of the Company's obligations under any
Intercreditor Agreement, any Note Purchase Agreement or any Liquidity
Facility;
(3) to add to the covenants of the Company for the
benefit of the Certificateholders of any series, or to surrender any right
or power in this Agreement, any Intercreditor Agreement, the Note Purchase
Agreement or any Liquidity Facility conferred upon the Company;
(4) (a) to correct or supplement any provision in this
Agreement, any Intercreditor Agreement, the Note Purchase Agreement or any
Liquidity Facility that may be defective or inconsistent with any other
provision herein or in any Trust Supplement, (b) to cure any ambiguity or
correct any mistake or (c) to modify any other provision with respect to
matters or questions arising under this Agreement, any Intercreditor
Agreement, the Note Purchase Agreement or any Liquidity Facility, provided
that any such action shall not materially adversely affect the interests of
the Certificateholders of any series;
(5) to modify, eliminate or add to the provisions of this
Agreement to such extent as shall be necessary to continue the
qualification of this Agreement (including any supplemental agreement)
under the Trust Indenture Act or under any similar Federal statute
hereafter enacted, and to add to this Agreement such other provisions as
may be expressly permitted by the Trust Indenture Act, excluding, however,
the provisions referred to in Section 316(a)(2) of the Trust Indenture Act
as in effect at the date as of which this Basic Agreement was executed or
any corresponding provision in any similar Federal statute hereafter
enacted;
48
(6) to evidence and provide for the acceptance of
appointment under this Agreement by the Trustee or a successor Trustee with
respect to one or more Trusts and to add to or change any of the provisions
of this Agreement as shall be necessary to provide for or facilitate the
administration of the Trusts hereunder and thereunder by more than one
Trustee, pursuant to the requirements of Section 7.10;
(7) to provide the information required under
Sections 7.12 and 12.03 as to the Trustee;
(8) to modify or eliminate provisions relating to the
effectiveness of the Registration Statement;
(9) to comply with any requirement of the SEC, any
applicable law, rules or regulations of any exchange or quotation system on
which the Certificates of any series are listed or of any regulatory body;
(10) to add to or change any of the provisions of this
Agreement or any Trust Supplement to such extent as shall be necessary to
facilitate the issuance of Certificates in bearer form or to facilitate or
provide for the issuance of Certificates global form in addition to or in
place of Certificates in certificated form; or
(11) to make or modify any other provision in regard to
matters or questions arising under this Basic Agreement or any related
Trust Supplement, any Intercreditor Agreement or any Liquidity Facility as
the Company may deem necessary or desirable and that will not materially
adversely affect the interests of the related Certificateholders;
(12) to evidence and provide for the acceptance of
appointment by a successor Trustee under this Agreement, any Intercreditor
Agreement, any Note Purchase Agreement, any Indenture or any Liquidity
Facility with respect to one or more Trusts and to add to or change any of
the provisions of this Agreement, any Intercreditor Agreement or any
Liquidity Facility as shall be necessary to provide for or facilitate the
administration of the Trust hereunder and thereunder by more than one
Trustee, pursuant to the requirements of Section 7.10;
(13) to provide the information required under
Section 7.12 and Section 12.03 as to the Trustee;
(14) to provide for the delivery of agreements
supplemental hereto or the Certificates of any series in or by any means of
any computerized, electronic or other medium, including without limitation
by computer diskette;
(15) to correct or supplement the description of any
property constituting property of such Trust;
(16) to modify, eliminate or add to the provisions of
this Basic Agreement or any Trust Supplement in order to reflect the
substitution of a Substitute Aircraft for any aircraft; or
49
(17) to make any other amendments or modifications
hereto, provided that such amendments or modifications shall only apply to
Certificates of one or more series to be thereafter issued;
provided, however, that no such supplemental agreement shall cause any
Trust to become an association taxable as a corporation for United States
federal income tax purposes.
