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EXHIBIT 4.15
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AMENDED AND RESTATED
TRUST INDENTURE AND SECURITY AGREEMENT
(1994 737 B)
Dated as of December 23, 1997
between
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity except as expressly set forth herein,
but solely as Owner Trustee,
and
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
_______________________________
Equipment Notes Covering
One Boeing 737-322 Aircraft
Bearing U.S. Registration No. N398UA
_______________________________
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TABLE OF CONTENTS
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
GRANTING CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
HABENDUM CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 2
THE EQUIPMENT NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.01. Equipment Notes; Title and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.02. Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.03. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.04. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.05. Noteholder Lists; Ownership of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.06. Mutilated, Destroyed, Lost or Stolen Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . 26
2.07. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.08. Payment on Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.09. Payment from Indenture Estate Only; Non-Recourse Obligations . . . . . . . . . . . . . . . . . . . . 28
2.10. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.11. Termination of Interest in the Indenture Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.12. Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 3
RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS IN THE INDENTURE . . . . . . . . . . . . . . . . . . . . . . 31
3.01. [Reserved for Potential Future Use] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.02. Payment in Case of Redemption or Purchase of Equipment Notes . . . . . . . . . . . . . . . . . . . . 31
3.03. Application of Basic Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.04. Application of Certain Payments in Case of Requisition or Event of Loss . . . . . . . . . . . . . . . 34
3.05. Payments During Continuance of Indenture Event of Default . . . . . . . . . . . . . . . . . . . . . . 35
3.06. Payments for Which Application Is Provided in Other Documents . . . . . . . . . . . . . . . . . . . . 37
3.07. Payments for Which No Application Is Otherwise Provided . . . . . . . . . . . . . . . . . . . . . . . 38
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3.08. Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 4
COVENANTS OF OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.01. Covenants of the Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE 5
DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN T . . . . . . . . . . . . . . . . . . . . . . 40
5.01. Disposition, Substitution and Release of Property Included in the Indenture
Estate During Continuation of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE 6
REDEMPTION OF EQUIPMENT NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.01. Redemption of Equipment Notes upon Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.02. Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.03. Notice of Redemption to Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.04. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.05. Equipment Notes Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.06. No Prepayment or Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE 7
MATTERS CONCERNING THE LESSEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.01. Repayment of Monies for Equipment Note Payments Held by the Indenture Trustee . . . . . . . . . . . . 43
7.02. Change in Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.03. Assumption of Obligations of Owner Trustee by the Lessee . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 8
DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.01. Indenture Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.02. Acceleration; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.03. Other Remedies Available to Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.04. Waiver of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.05. Waiver of Existing Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.06. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.07. Rights of Noteholders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.08. Indenture Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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ARTICLE 9
INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.01. Duties of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.02. Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.03. Individual Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.04. Funds May Be Held by Indenture Trustee or Paying Agent; Investments . . . . . . . . . . . . . . . . . 61
9.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.06. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.07. Replacement of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.08. Successor Indenture Trustee, Agents by Merger, etc . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.09. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.10. Trustee's Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE 10
TERMINATION OF TRUST INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.01. Termination of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.02. Survival of Certain Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.03. Monies to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.04. Monies to Be Returned to Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE 11
AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
11.01. Amendments to this Agreement Without Consent of Noteholders . . . . . . . . . . . . . . . . . . . . 68
11.02. Amendments to this Agreement with Consent of Noteholders . . . . . . . . . . . . . . . . . . . . . . 69
11.03. Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
11.04. Notation on or Exchange of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
11.05. Indenture Trustee Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
11.06. Amendments, Waivers, etc. of Other Operative Documents . . . . . . . . . . . . . . . . . . . . . . . 71
11.07. Notices to Primary Liquidity Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE 12
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
12.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
12.02. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
12.03. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
12.04. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
12.05. Section 1110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
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Exhibit A Form of Equipment Notes
Exhibit B-1 Description of Series A Equipment Notes
Exhibit B-2 Description of Series B Equipment Notes
Exhibit B-3 Description of Series C Equipment Notes
Exhibit B-4 Description of Series D Equipment Notes
Exhibit C Form of Trust Agreement and Trust Indenture
and Security Agreement Supplement
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AMENDED AND RESTATED
TRUST INDENTURE AND SECURITY AGREEMENT
This AMENDED AND RESTATED TRUST INDENTURE AND SECURITY
AGREEMENT (1994 737 B), dated as of December 23, 1997 between STATE STREET BANK
AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
association (as assignee of First Security Bank of Utah, National Association
(the "Original Owner Trustee")), not in its individual capacity except as
expressly provided herein, but solely as Owner Trustee under the Trust
Agreement, and FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association (as assignee of State Street Bank and Trust Company (the "Original
Indenture Trustee")), as Indenture Trustee hereunder, amends and restates in
its entirety that certain Trust Indenture and Security Agreement (1994 737 B)
dated as of September 1, 1994 (the "Original Indenture") between Original Owner
Trustee and Original Indenture Trustee, as amended by that certain First
Amendment to Trust Indenture and Security Agreement (1994 737 B) dated as of
June 1, 1995) (the "First Amendment"), that certain Second Amendment to Trust
Indenture and Security Agreement (1994 737 B) dated as of December 1, 1995 (the
"Second Amendment") and that certain Third Amendment to Trust Indenture and
Security Agreement (1994 737 B) dated January 26, 1996 (the "Third Amendment"),
in each case between Original Owner Trustee and Original Indenture Trustee, and
as supplemented by that certain Trust Agreement and Trust Indenture and
Security Agreement Supplement (1994 737 B) dated September 28, 1994 (the
"Supplement").
W I T N E S S E T H:
WHEREAS, the Owner Participant and the Owner Trustee in its
individual capacity have entered into the Trust Agreement whereby, among other
things, (i) the Owner Trustee has established a certain trust for the use and
benefit of the Owner Participant, subject, however, to the Indenture Estate
created pursuant hereto for the use and benefit of, and with the priority of
payment to, the Noteholders of the Equipment Notes issued hereunder, and (ii)
the Owner Trustee has been authorized and directed pursuant to the Trust
Agreement to execute and deliver this Amended and Restated Trust Indenture and
Security Agreement;
WHEREAS, all capitalized terms used and not otherwise defined
herein shall have the respective meanings set forth or referred to in Article 1
hereof;
WHEREAS, the Original Indenture and the Supplement were
recorded by the FAA on November 1, 1994 and assigned Conveyance No. II002365;
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[Trust Indenture and Securities Agreement (1994 737 B)]
WHEREAS, the First Amendment was recorded by the FAA on August
25, 1995 and assigned Conveyance No. T049370;
WHEREAS, the Second Amendment was recorded by the FAA on March
7, 1996 and assigned Conveyance No. HK005881;
WHEREAS, the Third Amendment was recorded by the FAA on March
7, 1996 and assigned Conveyance No. HK005882;
WHEREAS, pursuant to that certain Assignment and Assumption
Agreement (1994 737 B) dated as of December 11, 1997 between the Owner Trustee
and the Original Owner Trustee, the Original Owner Trustee assigned to the
Owner Trustee, and the Owner Trustee assumed, all of the obligations of the
Original Owner Trustee under the Operative Documents);
WHEREAS, the parties desire by this Agreement, among other
things, to (i) amend and restate in its entirety the Indenture, (ii) provide
for the issuance by the Owner Trustee of the Series A, Series B, Series C and
Series D Equipment Notes and (iii) provide for the assignment, mortgage and
pledge by the Owner Trustee to the Indenture Trustee, as part of the Indenture
Estate hereunder, among other things, of certain of the Owner Trustee's right,
title and interest in and to the Aircraft and the Operative Documents and
certain payments and other amounts received hereunder or thereunder in
accordance with the terms hereof, as security for, among other things, the
Owner Trustee's obligations to the Indenture Trustee, for the ratable benefit
and security of the Noteholders, subject to Section 2.10 and Article 3 hereof;
WHEREAS, all things have been done to make the Equipment
Notes, when executed by the Owner Trustee and authenticated and delivered by
the Indenture Trustee hereunder, the valid, binding and enforceable obligations
of the Owner Trustee; and
WHEREAS, all things necessary to make this Agreement the
legal, valid and binding obligation of the Owner Trustee and the Indenture
Trustee, for the uses and purposes herein set forth, in accordance with its
terms, have been done and performed and have happened;
GRANTING CLAUSE
NOW, THEREFORE, THIS AMENDED AND RESTATED TRUST INDENTURE AND
SECURITY AGREEMENT WITNESSETH, subject to Section 2.11(b) hereof, that, to
secure the prompt payment by the Owner Trustee, as and when required
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8
[Trust Indenture and Security Agreement (1994 737 B)]
hereunder or under the Equipment Notes, of the principal of, Break Amount, if
any, Make-Whole Amount, if any, and interest on, and all other amounts due with
respect to, all Equipment Notes from time to time outstanding under this
Indenture and all other amounts due hereunder and to secure the performance and
observance by the Owner Trustee of all the agreements, covenants and provisions
contained herein and in the other Operative Documents to which it is a party
(other than the Note Purchase Agreement), for the benefit of the Noteholders
and each of the Indenture Indemnitees, and the prompt payment of any and all
amounts from time to time owing hereunder, under the Lease and under the
Participation Agreement by the Owner Trustee, the Owner Participant or the
Lessee to the Noteholders and the Indenture Indemnitees, and for the uses and
purposes and subject to the terms and provisions hereof, and in consideration
of the premises and of the covenants herein contained, and of the acceptance of
the Equipment Notes by the Noteholders, and of other good and valuable
consideration the receipt and adequacy whereof are hereby acknowledged, the
Owner Trustee has granted, bargained, sold, assigned, transferred, conveyed,
mortgaged, pledged and confirmed, and does hereby grant, bargain, sell, assign,
transfer, convey, mortgage, pledge and confirm, unto the Indenture Trustee, its
successors and assigns, for the security and benefit of the Noteholders and the
Indenture Indemnitees from time to time, a first priority security interest in
and first priority mortgage lien on all estate, right, title and interest of
the Owner Trustee in, to and under the following described property, rights,
interests and privileges whether now or hereafter acquired and subject to the
Lien hereof (which collectively, including all property hereafter specifically
subjected to the lien of this Agreement by any instrument supplemental hereto,
but excluding the Excluded Payments, are herein called the "Indenture Estate"):
(1) the Airframe and Engines (each such Engine having 750
or more rated take-off horsepower or the equivalent thereof) as the
same is now and will hereafter be constituted, whether now or
hereafter acquired and subjected to the Lien hereof, and in the case
of such Engines, whether or not any such Engine shall be installed in
or attached to the Airframe or any other airframe and all
substitutions or replacements therefor, as provided in this Agreement,
together with all Parts of whatever nature which are from time to time
included in the "Airframe" or the "Engines", whether now or hereafter
acquired and subjected to the Lien hereof, and all renewals,
substitutions, replacements, additions, improvements, accessories and
accumulations with respect to any of the foregoing, and all records,
logs and other related materials with respect to any of the foregoing
as may be required to be maintained by the FAA;
(2) the Lease and all Rent thereunder, including, without
limitation, all amounts of Basic Rent, Supplemental Rent, and payments
of any kind required to be made by the Lessee thereunder; all amounts
payable to the Owner Trustee under the Participation Agreement that do
not constitute Excluded Payments; the Purchase
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9
[Trust Indenture and Security Agreement (1994 737 B)]
Agreement (to the extent assigned by the Owner Trustee's Purchase
Agreement), the Consent and Agreement, the Owner Trustee's Purchase
Agreement, the Owner Trustee's ▇▇▇▇ of Sale, the Owner Trustee's FAA
▇▇▇▇ of Sale and any and all contracts or agreements relating to the
Airframe and Engines or any rights or interest therein to which the
Owner Trustee is now or may hereafter be a party or have any interest
in; including, without limitation, all rights of the Owner Trustee to
receive any payments or other amounts or to exercise any election or
option or to make any decision, agreement or determination or to give
or receive any notice, consent, waiver or approval or to take any
other action under or in respect of any such document or to accept
surrender or redelivery of the Aircraft or any part thereof, as well
as all the rights, powers and remedies on the part of the Owner
Trustee, whether acting under any such document or by statute or at
law or in equity, or otherwise, including, without limitation, the
commencement, conduct and consummation of any legal, administrative or
other proceedings, and to do any and all other things whatsoever which
the Owner Trustee is or may be entitled to do under, or in respect of,
any such documents (other than the rights of the Owner Trustee
provided for hereunder);
(3) all rents, issues, profits, revenues and other income
of the property subjected or required to be subjected to the Lien of
this Agreement, including, without limitation, all payments and
proceeds payable to, or receivable by, the Owner Trustee as "Lessor"
under the Lease or payable to, or receivable by, the Owner Trustee
after the termination of the Lease with respect to the Aircraft as a
result of the sale, lease or other disposition thereof;
(4) without limiting the generality of the foregoing, all
requisition proceeds with respect to the Aircraft or any Part thereof
or any other property described in any of the Granting Clauses (to the
extent of the Owner Trustee's interest therein pursuant to the terms
of the Lease) and all insurance proceeds with respect to the Aircraft
or any Part thereof from insurance required to be maintained by the
Lessee under Section 11 of the Lease, but excluding any insurance
maintained by the Lessee and not required under Section 11 of the
Lease;
(5) all moneys and securities now or hereafter paid or
deposited or required to be paid or deposited to or with the Indenture
Trustee pursuant to any term of any Operative Document and held or
required to be held by the Indenture Trustee hereunder; and
(6) all proceeds of the foregoing.
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10
[Trust Indenture and Security Agreement (1994 737 B)]
The Owner Trustee has previously delivered to the Indenture Trustee
the original executed counterpart of the Lease and the initial Lease
Supplement, the First Amendment to Lease and the Second Amendment to Lease,
and, concurrently with the delivery hereof, is delivering the original
counterpart of the Third Amendment to Lease (to each of which a chattel paper
receipt is attached), and the Owner Trustee has previously delivered to the
Indenture Trustee executed copies of the Owner Trustee's Purchase Agreement and
the Consent and Agreement.
Notwithstanding the foregoing provisions:
(a) there shall be excluded from the security interest
granted by this Agreement all Excluded Payments;
(b) (i) whether or not a Lease Event of Default or an
Indenture Event of Default shall occur and be continuing, the Owner
Trustee and the Owner Participant shall at all times retain the right,
to the exclusion of the Indenture Trustee but subject always to the
provisions of the next succeeding full paragraph (a) to Excluded
Payments and to commence an action at law to obtain such Excluded
Payments, (b) to exercise any election or option or to make any
decision or determination, or to give or receive any notice, consent,
waiver or approval, or to take any other action in respect of, but in
each case only to the extent relating to, Excluded Payments, (c) to
exercise all rights with respect to insurance maintained for its own
account which Section 11(e) of the Lease specifically confers on the
"Lessor" and (d) to exercise, to the extent necessary to enable it to
exercise its rights under Section 8.03(e)(i) hereof, the rights of the
"Lessor" under Section 21 of the Lease;
(ii) whether or not a Lease Event of Default or Indenture
Event of Default shall occur and be continuing, the Owner Trustee and
the Indenture Trustee shall each have the right separately but not to
the exclusion of the other, (a) to receive from the Lessee all
notices, certificates, reports, filings, Opinions of Counsel, copies
of all documents and all information which the Lessee is permitted or
required to give or furnish to the "Lessor" pursuant to the Lease or
to the Owner Trustee pursuant to any other Operative Document, (b) to
exercise inspection rights pursuant to Section 12 of the Lease, (c) to
maintain separate insurance pursuant to Section 11(e) of the Lease and
to retain all rights with respect to such insurance maintained for its
own account, (d) to give any notice of default under Section 14 of the
Lease, (e) to cause the Lessee to take any action and execute and
deliver such documents and assurances as the "Lessor" may from time to
time reasonably request pursuant to Section 16 of the Lease and (f) to
consent (with the concurrent consent of the other such party to the
extent such consent is required) to changes to the list of countries
on Exhibit F or G to the Lease;
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[Trust Indenture and Security Agreement (1994 737 B)]
(iii) so long as no Indenture Event of Default shall have
occurred and be continuing (but subject to the provisions of Section
11.06), the Owner Trustee shall retain the right, to the exclusion of
the Indenture Trustee, to exercise the following rights of the
"Lessor" under the Lease: (a) the right to approve as satisfactory
any accountants, engineers or counsel to render services for or issue
opinions to the Owner Trustee pursuant to express provisions of the
Operative Documents; and (b) the right to waive the opinion required
pursuant to Section 8(e)(ii)(C) of the Participation Agreement;
(iv) so long as the Indenture Trustee shall not have
foreclosed the Lien of this Indenture, the Owner Trustee and the Owner
Participant shall retain the right, to the exclusion of the Indenture
Trustee, (a) to adjust Basic Rent and the percentages relating to
Stipulated Loss Value and Termination Value, the Special Termination
Value Percentage and the EBO Percentages as provided in Section 3(c)
of the Lease and Section 18 of the Participation Agreement, (b) to
retain the rights of the "Lessor" with respect to solicitations of
bids, and the election to retain the Aircraft pursuant to Section 9 of
the Lease, (c) to retain the rights of the "Lessor" under Section 7(b)
of the Lease and (d) to exercise the right of "Lessor" to determine
the fair market rental value or fair market sales value pursuant to
Section 19 of the Lease;
(c) the leasehold interest granted to the Lessee by the
Lease shall not be subject to the security interest granted by this
Agreement, and nothing in this Agreement shall affect the rights of
the Lessee under the Lease so long as no Lease Event of Default has
occurred and is continuing; and
(d) as between the Owner Trustee and the Indenture
Trustee, nothing contained in this Granting Clause shall prevent the
Owner Trustee, as the "Lessor" under the Lease, from seeking specific
performance of the covenants of the Lessee under the Lease relating to
the protection, insurance, maintenance, possession and use of the
Aircraft and from maintaining separate insurance with respect to the
Aircraft to the extent permitted by Section 11 of the Lease.
Notwithstanding anything to the contrary contained herein, the
Indenture Trustee shall have the right, subject to Section 8.03 hereof, to the
exclusion of the Owner Trustee and the Owner Participant, to declare the Lease
to be in default under Section 15 thereof and to exercise the remedies set
forth in Section 15 of the Lease at any time that a Lease Event of Default
shall have occurred and be continuing.
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[Trust Indenture and Security Agreement (1994 737 B)]
HABENDUM CLAUSE
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the
benefit and security of the Indenture Trustee and the Noteholders from time to
time, without, except as provided in Section 2.10 and Article 3, any
preference, priority or distinction of any one Equipment Note over any other by
reason of series, priority of time of issue, sale or negotiation, date of
maturity or otherwise for any reason whatsoever, and for the uses and purposes
and subject to the terms and provisions set forth in this Agreement.
1. It is expressly agreed that anything herein contained
to the contrary notwithstanding, the Owner Trustee shall remain liable under
each of the Operative Documents to which it is a party to perform all of its
obligations thereunder, all in accordance with and pursuant to the terms and
provisions thereof, and the Indenture Trustee and the Noteholders shall have no
obligation or liability under any of the Operative Documents to which the Owner
Trustee is a party by reason of or arising out of the assignment hereunder, nor
shall the Indenture Trustee (except as to the Indenture Trustee, if the
Indenture Trustee shall have become the "Lessor" under the Lease) or the
Noteholders be required or obligated in any manner to perform or fulfill any
obligations of the Owner Trustee under any of the Operative Documents to which
the Owner Trustee is a party, or, except as herein expressly provided, to make
any payment, or to make any inquiry as to the nature or sufficiency of any
payment received by it, or present or file any claim, or take any action to
collect or enforce the payment of any amounts which may have been assigned to
it or to which it may be entitled at any time or times.