Section 9.02 Supplemental Agreements with Consent of
Certificateholders. With respect to the Trusts of each series and the
series of Certificates relating thereto, with the consent of the
Certificateholders holding Certificates evidencing Fractional Cumulative
Interests aggregating not less than a majority in interest in such Trust,
by Direction of said Certificateholders delivered to the Company and the
Trustee, the Company may (with the consent of the Owner Trustees, if any,
relating to such Certificates, which consent shall not be unreasonably
withheld), and the Trustee (subject to Section 9.03) shall, enter into an
agreement or agreements supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, any Intercreditor Agreement, any Liquidity
Facility, or the Note Purchase Agreement to the extent applicable to such
Certificateholders or of modifying in any manner the rights and obligations
of such Certificateholders under this Agreement, any Intercreditor
Agreement, any Liquidity Facility, or the Note Purchase Agreement;
provided, however, that no such supplemental agreement shall, without the
consent of the Certificateholder of each Outstanding Certificate affected
thereby:
(1) reduce in any manner the amount of, or delay the
timing of, any receipt by the Trustee of payments on the Equipment
Notes held in such Trust or distributions that are required to be
made herein on any Certificate of such series, or change any date
of payment on any Certificate of such series, or change the place
of payment where, or the coin or currency in which, any
Certificate of such series is payable, or impair the right to
institute suit for the enforcement of any such payment or
distribution on or after the Regular Distribution Date or Special
Distribution Date applicable thereto;
(2) except as permitted by this Agreement or any
applicable Note Purchase Agreement, Intercreditor Agreement or
Liquidity Facility, permit the disposition of any Equipment Note
included in the Trust Property of such Trust or otherwise deprive
such Certificateholder of the benefit of the ownership of the
Equipment Notes in such Trust;
(3) reduce the percentage of the aggregate Fractional
Cumulative Interests of such Trusts which is required for any such
supplemental agreement, or reduce such percentage required for any
waiver of compliance with certain provisions of this Agreement or
certain defaults hereunder and their consequences provided for in
this Agreement; or
(4) alter the priority of distributions specified in the
relevant Intercreditor Agreement, if any, in a manner materially
adverse to the interests of the Certificateholders of any series.
50
It shall not be necessary for any Direction of such
Certificateholders under this Section 9.02 to approve the particular form
of any proposed supplemental agreement, but it shall be sufficient if such
Direction shall approve the substance thereof.
Section 9.03 Documents Affecting Immunity or Indemnity. If in the
opinion of the Trustee any document required to be executed by it pursuant
to the terms of Section 9.01 or 9.02 has a material adverse effect on any
interest, right, duty, immunity or indemnity in favor of the Trustee under
this Basic Agreement or any Trust Supplement, the Trustee may in its
discretion decline to execute such document.
Section 9.04 Execution of Supplemental Agreements. In executing,
or accepting the additional trusts created by, any supplemental agreement
permitted by this Article IX or the modifications thereby of the trusts
created by this Agreement, the Trustee shall be entitled to receive upon
its request, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement.
Section 9.05 Effect of Supplemental Agreements. Upon the execution
of any supplemental agreement under this Article IX, this Basic Agreement
shall be modified in accordance therewith, and such supplemental agreement
shall form a part of this Basic Agreement for all purposes; and every
Certificateholder of each series theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby to the extent applicable to
such series.
Section 9.06 Conformity with Trust Indenture Act. Every
supplemental agreement executed pursuant to this Article IX shall conform
to the requirements of the Trust Indenture Act as then in effect.
Section 9.07 Reference in Certificates to Supplemental Agreements.