2. The Owner Trustee does hereby constitute the
Indenture Trustee the true and lawful attorney of the Owner Trustee,
irrevocably, for good and valuable consideration and coupled with an interest
and with full power of substitution, with full power (in the name of the Owner
Trustee or otherwise) subject to the terms and conditions of this Indenture, to
ask, require, demand, receive, ▇▇▇ for, compound and give acquittance for any
and all moneys and claims for moneys due and to become due to the Owner Trustee
(other than Excluded Payments) under or arising out of the Lease (subject to
Section 11.06(b)(1) hereof), the Purchase Agreement, the Owner Trustee's ▇▇▇▇
of Sale, the Consent and Agreement and the Owner Trustee's Purchase Agreement,
to endorse any checks or other instruments or orders in connection therewith
and to file any claims or take any action or institute any proceedings which
the Indenture Trustee may deem to be necessary or advisable in the premises as
fully as the Owner Trustee itself could do. The Owner Trustee has directed the
Lessee to make all payments of Rent (other than Excluded Payments) payable to
the Owner Trustee by the Lessee and all other amounts which are required to be
paid to or deposited with the Owner Trustee pursuant to the Lease directly to,
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[Trust Indenture and Security Agreement (1994 737 B)]
or as directed by, the Indenture Trustee at such address as the Indenture
Trustee shall specify, for application as provided in this Agreement. The
Owner Trustee agrees that promptly on receipt thereof, it will transfer to the
Indenture Trustee any and all moneys from time to time received by it
constituting part of the Indenture Estate, for distribution by the Indenture
Trustee pursuant to this Agreement, except that the Owner Trustee shall accept
for distribution pursuant to the Trust Agreement any amounts distributed to it
by the Indenture Trustee as expressly provided in this Agreement and any
Excluded Payments.
3. The Owner Trustee agrees that at any time and from
time to time, upon the written request of the Indenture Trustee, the Owner
Trustee will promptly and duly execute and deliver or cause to be duly executed
and delivered any and all such further instruments and documents as the
Indenture Trustee may reasonably deem desirable in obtaining the full benefits
of the assignment hereunder and of the rights and powers herein granted.
4. The Owner Trustee does hereby warrant and represent
that it has not assigned or pledged, and hereby covenants that it will not
assign or pledge, so long as the Lien granted hereunder has not been discharged
in accordance with the terms hereof, any of its rights, titles or interests
hereby assigned, to any Person other than the Indenture Trustee, and that it
will not, except as provided in or permitted by this Agreement, accept any
payment under any agreement subject to the Lien hereof, enter into an agreement
amending or supplementing any of the Operative Documents, execute any waiver or
modification of, or consent under the terms of any of the Operative Documents,
settle or compromise any claim (other than claims in respect of Excluded
Payments) arising under any of the Operative Documents, or submit or consent to
the submission of any dispute, difference or other matter arising under or in
respect of any of the Operative Documents, to arbitration thereunder.
It is hereby further agreed that any and all property described or
referred to in the granting clause hereof which is hereafter acquired by the
Owner Trustee shall ipso facto, and without any other conveyance, assignment or
act on the part of the Owner Trustee or the Indenture Trustee, become and be
subject to the Lien herein granted as fully and completely as though
specifically described herein, but nothing contained in this paragraph shall be
deemed to modify or change the obligations of the Owner Trustee contained in
the foregoing paragraphs.
The Owner Trustee does hereby ratify and confirm the Lease and does
hereby agree that it will not violate any covenant or agreement made by it
therein, herein or in any other Operative Document to which it is a party.
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[Trust Indenture and Security Agreement (1994 737 B)]
IT IS HEREBY FURTHER COVENANTED AND AGREED by and between the
parties hereto as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. (a) For all purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(1) each of "Owner Trustee," "Indenture Trustee,"
"Noteholder," "Lessee," "Primary Liquidity Provider,""Subordination
Agent," "Pass Through Trustee" or any other Person includes, without
prejudice to the provisions of any Operative Documents, any successor
in interest to it and any permitted transferee, permitted purchaser or
permitted assignee of it;
(2) the terms defined in this Article 1 have the meanings
assigned to them in this Article 1, and include the plural as well as
the singular;
(3) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with generally
accepted accounting principles in the United States;
(4) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and
not to any particular Article, Section or other subdivision;
(5) all references in this Agreement to Articles,
Sections and Exhibits refer to Articles, Sections and Exhibits of this
Agreement; and
(6) terms used herein without definition shall have the
respective meanings specified therefor in the Lease.
(b) For all purposes of this Agreement, the following
capitalized terms have the following respective meanings:
"Affiliate" with respect to a specified Person, means any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person. For the purposes of this
definition, "control" when used with respect to any
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[Trust Indenture and Security Agreement (1994 737 B)]
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent" means any Paying Agent or Registrar.
"Aircraft" shall have the meaning specified therefor in the
Lease.
"Airframe" shall have the meaning specified therefor in the
Lease.
"Amortization Amount" means, with respect to any Equipment
Note, as of any Payment Date, the amount determined by multiplying the
percentage set forth opposite such Payment Date on the Amortization Schedule by
the original principal amount of such Equipment Note.
"Amortization Schedule" means, with respect to each Series of
Equipment Notes, the amortization schedule for such Series as set forth on
Exhibit ▇-▇, ▇-▇, ▇-▇ or B-4, as the case may be.
"Applicable Date" has the meaning specified therefor in the
definition of "Break Amount".
"Applicable Margin" means, with respect to any Series of
Equipment Notes, the Series A Margin, the Series B Margin, the Series C Margin,
or the Series D Margin, as the case may be.
"Applicable Rate" means for each Interest Period for each
Series of Equipment Notes, a rate per annum equal to the Three-Month LIBOR for
such Interest Period plus the Applicable Margin.
"Assignment and Assumption Agreements" means each of (i) that
certain Assignment and Assumption Agreement (1994 737 B) dated as of December
11, 1997, between the Owner Trustee and the Original Owner Trustee and (ii)
that certain Assignment and Assumption Agreement (1994 737 B) dated as of
December 11, 1997 between the Original Indenture Trustee and the Indenture
Trustee.
"Bankruptcy Code" shall have the meaning specified therefor in
the Lease.
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[Trust Indenture and Security Agreement (1994 737 B)]
"Basic Pass Through Trust Agreement" means the Pass Through
Trust Agreement dated as of December 23, 1997 between Lessee and Pass Through
Trustee, but does not include any Pass Through Trust Supplement.
"Basic Rent" shall have the meaning specified therefor in the
Lease.
"Break Amount" means, as of any date of payment, redemption or
acceleration for any Series of Equipment Notes (the "Applicable Date"), an
amount determined by the Calculation Agent on the date that is two (2) LIBOR
Business Days prior to the Applicable Date pursuant to the formula set forth
below:
The Break Amount shall be calculated as follows:
Break Amount = Z-Y
Where:
X = with respect to any applicable Interest Period, the
sum of (i) the amount of the outstanding principal
amount for such Series of Equipment Notes as of the
first day of the then applicable Interest Period plus
(ii) interest payable thereon during such entire
Interest Period at then effective Three-Month LIBOR.
Y = X, discounted to present value from the last day of
the then applicable Interest Period to the Applicable
Date using then effective Three-Month LIBOR as the
discount rate.
Z = X, discounted to present value from the last day of
the then applicable Interest Period to the Applicable
Date using a rate equal to the applicable London
interbank offered rate for a period commencing on the
Applicable Date and ending on the last day of the
then applicable Interest Period, determined by the
Calculation Agent as of two LIBOR Business Days prior
to the Applicable Date as the discount rate.
No Break Amount will be payable (x) if the Break Amount, as calculated pursuant
to the formula set forth above, is equal to or less than zero or (y) on or in
respect of any Applicable Date that is an Interest Payment Date.
"Business Day" shall have the meaning specified therefor in
the Lease.
11
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[Trust Indenture and Security Agreement (1994 737 B)]
"Calculation Agent" means the Indenture Trustee.
"Citizen of the United States" shall have the meaning
specified therefor in the Lease.
"Closing Date" shall have the meaning specified therefor in
the Lease.
"Commencement Date" shall have the meaning specified therefor
in the Lease.
"Continuous Stay Period" shall have the meaning specified in
Section 8.03(e) hereof.
"Co-Registrar" shall have the meaning specified therefor in
Section 2.03.
"Corporate Trust Department" means the principal office of the
Indenture Trustee located at the Indenture Trustee's address for notices under
the Participation Agreement or such other office at which the Indenture
Trustee's corporate trust business shall be administered which the Indenture
Trustee shall have specified by notice in writing to Owner Trustee and each
Noteholder.
"Debt" shall mean any liability for borrowed money, or any
liability for the payment of money in connection with any letter of credit
transaction, or other liabilities evidenced or to be evidenced by bonds,
debentures, notes or other similar instruments.
"EBO Date" shall have the meaning specified therefor in the
Lease.
"Eligible Institution" means (a) the corporate trust
department of the Indenture Trustee, the Subordination Agent or any Pass
Through Trustee, as applicable, or (b) a depository institution organized under
the laws of the United States of America or any one of the States thereof or
the District of Columbia (or any U.S. branch of a foreign bank), which has a
long-term unsecured debt rating from Moody's and Standard & Poor's of at least
"A-3" or its equivalent.
"Engine" shall have the meaning specified therefor in the
Lease.
"Equipment Note" or "Equipment Notes" means any equipment note
or notes issued under this Agreement, including each of the Series A, Series B,
Series C and Series D Equipment Notes issued hereunder, substantially in the
form of Exhibit A hereto, as such form may be varied pursuant to the terms
hereof, and any and all Equipment Notes issued in replacement or exchange
therefor in accordance with the provisions hereof.
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[Trust Indenture and Security Agreement (1994 737 B)]
"Event of Loss" shall have the meaning specified therefor in
the Lease.
"Excluded Payments" means (i) any right, title or interest of
the Owner Trustee in its individual capacity, the Owner Participant or their
respective Affiliates or of their respective successors, permitted assigns,
directors, officers, employees, servants and agents to any payment which by the
terms of Section 7(b) or 7(c) of the Participation Agreement, Section 5.03 or
7.01 of the Trust Agreement or any section of the Tax Indemnity Agreement or
any corresponding payment under Section 3(d) of the Lease is payable to such
Person, (ii) any insurance proceeds payable under insurance permitted to be
maintained under Section 11(e) of the Lease by the Owner Trustee in its
individual capacity or the Owner Participant (whether directly or through the
Owner Trustee), or to their respective Affiliates, successors, permitted
assigns, directors, officers, employees, servants and agents, (iii) any
insurance proceeds (or proceeds of governmental indemnities in lieu thereof)
payable to the Owner Trustee in its individual capacity or to the Owner
Participant, or to their respective Affiliates, successors, permitted assigns,
directors, officers, employees, servants and agents, under any liability
insurance maintained by the Lessee pursuant to Section 11 of the Lease or by
any other Person (or proceeds of governmental indemnities in lieu thereof),
(iv) any rights of the Owner Participant or the Owner Trustee to demand,
collect, ▇▇▇ for, or otherwise receive and enforce payment of the foregoing
amounts (including interest thereon to the extent provided in the applicable
provisions of the Operative Documents) and the right to give any notice of
default under Section 14 of the Lease, but not including the right to exercise
any remedies under the Lease except for those specifically provided for in this
clause (iv), (v) if the Lessee has assumed the obligations of the Owner Trustee
in respect of the Equipment Notes in accordance with Section 7.03 hereof and
Section 8(r) of the Participation Agreement, the amount payable as purchase
price pursuant to Section 19(b) of the Lease, (vi) amounts or expenses paid or
payable to, or for the benefit of, the Owner Participant pursuant to the
Participation Agreement or the Note Purchase Agreement, (vii) the respective
rights of the Owner Trustee in its individual capacity or the Owner Participant
to the proceeds of the foregoing and (viii) any right to demand, collect or
otherwise receive and enforce the payment of any amount described in clauses
(i) through (vii) above.
"Federal Aviation Act" shall have the meaning specified for
the "Transportation Code" as defined in the Lease.
"Federal Aviation Administration" and "FAA" shall have the
meaning specified therefor in the Lease.
"Final Expected Distribution Date" means December 2, 2002.
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[Trust Indenture and Security Agreement (1994 737 B)]
"Indenture Default" means any event which is, or after notice
or passage of time, or both, would be, an Indenture Event of Default.
"Indenture Estate" shall have the meaning specified therefor
in the Granting Clause hereof.
"Indenture Event of Default" shall have the meaning specified
therefor in Article 8.
"Indenture Indemnitee" means (i) the Indenture Trustee in its
individual capacity and as Indenture Trustee, (ii) each separate or additional
trustee appointed pursuant to this Agreement, (iii) the Subordination Agent,
(iv) each Primary Liquidity Provider, (v) each Pass Through Trustee, and (vi)
each of the respective directors, officers, employees, agents and servants of
the persons described in clauses (i) through (v) inclusive above.
"Indenture Supplement" means a supplement to this Agreement in
the form of Exhibit C hereto.
"Indenture Trustee" means First Security Bank, National
Association, and each other Person which may from time to time be acting as
Indenture Trustee in accordance with the provisions of this Agreement.
"Intercreditor Agreement" means that certain Intercreditor
Agreement among the Pass Through Trustees, the Primary Liquidity Providers and
the Subordination Agent, dated as of the date hereof, provided that, for
purposes of any obligation of Owner Trustee, no amendment, modification or
supplement to, or substitution or replacement of, such Intercreditor Agreement
shall be effective unless consented to by Owner Trustee.
"Interest Payment Date" means March 2, 1998 and each March 2,
June 2, September 2 and December 2 of each year thereafter.
"Interest Period" means, with respect to each Series of
Equipment Notes initially, the period from (and including) the Issuance Date
for such Series and ending on (but excluding) the first Interest Payment Date
following such Issuance Date, and thereafter each successive quarterly period
from (and including) on the final day of the preceding Interest Period for such
Series of Equipment Notes and ending on the next succeeding Interest Payment
Date.
"Issuance Date" means, with respect to each Series of
Equipment Notes, the date such Equipment Notes are issued by the Owner Trustee
pursuant to the terms hereof.
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[Trust Indenture and Security Agreement (1994 737 B)]
"Lease" means the Lease Agreement (1994 737 B), dated as of
September 1, 1994, as amended by that certain First Amendment to Lease
Agreement (1994 737 B) dated January 26, 1996, and that certain Second
Amendment to Lease Agreement (1994 737 B) dated January 26, 1996, in each case
between the Original Owner Trustee, as lessor, and the Lessee, as lessee, and
that certain Third Amendment to Lease Agreement (1994 737 B) dated as of
December 23, 1997, between the Owner Trustee, as lessor, and the Lessee, as
lessee, as such Lease Agreement may from time to time be further supplemented,
amended or modified in accordance with the terms thereof and this Agreement.
The term "Lease" shall also include each Lease Supplement entered into pursuant
to the terms of the Lease.
"Lease Event of Default" shall have the meaning specified for
the term "Event of Default" in the Lease.
"Lease Loss Payment Date" shall have the meaning specified for
the term "Loss Payment Date" in the Lease.
"Lease Supplement" shall have the meaning specified therefor
in the Lease.
"Lease Termination Date" shall have the meaning specified for
the term "Termination Date" in the Lease.
"Lessee" means United Air Lines, Inc., a Delaware corporation,
and, subject to the provisions of the Participation Agreement, its permitted
successors and assigns.
"Lessor Liens" shall have the meaning specified therefor in
the Lease.
"LIBOR Business Day" means any day other than Saturday, Sunday
or any other day on which banks in New York, New York or London, England are
required or authorized to be closed.
"Lien" means any mortgage, pledge, lien, charge, encumbrance,
lease, exercise of rights, security interest or claim.
"London Reference Banks" means the principal London offices of
National Westminster Bank Plc, Barclays Bank Plc and Bayerische Landesbank
Girozentrale, or such other bank or banks as may from time to time be agreed by
Lessee and the Calculation Agent.
15
21
[Trust Indenture and Security Agreement (1994 737 B)]
"Majority in Interest of Noteholders" means, subject to
Section 2.6 of the Intercreditor Agreement, as of a particular date of
determination, the holders of a majority in aggregate unpaid principal amount
of all Equipment Notes outstanding as of such date (excluding any Equipment
Notes held by Owner Trustee, the Owner Participant, the Lessee, Indenture
Trustee or any Affiliate of any such party or any interests of Owner Trustee
therein (unless all Equipment Notes shall be held by any such entity or an
Affiliate thereof; provided, however, if all Equipment Notes are held by the
Lessee or an Affiliate thereof upon the occurrence and during the continuance
of an Event of Default, then the Owner Participant shall be considered the
"Majority in Interest of Noteholders" during the continuance of such Event of
Default)); provided that for the purposes of directing any action or casting
any vote or giving any consent, waiver or instruction hereunder, any Noteholder
of an Equipment Note or Equipment Notes may allocate, in such Noteholder's sole
discretion, any fractional portion of the principal amount of such Equipment
Note or Equipment Notes in favor of or in opposition to any such action, vote,
consent, waiver or instruction.
"Make-Whole Amount" with respect to each of the Series A
Equipment Notes or the Series B Equipment Notes to be redeemed or purchased on
any redemption or purchase date, means an amount which an independent
investment banking institution of national standing selected by the Lessee (or,
following the occurrence and during the continuance of an Event of Default, the
Indenture Trustee) shall determine to be equal to the excess of (i) the sum of
the present values, discounted to such redemption or purchase date, of all the
remaining scheduled payments of principal and interest, using then effective
Three-Month LIBOR plus the Applicable Margin for each such Series for all
remaining interest payments, payable between such redemption date and the Final
Expected Distribution Date (assuming that all principal on the Equipment Notes
payable after the Final Expected Distribution Date is payable on the Final
Expected Distribution Date), discounted quarterly on each Interest Payment
Date, using then effective Three-Month LIBOR less 0.05% as the discount rate
over (ii) the aggregate unpaid principal amount of such Series of Equipment
Notes plus accrued but unpaid interest thereon.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. (or any
successor thereto).
"Noteholder" means a person in whose name an Equipment Note is
registered on the Register (including, so long as it holds any Series A, Series
B, Series C or Series D Equipment Notes issued hereunder, the Subordination
Agent on behalf of the Pass Through Trustee under the applicable Pass Through
Trust Agreement pursuant to the provisions of the Intercreditor Agreement).
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[Trust Indenture and Security Agreement (1994 737 B)]
"Note Purchase Agreement" means that certain Note Purchase
Agreement dated as of December 23, 1997 among the Lessee, Owner Trustee,
Indenture Trustee, Subordination Agent, each Pass Through Trustee and
Kreditanstalt fur Wiederaufbau.
"Owner Participant" shall be the party specified as the "Owner
Participant" in the Participation Agreement, its successors and, to the extent
permitted by Article VIII of the Trust Agreement and Section 8(l) of the
Participation Agreement, its permitted successors and assigns.
"Owner Trustee" means State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, but solely
as trustee under the Trust Agreement, and each other Person which may from time
to time be acting as Owner Trustee in accordance with the provisions of the
Operative Documents.
"Owner Trustee's Purchase Agreement" shall have the meaning
specified therefor in the Lease.
"Participation Agreement" shall have the meaning specified the
refor in the Lease.
"Parts" shall have the meaning specified therefor in the
Lease.
"Pass Through Agreements" means the Pass Through Trust
Agreements, the Note Purchase Agreement, the Intercreditor Agreement, the
Registration Rights Agreement and the Primary Liquidity Facilities.
"Pass Through Certificates" means any of the Credit Enhanced
Pass Through Certificates issued pursuant to any of the Pass Through Trust
Agreements.
"Pass Through Trust" means each of the four separate pass
through trusts created pursuant to the related Pass Through Trust Agreement.
"Pass Through Trust Agreements" means each of the four
separate Pass Through Trust Supplements, together in each case with the Basic
Pass Through Trust Agreement, each dated as of December 23, 1997 and entered
into by and between the Lessee and a Pass Through Trustee.
"Pass Through Trust Supplement" shall have the meaning
specified for the term "Trust Supplement" in the Basic Pass Through Trust
Agreement.
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[Trust Indenture and Security Agreement (1994 737 B)]
"Pass Through Trustee" means First Security Bank, National
Association in its capacity as trustee under each Pass Through Trust Agreement,
and such other Person that may from time to time be acting as successor trustee
under any such Pass Through Trust Agreement.