Certificates of each series authenticated and delivered after the execution
of any supplemental agreement applicable to such series pursuant to this
Article IX may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental agreement; and, in such case,
suitable notation may be made upon Outstanding Certificates of such series
after proper presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURES AND NOTE DOCUMENTS
Section 10.01 Amendments and Supplements to Indentures and Other
Note Documents. If the Trustee, as holder (or beneficial owner through the
Subordination Agent) of any Equipment Note in trust for the benefit of the
Certificateholders of any series or as Controlling Party under any
Intercreditor Agreement, receives a request pursuant to Section 9.02 or
Section 6.04 for a consent to any amendment, modification, waiver or
supplement under any related Indenture or other related Note Document,
subject to Section 9.01 hereof, the Trustee shall forthwith send a notice
of such proposed amendment, modification, waiver or supplement to each
Certificateholder of such series registered on the Register as of the date
51
of such notice. The Trustee shall request from the Certificateholders of
such series a Direction as to (a) whether or not to take or refrain from
taking (or direct the Subordination Agent to take or refrain from taking)
any action which a holder of such Equipment Note has the option to direct,
(b) whether or not to give or execute (or direct the Subordination Agent to
give or execute) any waivers, consents, amendments, modifications or
supplements as a holder of such Equipment Note or a Controlling Party and
(c) how to vote (or direct the Subordination Agent to vote) the Equipment
Notes if a vote has been called for with respect thereto. If such a request
for Certificateholder Direction shall have been made, in directing any
action or casting any vote or giving any consent as the holder of any such
Equipment Notes (or directing the Subordination Agent in any of the
foregoing), (i) other than as Controlling Party, the Trustee shall vote for
or give consent to any such action with respect to such Equipment Note in
the same proportion as that of (A) the aggregate face amounts of all
Certificates of such series actually voted in favor of or for giving
consent to such action by such Direction of Certificateholders to (B) the
aggregate face amount of all Outstanding Certificates and (ii) as
Controlling Party, the Trustee shall vote as directed in such
Certificateholder Direction by the Certificateholders of such series
evidencing a Fractional Cumulative Interest aggregating not less than a
majority in interest in the related Trust. For purposes of the preceding
sentence, a Certificate shall have been "actually voted" if the Holder of
such Certificate has delivered to the Trustee an instrument evidencing such
Holder's consent to such Direction prior to two Business Days before the
Trustee directs such action or casts such vote or gives such consent.
Notwithstanding the foregoing, but subject to Section 6.04 and any
Intercreditor Agreement, the Trustee may, with respect to the Certificates
of any series, in its own discretion and at its own direction, consent and
notify the relevant Indenture Trustee of such consent (or direct the
Subordination Agent to consent and notify such Indenture Trustee of such
consent) to any amendment, modification, waiver or supplement under the
relevant Indenture or any other Note Document, if an Event of Default
hereunder shall have occurred and be continuing, or if such amendment,
modification or waiver shall not adversely affect the interests of the
Certificateholders of such series.
ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01 Termination of the Trusts. In respect of the Trusts
of each series created by the Basic Agreement as supplemented by a related
Trust Supplement, the respective obligations and responsibilities of the
Company and the Trustee created under this Agreement and such Trusts
created hereby shall terminate upon the distribution to all Holders of the
Certificates of the series of such Trusts and the Trustee of all amounts
required to be distributed to them pursuant to this Agreement and the
disposition of all property held as part of the Trust Property of the
related series of such Trusts; provided, however, that in no event shall
such Trusts continue beyond the final expiration date determined as
provided in such Trust Supplement.
Notice of any termination of the Trusts of a series,
specifying the applicable Regular Distribution Date (or applicable Special
Distribution Date, as the case may be) upon which the Certificateholders of
such series may surrender their Certificates to the Trustee for payment of
the final distribution and cancellation, shall be mailed promptly by the
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Trustee to Certificateholders of such series not earlier than the 60th day
and not later than the 15th day preceding such final distribution
specifying (A) the Regular Distribution Date (or Special Distribution Date,
as the case may be) upon which the proposed final payment of the
Certificates of such series shall be made upon presentation and surrender
of Certificates of such series at the office or agency of the Trustee
therein specified, (B) the amount of any such proposed final payment, and
(C) that the Record Date otherwise applicable to such Regular Distribution
Date (or Special Distribution Date, as the case may be) is not applicable,
payments being made only upon presentation and surrender of the
Certificates of such series at the office or agency of the Trustee therein
specified. The Trustee shall give such notice to the Registrar at the time
such notice is given to Certificateholders of such series. Upon
presentation and surrender of the Certificates of such series in accordance
with such notice, the Trustee shall cause to be distributed to
Certificateholders of such series such final payments.