"Past Due Rate" means, with respect to the principal of or
interest, Break Amount, if any, or Make- Whole Amount, if any, on any Equipment
Note not paid in full when due (whether at stated maturity, by acceleration or
otherwise), or with respect to any other amount payable to the holder thereof
thereon or under this Agreement not so paid in full when due, a rate of
interest per annum equal to 1.00% per annum above the Three-Month LIBOR (plus,
in the case of the Series C Equipment Notes only, the Applicable Margin for the
Series C Equipment Notes) for the period applicable thereto (computed on the
basis of a year of 360 days and actual days elapsed); but in no event shall
such rate exceed the maximum rate permitted by applicable law.
"Paying Agent" means any Person acting as Paying Agent
hereunder pursuant to Section 2.03.
"Payment Date" means, with respect to each Series of Equipment
Notes, each Interest Payment Date listed on the Amortization Schedule for such
Series of Equipment Notes set forth in Exhibit ▇-▇, ▇-▇, ▇-▇ or B-4, as the
case may be.
"Permitted Investment" means (a) investments in obligations
of, or guaranteed by, the United States Government having maturities no later
than 90 days following the date of such investment; (b) investments in open
market commercial paper of any corporation incorporated under the laws of the
United States of America or any state thereof with a short-term unsecured debt
rating issued by Moody's and Standard & Poor's of at least "A-1" and "P-1,"
respectively, having maturities no later than 90 days following the date of
such investment; or (c) investments in negotiable certificates of deposit, time
deposits, banker's acceptances, commercial paper or other direct obligations
of, or obligations guaranteed by, commercial banks organized under the laws of
the United States or of any political subdivision thereof (or any U.S. branch
of a foreign bank) with issuer ratings of at least "B/C" by Thomson Bankwatch,
having maturities no later than 90 days following the date of such investment;
provided, however, that: (x) all Permitted Investments that are bank
obligations shall be denominated in U.S. dollars; and (y) the aggregate amount
of Permitted Investments at any one time that are bank obligations issued by
any one bank shall not be in excess of 5% of such bank's capital and surplus;
provided further that (1) any investment of the types described in clauses (a),
(b) and (c) above may be made through a repurchase agreement in commercially
reasonable form with a bank or other financial institution qualifying as an
Eligible Institution so long as such investment is held by a third party
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[Trust Indenture and Security Agreement (1994 737 B)]
custodian also qualifying as an Eligible Institution, and (2) all such
investments set forth in clauses (a), (b) and (c) above mature no later than
the Business Day preceding the next Interest Payment Date; and provided
further, that in the case of any Permitted Investment issued by a domestic
branch of a foreign bank, the income from such investment shall be from sources
within the United States for purposes of the Code.
"Permitted Lien" shall have the meaning specified therefor in
the Lease.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Primary Liquidity Facilities" means the two Revolving Credit
Agreements (consisting of a separate Revolving Credit Agreement with the
applicable Primary Liquidity Provider with respect to each of the Class A Trust
and the Class B Trust) between the Subordination Agent, as borrower, and such
Primary Liquidity Provider, each dated as of December 23, 1997; provided that,
for purposes of any obligation of Owner Trustee or Lessee, no amendment,
modification or supplement to, or substitution or replacement of, any such
Primary Liquidity Facility shall be effective unless consented to by Owner
Trustee or Lessee, as the case may be.
"Primary Liquidity Providers" means Kreditanstalt fur
Wiederaufbau, as the Primary Liquidity Provider under the Class A Primary
Liquidity Facility and the Class B Primary Liquidity Facility (as such terms
are defined in the Intercreditor Agreement) or any successor thereto.
"Purchase Agreement" shall have the meaning specified therefor
in the Lease.
"Purchase Option Date" shall have the meaning specified
therefor in the Lease.
"Record Date" for the interest or Amortization Amount payable
on any Equipment Note on any Interest Payment Date or Payment Date (other than
the maturity date) for such Equipment Note, as the case may be, means the
calendar day (whether or not a Business Day) which is 15 calendar days prior to
the related Interest Payment Date or Payment Date.
"Redemption Date" means the date on which the Equipment Notes
are to be redeemed or purchased pursuant to Section 6.01 or Section 6.02, as
the case may be, as specified in the notice delivered pursuant to Section 6.03
hereof.
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[Trust Indenture and Security Agreement (1994 737 B)]
"Redemption Price" means the price at which the Equipment
Notes are to be redeemed or purchased, determined as of the applicable
Redemption Date, pursuant to Section 6.01 or Section 6.02, as the case may be.
"Refinancing Date" shall mean the date designated by the
Lessee as the date for a refinancing of the Equipment Notes in accordance with
Section 17 of the Participation Agreement.
"Register" shall have the meaning specified therefor in
Section 2.03.
"Registrar" means any person acting as Registrar hereunder
pursuant to Section 2.03.
"Registration Rights Agreement" shall have the meaning
specified therefor in the Note Purchase Agreement.
"Rent" shall have the meaning specified therefor in the Lease.
"Replacement Airframe" shall have the meaning specified
therefor in the Lease.
"Replacement Engine" shall have the meaning specified therefor
in the Lease.
"SEC" means the Securities and Exchange Commission.
"Secured Obligations" shall have the meaning specified
therefor in Section 2.11.
"Senior Noteholder" has the meaning specified in Section 2.11.
"Series" means any of Series A, Series B, Series C or Series
D.
"Series A" or "Series A Equipment Notes" means Equipment Notes
issued hereunder and designated as "Series A," in the original principal amount
and maturities and bearing interest as specified in Exhibit B-1.
"Series A Margin" means the margin applicable to the Series A
Equipment Notes, as the same is specified on Exhibit B-1.
"Series B" or "Series B Equipment Notes" means Equipment Notes
issued hereunder and designated as "Series B," in the original principal amount
and maturities and bearing interest as specified in Exhibit B-2.
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[Trust Indenture and Security Agreement (1994 737 B)]
"Series B Margin" means the margin applicable to the Series B
Equipment Notes, as the same is specified on Exhibit B-2.
"Series C" or "Series C Equipment Notes" means Equipment Notes
issued hereunder and designated as "Series C," in the original principal amount
and maturities and bearing interest as specified in Exhibit B-3.
"Series C Margin" means the margin applicable to the Series C
Equipment Notes, as the same is specified on Exhibit B-3.
"Series D" or "Series D Equipment Notes" means Equipment Notes
issued hereunder and designated as "Series D," in the original principal amount
and maturities and bearing interest as specified in Exhibit B-4.
"Series D Margin" means the margin applicable to the Series D
Equipment Notes, as the same is specified on Exhibit B-4.
"Special Purchase Option Date" shall have the meaning
specified therefor in the Lease.
"Standard & Poor's" means Standard & Poor's Ratings Services,
a division of ▇▇▇▇▇▇-▇▇▇▇ Inc. (or any successor thereto).
"Stipulated Loss Value" shall have the meaning specified
therefor in the Lease.
"Subordination Agent" means First Security Bank, National
Association as Subordination Agent under the Intercreditor Agreement, or any
successor thereto.
"Supplemental Rent" shall have the meaning specified therefor
in the Lease.
"Tax Indemnity Agreement" shall have the meaning specified
therefor in the Lease.
"Termination Value" shall have the meaning specified therefor
in the Lease.
"Three-Month LIBOR" means, in relation to any Interest Period,
the interest rate per annum (calculated on the basis of a 360-day year and
actual days elapsed) at which deposits in United States dollars are offered to
prime banks in the London interbank market as indicated on display page 3750
(British Bankers Association-LIBOR) of the Dow ▇▇▇▇▇ Markets Service (or such
other page as may replace such display page 3750 for the purpose of displaying
London interbank offered rates for Dollar deposits) or, if not so indicated,
the average (rounded upwards to the nearest 1/100%), as determined by the
Calculation Agent,
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[Trust Indenture and Security Agreement (1994 737 B)]
of such rates as indicated on the Reuters Screen LIBO Page (or such other page
as may replace such Reuters Screen LIBO Page for the purpose of displaying
London interbank offered rates for Dollar deposits) or, if neither such
alternative is indicated, the average (rounded upwards to the nearest 1/100%),
as determined by the Calculation Agent, of such rates offered by the London
Reference Banks to prime banks in the London interbank market, in each case at
or about 11:00 a.m. (London time) on the LIBOR Business Day that is two LIBOR
Business Days prior to the first day of such Interest Period for deposits of a
duration equal to such Interest Period (or other period most nearly
corresponding to such period) in an amount substantially equal to the principal
amount of the Equipment Notes outstanding as of the first day of such Interest
Period. The Calculation Agent will, if necessary, request that each of the
London Reference Banks provide a quotation of its rate. If at least two such
quotations are provided, the rate will be the average of the quotations
(rounded upwards to the nearest 1/100%). If no such quotation can be obtained,
the rate will be the Three-Month LIBOR for the immediately preceding Interest
Period.
"Trust Agreement" shall have the meaning specified therefor in
the Lease.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trust Indenture and Security Agreement", "Indenture" or "this
Agreement" means this Amended and Restated Trust Indenture and Security
Agreement (1994 737 B), as the same may from time to time be supplemented,
amended or modified.
"Trust Indenture Estate" shall have the meaning specified for
the term "Indenture Estate" hereunder.
"Trust Office" shall mean the principal corporate trust office
of the Owner Trustee located at the Owner Trustee's address for notices under
the Participation Agreement, or such other office at which the Owner Trustee's
corporate trust business shall be administered which the Owner Trustee shall
have specified by notice in writing to the Lessee, the Indenture Trustee and
each Noteholder.
"Trust Supplement" means a supplement to the Trust Agreement
and this Agreement in the form of Exhibit C hereto.
"Trustee's Liens" shall have the meaning specified therefor in
Section 9.10.
"United States" or "U.S." means the United States of America.
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[Trust Indenture and Security Agreement (1994 737 B)]
ARTICLE 2
THE EQUIPMENT NOTES
Section 2.01. Equipment Notes; Title and Terms. The Equipment
Notes shall be issued in four separate series designated as Series A, Series B,
Series C and Series D, shall be dated the applicable Issuance Date with respect
to such Series, and shall be in the maturities and principal amounts and shall
bear interest as specified in Exhibit ▇- ▇, ▇-▇, ▇-▇ or B-4, as the case may
be. Each Series A, Series B, Series C and Series D Equipment Note shall be
issued to the Subordination Agent as nominee for the Pass Through Trustee under
the applicable Pass Through Trust Agreement. The Issuance Date for the Series
A, Series B, Series C and Series D Equipment Notes will be the Closing Date.
The Owner Trustee agrees to pay to the Indenture Trustee for
distribution in accordance with Section 3.06 hereof: (i) an amount equal to
the fees payable to the relevant Primary Liquidity Provider under the related
Fee Letter (as defined in the Intercreditor Agreement as originally in effect
or as amended with the consent of the Owner Participant) multiplied by a
fraction the numerator of which shall be the sum of the then outstanding
aggregate principal amount of the Series A Equipment Notes and Series B
Equipment Notes, and the denominator of which shall be the sum of the then
outstanding aggregate principal amount of all "Series A Equipment Notes" and
"Series B Equipment Notes" (each as defined in the Intercreditor Agreement);
(ii) (x) the amount equal to interest on any Downgrade Advance (other than any
Applied Downgrade Advance) payable under Section 3.07 of each Primary Liquidity
Facility minus Investment Earnings from such Downgrade Advance multiplied by
(y) the fraction specified in the foregoing clause (i); (iii) (x) any amounts
owed to the Primary Liquidity Providers by the Subordination Agent as borrower
under Section 3.01 (other than in respect of an Unpaid Advance or Applied
Downgrade Advance), 3.02, 3.03 (other than in respect of an Unpaid Advance or
Applied Downgrade Advance) 7.05 or 7.07 of each Primary Liquidity Facility (or
similar provisions of any succeeding liquidity facility) multiplied by (y) the
fraction specified in the foregoing clause (i); and (iv) if any payment default
shall have occurred and be continuing with respect to interest on any Series A
Equipment Note or Series B Equipment Note, (x) the excess, if any, of (1) the
sum of (x) the amount equal to interest on any Unpaid Advance or Applied
Downgrade Advance payable under Section 3.07 of each Primary Liquidity Facility
plus (y) any other amounts payable in respect of such Unpaid Advance or Applied
Downgrade Advance under Section 3.01, 3.03 or 3.09 of the applicable Primary
Liquidity Facility over (2) the sum of Investment Earnings from any such Unpaid
Advance or Applied Downgrade Advance plus any amount of interest at the Past
Due Rate actually payable (whether or not in fact paid) by the Owner Trustee on
the overdue scheduled interest on the Equipment Notes in respect of which such
Unpaid Advance or Applied Downgrade Advance was made, multiplied by (y) a
fraction the
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[Trust Indenture and Security Agreement (1994 737 B)]
numerator of which shall be the then aggregate overdue amounts of interest on
the Series A Equipment Notes and Series B Equipment Notes (other than interest
becoming due and payable solely as a result of acceleration of any such
Equipment Notes) and the denominator of which shall be the then aggregate
overdue amounts of interest on all "Series A Equipment Notes" and "Series B
Equipment Notes" (each as defined in the Intercreditor Agreement) (other than
interest becoming due and payable solely as a result of acceleration of any
such "Equipment Notes"). For purposes of this paragraph, the terms "Applied
Downgrade Advance", "Downgrade Advance", "Final Advance", "Investment Earnings"
and "Unpaid Advance" shall have the meanings specified in each Primary
Liquidity Facility or the Intercreditor Agreement referred to therein.
The Applicable Margin or the Applicable Rate for certain
Series of Equipment Notes may be adjusted under the following circumstances:
(a) in the case of the Series A and Series B
Equipment Notes, if the Lessee has failed to effect a Registration
Event (as defined in the Registration Rights Agreement) on or prior to
July 1, 1998, or if the Shelf Registration Statement (as defined in
the Registration Rights Agreement) ceases to be effective for more
than 60 days in any twelve-month period, whether or not consecutive,
the Applicable Margin shall be increased by .50% per annum from July
1, 1998, if no Registration Event has occurred, or from the 61st day
of such twelve-month period in the case of such Shelf Registration
Statement ceasing to be effective, until the Lessee effects a
Registration Event, or causes such Shelf Registration Statement to be
effective, as more particularly set forth in the Registration Rights
Agreement; and
(b) in the case of all Equipment Notes, effective
on the Final Expected Distribution Date, the Applicable Rate shall be
equal to the interest rate determined by the Reset Agent (as defined
in the Note Purchase Agreement) pursuant to Section 3(c) thereof, as
more particularly set forth in the Note Purchase Agreement.
Section 2.02. Execution and Authentication. (a) Equipment
Notes shall be executed on behalf of the Owner Trustee by the manual or
facsimile signature of its President, a senior vice president, a vice
president, an assistant vice president, its treasurer or other authorized
officer.
(b) If any officer of the Owner Trustee executing an
Equipment Note no longer holds that office at the time such Equipment Note is
executed on behalf of the Owner Trustee, such Equipment Note shall be valid
nevertheless.
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[Trust Indenture and Security Agreement (1994 737 B)]
(c) At any time and from time to time after the execution
of the Equipment Notes, the Owner Trustee may deliver such Equipment Notes to
the Indenture Trustee for authentication and, subject to the provisions of
Section 2.10, the Indenture Trustee shall authenticate the Equipment Notes by
manual signature upon written orders of the Owner Trustee. Equipment Notes
shall be authenticated on behalf of the Indenture Trustee by any authorized
officer or signatory of the Indenture Trustee.
(d) An Equipment Note shall not be valid or obligatory
for any purpose or entitled to any security or benefit hereunder until executed
on behalf of the Owner Trustee by the manual or facsimile signature of an
officer of the Owner Trustee as provided in Section 2.02(a) and until
authenticated on behalf of the Indenture Trustee by the manual signature of an
authorized officer or signatory of the Indenture Trustee as provided in Section
2.02(c). Such signatures shall be conclusive evidence that such Equipment Note
has been duly executed, authenticated and issued under this Agreement.
Section 2.03. Registrar and Paying Agent. The Indenture
Trustee shall maintain an office or agency where the Equipment Notes may be
presented for registration of transfer or for exchange (the "Registrar") and an
office or agency where (subject to Sections 2.04 and 2.08) the Equipment Notes
may be presented for payment or for exchange (the "Paying Agent"). The
Registrar shall keep a register (the "Register") with respect to the Equipment
Notes and to their transfer and exchange and the payments of Amortization
Amounts thereon, if any. The Indenture Trustee may appoint one or more
co-registrars (the "Co-Registrars") and one or more additional Paying Agents
for the Equipment Notes and the Indenture Trustee may terminate the appointment
of any Co-Registrar or Paying Agent at any time upon written notice. The term
"Registrar" includes any Co-Registrar. The term "Paying Agent" includes any
additional Paying Agent.
The Indenture Trustee shall initially act as Registrar and
Paying Agent.
Section 2.04. Transfer and Exchange. At the option of the
Noteholder thereof, Equipment Notes may be exchanged for an equal aggregate
principal amount of other Equipment Notes of the same Series, maturity and type
and of any authorized denominations or transferred upon surrender of the
Equipment Notes to be exchanged or transferred at the principal corporate trust
office of the Indenture Trustee, or at any office or agency maintained for such
purpose pursuant to Section 2.03. Whenever any Equipment Notes are so
surrendered for exchange, the Owner Trustee shall execute, and the Indenture
Trustee shall authenticate and deliver, the replacement Equipment Notes, dated
the same date as the Equipment Note or Equipment Notes being replaced which the
Noteholder making the exchange is entitled to receive.
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[Trust Indenture and Security Agreement (1994 737 B)]
All Equipment Notes issued upon any registration of transfer
or exchange of Equipment Notes shall be the valid obligations of the Owner
Trustee, evidencing the same obligations, and entitled to the same security and
benefits under this Agreement, as the Equipment Notes surrendered upon such
registration of transfer or exchange.
Every Equipment Note presented or surrendered for registration
of transfer or exchange shall (if so required by the Registrar) be duly
endorsed by, or be accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by, the Noteholder thereof or his
attorney duly authorized in writing. Indenture Trustee may require such
evidence reasonably satisfactory to it as to the compliance of any such
transfer with the Securities Act, and the securities laws of any applicable
state. Each initial Noteholder and each transferee of an Equipment Note, by
its acceptance of an Equipment Note, agrees to be bound by and comply with the
provisions of the Participation Agreement, this Indenture, the Note Purchase
Agreement, and each other Fundamental Document applicable to a Noteholder.
No service charge shall be made to a Noteholder for any
registration of transfer or exchange of Equipment Notes, but the Registrar may,
as a condition to any transfer or exchange hereunder, require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Equipment Notes.
The Registrar shall not be required to register the transfer
of or to exchange any Equipment Note called for redemption or purchase pursuant
to such Section 6.01 or 6.02.
Section 2.05. Noteholder Lists; Ownership of Equipment Notes.
(a) The Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Noteholders, which list shall be available to the Owner Trustee or its
representative (which may be the Owner Participant) and the Lessee for
inspection. If the Indenture Trustee is not the Registrar, the Registrar shall
be required to furnish to the Indenture Trustee quarterly on or before each
Interest Payment Date, and at such other times as the Indenture Trustee may
request in writing, a list, in such form and as of such date as the Indenture
Trustee may reasonably require, containing all the information in the
possession or control of the Registrar as to the names and addresses of the
Noteholders.
(b) Ownership of the Equipment Notes shall be proved by
the Register kept by the Registrar. Prior to due presentment for registration
of transfer of any Equipment Note, the Owner Trustee, the Owner Participant,
the Lessee, the Indenture Trustee,
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[Trust Indenture and Security Agreement (1994 737 B)]
the Paying Agent and the Registrar may deem and treat the Person in whose name
any Equipment Note is registered as the absolute owner of such Equipment Note
for the purpose of receiving payment of principal (including, subject to the
provisions herein regarding the applicable Record Dates, Amortization Amounts)
of, Break Amount, if any, Make-Whole Amount, if any, and interest on such
Equipment Note and for all other purposes whatsoever, whether or not such
Equipment Note is overdue, and none of the Owner Trustee, the Indenture
Trustee, the Paying Agent or the Registrar shall be affected by notice to the
contrary.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Equipment
Notes. If any Equipment Note shall become mutilated, destroyed, lost or
stolen, the Owner Trustee shall, upon the written request of the Noteholder of
such Equipment Note, issue and execute, and the Indenture Trustee shall
authenticate and deliver, in replacement thereof, as applicable, a new
Equipment Note of the same Series and having the same maturity, payable to the
same Noteholder in the same principal amount and dated the same date as the
Equipment Note so mutilated, destroyed, lost or stolen. If the Equipment Note
being replaced has become mutilated, such Equipment Note shall be surrendered
to the Indenture Trustee. If the Equipment Note being replaced has been
destroyed, lost or stolen, the Noteholder of such Equipment Note shall furnish
to the Owner Trustee and the Indenture Trustee such security or indemnity as
may be required by it to save the Owner Trustee and the Indenture Trustee
harmless and evidence satisfactory to the Owner Trustee and the Indenture
Trustee of the destruction, loss or theft of such Equipment Note and of the
ownership thereof.
Section 2.07. Cancellation. The Registrar and any Paying
Agent shall forward to the Indenture Trustee all Equipment Notes surrendered to
them for replacement, redemption, registration of transfer, exchange or
payment. The Indenture Trustee shall cancel all Equipment Notes surrendered
for replacement, redemption, registration of transfer, exchange, payment or
cancellation and shall destroy cancelled Equipment Notes.
Section 2.08. Payment on Equipment Notes. The principal
amount of, interest on, Break Amount, if any, Make-Whole Amount, if any, and
other amounts due under each Equipment Note or hereunder will be payable in
Dollars by wire transfer of immediately available funds not later than 11:00
a.m., Chicago, Illinois time, on the due date of payment to the Indenture
Trustee at the Corporate Trust Department for distribution among the
Noteholders in the manner provided herein. The Owner Trustee shall not have
any responsibility for the distribution of such payment to any Noteholder.
Notwithstanding the foregoing or any provision in any Equipment Note to the
contrary, the Indenture Trustee will use reasonable efforts to pay or cause to
be paid, if so directed in writing by any Noteholder (with a copy to the Owner
Trustee), all amounts paid by the Owner Trustee hereunder and under such
Noteholder's Equipment Note or Equipment Notes to such
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[Trust Indenture and Security Agreement (1994 737 B)]
Noteholder or a nominee therefor (including all amounts distributed pursuant to
Article 3 of this Agreement) by transferring, or causing to be transferred, by
wire transfer of immediately available funds in Dollars, prior to 1:00 p.m.,
Chicago, Illinois time, on the due date of payment, to an account maintained by
such Noteholder with a bank located in the continental United States the amount
to be distributed to such Noteholder, for credit to the account of such
Noteholder maintained at such bank. If the Indenture Trustee shall fail to
make any such payment as provided in the immediately foregoing sentence after
its receipt of funds at the place and prior to the time specified above, the
Indenture Trustee, in its individual capacity and not as trustee, agrees to
compensate such Noteholders for loss of use of funds at the Applicable Rate
until such payment is made and the Indenture Trustee shall be entitled to any
interest earned on such funds until such payment is made. Any payment made
hereunder shall be made free and clear of and without deduction for or on
account of all wire and like charges without any presentment or surrender of
any Equipment Note, except that, in the case of the final payment in respect of
any Equipment Note, such Equipment Note shall be surrendered to the Applicable
Trustee for cancellation promptly after such payment. Notwithstanding any
other provision of this Agreement to the contrary, the Indenture Trustee shall
not be required to make, or cause to be made, wire transfers as aforesaid prior
to the first Business Day on which it is practicable for the Indenture Trustee
to do so in view of the time of day when the funds to be so transferred were
received by it if such funds were received after 11:00 a.m., Chicago, Illinois
time, at the place of payment.
Section 2.09. Payment from Indenture Estate Only;
Non-Recourse Obligations. All amounts payable by the Indenture Trustee and the
Owner Trustee under the Equipment Notes and this Agreement shall be made only
from the income and proceeds of the Indenture Estate. Each Noteholder of an
Equipment Note, by its acceptance of such Equipment Note, agrees that (a) it
will look solely to the income and proceeds of the Indenture Estate for the
payment of such amounts, to the extent available for distribution to it as
herein provided, and (b) none of the Owner Trustee, the Owner Participant or
the Indenture Trustee is or shall be personally liable to the Noteholder of any
Equipment Note for any amount payable under such Equipment Note or this
Agreement or, except as expressly provided in this Agreement in the case of the
Owner Trustee and the Indenture Trustee, for any liability thereunder.
Except as expressly provided herein, State Street Bank and
Trust Company of Connecticut, National Association is entering into this
Agreement solely as Owner Trustee under the Trust Agreement and not in its
individual capacity, and in no case whatsoever shall State Street Bank and
Trust Company of Connecticut, National Association (or any entity acting as
successor trustee under the Trust Agreement) be personally liable for, or for
any loss in respect of, any statements, representations, warranties, agreements
or obligations hereunder or thereunder; provided that State Street Bank and
Trust Company of Connecticut,
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[Trust Indenture and Security Agreement (1994 737 B)]
shall be liable hereunder in its individual capacity, (i) for the performance
of its agreements in its individual capacity under Section 8 of the
Participation Agreement, (ii) for its own willful misconduct or gross
negligence and (iii) for the failure to use ordinary care in the disbursement
of funds. If a successor Owner Trustee is appointed in accordance with the
terms of the Trust Agreement and the Participation Agreement, such successor
Owner Trustee shall, without any further act, succeed to all of the rights,
duties, immunities and obligations hereunder, and its predecessor Owner Trustee
and State Street Bank and Trust Company of Connecticut, National Association
shall be released from all further duties and obligations hereunder, without
prejudice to any claims against State Street Bank and Trust Company of
Connecticut, National Association or such predecessor Owner Trustee for any
default by State Street Bank and Trust Company of Connecticut, National
Association or such predecessor Owner Trustee, respectively, in the performance
of its obligations hereunder prior to such appointment.
Section 2.10. Subordination. (a) The Indenture Trustee and,
by acceptance of its Equipment Notes of any Series, each Noteholder of such
Series, hereby agree that no payment or distribution shall be made on or in
respect of the amounts owed to such Noteholder of such Series, including any
payment or distribution of cash, property or securities after the commencement
of a proceeding of the type referred to in Section 8.01(f) or (g) hereof,
except as expressly provided in Articles 2 and 3 hereof.
(b) By the acceptance of its Equipment Notes of any
Series (other than Series A), each Noteholder of such Series agrees that in the
event that such Noteholder, in its capacity as a Noteholder, shall receive any
payment or distribution on any amounts in respect of such Series which it is
not entitled to receive under this Section 2.10 or Article 3 hereof, it will
hold any amount so received in trust for the Senior Noteholder (as defined in
Section 2.10(c) hereof) and will forthwith turn over such payment to the
Indenture Trustee in the form received to be applied as provided in Article 3
hereof.
(c) As used in this Section 2.10, the term "Senior
Noteholder" shall mean, (i) the Noteholders of Series A until all amounts in
respect of the Series A Equipment Notes have been paid in full, (ii) after all
amounts in respect of Series A Equipment Notes have been paid in full, the
Noteholders of Series B until all amounts in respect of the Series B Equipment
Notes have been paid in full, (iii) after all amounts in respect of the Series
B Equipment Notes have been paid in full, the Noteholders of Series C until all
amounts in respect of the Series C Equipment Notes have been paid in full and
(iv) after all amounts in respect of the Series C Equipment Notes have been
paid in full, the Series D Equipment Notes.
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[Trust Indenture and Security Agreement (1994 737 B)]
Section 2.11. Termination of Interest in the Indenture
Estate. (a) No Noteholder or Indenture Indemnitee shall have any further
interest in, or other right with respect to, the Indenture Estate when and if
the principal amount of, Break Amount, if any, Make-Whole Amount, if any, and
interest on all Equipment Notes held by such Noteholder and all other sums
payable to such Noteholder or Indenture Indemnitee, as the case may be,
hereunder, under the Lease, such Equipment Notes and the Participation
Agreement by the Lessee, the Owner Participant and the Owner Trustee
(collectively, the "Secured Obligations") shall have been paid in full.
(b) It is understood and agreed that (i) neither this
Indenture nor the Indenture Estate secures any payment or performance
obligations of any party under the Note Purchase Agreement, (ii) the Secured
Obligations shall not include any of such payment or performance obligations
and (iii) the failure by Lessee to pay, perform or observe any of such payment
or performance obligations shall not constitute an Indenture Default or an
Indenture Event of Default (it being understood that the Owner Trustee's
obligation to pay an increased interest rate on the Equipment Notes pursuant to
the third paragraph of Section 2.01 hereof is a Secured Obligation).
Section 2.12. Withholding Taxes. The Indenture Trustee, as
agent for the Owner Trustee, shall exclude and withhold at the appropriate rate
from each payment of principal amount of, interest on, Break Amount, if any,
Make- Whole Amount, if any, and other amounts due hereunder or under each
Equipment Note (and such exclusion and withholding shall constitute payment in
respect of such Equipment Note) any and all United States withholding taxes
applicable thereto as required by law. The Indenture Trustee agrees to act as
such withholding agent and, in connection therewith, whenever any present or
future United States taxes or similar charges are required to be withheld with
respect to any amounts payable hereunder or in respect of the Equipment Notes,
to withhold such amounts and timely pay the same to the appropriate authority
in the name of and on behalf of the Noteholders, that it will file any
necessary United States withholding tax returns or statements when due, and
that as promptly as possible after the payment thereof (but in no event later
than 30 days after the due date thereof) it will deliver to each Noteholder
(with a copy to the Owner Trustee) appropriate receipts and a U.S. Treasury
Form 1042-S and Form 8109 or Form 8109-B (or similar form at any relevant time
in effect) showing the payment thereof, together with such additional
documentary evidence as any such Noteholder may reasonably request from time to
time.
If a Noteholder which is a Non-U.S. Person has furnished to
the Indenture Trustee a properly completed, accurate and currently effective
U.S. Internal Revenue Service Form 1001 or W-8 (or such successor form or forms
as may be required by the United States Treasury Department) during the
calendar year in which the payment hereunder or under the
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[Trust Indenture and Security Agreement (1994 737 B)]
Equipment Note(s) held by such Noteholder is made (but prior to the making of
such payment), or in either of the two preceding calendar years or such other
previous period if such forms continue to apply under applicable law with
respect to the year in which such payment is made, and has not notified the
Indenture Trustee of the withdrawal or inaccuracy of such form prior to the
date of such payment (and the Indenture Trustee has no reason to believe that
any information set forth in such form is inaccurate), the Indenture Trustee
shall withhold only the amount, if any, required by law (after taking into
account any applicable exemptions properly claimed by the Noteholder) to be
withheld from payments hereunder or under the Equipment Notes held by such
Noteholder in respect of United States federal income tax. If a Noteholder (x)
which is a Non-U.S. Person has furnished to the Indenture Trustee a properly
completed, accurate and currently effective U.S. Internal Revenue Service Form
4224 in duplicate (or such successor certificate, form or forms as may be
required by the United States Treasury Department as necessary in order to
properly avoid withholding of United States federal income tax), for each
calendar year in which a payment is made or for any other period in which such
form applies under applicable law and in which a payment is made (but prior to
the making of any payment for such year or other period), and has not notified
the Indenture Trustee of the withdrawal or inaccuracy of such certificate or
form prior to the date of such payment (and the Indenture Trustee has no reason
to believe that any information set forth in such form is inaccurate) or (y)
which is a U.S. Person has furnished to the Indenture Trustee a properly
completed, accurate and currently effective U.S. Internal Revenue Service Form
W-9, if applicable, prior to a payment hereunder or under the Equipment Notes
held by such Noteholder, no amount shall be withheld from payments in respect
of United States federal income tax. If any Noteholder has notified the
Indenture Trustee that any of the foregoing forms or certificates is withdrawn
or inaccurate, or if such Noteholder has not filed a form claiming an exemption
from United States withholding tax which is applicable to any relevant period
in which a payment is made or if the Code or the regulations thereunder or the
administrative interpretation thereof is at any time after the date hereof
amended to require such withholding of United States federal income taxes from
payments under the Equipment Notes held by such Noteholder, the Indenture
Trustee agrees to withhold from each payment due to the relevant Noteholder
withholding taxes at the appropriate rate under law and will, on a timely basis
as more fully provided above, deposit such amounts with an authorized
depository and make such returns, statements, receipts and other documentary
evidence in connection therewith as required by law.
Owner Trustee shall not have any liability for the failure of
the Indenture Trustee to withhold taxes in the manner provided for herein or
for any false, inaccurate or untrue evidence provided by any Noteholder
hereunder.
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[Trust Indenture and Security Agreement (1994 737 B)]
ARTICLE 3
RECEIPT, DISTRIBUTION AND APPLICATION
OF FUNDS IN THE INDENTURE ESTATE
Section 3.01. [Reserved for Potential Future Use]
Section 3.02. Payment in Case of Redemption or Purchase of
Equipment Notes. Except as otherwise provided in Section 3.05, in the event the
Equipment Notes are redeemed or purchased in accordance with the provisions of
Section 6.01, the Indenture Trustee will apply on the Redemption Date any
amounts then held by it in the Indenture Estate and received by it from or on
behalf of the Lessee or the Owner Trustee in the following order of priority:
first, so much thereof as was received by the Indenture
Trustee with respect to the amounts due to it pursuant to Section 9.06
shall be applied to pay the Indenture Trustee such amounts;
second, so much thereof remaining as shall be required to pay
an amount equal to the Redemption Price on the Series A Equipment
Notes pursuant to Section 6.01 on the Redemption Date shall be applied
to the redemption or purchase of the Series A Equipment Notes on the
Redemption Date;
third, so much thereof remaining as shall be required to pay
an amount equal to the Redemption Price on the Series B Equipment
Notes pursuant to Section 6.01 on the Redemption Date shall be applied
to the redemption or purchase of the Series B Equipment Notes on the
Redemption Date;
fourth, so much thereof remaining as shall be required to pay
an amount equal to the Redemption Price on the Series C Equipment
Notes pursuant to Section 6.01 on the Redemption Date shall be applied
to the redemption or purchase of the Series C Equipment Notes on the
Redemption Date;
fifth, so much thereof remaining as shall be required to pay
an amount equal to the Redemption Price on the Series D Equipment
Notes pursuant to Section 6.01 on the Redemption Date shall be applied
to the redemption or purchase of the Series D Equipment Notes on the
Redemption Date; and
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[Trust Indenture and Security Agreement (1994 737 B)]
sixth, the balance, if any, thereof remaining thereafter shall
be distributed to the Owner Trustee to be held or distributed to the
Owner Participant in accordance with the terms of the Trust Agreement.
Section 3.03. Application of Basic Rent. Except as otherwise
provided in Section 3.02, 3.04, 3.05 or 3.06, each amount of Basic Rent
received by the Indenture Trustee, any amount of interest on overdue
installments of Basic Rent and any amount received by the Indenture Trustee
pursuant to Section 8.03(e)(i) shall be promptly distributed by the Indenture
Trustee in the following order of priority:
first, (i) so much of such payment as shall be required
to pay in full the aggregate amount of the
payment or payments of principal amount and
interest (as well as any interest on any
overdue principal amount and, to the extent
permitted by applicable law, on any overdue
interest) then due under all Series A
Equipment Notes shall be distributed to the
Noteholders of Series A Equipment Notes
ratably, without priority of one over the
other, in the proportion that the amount of
such payment or payments then due under all
Series A Equipment Notes held by each such
Noteholder bears to the aggregate amount of
the payments then due under all Series A
Equipment Notes held by all such Noteholders;
(ii) after giving effect to paragraph (i) above,
so much of such payment remaining as shall be
required to pay in full the aggregate amount
of the payment or payments of principal
amount and interest (as well as any interest
on any overdue principal amount and, to the
extent permitted by applicable law, on any
overdue interest) then due under all Series B
Equipment Notes shall be distributed to the
Noteholders of Series B Equipment Notes
ratably, without priority of one over the
other, in the proportion that the amount of
such payment or payments then due under all
Series B Equipment Notes held by each such
Noteholder bears to the aggregate amount of
the payments then due under all Series B
Equipment Notes held by all such Noteholders;
(iii) after giving effect to paragraph (ii) above,
so much of such payment remaining as shall be
required to pay in full the aggregate amount
of the payment or payments of principal
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[Trust Indenture and Security Agreement (1994 737 B)]
amount and interest (as well as any interest
on any overdue principal amount and, to the
extent permitted by applicable law, on any
overdue interest) then due under all Series C
Equipment Notes shall be distributed to the
Noteholders of Series C Equipment Notes
ratably, without priority of one over the
other, in the proportion that the amount of
such payment or payments then due under all
Series C Equipment Notes held by each such
Noteholder bears to the aggregate amount of
the payments then due under all Series C
Equipment Notes held by all such Noteholders;
and
(iv) after giving effect to paragraph (iii) above,
so much of such payment remaining as shall be
required to pay in full the aggregate amount
of the payment or payments of principal
amount and interest (as well as any interest
on any overdue principal amount and, to the
extent permitted by applicable law, on any
overdue interest) then due under all Series D
Equipment Notes shall be distributed to the
Noteholders of Series D Equipment Notes
ratably, without priority of one over the
other, in the proportion that the amount of
such payment or payments then due under all
Series D Equipment Notes held by each such
Noteholder bears to the aggregate amount of
the payments then due under all Series D
Equipment Notes held by all such Noteholders;
and
second, so much of such aggregate amount remaining as shall be
required to pay any amount due the Indenture Trustee pursuant to
Section 9.06 shall be applied to pay the Indenture Trustee such
amounts; and
third, the balance, if any, of such aggregate amount remaining
thereafter shall be distributed to the Owner Trustee to be held or
distributed in accordance with the terms of the Lease, the
Participation Agreement and the Trust Agreement; provided that, during
the continuance of an Event of Default and prior to the outstanding
principal amount of the Equipment Notes becoming due and payable, the
balance shall be held by the Indenture Trustee as collateral security
for the obligations secured hereby; provided, further, that, at such
time as one or more Lease Events of Default shall have occurred and
any such Lease Event of Default shall have continued for a period of
180 days, such amounts shall be distributed to the Owner Trustee to be
distributed in accordance with the terms of the Trust Agreement so
long as no Event of Default exists other than by virtue of such Lease
Event of Default.
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[Trust Indenture and Security Agreement (1994 737 B)]
Section 3.04. Application of Certain Payments in Case of
Requisition or Event of Loss. Except as otherwise provided in Section 3.05,
any amounts received directly or otherwise pursuant to the Lease from any
governmental authority or other party pursuant to Section 10 of the Lease with
respect to the Airframe or the Airframe and the Engines or engines then
installed on the Airframe whether or not in connection with an Event of Loss,
to the extent that such amounts are not at the time required to be paid to the
Lessee pursuant to said Section 10, and any amounts of insurance proceeds for
damage to the Indenture Estate received directly or otherwise pursuant to the
Lease from any insurer pursuant to Section 11 of the Lease with respect thereto
whether or not in connection with an Event of Loss, to the extent such amounts
are not at the time required to be paid to the Lessee pursuant to said Section
11, shall, except as otherwise provided in the next sentence, be applied by the
Indenture Trustee on behalf of the Owner Trustee in reduction of the Lessee's
obligations to pay Stipulated Loss Value and the other amounts payable by the
Lessee pursuant to Section 10 of the Lease for distribution under Section 3.02
hereof and the remainder, if any, shall, except as provided in the next
sentence, be distributed to the Owner Trustee to be held or distributed in
accordance with the terms of the Lease. Any portion of any such amount referred
to in the preceding sentence which is not required to be so paid to the Lessee
pursuant to the Lease, solely because a Lease Event of Default shall have
occurred and be continuing, shall be held by the Indenture Trustee on behalf of
the Owner Trustee as security for the obligations of the Lessee under the Lease
and at such time as there shall not be continuing any Lease Event of Default or
such earlier time as shall be provided for in the Lease, such portion shall be
paid to the Owner Trustee to be held or distributed in accordance with the
terms of the Lease, unless the Indenture Trustee (as assignee from the Owner
Trustee of the Lease) shall have theretofore declared the Lease to be in
default pursuant to Section 15 thereof, in which event such portion shall be
distributed forthwith upon such declaration in accordance with the provisions
of Section 3.05 hereof.