If all of the Certificateholders of such series shall not
surrender their Certificates for cancellation within six months after the
date specified in the above-mentioned written notice, the Trustee shall
give a second written notice to the remaining Certificateholders of such
series to surrender their Certificates for cancellation and receive the
final distribution with respect thereto. No additional interest shall
accrue on the Certificates of such series after the Regular Distribution
Date (or Special Distribution Date, as the case may be) specified in the
first written notice. If any money held by the Trustee for the payment of
distributions on the Certificates of such series shall remain unclaimed for
two years (or such lesser time as the Trustee shall be satisfied, after 60
days' notice from the Company, is one month prior to the escheat period
provided under applicable law) after the final distribution date with
respect thereto, the Trustee shall pay to each Indenture Trustee the
appropriate amount of money relating to such Indenture Trustee and shall
give written notice thereof to the related Owner Trustees, the Owner
Participants and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Limitation on Rights of Certificateholders. (a) The
insolvency, death or incapacity of any Certificateholder of any series
shall not operate to terminate this Agreement or the related Trust, nor
entitle such Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or commence any proceeding in any court
for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations, and liabilities of the parties hereto or any of them.
No Certificateholder of any series shall be entitled to revoke the related
Trust.
(b) No transfer, by operation of law or otherwise, of any
Certificate or other right, title and interest of any Certificateholder in
and to the applicable Trust Property or under the related Trust shall
operate to terminate the Trust or entitle such Certificateholder or any
successor or transferee of such Certificateholder to an accounting or to
the transfer to it of legal title to any part of such Trust Property.
Section 12.02 Certificates Nonassessable and Fully Paid. Except
as set forth in the last sentence of this Section 12.02, Certificateholders of
53
each series shall not be personally liable for obligations of the related
Trusts, the Fractional Undivided Interests represented by the Certificates
of such series shall be nonassessable for any losses or expenses of such
Trust or for any reason whatsoever, and Certificates of such series, upon
authentication thereof by the Trustee pursuant to Section 3.03, are and
shall be deemed fully paid. No Certificateholder of such series shall have
any right (except as expressly provided herein) to vote or in any manner
otherwise control the operation and management of the related Trust
Property, the related Trust, or the obligations of the parties hereto, nor
shall anything set forth herein, or contained in the terms of the
Certificates of such series, be construed so as to constitute the
Certificateholders of such series from time to time as partners or members
of an association. Neither the existence of any Trust nor any provision
herein is intended to or shall limit the liability the Certificateholders
of each series would otherwise incur if such Certificateholders owned the
related Trust Property as co-owners, or incurred any obligations of the
related Trust, directly rather than through the related Trust.
Section 12.03 Notices. (a) Unless otherwise specifically provided
herein or in the applicable Trust Supplement with respect to any Trust, all
notices required under the terms and provisions of this Basic Agreement or
such Trust Supplement with respect to such Trust shall be in English and in
writing, and any such notice may be given by United States mail, courier
service or telecopy, and any such notice shall be effective when delivered
or received or, if mailed, three days after deposit in the United States
mail with proper postage for ordinary mail prepaid,
if to the Company, to:
U.S. Mail Overnight Delivery Service
--------- --------------------------
United Air Lines, Inc. United Air Lines, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Elk ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Vice President and Attn: Vice President and
Treasurer Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee, to:
[Address]
(b) The Company or the Trustee as to any series of
Certificates, by written notice to the other, may designate additional or
different addresses for subsequent notices or communications.
(c) Any notice or communication to Certificateholders of
any series shall be mailed by first-class mail to the addresses for
Certificateholders of such series shown on the Register kept by the
Registrar. Failure so to mail a notice or communication or any defect in
such notice or communication shall not affect its sufficiency with respect
to other Certificateholders of such series.
54
(d) If a notice or communication is mailed in the manner
provided above within the time prescribed, it is conclusively presumed to
have been duly given, whether or not the addressee receives it.
Notwithstanding the foregoing, all communications or notices to the Trustee
shall be deemed to be given only when received by a Responsible Officer of
the Trustee.
(e) If the Company mails a notice or communication to the
Certificateholders of such series, it shall mail a copy to the Trustee and
to each Paying Agent for such series at the same time.
(f) The Trustee shall promptly furnish the Company with a
copy of any demand, notice or written communication received by the Trustee
hereunder from any Certificateholder, Owner Trustee or Indenture Trustee.