Section 3.05. Payments During Continuance of Indenture Event
of Default. All payments (except Excluded Payments) received and amounts held
or realized by the Indenture Trustee after an Indenture Event of Default shall
have occurred and be continuing (including any amounts realized by the
Indenture Trustee from the exercise of any remedies pursuant to Article 8) and
the outstanding principal amount of the Equipment Notes shall have become due
and payable, as well as all payments or amounts then held or thereafter
received by the Indenture Trustee as part of the Indenture Estate while such
Indenture Event of Default shall be continuing, shall be distributed by the
Indenture Trustee in the following order of priority:
first, so much of such payments or amounts as shall be
required to pay the Indenture Trustee all amounts then due it pursuant
to Section 9.06 shall be applied to pay the Indenture Trustee such
amounts;
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[Trust Indenture and Security Agreement (1994 737 B)]
second, so much of such payments or amounts remaining as shall
be required to reimburse the then existing or prior Noteholders for
payments made pursuant to Section 9.06 hereof (to the extent not
previously reimbursed), shall be distributed to such then existing or
prior Noteholders ratably, without priority of one over the other, in
accordance with the amount of the payment or payments made by each
such then existing or prior Noteholder pursuant to said Section 9.06
hereof;
third, so much of such payments or amounts remaining as shall
be required to (i) pay, or reimburse the Indenture Trustee for, all
costs, losses, taxes and expenses (including, without limitation,
reasonable attorney's fees and expenses) incurred (including unbilled
expenses in respect of property delivered or contracted for or
services rendered or contracted for if the amount of such expenses is
liquidated) in using, operating, storing, selling, leasing, disposing
of, controlling or managing the Indenture Estate, and in connection
with all maintenance, insurance, repairs, replacements, alterations,
additions and improvements of and to the Indenture Estate and in
connection with the protection, exercise, enforcement and
investigation into enforcement of any right, power or remedy available
to, or any damages sustained by, the Indenture Trustee, whether
liquidated or otherwise, and to make all payments which the Indenture
Trustee may be required or may elect to make, if any, for taxes,
assessments, insurance or other proper charges upon the Indenture
Estate or any part thereof (including the employment of engineers and
accountants to examine and make reports upon the properties, books and
records of the Owner Trustee and, to the extent permitted under the
Lease, the Lessee) shall be applied for such purposes and (ii) pay, or
reimburse the other Indenture Indemnitees for, all Secured Obligations
payable to any of them; and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in accordance with
the amounts owed to each;
fourth, (i) so much of such payments or amounts remaining as
shall be required to pay in full the aggregate unpaid principal amount
of all Series A Equipment Notes, and the accrued but unpaid interest
and other amounts due thereon (including Break Amount, if any) and all
other Secured Obligations owed in respect of the Series A Equipment
Notes to the date of distribution, shall be distributed to the holders
of Series A Equipment Notes, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion
that the aggregate unpaid principal amount of all Series A Equipment
Notes held by each Noteholder plus the accrued but unpaid interest and
other amounts due hereunder or thereunder (including Break Amount, if
any) to the date of distribution, bears to the aggregate unpaid
principal amount of all Series A Equipment Notes held by all such
Noteholders plus the accrued but unpaid interest and other amounts due
thereon (including Break Amount, if any) to the date of distribution;
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[Trust Indenture and Security Agreement (1994 737 B)]
(ii) after giving effect to paragraph (i) above, so much of
such payments or amounts remaining as shall be required to pay in full
the aggregate unpaid principal amount of all Series B Equipment Notes,
and the accrued but unpaid interest and other amounts due thereon
(including Break Amount, if any) and all other Secured Obligations in
respect of the Series B Equipment Notes to the date of distribution,
shall be distributed to the holders of Series B Equipment Notes, and
in case the aggregate amount so to be distributed shall be
insufficient to pay in full as aforesaid, then ratably, without
priority of one over the other, in the proportion that the aggregate
unpaid principal amount of all Series B Equipment Notes held by each
Noteholder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder (including Break Amount, if any) to the date
of distribution, bears to the aggregate unpaid principal amount of all
Series B Equipment Notes held by all such holders plus the accrued but
unpaid interest and other amounts due thereon (including Break Amount,
if any) to the date of distribution;
(iii) after giving effect to paragraph (ii) above, so much of
such payments or amounts remaining as shall be required to pay in full
the aggregate unpaid principal amount of all Series C Equipment Notes,
and the accrued but unpaid interest and other amounts due thereon
(including Break Amount, if any) and all other Secured Obligations in
respect of the Series C Equipment Notes (including Break Amount, if
any) to the date of distribution, shall be distributed to the
Noteholders of Series C Equipment Notes, and in case the aggregate
amount so to be distributed shall be insufficient to pay in full as
aforesaid, then ratably, without priority of one over the other, in
the proportion that the aggregate unpaid principal amount of all
Series C Equipment Notes held by each Noteholder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder
(including Break Amount, if any) to the date of distribution, bears to
the aggregate unpaid principal amount of all Series C Equipment Notes
held by all such holders plus the accrued but unpaid interest and
other amounts due thereon (including Break Amount, if any) to the date
of distribution; and
(iv) after giving effect to paragraph (iii) above, so much of
such payments or amounts remaining as shall be required to pay in full
the aggregate unpaid principal amount of all Series D Equipment Notes,
and the accrued but unpaid interest and other amounts due thereon
(including Break Amount, if any) and all other Secured Obligations in
respect of the Series D Equipment Notes (including Break Amount, if
any) to the date of distribution, shall be distributed to the
Noteholders of Series D
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[Trust Indenture and Security Agreement (1994 737 B)]
Equipment Notes, and in case the aggregate amount so to be distributed
shall be insufficient to pay in full as aforesaid, then ratably,
without priority of one over the other, in the proportion that the
aggregate unpaid principal amount of all Series D Equipment Notes held
by each Noteholder plus the accrued but unpaid interest and other
amounts due hereunder or thereunder (including Break Amount, if any)
to the date of distribution, bears to the aggregate unpaid principal
amount of all Series D Equipment Notes held by all such Noteholders
plus the accrued but unpaid interest and other amounts due thereon
(including Break Amount, if any) to the date of distribution; and
fifth, the balance, if any, of such payments or amounts
remaining thereafter shall be held by the Indenture Trustee as
collateral security for the obligations secured hereby until such time
as no Indenture Event of Default shall be continuing hereunder or the
Equipment Notes have been accelerated and all amounts due thereon or
payable with respect thereto have been paid, at which time such
payments or amounts shall be distributed to the Owner Trustee to be
held or distributed in accordance with the terms of the Lease, the
Participation Agreement and the Trust Agreement.
No Make-Whole Amount shall be payable in connection with an
Indenture Event of Default or distributable under this Section 3.05.
Section 3.06. Payments for Which Application Is Provided in
Other Documents. (a) Any payments received by the Indenture Trustee for which
no provision as to the application thereof is made in this Agreement and for
which such provision is made in the Lease or the Participation Agreement shall
be applied forthwith to the purpose for which such payment was made in
accordance with the terms of the Lease or the Participation Agreement, as the
case may be.
(b) Notwithstanding anything to the contrary contained in
this Article 3, the Indenture Trustee will distribute promptly upon receipt any
indemnity payment received by it from the Owner Trustee or the Lessee in
respect of the Indenture Trustee in its individual capacity, any Noteholder or
any other Indenture Indemnitee, in each case whether pursuant to Section 7 of
the Participation Agreement or as Supplemental Rent, directly to the Person
entitled thereto. Subject to the foregoing sentence of this Section 3.06(b),
any payment received by the Indenture Trustee under the second paragraph of
Section 2.01 shall be distributed to the Subordination Agent to be distributed
in accordance with the terms of the Intercreditor Agreement.
(c) Notwithstanding anything to the contrary contained in
this Article 3, any payments received by the Indenture Trustee which constitute
Excluded Payments shall be distributed promptly upon receipt by the Indenture
Trustee directly to the Person or Persons entitled thereto.
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[Trust Indenture and Security Agreement (1994 737 B)]
Section 3.07. Payments for Which No Application Is Otherwise
Provided. Except as otherwise provided in Section 3.06, any payment received
and amounts realized by the Indenture Trustee for which no provision as to the
application thereof is made elsewhere in this Agreement, shall be distributed
by the Indenture Trustee (a) to the extent received or realized at any time
prior to the payment in full of all Secured Obligations to the Noteholders, in
the order of priority specified in Section 3.03 hereof, and (b) to the extent
received or realized or realized after payment in full of all Secured
Obligations to the Noteholders, in the following order of priority:
first, so much of such aggregate amount as shall be
required to pay the Indenture Trustee all amounts then due it
pursuant to Section 9.06 shall be applied to pay the Indenture
Trustee such amounts; and
second, the balance if any, of such aggregate amount
remaining thereafter shall be distributed to the Owner Trustee
to be held or distributed in accordance with the terms of the
Trust Agreement.
Section 3.08. Application of Payments. Each payment of
principal or and interest or other amounts due on each Equipment Note shall,
except as otherwise provided herein, be applied, first, to the payment of
interest on such Equipment Note due and payable to the date of such payment, as
provided in such Equipment Note, as well as any interest on overdue principal,
Break Amount, if any, Make-Whole Amount, if any, and, to the extent permitted
by law, interest and other amounts due thereunder, second, to the payment of
any other amount (other than the principal of such Equipment Note) due
hereunder to the Noteholder of such Equipment Note or under such Equipment
Note, third, to the payment of the principal of such Equipment Note if then due
hereunder or under any such Equipment Note, and fourth, the balance, if any
remaining thereafter, to the principal of such Equipment Note remaining unpaid
(provided that such Equipment Note shall not be subject to prepayment without
the consent of the affected Noteholder except as permitted by Section 6.01
hereof).
ARTICLE 4
COVENANTS OF OWNER TRUSTEE
Section 4.01. Covenants of the Owner Trustee. The Owner
Trustee hereby covenants and agrees that:
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[Trust Indenture and Security Agreement (1994 737 B)]
(i) the Owner Trustee will duly and punctually
pay the principal of, Break Amount, if any, Make-Whole
Amount, if any, and interest on and other amounts due
under the Equipment Notes in accordance with, and
subject to, the terms of such Equipment Notes, this
Agreement and any related supplement hereto;
(ii) (A) the Owner Trustee, in its individual
capacity, will not directly or indirectly create, incur,
assume or suffer to exist any Lessor Lien attributable
to it in its individual capacity with respect to any of
the properties or assets of the Indenture Estate and if
any such Lessor Lien shall nevertheless exist, it will
promptly, at its own expense, take such action as may be
necessary to duly discharge such Lessor Lien; and (B)
the Owner Trustee will, in its individual capacity,
perform all of its covenants and obligations set forth
in the Participation Agreement;
(iii) in the event an officer in the Corporate
Trust Department of the Owner Trustee shall have actual
knowledge of an Indenture Event of Default or Indenture
Default or an Event of Loss, the Owner Trustee will give
prompt written notice of such Indenture Event of Default
or Indenture Default or Event of Loss to the Indenture
Trustee, the Owner Participant and the Lessee;
(iv) except as contemplated by the Operative
Documents, the Owner Trustee will not contract for,
create, incur, assume or permit to exist any Debt, and
will not guarantee (directly or indirectly or by an
instrument having the effect of assuring another's
payment or performance on any obligation or capability
of so doing, or otherwise), endorse or otherwise be or
become contingently liable, directly or indirectly, in
connection with the Debt of any other Person; and
(v) the Owner Trustee will not enter into any
business or other activity other than owning the
Aircraft, the leasing thereof to the Lessee and the
carrying out of the transactions contemplated hereby and
by the Participation Agreement, the Trust Agreement and
the other Operative Documents.
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[Trust Indenture and Security Agreement (1994 737 B)]
ARTICLE 5
DISPOSITION, SUBSTITUTION AND RELEASE
OF PROPERTY INCLUDED IN THE INDENTURE ESTATE DURING
CONTINUATION OF LEASE
Section 5.01. Disposition, Substitution and Release of
Property Included in the Indenture Estate During Continuation of Lease. So
long as the Lease is in effect:
(a) Parts. Any Parts and alterations, improvements and
modifications in and additions to the Aircraft shall, to the extent
required or specified by the Lease, become subject to the Lien of this
Agreement and be leased to the Lessee under the Lease; provided that,
to the extent permitted by and as provided in the Lease, the Lessee
shall have the right, at any time and from time to time, without any
release from or consent by the Owner Trustee or the Indenture Trustee,
to remove, replace and pool Parts and to make alterations,
improvements and modifications in, and additions to, the Aircraft.
The Indenture Trustee agrees that, to the extent permitted by and as
provided in the Lease, title to any such Part shall vest in the
Lessee. The Indenture Trustee shall, upon written request by the
Lessee or the Owner Trustee, from time to time execute an appropriate
written instrument or instruments to confirm the release of the
security interest of the Indenture Trustee in any Part as provided in
this Section 5.01.
(b) Substitution Under the Lease upon an Event of Loss
Occurring to Airframe or Engines or upon Voluntary Termination of
Lease with Respect to Engines. Upon (i) the occurrence of an Event of
Loss occurring to the Airframe or an Engine, or (ii) a voluntary
termination of the Lease with respect to an Engine, the Lessee, in
accordance with the Lease, may, in the case of an Event of Loss which
has occurred to the Airframe, or shall, except as provided in Section
10(b) of the Lease, in the case of an Event of Loss which has occurred
to, or termination of the Lease with respect to, an Engine, substitute
an airframe or engine, as the case may be, in which case, upon
satisfaction of all conditions to such substitution specified in
Section 10 of the Lease, the Indenture Trustee shall release all of
its right, interest and Lien in and to the Airframe or such Engine in
accordance with the provisions of the following two sentences. The
Indenture Trustee shall execute and deliver to the Owner Trustee an
instrument releasing its Lien in and to the Airframe or such Engine
and shall execute for recording in public offices, such instruments in
writing as the Owner Trustee or the Lessee shall reasonably request
and as shall be reasonably acceptable to the Indenture Trustee in
order to make clear upon public records that such lien has been
released under the laws of the applicable jurisdiction.
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[Trust Indenture and Security Agreement (1994 737 B)]
ARTICLE 6
REDEMPTION OF EQUIPMENT NOTES
Section 6.01. Redemption of Equipment Notes upon Certain
Events. (a) If there shall be an Event of Loss to the Aircraft or Airframe
and the Aircraft or Airframe is not replaced pursuant to Section 10(a)(ii) of
the Lease, each outstanding Equipment Note shall be redeemed in whole at a
redemption price equal to 100% of the outstanding principal amount of such
Equipment Note, the Break Amount, if any, together with accrued and unpaid
interest thereon to but excluding the applicable Redemption Date. No
Make-Whole Amount shall be payable in connection with a redemption under this
Section 6.01(a).
(b) If (i) the Lease shall be terminated by the Lessee at
its option pursuant to Section 9(b) of the Lease or upon the purchase of the
Aircraft by the Lessee at its option on a Special Purchase Option Date or the
EBO Date pursuant to Section 19(b) of the Lease (unless the Lessee shall have
elected to assume the rights and obligations of the Owner Trustee hereunder to
the extent and as provided for in Section 8(r) of the Participation Agreement)
or (ii) the Owner Trustee or the Owner Participant shall have given notice of
redemption or purchase to the Indenture Trustee pursuant to Section
8.03(e)(ii), each outstanding Equipment Note shall be redeemed or purchased in
whole on the Redemption Date and at the Redemption Price determined pursuant to
Section 6.02 below. The Redemption Date for Equipment Notes to be redeemed or
purchased (X) pursuant to clause (i) of this Section 6.01(b) shall be (A) in
the case of a termination of the Lease pursuant to Section 9(b) thereof, the
third Business Day following the Lease Termination Date, if any, or, in the
case of purchase of the Aircraft by the Lessee pursuant to Section 19(b) of the
Lease, the applicable Special Purchase Option Date or EBO Date and (Y) pursuant
to clause (ii) of this Section 6.01(b), shall be the date specified in the
notice given by the Owner Trustee or the Owner Participant to the Indenture
Trustee pursuant to Section 8.03(e)(ii). If the Owner Trustee elects to
purchase the Equipment Notes under Section 8.03(e)(ii), nothing herein,
including use of the terms "Redemption Date" and "Redemption Price" shall be
deemed to result in a redemption of the Equipment Notes.
(c) All the outstanding Equipment Notes may be redeemed if
the Lessee shall have requested the Owner Trustee and the Owner Participant to
effect a redemption thereof pursuant to Section 17 of the Participation
Agreement as part of a refunding or refinancing, and if all the conditions to
such refunding or refinancing set forth in such Section 17 of the Participation
Agreement shall have been satisfied. In such event, each outstanding Equipment
Note may be so redeemed at a Redemption Price specified in Section 6.02;
provided, however, that the applicable Redemption Date for Equipment Notes to
be redeemed pursuant to this Section 6.01(c) shall be the applicable
Refinancing Date under Section 17 of the Participation Agreement.
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[Trust Indenture and Security Agreement (1994 737 B)]
Section 6.02. Redemption Price. If the Equipment Notes are
to be redeemed or purchased pursuant to Section 6.01 or 8.03(e)(ii), each
outstanding Equipment Note shall be redeemed or purchased in whole at a
Redemption Price equal to 100% of its principal amount plus the Break Amount,
if any, plus (except in connection with a redemption or purchase under Section
8.02(e)(ii)) Make-Whole Amount, if any, plus accrued and unpaid interest
thereon to but excluding the applicable Redemption Date as determined below.
Section 6.03. Notice of Redemption to Noteholders. Notice of
redemption or purchase pursuant to Section 6.01 or 6.02 shall be given by
first-class mail, postage prepaid, mailed not less than 26 nor more than 60
days prior to the Redemption Date, to each Noteholder of Equipment Notes to be
redeemed or purchased, at such Noteholder's address appearing in the Register;
provided, that such notice shall become irrevocable 26 days prior to the
applicable Redemption Date; provided that, in the case of a redemption pursuant
to Section 6.01(b)(i) related to Lessee's exercise of its option pursuant to
Section 9(b) of the Lease, such notice shall be revocable and shall be deemed
revoked in the event the Lease does not in fact terminate on the related Lease
Termination Date.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the applicable basis for determining the Redemption
Price,
(3) that on the Redemption Date, the Redemption Price will
become due and payable upon each such Equipment Note, and that
interest on Equipment Notes shall cease to accrue on and after such
Redemption Date,
(4) an estimate of the amount of Break Amount, if any,
and/or Make-Whole Amount, if any, that will be payable with respect to
such redemption, and
(5) the place or places where such Equipment Notes are to be
surrendered for payment of the Redemption Price.
Notice of redemption or purchase of Equipment Notes to be redeemed or purchased
shall be given by the Indenture Trustee.
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[Trust Indenture and Security Agreement (1994 737 B)]
Section 6.04. Deposit of Redemption Price. On or before the
Redemption Date, the Owner Trustee (or any person on behalf of the Owner
Trustee) shall, to the extent an amount equal to the Redemption Price for the
Equipment Notes to be redeemed or purchased on the Redemption Date shall not
then be held in the Indenture Estate, deposit or cause to be deposited with the
Indenture Trustee or the Paying Agent by 11:00 a.m., Chicago time, in
immediately available funds the Redemption Price of the Equipment Notes to be
redeemed or purchased on the Redemption Date.
Section 6.05. Equipment Notes Payable on Redemption Date.
Notice of redemption or purchase having been given as aforesaid (and not deemed
revoked as contemplated in the proviso to Section 6.03), the Equipment Notes
shall, on the applicable Redemption Date, become due and payable at the
Corporate Trust Department of the Indenture Trustee or at any office or agency
maintained for such purposes pursuant to Section 2.03, and from and after such
Redemption Date (unless there shall be a default in the deposit of the
Redemption Price pursuant to Section 6.04) any Equipment Notes then outstanding
shall cease to bear interest or be deemed to be outstanding for any other
purpose. Upon surrender of any such Equipment Note for redemption or purchase
in accordance with said notice such Equipment Note shall be paid at the
Redemption Price.
If any Equipment Note called for redemption or purchase shall
not be so paid upon surrender thereof for redemption or purchase, the principal
amount thereof shall, until paid, continue to bear interest from the applicable
Redemption Date at the interest rate applicable to such Equipment Note.
Section 6.06. No Prepayment or Redemption. Except as
expressly provided in this Article 6 or as expressly provided in any supplement
to this Agreement, the Equipment Notes may not be redeemed or prepaid, in whole
or in part, prior to the respective maturities thereof.
ARTICLE 7
MATTERS CONCERNING THE LESSEE
Section 7.01. Repayment of Monies for Equipment Note Payments
Held by the Indenture Trustee. Any money held by the Indenture Trustee or any
Paying Agent in trust for any payment of the principal of, Break Amount, if
any, Make-Whole Amount, if any, or interest on any Equipment Note, including
without limitation any money deposited pursuant to Section 6.03 or Article 10
and remaining unclaimed for two years after the due date for such payment,
shall be paid to the Owner Trustee. The Noteholders of any
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[Trust Indenture and Security Agreement (1994 737 B)]
outstanding Equipment Notes shall thereafter, as unsecured general creditors,
look only to the Lessee on behalf of the Owner Trustee for payment thereof, and
all liability of the Indenture Trustee or any such Paying Agent with respect to
such trust money shall thereupon cease; provided that the Indenture Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Lessee cause to be mailed to each such Noteholder notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of mailing, any unclaimed balance
of such money then remaining will be repaid to the Owner Trustee as provided
herein.
Section 7.02. Change in Registration. So long as no Default
under Section 14(a), (b), (f) or (g) of the Lease or any Indenture Event of
Default shall have occurred and be continuing and the Lien of this Indenture
shall not have been discharged, the Indenture Trustee shall, upon the request
of the Lessee and compliance with the applicable provisions of the next two
paragraphs, consent to the deregistration of the Aircraft under the laws of the
jurisdiction in which it is at the time registered and the registration of the
Aircraft under the laws of (i) any country listed on Exhibit F to the Lease
with which the United States then maintains normal diplomatic relations or, if
Taiwan, the United States then maintains diplomatic relations at least as good
as those in effect on the Closing Date (a "Scheduled Country"), or (ii) any
other country, in each case subject to the provisions hereof.
Prior to any such re-registration under the laws of a
Scheduled Country, the Indenture Trustee shall have received a favorable
opinion of counsel addressed to it to the effect that (i) the laws of the new
country of registration will recognize the Owner Trustee's right of ownership
with respect to the Aircraft and will give effect to the priority of the Lien
and security interest created by this Indenture, (ii) this Indenture and the
Indenture Trustee's Lien and right to repossession thereunder is valid and
enforceable under the laws of such country and (iii) the terms (including,
without limitation, the governing-law, service-of-process and
jurisdictional-submission provisions thereof) of the Indenture are legal,
valid, binding and enforceable in such jurisdiction.
Prior to any such re-registration under the laws of any
country other than the U.S. or a Scheduled Country, the Indenture Trustee shall
have received (x) a favorable opinion of counsel in the new jurisdiction of
registry covering the matters set forth in the preceding paragraph and to the
effect that (A) it is not necessary for the Indenture Trustee to register or
qualify to do business in such jurisdiction, (B) that there is no tort
liability of the lender of an aircraft not in possession thereof under the laws
of such jurisdiction other than tort liability which might have been imposed on
such lender under the laws of the United States or any state thereof (it being
understood that, such opinion shall be waived if insurance reasonably
satisfactory to Indenture Trustee is provided, at Lessee's expense, to cover
such risk), and (C) (unless Lessee shall have agreed to provide insurance
covering the risk of
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[Trust Indenture and Security Agreement (1994 737 B)]
requisition of use or title of the Aircraft by the government of such
jurisdiction so long as the Aircraft is registered under the laws of such
jurisdiction) that the laws of such jurisdiction require fair compensation by
the government of such jurisdiction payable in currency freely convertible into
Dollars for the loss of use or title of the Aircraft in the event of the
requisition by such government of such use or title and (y) assurances (A) to
the effect that the insurance or self-insurance provisions of the Indenture
have been complied with after giving effect to such change of registry, (B) to
the effect that the original indemnities (and any additional indemnities for
which the Lessee is then willing to enter into a binding agreement to
indemnify) in favor of the Indenture Trustee under the Indenture, afford each
such party substantially the same protection as provided prior to such change
of registry.
Section 7.03. Assumption of Obligations of Owner Trustee by
the Lessee. In the event that the Lessee shall have elected to assume all of
the rights and obligations of the Owner Trustee under this Agreement and the
Equipment Notes in connection with the purchase by the Lessee of the Aircraft
pursuant to Section 8(r) of the Participation Agreement and, if on or prior to
the Purchase Option Date:
(a) the Lessee shall have paid to the Owner Trustee all
amounts required to be paid to the Owner Trustee pursuant to Section
19(b) of the Lease in connection with such purchase and assumption and
shall have delivered to the Indenture Trustee an Officer's Certificate
to such effect;
(b) the Indenture Trustee shall have received an opinion or
opinions of counsel for the Lessee (which may be Lessee's General
Counsel), dated the Purchase Option Date, which (subject to customary
qualifications) shall be to the effect that, after giving effect to
the indenture supplement referred to below:
(i) this Agreement, as supplemented by the indenture
supplement described in clause (c) below, constitutes the
legal, valid and binding obligation of the Lessee, enforceable
against the Lessee in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of
equity, and except as limited by applicable laws which may
affect the remedies provided for in this Agreement, which
laws, however, do not in the opinion of such counsel make the
remedies provided for in this Agreement inadequate for the
practical realization of the rights and benefits provided for
in this Agreement;
(ii) the Aircraft is duly registered in compliance with
applicable law;
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[Trust Indenture and Security Agreement (1994 737 B)]
(iii) the indenture supplement described in clause (c)
below has been duly filed with the FAA and is in due form for
recording with the FAA, the Lien on the Aircraft constitutes a
fully perfected Lien and all other filing, recording or other
action (specifying the same) necessary to perfect and protect
the Lien of this Agreement has been accomplished;
(iv) the Indenture Trustee would be entitled to the
benefits of Section 1110 of the Bankruptcy Code with respect
to the Aircraft; provided that such opinion may contain
qualifications of the tenor contained in the opinion of
special counsel for the Lessee delivered pursuant to Section
3(a)(vii) in the Note Purchase Agreement;
(v) no Noteholder will be required to recognize
income, gain or loss for tax purposes in connection with such
assumption;
(c) the Lessee shall have executed and delivered an
indenture supplement hereto, dated the Purchase Option Date, whereby,
among other things:
(i) the Lessee shall assume all of the obligations of
the Owner Trustee with respect to the Equipment Notes as full
recourse obligations of the Lessee;
(ii) the Lessee shall reaffirm that it has acquired
the Aircraft and the Indenture Estate subject to the liens and
security interests granted pursuant to the Indenture with
respect to the Indenture Estate;
(iii) the Lessee shall warrant and covenant to defend
its title to the Indenture Estate and the validity, perfection
and priority of the Lien granted pursuant to this Agreement,
as supplemented by the indenture supplement executed and
delivered by the Lessee;
(iv) the Lessee shall covenant to: (A) (1) register,
maintain, use and operate, reregister, possess and place
appropriate insignia on the Aircraft only as would be
permitted pursuant to Section 7 of the Lease, (2) maintain
insurance coverage as and to the extent as would be required
by Section 11 of the Lease, (3) apply insurance and
requisition proceeds in the manner as would be required by
Section 10 of the Lease, and (4) make any replacements,
pooling arrangements, alterations, modifications, and
additions as would be permitted by Section 8 of the Lease, in
each case, with such changes as may be appropriate to reflect
the ownership of the Aircraft by the Lessee and the
termination of the Lease, (b) not directly or indirectly
create, incur, assume,
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[Trust Indenture and Security Agreement (1994 737 B)]
permit or suffer to exist any Liens with respect to the
Indenture Estate other than Permitted Liens, and (C) pay all
taxes, fees and charges in connection with its purchase of the
Aircraft, termination of the Lease and assumption of the
Equipment Notes, including, without limitation, in connection
with the maintenance and perfection of the Indenture Trustee's
security interest in the Aircraft and the Indenture Estate;
(v) additional Indenture Events of Default will be
added substantially equivalent to, and consistent with, the
Lease Events of Default contained in Section 14 of the Lease;
and
(vi) such terms, covenants, conditions and provisions
of this Agreement shall be deleted as reasonably requested by
the Indenture Trustee and such terms, covenants, conditions
and provisions of the Lessee shall be added substantially
equivalent to, and consistent with, the obligations of the
Lessee under the Operative Documents;
(d) after giving effect to the indenture supplement
described in clause (c) above, no Indenture Event of Default or
Indenture Default under Section 8.01(a), (f) or (g) shall have
occurred and be continuing immediately subsequent to such purchase and
assumption and the Indenture Trustee shall have received an officer's
certificate from the Lessee, dated the Purchase Option Date, to such
effect;
(e) the purchase and assumption shall comply in all material
respects with all applicable laws, including, without limitation,
securities laws;
(f) after giving effect to such purchase and assumption, no
Lien other than Permitted Liens shall exist upon the Indenture Estate
and the Indenture Trustee shall have received evidence of the
insurances required to be maintained by the Lessee as set forth in the
indenture supplement described in clause (c) above; and
(g) the Indenture Trustee shall have received evidence of
all filings, recordings and other actions referred to in the opinions
of counsel described above.
then, automatically and without the requirement of further action by
any Person, effective as of the Purchase Option Date, the Owner
Trustee shall be released from all of its obligations under the
Agreement in respect of the Equipment Notes or otherwise (other than
any obligations or liabilities of the Owner Trustee in its individual
capacity incurred on or prior to the Purchase Option Date or arising
out of or based upon events occurring on or prior to the Purchase
Option Date, which obligations and liabilities shall remain the sole
responsibility of the Owner Trustee).
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[Trust Indenture and Security Agreement (1994 737 B)]
If, concurrent with an assumption pursuant to this Section
7.03, the Aircraft is being reregistered the Lessee must comply with the
provisions of Section 7.02 hereof.
ARTICLE 8
DEFAULTS AND REMEDIES
Section 8.01. Indenture Events of Default. Subject to
Section 2.11(b), the following events shall constitute "Indenture Events of
Default" under this Agreement (whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(a) Owner Trustee shall fail to pay (i) any amount of
principal, Break Amount, if any, Make-Whole Amount, if any, or
interest on any Equipment Note when due and payable by the Owner
Trustee under such Equipment Note (whether upon redemption or
purchase, final maturity, acceleration or otherwise) and such failure
shall continue unremedied for 10 days after such amount shall have
become due and payable by the Owner Trustee under such Equipment Note
or (ii) any other amount payable by Owner Trustee hereunder or under
the Participation Agreement to any Noteholder or any Indenture
Indemnitee when due and payable and such failure shall continue
unremedied for 15 days after receipt by Owner Trustee of written
notice from the Indenture Trustee; provided that, in each case, if
such failure to pay results from a Lease Default or Lease Event of
Default, then such failure to pay shall for all purposes of this
Indenture be an Event of Default under Section 8.01(e) and not this
Section 8.01(a); or
(b) any Lien or encumbrance required to be discharged by the
Owner Trustee, in its individual capacity or by the Owner Participant
pursuant to Section 8(g) of the Participation Agreement shall remain
undischarged for a period of 30 calendar days after notice thereof has
been given by the Indenture Trustee to the Owner Trustee and the Owner
Participant; or
(c) other than as provided in paragraphs (a) or (b) above,
any failure by the Owner Trustee, in its individual capacity or as
Owner Trustee, to observe or perform any other covenant or obligation
of the Owner Trustee for the benefit of the Noteholders or any
Indenture Indemnitee contained in this Agreement, any Equipment
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[Trust Indenture and Security Agreement (1994 737 B)]
Note, or the Participation Agreement or any failure by the Owner
Participant to observe or perform any other covenant or obligation of
the Owner Participant for the benefit of the Noteholders or any
Indenture Indemnitee contained in the Participation Agreement which
failure is not remedied within a period of 30 days after there has
been given to the Owner Trustee and the Owner Participant by
registered or certified mail, a written notice specifying such failure
and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder, by the Indenture Trustee or, subject to
Section 2.6 of the Intercreditor Agreement, by the Noteholders of at
least 25% in principal amount of outstanding Equipment Notes;
provided, however, that, if the Owner Trustee, in its individual
capacity or as Owner Trustee, or the Owner Participant shall have
undertaken to cure any such failure and, notwithstanding the
reasonable diligence of any of them in attempting to cure such
failure, such failure is not cured within said 30 day period but is
curable with future due diligence, there shall exist no Indenture
Event of Default as a consequence of such failure so long as the Owner
Trustee in its individual capacity or as Owner Trustee or the Owner
Participant is proceeding with due diligence to cure such failure,
there exists no adverse effect on the Lien of this Agreement and such
failure is in fact cured within a further period of 90 days; or
(d) any representation or warranty made by the Owner
Trustee, in its individual capacity or as Owner Trustee, or by the
Owner Participant under the Participation Agreement, or by the Owner
Trustee hereunder, or by the Owner Trustee, in its individual capacity
or as Owner Trustee, or by the Owner Participant in any document or
Equipment Note furnished to the Indenture Trustee in connection
herewith or therewith or pursuant hereto or hereto, shall prove at any
time to have been incorrect in any material respect as of the date
made and such incorrectness shall remain material at the date of the
notice referred to below and such incorrectness shall continue
unremedied for a period of 30 days after there has been given to the
Owner Trustee and the Owner Participant by registered or certified
mail, a written notice specifying such incorrectness and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder, by the Indenture Trustee or, subject to Section 2.6 of the
Intercreditor Agreement, by the Noteholders of at least 25% in
principal amount of outstanding Equipment Notes; or
(e) there shall be a Lease Event of Default other than any
such Lease Event of Default arising by reason of nonpayment of any
Excluded Payments when due; or
(f) either the Trust Estate or the Owner Trustee with
respect thereto (and not in its individual capacity) or the Owner
Participant or the Owner Participant
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[Trust Indenture and Security Agreement (1994 737 B)]
Guarantor, if any, as the case may be, shall (i) file, or consent by
answer or otherwise to the filing against it of a petition for relief
or reorganization or arrangement or any other petition in bankruptcy,
for liquidation or to take advantage of any bankruptcy or insolvency
law of any jurisdiction, (ii) make an assignment for the benefit of
its creditors, or (iii) consent to the appointment of a custodian,
receiver, trustee or other officer with similar powers of itself or
any substantial part of its property; provided that an event referred
to in this Section 8.01(f) with respect to the Owner Participant shall
not constitute an Indenture Event of Default if, within 30 days, an
order, judgment or decree shall be entered in a proceeding by a court
or a trustee, custodian, receiver or liquidator which is either final
and non-appealable or has not been stayed pending any appeal, to the
effect that no part of the Trust Estate created by the Trust Agreement
(except for the Owner Participant's beneficial interest in such Trust
Estate) and no right, title or interest under the Indenture Estate
shall be included in, or be subject to, any declaration or
adjudication of, or proceedings with respect to the bankruptcy,
insolvency or liquidation of the Owner Participant referred to in this
Section 8.01(f); or
(g) a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent by the
Indenture Estate or the Owner Trustee with respect thereto (and not in
its individual capacity) or the Owner Participant or the Owner
Participant Guarantor, if any, as the case may be, a custodian,
receiver, trustee or other officer with similar powers with respect to
it or with respect to any substantial part of its property, or
constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation
of the Indenture Estate or the Owner Trustee with respect thereto (and
not in its individual capacity) or the Owner Participant or the Owner
Participant Guarantor, if any, as the case may be, and any such order
or petition is not dismissed or stayed within 90 days after the
earlier of the entering of any such order or the approval of any such
petition; provided that an event referred to in this Section 8.01(g)
with respect to the Owner Participant shall not constitute an
Indenture Event of Default if, within 30 days, an order, judgment or
decree shall be entered in a proceeding by a court or a trustee,
custodian, receiver or liquidator which is either final and
non-appealable or has not been stayed pending an appeal, to the effect
that no part of the Trust Estate created by the Trust Agreement
(except for the Owner Participant's beneficial interest in such Trust
Estate) and no right, title or interest under the Indenture Estate
shall be included in, or be subject to, any declaration or
adjudication of, or proceedings with respect to, the bankruptcy,
insolvency or liquidation of the Owner Participant referred to in this
Section 8.01(g).
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[Trust Indenture and Security Agreement (1994 737 B)]
Section 8.02. Acceleration; Rescission and Annulment. If an
Indenture Event of Default under Section 8.01(f) or 8.01(g) or a Lease Event of
Default under Section 14(f) or 14(g) of the Lease shall have occurred and is
continuing, then the principal of the Equipment Notes, together with accrued
but unpaid interest thereon, and all other amounts due thereunder and hereunder
shall immediately become due and payable without presentment, demand, protest
or notice, all of which are hereby waived, and if any other Indenture Event of
Default occurs and is continuing, either the Indenture Trustee, by notice to
the Lessee and the Owner Trustee or, subject to Section 2.6 of the
Intercreditor Agreement, Noteholders of at least 25% in principal amount of
outstanding Equipment Notes, by notice to the Lessee, the Indenture Trustee,
the Owner Trustee and the Owner Participant, may declare the principal of all
the Equipment Notes to be immediately due and payable. Upon such declaration,
the principal of all Equipment Notes together with accrued interest thereon
from the date in respect of which interest was last paid hereunder to the date
payment of such principal has been made or duly provided for, and Break Amount,
if any, but without Make-Whole Amount, shall be immediately due and payable
without presentment, demand, protest or other notice, all of which are hereby
waived. At any time after such declaration and prior to the sale or
disposition of the Indenture Estate, a Majority-in-Interest of Noteholders, by
notice to the Indenture Trustee, the Lessee, the Owner Trustee and the Owner
Participant, may rescind such a declaration and thereby annul its consequences
if (i) an amount sufficient to pay all principal on any Equipment Notes which
have become due otherwise than by such declaration and any interest thereon and
interest due or past due, if any, and all sums due and payable to the Indenture
Trustee have been deposited with the Indenture Trustee, (ii) the rescission
would not conflict with any judgment or decree and (iii) all existing Indenture
Defaults and Indenture Events of Default under this Agreement have been cured
or waived except nonpayment of principal of, or interest on, the Equipment
Notes that has become due solely because of such acceleration. No such
rescission shall affect any subsequent default or impair any right consequent
thereon.
Section 8.03. Other Remedies Available to Indenture Trustee.
(a) After an Indenture Event of Default shall have occurred and so long as
such Indenture Event of Default shall be continuing, then and in every such
case the Indenture Trustee, as trustee of an express trust and as assignee
hereunder of the Lease or as holder of a security interest in the Aircraft or
Engines or otherwise, may, and when required pursuant to the provisions of
Article 9 shall, exercise, subject to Sections 8.03(b), 8.03(e), 8.03(f) and
8.03(h), any or all of the rights and powers and pursue any and all of the
remedies accorded to the Owner Trustee pursuant to Section 15 of the Lease and
this Article 8, may recover judgment in its own name as Indenture Trustee
against the Indenture Estate and may take possession of all or any part of the
Indenture Estate and may exclude the Owner Trustee and the Owner Participant
and all Persons claiming under any of them wholly or partly therefrom.