Section 12.04 Governing Law. THIS BASIC AGREEMENT, ALL TRUST
SUPPLEMENTS AND ALL CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF (OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW)) AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section 12.05 Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in
no way affect the validity or enforceability of the other provisions of
this Agreement or any Trust, or of the Certificates of any series or the
rights of the Certificateholders thereof.
Section 12.06 Trust Indenture Act Controls. This Agreement is
subject to the provisions of the Trust Indenture Act and if any provision
of this Agreement limits, qualifies or conflicts with another provision
which is required to be included in this Agreement by the Trust Indenture
Act, the required provision shall control. If any provision of this
Agreement modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed
to apply to this Agreement as so modified, or to be excluded, as the case
may be, whether or not such provision of this Agreement refers expressly to
such provision of the Trust Indenture Act.
Section 12.07 Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 12.08 Successors and Assigns. All covenants, agreements,
representations and warranties in this Agreement by the Trustee and the
Company shall bind and, to the extent permitted hereby, shall inure to the
benefit of and be enforceable by their respective successors and assigns,
whether so expressed or not.
55
Section 12.09 Benefits of Agreement. Nothing in this Agreement or
in the Certificates of any series, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder, and
the Certificateholders of each series, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
Section 12.10 Legal Holidays. In any case where any Regular
Distribution Date or Special Distribution Date relating to any Certificate
of any series shall not be a Business Day with respect to such series, then
(notwithstanding any other provision of this Agreement) payment need not be
made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on such Regular Distribution Date or
Special Distribution Date, and interest shall accrue during the intervening
period.
Section 12.11 Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.
Section 12.12 Intention of Parties. The parties hereto intend that
each Trust be classified for U.S. federal income tax purposes as a grantor
trust under Subpart E, Part I of Subchapter J of the Internal Revenue Code
of 1986, as amended, and not as a trust or association taxable as a
corporation or as a partnership. The powers granted and obligations
undertaken pursuant to this Agreement shall be so construed so as to
further such intent.
Section 12.13 Registration of Equipment Notes in Name of
Subordination Agent. The Trustee agrees that all Equipment Notes to be
purchased by any Trust shall be issued in the name of any Subordination
Agent under any Intercreditor Agreement or its nominee and held by such
Subordination Agent in trust for the benefit of the Certificateholders, or,
if not so held, such Subordination Agent or its nominee shall be reflected
as the owner of such Equipment Notes in the register of the issuer of such
Equipment Notes.
Section 12.14 Communication by Certificateholders with other
Certificateholders. Certificateholders of any series may communicate with
other Certificateholders of such series with respect to their rights under
this Basic Agreement, the related Trust Supplements or the Certificates of
such series pursuant to Section 312(b) of the Trust Indenture Act. The
Company, the Trustee and any and all other persons benefitted by this
Agreement shall have the protection afforded by Section 312(c) of the Trust
Indenture Act.
Section 12.15. Normal Commercial Relations. Anything contained in
this Agreement to the contrary notwithstanding, the Trustee and any
Certificateholder, or any bank or other affiliate of any such party, may
conduct any banking or other financial transactions, and have banking or
other commercial relationships, with the Company fully to the same extent
as if this Agreement were not in effect, including without limitation the
making of loans or other extensions of credit to the Company for any
purpose whatsoever, whether related to any of the transactions contemplated
hereby or otherwise.
56
Section 12.16. No Recourse Against Others. No past, present or
future director, officer, employee, agent, member, manager, trustee or
stockholder, as such, of the Company or any successor Person shall have any
liability for any obligations of the Company or any successor Person,
either directly or through the Company or any successor Person, under the
Certificates or this Agreement or for any claim based on, in respect of or
by reason of such obligations or their creation, whether by virtue of any
rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise. By
accepting a Certificate, each Certificateholder agrees to the provisions of
this Section 12.16 and waives and releases all such liability. Such waiver
and release shall be part of the consideration for the issue of the
Certificates.
57
IN WITNESS WHEREOF, the parties have caused this Basic Agreement
to be duly executed by their respective officers thereunto duly authorized
as of the day and year first written above.
UNITED AIR LINES, INC.