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[Trust Indenture and Security Agreement (1994 737 B)]
(b) After an Indenture Event of Default shall have occurred
and so long as such Indenture Event of Default shall be continuing, subject to
Sections 8.03(e), 8.03(f) and 8.03(h), the Indenture Trustee may, if at the
time such action may be lawful and always subject to compliance with any
mandatory legal requirements, either with or without taking possession, and
either before or after taking possession and without instituting any legal
proceedings whatsoever, and having first given notice of such sale, assignment,
transfer and/or delivery by registered mail to the Owner Trustee, the Owner
Participant and the Lessee at least 30 days prior to the date of such sale, and
any other notice which may be required by law, sell, assign, transfer, deliver
and dispose of the Indenture Estate, or any part thereof, or interest therein,
at public auction or private sale, in one lot as an entirety or in separate
lots, and either for cash or on credit and on such terms as the Indenture
Trustee may determine, and at any place (whether or not it be the location of
the Indenture Estate or any part thereof) and time designated in the notice
above referred to; provided, however, that, notwithstanding any provision
herein to the contrary, the Indenture Trustee may not provide the notice
provided for above of its intention to sell, assign, transfer or deliver any of
the Indenture Estate, exercise remedies under the Lease or exercise other
remedies against the Indenture Estate seeking to deprive the Owner Trustee or
the Owner Participant of its rights therein unless a declaration of
acceleration has been made pursuant to Section 8.02 or the Equipment Notes have
otherwise theretofore become due and payable through redemption or otherwise.
Any such sale or sales may be adjourned from time to time by announcement at
the time and place appointed for such sale or sales, or for any such adjourned
sale or sales, without further notice, and the Indenture Trustee and the
Noteholder or Noteholders of any Equipment Notes, or any interest therein, may
bid and become the purchaser at any such sale and each Noteholder shall be
entitled at any sale to credit against any purchase price bid at such sale by
such Noteholder all or any part of the unpaid Secured Obligations owing to such
Noteholder secured by the Lien of this Indenture. No such sale may be
consummated if the Owner Trustee or the Owner Participant shall, prior to the
consummation thereof, have given notice pursuant to and made the deposit
required by, and in accordance with, Section 8.03(e)(ii). The Indenture
Trustee may exercise such right without possession or production of the
Equipment Notes or proof of ownership thereof, and as representative of the
Noteholders may exercise such right without notice to the Noteholders or
including the Noteholders as parties to any suit or proceeding relating to
foreclosure of any property in the Indenture Estate. The Owner Trustee hereby
irrevocably constitutes the Indenture Trustee the true and lawful
attorney-in-fact of the Owner Trustee (in the name of the Owner Trustee or
otherwise) for the purpose of effectuating any sale, assignment, transfer or
delivery for enforcement of the lien created under this Agreement, whether
pursuant to foreclosure or power of sale or otherwise, to execute and deliver
all such bills of sale, assignments and other instruments as the Indenture
Trustee may consider necessary or appropriate, with full power of substitution,
the Owner Trustee hereby ratifying and confirming all that such attorney or any
substitute shall lawfully do by virtue hereof. Nevertheless, if so requested
by
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[Trust Indenture and Security Agreement (1994 737 B)]
the Indenture Trustee or any purchaser, the Owner Trustee shall ratify and
confirm any such sale, assignment, transfer or delivery, by executing and
delivering to the Indenture Trustee or such purchaser all bills of sale,
assignments, releases and other proper instruments to effect such ratification
and confirmation as may be designated in any such request.
(c) Subject to Sections 8.03(b), 8.03(e), 8.03(f) and
8.03(h) if an Indenture Event of Default has occurred and is continuing, the
Owner Trustee shall, at the request of the Indenture Trustee, promptly execute
and deliver to the Indenture Trustee such instruments of title or other
documents as the Indenture Trustee may deem necessary or advisable to enable
the Indenture Trustee or an agent or representative designated by the Indenture
Trustee, at such time or times and place or places as the Indenture Trustee may
specify, to obtain possession of all or any part of the Indenture Estate. If
the Owner Trustee shall for any reason fail to execute and deliver such
instruments and documents after such request by the Indenture Trustee, the
Indenture Trustee shall be entitled, in a proceeding to which the Owner Trustee
will be a necessary party, to a judgment for specific performance of the
covenants contained in the foregoing sentence, conferring upon the Indenture
Trustee the right to immediate possession and requiring the Owner Trustee to
execute and deliver such instruments and documents to the Indenture Trustee.
The Indenture Trustee shall also be entitled to pursue all or any part of the
Indenture Estate wherever it may be found and may enter any of the premises of
the Owner Trustee or any other Person wherever the Indenture Estate may be or
be supposed to be and search for the Indenture Estate and take possession of
any item of the Indenture Estate pursuant to this Section 8.03(c). The
Indenture Trustee may, from time to time, at the expense of the Indenture
Estate, make all such expenditures for maintenance, insurance, repairs,
replacements, alterations, additions and improvements to and of the Indenture
Estate, as it may deem proper. In each such case, the Indenture Trustee shall
have the right to maintain, use, insure, operate, store, lease, control or
manage the Indenture Estate, and to carry on business and exercise all rights
and powers of the Owner Trustee relating to the Indenture Estate as the
Indenture Trustee shall deem appropriate, including the right to enter into any
and all such agreements with respect to the maintenance, use, insurance,
operation, storage, leasing, control or management of the Indenture Estate or
any part thereof; and the Indenture Trustee shall be entitled to collect and
receive directly all tolls, rents (including Rent), issues, profits, products,
revenues and other income of the Indenture Estate and every part thereof,
without prejudice, however, to the right of the Indenture Trustee under any
provision of this Agreement to collect and receive all cash held by, or
required to be deposited with, the Indenture Trustee hereunder. In accordance
with the terms of this Section 8.03(c), such tolls, rents (including Rent),
issues, profits, products, revenues and other income shall be applied to pay
the expenses of using, operating, storing, leasing, controlling or managing the
Indenture Estate, and of all maintenance, insurance, repairs, replacements,
alterations, additions and improvements, and to make all payments which the
Indenture Trustee may be required or may elect to make, if
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[Trust Indenture and Security Agreement (1994 737 B)]
any, for taxes, assessments, insurance or other proper charges upon the
Indenture Estate or any part thereof (including the employment of engineers and
accountants to examine, inspect and make reports upon the properties and books
and records of the Owner Trustee and, to the extent permitted by the Lease, the
Lessee), and all other payments which the Indenture Trustee may be required or
authorized to make under any provision of this Agreement, including this
Section 8.03(c), as well as just and reasonable compensation for the services
of the Indenture Trustee, and of all persons properly engaged and employed by
the Indenture Trustee.
If an Indenture Event of Default occurs and is continuing and
the Indenture Trustee shall have obtained possession of or title to the
Aircraft, the Indenture Trustee shall not be obligated to use or operate the
Aircraft or cause the Aircraft to be used or operated directly or indirectly by
itself or through agents or other representatives or to lease, license or
otherwise permit or provide for the use or operation of the Aircraft by any
other Person unless (i) the Indenture Trustee shall have been able to obtain
insurance in kinds, at rates and in amounts satisfactory to it in its
discretion to protect the Indenture Estate and the Indenture Trustee, as
trustee and individually, against any and all liability for loss or damage to
the Aircraft and for public liability and property damage resulting from use or
operation of the Aircraft and (ii) funds are available in the Indenture Estate
to pay for all such insurance or, in lieu of such insurance, the Indenture
Trustee is furnished with indemnification from the Noteholders or any other
Person upon terms and in amounts satisfactory to the Indenture Trustee in its
discretion to protect the Indenture Estate and the Indenture Trustee, as
trustee and individually, against any and all such liabilities.
(d) Subject to Sections 8.03(b), 8.03(e), 8.03(f) and
8.03(h), the Indenture Trustee may proceed to protect and enforce this
Agreement and the Equipment Notes by suit or suits or proceedings in equity, at
law or in bankruptcy, and whether for the specific performance of any covenant
or agreement herein contained or in execution or aid of any power herein
granted; or for foreclosure hereunder, or for the appointment of a receiver or
receivers for the Indenture Estate or any part thereof, or for the recovery of
judgment for the indebtedness secured by the Lien created under this Agreement
or for the enforcement of any other proper, legal or equitable remedy available
under applicable law.
(e) (i) If the Lessee shall fail to make any payment
of Basic Rent under the Lease when the same shall become due, and if
such failure of the Lessee to make such payment of Basic Rent shall
not constitute the seventh consecutive failure to pay Basic Rent prior
to the expiration of the grace period provided for in Section 14(a) of
the Lease or the thirteenth or subsequent cumulative such failure,
then as long as no Indenture Event of Default (other than arising from
a Lease Event of Default not involving any failure to make any
payments to which the Indenture
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[Trust Indenture and Security Agreement (1994 737 B)]
Trustee or any Noteholder is entitled hereunder when due) shall have
occurred and be continuing, the Owner Participant or the Owner Trustee
may (but need not) pay to the Indenture Trustee, at any time prior to
the day which is the later of (x) the 11th day subsequent to notice of
such failure by the Indenture Trustee to the Owner Trustee or the
Owner Participant and (y) the sixth day subsequent to the expiration
of the grace period provided for in Section 14(a) of the Lease with
respect to the payment of Basic Rent (and the Indenture Trustee shall
not (without the prior written consent of the Owner Trustee) declare
the Lease in default pursuant to Section 15 thereof or exercise any of
the rights, powers or remedies pursuant to such Section 15 or this
Article 8 prior to the occurrence of such later date), an amount equal
to the full amount of such payment of Basic Rent, together with any
interest due thereon on account of the delayed payment thereof to the
date of such payment, and such payment by the Owner Participant or the
Owner Trustee shall be deemed to cure as of the date of such payment
any Indenture Event of Default which arose from such failure of the
Lessee (including any Lease Event of Default arising from the Lessee's
failure to pay interest in respect of such overdue Basic Rent for the
period commencing on the date of such payment), but such cure shall
not relieve the Lessee of any of its obligations. If the Lessee shall
fail to perform or observe any covenant, condition or agreement to be
performed or observed by it under the Lease (other than the obligation
to pay Basic Rent), and if (but only if) the performance or observance
thereof can be effected by the payment of money alone (it being
understood that actions such as the obtaining of insurance and the
procurement of maintenance services can be so effected), then as long
as no other Indenture Event of Default (other than those arising from
such Lease Event of Default) shall have occurred and be continuing,
the Owner Participant or the Owner Trustee may (but need not) pay to
the Indenture Trustee (or to such other Person as may be entitled to
receive the same), at any time prior to the day which is the later of
(x) the 11th day subsequent to notice of such failure by the Indenture
Trustee to the Owner Trustee or the Owner Participant and (y) the
sixth day subsequent to the expiration of the grace period, if any,
provided with respect to such failure on the part of the Lessee in
Section 14 of the Lease (and the Indenture Trustee shall not (without
the prior written consent of the Owner Trustee) declare the Lease in
default pursuant to Section 15 thereof or exercise any of the rights,
powers or remedies pursuant to Section 15 of the Lease or this Article
8 prior to the occurrence of such later date), all sums necessary to
effect the performance or observance of such covenant or agreement of
the Lessee, together with any interest due thereon on account of the
delayed payment thereof to the date of such payments and such payment
by the Owner Participant or the Owner Trustee shall be deemed to cure
as of the date of such payment any Indenture Event of Default which
arose from such failure of the Lessee (including any Lease Event of
Default arising from the Lessee's failure to pay interest in respect
of such overdue payment for the period commencing
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[Trust Indenture and Security Agreement (1994 737 B)]
on the date of such payment), but such cure shall not relieve the
Lessee of any of its obligations. Upon any payment of Basic Rent by
the Owner Participant or the Owner Trustee in accordance with the
first sentence of this Section 8.03(e)(i), or upon any payment of any
other sums by the Owner Participant or the Owner Trustee in accordance
with the second sentence of this Section 8.03(e)(i), the Owner
Participant or the Owner Trustee shall, to the extent of their
respective payments, be subrogated, in the case of any such payment in
accordance with such first sentence, to the rights of the Indenture
Trustee, as assignee hereunder of the Owner Trustee, or, in the case
of any such payment in accordance with such second sentence, to the
rights of the Indenture Trustee (but shall have no rights as secured
party hereunder) or such other Person as the case may be, which
actually received such payment, to receive such payment of Basic Rent
or such other payment, as the case may be (and any interest due
thereon on account of the delayed payment thereof), and shall be
entitled to receive such payment upon its receipt by the Indenture
Trustee or such other Person, as aforesaid (but in each case only if
all amounts of principal of, and interest at the time due and payable
on, the Equipment Notes together with interest due thereon on account
of the delayed payment thereof shall have been paid in full; provided
that neither the Owner Participant nor the Owner Trustee shall attempt
to recover any such amount paid by it on behalf of the Lessee pursuant
to this Section 8.03(e)(i) except by demanding of the Lessee payment
of such amount or by proceeding by appropriate court action against
the Lessee to enforce the payment of such amount pursuant to Section
15(f), but only said Section 15(f), of the Lease.
(ii) In the event that (A) at any time one or more
Lease Events of Default shall have occurred and be continuing for a
period of 120 days or more and no Indenture Event of Default (other
than arising out of such Lease Event(s) of Default) shall have
occurred and is continuing, or (B) the Equipment Notes shall have been
become due and payable pursuant to Section 8.02 or (C) Owner
Participant has received notice from the Indenture Trustee that the
Indenture Trustee intends to foreclose the Lien of this Indenture or
after the Indenture Trustee has elected to exercise any other remedy
specified in Sections 8.02 or 8.03 hereof or Section 15 of the Lease
(and the Indenture Trustee hereby agrees that, without limiting the
other provisions of this Indenture, it may not exercise any such other
remedy prior to 10 days after it has given notice to the Owner
Participant of its intention to exercise such other remedy), the Owner
Trustee or the Owner Participant may, at its option, give at least 26
days' prior irrevocable notice to the Indenture Trustee that the Owner
Trustee or the Owner Participant will redeem or purchase all Equipment
Notes then outstanding on the date specified in such notice and,
concurrently with such notice, the Owner Trustee or the Owner
Participant will deposit with the Indenture Trustee an amount
sufficient to redeem or purchase at the applicable Redemption Price
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[Trust Indenture and Security Agreement (1994 737 B)]
determined consistently with the applicable provisions of Article 6
all Equipment Notes then outstanding (including an estimate of the
Break Amount to be paid on the Redemption Date determined as if the
Redemption Date were the date of such notice (unless the payment date
specified in such notice is a Payment Date, in which case the Break
Amount shall be zero)) and to pay the Indenture Trustee all amounts
then due it hereunder, which funds shall be held by the Indenture
Trustee as provided in Section 9.04. Upon the giving of such notice
and the receipt by the Indenture Trustee of such deposit, the
Indenture Trustee shall (y) deem all instructions received from the
Owner Trustee as having been given by the Noteholders of 100% of the
outstanding principal amount of Equipment Notes for all purposes of
this Indenture and (z) shall not declare the Lease in default pursuant
to Section 15 thereof or exercise any of the rights, powers or
remedies pursuant to such Section 15 or this Article 8 prior to the
occurrence of the applicable Redemption Date. If such notice is
given, the Owner Trustee further agrees that it will deposit or cause
to be deposited with the Indenture Trustee, on or prior to the
Business Day preceding the applicable Redemption Date, whether or not
an Indenture Event of Default is then continuing, funds sufficient,
when added to the funds already held by the Indenture Trustee for such
purpose, to redeem or purchase at the applicable Redemption Price
(including the Break Amount actually payable in respect thereof) on
such Redemption Date all Equipment Notes then outstanding and to pay
the Indenture Trustee all amounts then due it hereunder. No
Make-Whole Amount shall be payable by the Owner Trustee or the Owner
Participant in connection with a redemption or purchase of the
Equipment Notes under this Section 8.03(e)(ii).
(iii) Anything in this Agreement to the contrary
notwithstanding, the Indenture Trustee shall not be entitled to exercise any
remedy hereunder as a result of an Indenture Event of Default which arises
solely by reason of one or more events or circumstances which constitute a
Lease Event of Default unless the Indenture Trustee as security assignee of the
Owner Trustee shall have exercised or concurrently be exercising one or more of
the dispossessory remedies provided for in Section 15(a)-(f) of the Lease with
respect to the Aircraft; provided, however, that such requirement to exercise
one or more of such remedies under the Lease shall not apply in circumstances
where the Indenture Trustee is, and has been, for a continuous period in excess
of 60 days or such other period as may be specified in section 1110(a)(l)(A) of
the Bankruptcy Code (such 60-day or other period being the "Section 1110
Period"), involuntarily stayed or prohibited by applicable law or court order
from exercising such remedies under the Lease (a "Continuous Stay Period");
provided further, however, that the requirement to exercise one or more of such
remedies under the Lease shall nonetheless be applicable during a Continuous
Stay Period subsequent to the expiration of the Section 1110 Period to the
extent that the continuation of such Continuous Stay Period subsequent to the
expiration of the Section 1110 Period (A) results from an
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[Trust Indenture and Security Agreement (1994 737 B)]
agreement by the trustee or the debtor-in possession in such proceeding during
the Section 1110 Period with the approval of the relevant court to perform the
Lease in accordance with Section 1110(a)(1)(A) of the Bankruptcy Code and
continues to perform as required by Section 1110(a)(1)(A-B) of the Bankruptcy
Code or (B) is an extension of the Section 1110 Period with the consent of the
Indenture Trustee pursuant to Section 1110(b) of the Bankruptcy Code or (C)
results from the Lessee's assumption during the Section 1110 period with the
approval of the relevant court of the Lease pursuant to Section 365 of the
Bankruptcy Code or (D) is the consequence of the Indenture Trustee's own
failure to give any requisite notice to any person (unless the Indenture
Trustee is stayed or otherwise precluded by applicable law from giving such
notice) or (E) is pursuant to a judicial stay pending the resolution of
litigation with respect to the applicability of Section 1110 of the Bankruptcy
Code and there is either no Lease Event of Default other than one arising
solely from the Lessee's bankruptcy or any such other Lease Event of Default
has been cured; provided further, however, that the requirement to exercise one
or more of such remedies under the Lease during a Continuous Stay Period
subsequent to the expiration of the Section 1110 period based upon a judicial
stay as provided for in this clause (E) shall in any event cease to be
applicable subsequent to the 120th day of such Continuous Stay Period.
References in this subsection (iii) to particular sections of the Bankruptcy
Code as in effect on the date of the amendment and restatement of this
Indenture shall include any substantially similar successor provisions.
(f) Notwithstanding any provision of this Agreement to the
contrary, including, without limitation, Sections 8.03(b), 8.03(c) and 8.03(d),
as long as no Lease Event of Default shall have occurred and be continuing,
neither the Indenture Trustee nor the Owner Trustee shall take any action in
violation of the Lessee's rights under the Lease, including, without
limitation, (x) the right to receive all monies due and payable to it in
accordance with the provisions of the Lease and (y) the Lessee's rights to
possession and use of, and of quiet enjoyment of, the Aircraft.
(g) Each and every right, power and remedy herein given to
the Indenture Trustee specifically or otherwise in this Agreement shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time and as often in
such order as may be deemed expedient by the Indenture Trustee, and the
exercise or the beginning of the exercise of any power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy. No delay or omission by the
Indenture Trustee in the exercise of any right, remedy or power or in pursuing
any remedy shall impair any such right, power or remedy or be construed to be a
waiver of any default on the part of the Owner Trustee or the Lessee or to be
an acquiescence therein.