By:___________________________________
Name:
Title:
S-1 PASS THROUGH TRUST AGREEMENT
[TRUSTEE NAME], as Trustee
By:
------------------------------------
Name:
Title:
S-2 PASS THROUGH TRUST AGREEMENT
EXHIBIT A
FORM OF CERTIFICATE
REGISTERED $_____________________________
Fractional Undivided Interest*
No. R - _____
CUSIP NO. _______________
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN
EXCHANGE FOR THIS CERTIFICATE IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 3.05 OF THE
PASS THROUGH TRUST AGREEMENT REFERRED TO HEREIN.
UNITED AIRLINES _____________________ PASS THROUGH TRUST
UNITED AIRLINES _____________________________________ PASS
THROUGH CERTIFICATE, SERIES _________________________
Final Expected Distribution Date: ________________________
evidencing a fractional undivided interest in a trust, the property of
which includes certain equipment notes each secured by an Aircraft owned by
or leased to United Air Lines, Inc.
A-1
THIS CERTIFIES THAT _______________, for value received,
is the registered owner of a _____________ Dollars ($ dollars) Fractional
Undivided Interest in the United Airlines ______________ Pass Through Trust
(the "Trust") created by [Trustee Name], as trustee (the "Trustee")
pursuant to a Pass Through Trust Agreement, dated as of _______________
(the "Basic Agreement"), as supplemented by Trust Supplement No.
______________________, (collectively, the "Agreement") between the Trustee
and United Air Lines, Inc., a Delaware corporation (the "Company"), a
summary of certain of the pertinent provisions of which is set forth below.
To the extent not otherwise defined herein, the capitalized terms used
herein have the meanings assigned to them in the Agreement. This
Certificate is one of the duly authorized Certificates designated as
"United Airlines Pass Through Certificates, Series __________________" (the
"Certificates"). This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement.
By virtue of its acceptance hereof, the Certificateholder
of this Certificate assents to and agrees to be bound by the provisions of
the Agreement, any Intercreditor Agreement and the Note Purchase Agreement.
The property of the Trust includes (i) certain Equipment Notes and all
monies at any time paid thereon and all monies due and to become due
thereunder, (ii) funds from time to time deposited in the related Escrow
Account, the related Certificate Account and the related Special Payments
Account, (iii) all rights of such Trust and the Trustee, on behalf of such
Trust, under any Intercreditor Agreement and the Note Purchase Agreement,
including all rights to receive certain payments thereunder and all monies
paid to such Trustee on behalf of such Trust pursuant to any Intercreditor
Agreement or the Note Purchase Agreement; and (iv) all monies receivable by
the Subordination Agent under any Liquidity Facilities for the Trust (
together with the property of all other trusts of the same series the
"Trust Property"). Each issue of the Equipment Notes is secured by, among
other things, a security interest in the Aircraft leased to or owned by the
Company.
The Certificates represent fractional undivided interests
in the Trust, all other trusts of the same series and the Trust Property,
and have no rights, benefits or interest in respect of any assets or
property of any trust of another series.
Interest applicable to this Certificate will be payable
[at __________%] [at a floating
rate equal to [____________]].
Subject to and in accordance with the terms of the
Agreement[, any Intercreditor Agreement] and the Note Purchase Agreement,
from and to the extent of funds then available to the Trustee, there shall
be distributed on each ______________________ (a "Regular Distribution
Date"), commencing on _________________, to the Person in whose name this
Certificate is registered at the close of business on the 15th day
preceding such Regular Distribution Date, an amount in respect of the
Scheduled Payments on the Equipment Notes due on such Regular Distribution
Date, the receipt of which has been confirmed by the Trustee, equal to the
product of the percentage interest in the Trust (or, if more than one trust
of like series, all such trusts) evidenced by this Certificate and an
amount equal to the sum of such Scheduled Payments. Subject to and in
accordance with the terms of the Agreement, the Intercreditor Agreement and
the Note Purchase Agreement, if Special Payments on the Equipment Notes are
A-2
received by the Trustee, from funds then available to the Trustee, there
shall be distributed on the applicable Special Distribution Date, to the
Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special Distribution Date, an amount
in respect of such Special Payments on the Equipment Notes, the receipt of
which has been confirmed by the Trustee, equal to the product of the
percentage interest in the Trust (or, if more than one trust of like
series, all such trusts) evidenced by this Certificate and an amount equal
to the sum of such Special Payments so received. If a Regular Distribution
Date or Special Distribution Date is not a Business Day, distribution shall
be made on the next Business Day with the same force and effect as if made
on such Regular Distribution Date or Special Distribution Date and interest
shall accrue during the intervening period. The Trustee shall mail notice
of each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate. The Certificates are redeemable as
and to the extent provided in the Note Purchase Agreement.
Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this Certificate shall
be made after notice mailed by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate
at the office or agency of the Trustee specified in such notice.
THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF (OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW)) AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE HOLDER OF THIS CERTIFICATE SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
Reference is hereby made to the further provisions of
this Certificate set forth in the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this
Certificate to be duly signed, manually or in facsimile, by its Authorized
Officer.
Dated: __________________ UNITED AIRLINES __________________
PASS THROUGH TRUST
By: [TRUSTEE NAME],
not in its individual capacity but
solely as Trustee
By:
------------------------------------------
Name:
Title:
A-3
FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Agreement.
[TRUSTEE NAME],
not in its individual capacity but solely as
Trustee
By:
--------------------------------
Authorized Officer
A-4
[REVERSE OF CERTIFICATE]
The Certificates do not represent a direct obligation of,
or an obligation guaranteed by, or an interest in, the Company or the
Trustee or any of their affiliates. The Certificates are limited in right
or payment, all as more specifically set forth on the face hereof and in
the Agreement. All payments or distributions made to Certificateholders
under the Agreement shall be made only from the Trust Property and only to
the extent that the Trustee shall have sufficient income or proceeds from
the Trust Property to make such payments in accordance with the terms of
the Agreement. Each Certificateholder of this Certificate, by its
acceptance hereof, agrees that it shall look solely to the income and
proceeds from the Trust Property to the extent available for distribution
to such Certificateholder as provided in the Agreement. This Certificate
does not purport to summarize the Agreement and reference is made to the
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby. A copy of the Agreement
may be examined during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the Trustee, by
any Certificateholder upon request.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Certificateholders under
the Agreement at any time by the Company and the Trustee with the consent
of the Certificateholders holding Certificates evidencing Fractional
Cumulative Interests aggregating not less than a majority in interest in
the Trust. Any such consent by the Certificateholder of this Certificate
shall be conclusive and binding on such Certificateholder and upon all
future Certificateholders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange hereof or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement
also permits the amendment thereof, in certain limited circumstances,
without the consent of the Certificateholders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registrable in the Register upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by the
Trustee in its capacity as Registrar, or by any successor Registrar, at its
Corporate Trust Office, duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the
Registrar duly executed by the Certificateholder hereof or such
Certificateholder's attorney duly authorized in writing, and thereupon one
or more new Certificates of authorized denominations evidencing the same
aggregate Fractional Undivided Interest in the Trust shall be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in minimum denominations of $1,000 Fractional
Undivided Interest and integral multiples of $1,000 in excess thereof. As
provided in the Agreement and subject to certain limitations therein set
forth, the Certificates are exchangeable for new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest
in the Trust, as requested by the Certificateholder surrendering the same.
A-5
No service charge shall be made for any such registration
of transfer or exchange, but the Trustee shall require payment by the
Holder of a sum sufficient to cover any tax or governmental charge payable
in connection therewith.
The Trustee, the Registrar, and any agent of the Trustee
or the Registrar may treat the person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Trustee,
the Registrar, nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the
Agreement and the Trust created thereby shall terminate upon the
distribution to Certificateholders of all amounts required to be
distributed to them pursuant to the Agreement and the disposition of all
property held as part of the Trust Property.
A-6
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No._____________________________________________
_______________________________________________________________________________
please print or typewrite name and address including zip code of assignee
_______________________________________________________________________________
_______________________________________________________________________________
the within Certificate and all rights thereunder, hereby irrevocably
constituting and appointing____________________________________________________
_______________________________________________________________________________
attorney to transfer said Certificate on the books of the Trustee with full
power of substitution in the premises.
Date: [Name of Transferor]
------------------------------------
NOTE: The signature must correspond with
the name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or any
change whatsoever.
Signature Guarantee: _______________________________
A-7