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[Trust Indenture and Security Agreement (1994 737 B)]
(h) Notwithstanding anything contained herein to the
contrary, so long as the Subordination Agent (acting on behalf of the Pass
Through Trustees) or any Pass Through Trustee is a Noteholder, the Indenture
Trustee is not authorized or empowered to acquire title to the Indenture
Estate, or to take any action with respect to any of the Indenture Estate so
acquired by it, if such acquisition or action would cause any Pass Through
Trust to fail to qualify as a "grantor trust" for federal income tax purposes.
Section 8.04. Waiver of Owner Trustee. To the extent now or
at any time hereafter enforceable under applicable law, the Owner Trustee
covenants that it will not at any time insist upon or plead, or in any manner
whatsoever claim or take any benefit or advantage of or from any law now or
hereafter in force providing for the valuation or appraisal of the Indenture
Estate or any part thereof, prior to any sale or sales thereof to be made
pursuant to any provision herein contained, or prior to any applicable decree,
judgment or order of any court of competent jurisdiction; nor, after such sale
or sales, claim or exercise any right under any statute now or hereafter made
or enacted by any state or otherwise to redeem the property so sold or any part
thereof, and hereby expressly waives for itself and on behalf of each and every
Person, except decree or judgment creditors of the Owner Trustee acquiring any
interest in or title to the Indenture Estate or any part thereof subsequent to
the date of this Agreement, all benefit and advantage of any such law or laws,
and covenants that it will not invoke or utilize any such law or laws, but will
suffer and permit the execution of every such power as though no such law or
laws had been made or enacted. Nothing in this Section 8.04 shall be deemed to
be a waiver by the Owner Trustee of its rights under Section 8.03(e).
The Indenture Trustee may maintain such a pleading, or, in any
manner whatsoever, claim or take any benefit or advantage of or from any law
now or hereafter in force even if it does not possess any of the Equipment
Notes or does not produce any of them in the proceeding. A delay or omission
by the Indenture Trustee or any Noteholder in exercising any right or remedy
accruing upon an Indenture Event of Default under this Agreement shall not
impair the right or remedy or constitute a waiver of or acquiescence in such
Indenture Event of Default.
Section 8.05. Waiver of Existing Defaults. The Majority in
Interest of Noteholders by notice to the Indenture Trustee may waive on behalf
of the Noteholders an existing Indenture Default or Indenture Event of Default
and its consequences except (i) an Indenture Default or Indenture Event of
Default in the payment of the principal of or interest on any Equipment Note or
(ii) in respect of a covenant or provision hereof which pursuant to Section
11.02 cannot be amended or modified without the consent of each Noteholder
affected thereby.
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[Trust Indenture and Security Agreement (1994 737 B)]
Section 8.06. Control by Majority. (a) Except as otherwise
expressly provided herein, the Majority in Interest of Noteholders may direct
the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee or exercising any trust or power conferred
on it by this Agreement. However, the Indenture Trustee may refuse to follow
any direction that conflicts with law or this Agreement, that is unduly
prejudicial to the rights of the Noteholders so affected, or that would subject
the Indenture Trustee to personal liability.
(b) The Owner Trustee may pursuant to the direction and
instruction of the Owner Participant by delivery of written notice to the
Indenture Trustee set a record date to determine the Noteholders entitled to
give any consent, request, demand, authorization, direction, notice, waiver or
other act. Such record date shall be the record date specified in such
Officers' Certificate which shall be a date not more than 30 days prior to the
first solicitation of Noteholders in connection therewith. If such a record
date is fixed, such consent, request, demand, authorization, direction, notice,
waiver or other act may be given before or after such record date, but only the
Noteholders of record at the close of business on such record date shall be
deemed to be Noteholders for the purpose of determining whether Noteholders
holding the requisite percentage of Equipment Notes have authorized or agreed
or consented to such consent, request, demand, authorization, direction,
notice, waiver or other act, and for that purpose the outstanding Equipment
Notes shall be computed as of such record date; provided that no such consent,
request, demand, authorization, direction, notice, waiver or other act by the
Noteholders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Agreement not later than
one year after the record date.
Section 8.07. Rights of Noteholders to Receive Payment.
Notwithstanding any other provision of this Agreement the right of any
Noteholder to receive payment of principal of, Break Amount, if any, Make-Whole
Amount, if any, and interest on such Equipment Note on or after the respective
due dates expressed in such Equipment Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Noteholder.
Section 8.08. Indenture Trustee May File Proofs of Claim.
The Indenture Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee and of the Noteholders allowed in any judicial proceedings
relating to any obligor on the Equipment Notes, its creditors, or its property.
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[Trust Indenture and Security Agreement (1994 737 B)]
ARTICLE 9
INDENTURE TRUSTEE
Section 9.01. Duties of Indenture Trustee. (a) The
Indenture Trustee may refuse to perform any duty or exercise any right or power
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(b) Subject to the provisions of Sections 2.08 and 9.04, the
Indenture Trustee shall not be liable for interest on any money received except
as otherwise provided in any other Operative Document. Money held in trust by
the Indenture Trustee need not be segregated from other funds except to the
extent required by law.
Section 9.02. Rights of Indenture Trustee. (a) The
Indenture Trustee may rely on any document believed by it to be genuine and to
have been signed or presented by the proper person. The Indenture Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from
acting, it may consult with counsel or require an officer's certificate or an
opinion of counsel from the Lessee or the Owner Trustee after which it will
take such action or refrain from acting as it deems appropriate. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith and in accordance herewith in reliance on a resolution of the Board of
Directors of the Lessee, the written advice of counsel acceptable to the Owner
Trustee, the Lessee and the Indenture Trustee, officer's certificate or
opinions of counsel provided by the Lessee or the Owner Trustee.
(c) The Indenture Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any such agent appointed
with due care; provided that, no such agents shall be appointed by the
Indenture Trustee without the consent of the Lessee and the Owner Trustee,
which consent shall, in each case, not be unreasonably withheld.
(d) The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be authorized or
within its rights or powers.
(e) If an Indenture Event of Default under this Agreement
has occurred and is continuing, the Indenture Trustee shall exercise its rights
and powers under this Agreement, and shall use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
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[Trust Indenture and Security Agreement (1994 737 B)]
Section 9.03. Individual Rights of Indenture Trustee. The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Equipment Notes and may otherwise deal with the Owner Trustee,
the Lessee or an Affiliate of the Owner Trustee or the Lessee or a subsidiary
of the Owner Trustee or the Lessee with the same rights it would have if it
were not the Indenture Trustee. Any Agent may do the same with like rights.
Section 9.04. Funds May Be Held by Indenture Trustee or
Paying Agent; Investments. Any monies (including without limitation for
purpose of this Section 9.04 Permitted Investments constituting the proceeds of
the maturity, sale or other disposition of any Permitted Investment) held by
the Indenture Trustee or the Paying Agent hereunder as part of the Indenture
Estate, until paid out by the Indenture Trustee or the Paying Agent as herein
provided, (i) subject to clause (ii) below, may be carried by the Indenture
Trustee or the Paying Agent on deposit with itself or on deposit to its account
with any bank, trust company or national banking association incorporated or
doing business under the laws of the United States of America or one of the
States thereof having combined capital and surplus and retained earnings of at
least $75,000,000, and neither the Indenture Trustee nor the Paying Agent shall
have any liability for interest upon any such monies except as otherwise agreed
in writing or (ii) at any time and from time to time, so long as no Lease Event
of Default shall have occurred and be continuing, at the request (given
directly by the Lessee to the Indenture Trustee) of the Lessee acting as the
agent of the Owner Trustee, shall be invested and reinvested in Permitted
Investments as specified in such request (if such investments are reasonably
available for purchase) and sold, in any case at such prices, including accrued
interest or its equivalent, as are set forth in such request, and such
Permitted Investments shall be held by the Indenture Trustee in trust as part
of the Indenture Estate until so sold; provided that the Lessee pursuant to
Section 22 of the Lease, on behalf of the Owner Trustee, as agent of the Owner
Trustee, shall upon demand pay to the Indenture Trustee the amount of any loss
realized upon maturity, sale or other disposition of any such Permitted
Investment and, so long as no Lease Event of Default shall have occurred and be
continuing, be entitled to receive from the Indenture Trustee, and the
Indenture Trustee shall promptly pay to the Lessee, on behalf of the Owner
Trustee, any profit, income, interest, dividend or gain realized upon maturity,
sale or other disposition of any Permitted Investment. If any Lease Event of
Default shall have occurred and be continuing, any net income, profit,
interest, dividend or gain realized upon maturity, sale or other disposition of
any Permitted Investment shall be held as part of the Indenture Estate and
shall be applied by the Indenture Trustee at the same time, on the same
conditions and in the same manner as the amounts in respect of which such
income, profit, interest, dividend or gain
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[Trust Indenture and Security Agreement (1994 737 B)]
was realized are required to be distributed in accordance with the provisions
hereof or of the Lease pursuant to which such amounts were required to be held.
The Indenture Trustee shall not be responsible for any losses on any
investments or sales of Permitted Investments made pursuant to the procedure
specified in this Section 9.04. All Permitted Investments held by the
Indenture Trustee or the Paying Agent pursuant to this Section 9.04 shall
either be (a) registered in the name of, payable to the order of, or, specially
indorsed to, the Indenture Trustee or the Paying Agent, as the case may be, or
(b) held in an Eligible Account. For purposes of this Section 9.04, "Eligible
Account" means an account established by and with an Eligible Institution at
the request of the Indenture Trustee or the Paying Agent, as the case may be,
which institution agrees, for all purposes of the applicable Uniform Commercial
Code ("UCC") including Article 8 thereof, that (a) such account shall be a
"securities account" (as defined in Section 8-501 of the UCC), (b) all property
(other than cash) credited to such account shall be treated as a "financial
asset" (as defined in Section 8-102(9) of the UCC), (c) the Indenture Trustee
or the Paying Agent, as the case may be, shall be the "entitlement holder" (as
defined in Section 8-102(7) of the UCC) in respect of such account, (d) the
Eligible Institution will comply with all entitlement orders issued by the
Indenture Trustee or the Paying Agent, as the case may be, to the exclusion of
the Lessee and the Owner Trustee, and (e) the "securities intermediary
jurisdiction" (under Section 8-110(e) of the UCC) shall be the State of
Illinois. For purposes of this Section 9.04, "Eligible Institution" means the
corporate trust department of (a) First Security Bank, National Association,
acting solely in its capacity as a "securities intermediary" (as defined in
Section 8-102(14) of the UCC), or (b) a depository institution organized under
the laws of the United States of America or any one of the states thereof or
the District of Columbia (or any U.S. branch of a foreign bank), which has a
long-term unsecured debt rating from Moody's and Standard & Poor's of at least
A-3 or its equivalent.
Section 9.05. Notice of Defaults. If an Indenture Default or
Indenture Event of Default under this Agreement occurs and is continuing and
the Indenture Trustee has actual knowledge of same, the Indenture Trustee shall
(i) promptly send written notice thereof to the Lessee, the Owner Trustee and
the Owner Participant and (ii) within 90 days after the occurrence of an
Indenture Event of Default, mail to each Noteholder notice of all uncured
Indenture Events of Default under this Agreement. Except in the case of a
default in the payment of the principal of, Break Amount, if any, Make-Whole
Amount, if any, or interest on any Equipment Note, the Indenture Trustee shall
be protected in withholding the notice required under clause (ii) above if and
so long as the executive committee or trust committee of directors of the
Indenture Trustee and/or responsible officers thereof in good faith determines
that withholding such notice is in the interest of the Noteholders. In
addition, if an Indenture Default under this Agreement occurs and is continuing
and if the Indenture Trustee has actual knowledge of same, the Indenture
Trustee shall promptly send written notice thereof by telecopier to the Lessee,
the Owner Trustee and the Owner Participant.
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[Trust Indenture and Security Agreement (1994 737 B)]
Section 9.06. Compensation and Indemnity. (a) The Owner
Trustee shall pay to the Indenture Trustee from time to time (i) reasonable
compensation for its services, which compensation shall not be limited by any
law on compensation of a trustee of an express trust, (ii) reimbursement for
all reasonable out-of-pocket expenses incurred by the Indenture Trustee in
connection with the performance of its duties under this Agreement (including
the reasonable compensation and expenses of the Indenture Trustee's counsel and
any agent appointed in accordance with Section 9.02(c)), and (iii)
indemnification against any loss or liability incurred by it arising out of or
in connection with its acceptance or administration of the trust or trusts
hereunder except (A) as such expenses or loss or liability might result from
the negligence or willful misconduct of the Indenture Trustee or the inaccuracy
of any representation or warranty of the Indenture Trustee in its individual
capacity in Section 8 of the Participation Agreement, (B) as otherwise provided
in Section 9.10 hereof and (C) as otherwise excluded by the terms of Sections
7(b) and 7(c) of the Participation Agreement from the Lessee's indemnities
under said Sections; provided that the Indenture Trustee shall not make any
claim under this Section 9.06(a) for any claim or expense indemnified against
by the Lessee under the Participation Agreement without first making demand on
the Lessee for payment of such claim or expense. The Indenture Trustee shall
notify the Owner Trustee and the Lessee promptly of any claim for which it is
entitled to be indemnified hereunder. Subject to the conditions and procedures
equivalent to those set forth in Sections 7(b) and 7(c) of the Participation
Agreement, the Owner Trustee shall defend the claim and the Indenture Trustee
shall cooperate in the defense. The Indenture Trustee may have separate
counsel and the Owner Trustee shall pay the reasonable fees and expenses of
such counsel. The Owner Trustee need not pay for any settlement made without
its and the Lessee's consent.
(b) To secure the payment obligations of the Owner Trustee
pursuant to this Section 9.06, the Indenture Trustee shall have a Lien prior to
that of the Noteholders of the Equipment Notes on all money or property held or
collected by the Indenture Trustee, except that held in trust to pay the
principal of and interest, Break Amount, if any, and Make-Whole Amount, if any,
on the Equipment Notes.
Section 9.07. Replacement of Indenture Trustee. (a) The
resignation or removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee shall become effective only upon the successor
Indenture Trustee's acceptance of appointment as provided in this Section.
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[Trust Indenture and Security Agreement (1994 737 B)]
(b) The Indenture Trustee may resign by giving at least 30
days' prior written notice to the Lessee and the Owner Trustee. The Majority
in Interest of Noteholders may remove the Indenture Trustee by giving at least
30 days' prior written notice to the Indenture Trustee, the Owner Trustee and
the Lessee and may appoint a successor Indenture Trustee for such Equipment
Notes with the Owner Trustee's and (so long as no Lease Event of Default is
continuing) the Lessee's consent. The Owner Trustee may remove the Indenture
Trustee if:
(1) the Indenture Trustee fails to comply with Section 9.09;
(2) the Indenture Trustee is adjudged a bankrupt or an
insolvent;
(3) a receiver or public officer takes charge of the
Indenture Trustee or its property; or
(4) the Indenture Trustee becomes incapable of acting.
(c) If a vacancy exists in the office of Indenture Trustee
for any reason, the Owner Trustee shall promptly appoint a successor Indenture
Trustee which will (so long as no Lease Event of Default is continuing) be
approved by the Lessee.
(d) If a successor Indenture Trustee does not take office
within 30 days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee, the Lessee, the Owner Trustee or the Majority in
Interest of Noteholders may petition any court of competent jurisdiction for
the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee fails to comply with Section
9.09, any Noteholder may petition any court of competent jurisdiction for the
removal of such Indenture Trustee and the appointment of a successor Indenture
Trustee.
(f) A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee, to the Lessee
and to the Owner Trustee. Thereupon, the resignation or removal of the retiring
Indenture Trustee shall become effective, and the successor Indenture Trustee
shall have all the rights, powers and duties of the retiring Indenture Trustee
for which the successor Indenture Trustee is to be acting as Indenture Trustee
under this Agreement. The retiring Indenture Trustee shall promptly transfer
all property and all books and records relating to the administration of the
Indenture Estate held by it as Indenture Trustee to the successor Indenture
Trustee subject to the Lien provided for in Section 9.06. The Lessee shall
give notice of each appointment of a successor Indenture Trustee if there are
Equipment Notes outstanding, by mailing written notice of such event by
first-class mail to the Noteholders.
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[Trust Indenture and Security Agreement (1994 737 B)]
(g) All provisions of this Section 9.07 except subparagraphs
(b)(l) and (e) and the words "subject to the lien provided for in Section 9.06"
in subparagraph (f) shall apply also to any Paying Agent.
Section 9.08. Successor Indenture Trustee, Agents by Merger,
etc. If the Indenture Trustee or any Agent consolidates with, merges or
converts into, or transfers all or substantially all of its corporate trust
business assets to, another corporation, the successor corporation, without any
further act, shall be the successor Indenture Trustee or Agent, as the case may
be.
Section 9.09. Eligibility; Disqualification. This Agreement
shall at all times have an Indenture Trustee which (i) shall have a combined
capital and surplus of at least $75,000,000 or (ii) shall have a combined
capital and surplus in excess of $7,500,000 and the obligations of which,
whether now in existence or hereafter incurred, are fully and unconditionally
guaranteed by a corporation organized and doing business under the laws of the
United States, any State or Territory thereof or of the District of Columbia
and having a combined capital and surplus of at least $75,000,000, and which,
in any case, shall be a Citizen of the United States. If such corporation
publishes reports of conditions at least annually, pursuant to law or to the
requirements of Federal, State, Territorial, or District of Columbia
supervising or examining authority, then for the purposes of this Section 9.09,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
conditions so published.
In case at any time the Indenture Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.09, the Indenture
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.07.
Section 9.10. Trustee's Liens. The Indenture Trustee in its
individual capacity agrees that it will at its own cost and expense promptly
take such action as may be necessary to duly discharge and satisfy in full all
Liens ("Trustee's Liens") on the Indenture Estate which are either (i)
attributable to the Indenture Trustee in its individual capacity and which are
unrelated to the transactions contemplated by the Operative Documents, or (ii)
which are attributable to the Indenture Trustee as trustee hereunder or in its
individual capacity and which arise out of acts or omissions which are not
expressly contemplated by this Agreement.
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[Trust Indenture and Security Agreement (1994 737 B)]
ARTICLE 10
TERMINATION OF TRUST INDENTURE
Section 10.01. Termination of Indenture. Upon (or at any time
after):
(x) payment in full of the outstanding principal amount of,
Break Amount, if any, Make-Whole Amount, if any, and interest on and
all other amounts due under all Equipment Notes and provided that all
other Secured Obligations due to the Noteholders and the Indenture
Indemnitees shall have been satisfied or paid in full; or
(y) at any time after the Owner Trustee has irrevocably
deposited (except as provided in Section 10.04) with the Indenture
Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Noteholders, (1) money in an
amount, or (2) Permitted Investments which, through the payment of
interest and principal in respect thereof in accordance with their
terms, will provide (not later than one Business Day before the due
date of any payment referred to below in this paragraph) money in an
amount, or (3) a combination of money and Permitted Investments
referred to in the foregoing clause (2), sufficient, in the opinion of
a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to
the Indenture Trustee, to pay in full the outstanding principal amount
of, Break Amount, if any, Make-Whole Amount, if any, and interest on
the Equipment Notes on the dates such amounts are due (including as a
result of redemption in respect of which irrevocable notice has been
given to the Indenture Trustee on or prior to the date of such
deposit); provided, however, that
(A) upon the making of the deposit referred to above
in this clause (y), the right of the Owner Trustee or the
Lessee to cause the redemption of Equipment Notes (except a
redemption in respect of which irrevocable notice has
theretofore been given) shall terminate;
(B) the Lessee on behalf of the Owner Trustee has
delivered to the Indenture Trustee an officer's certificate
and an opinion of counsel to the effect that there has been
published by the Internal Revenue Service a ruling to the
effect that Noteholders will not recognize income, gain or
loss for Federal income tax purposes as a result of the
exercise by the Owner Trustee of its option under Clause (y)
of this Section 10.01 and will be subject to Federal income
tax on the same amount and in the same manner and at the same
times, as would have been the case if such option had not been
exercised;
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[Trust Indenture and Security Agreement (1994 737 B)]
(C) all amounts then due and payable hereunder have
been paid; and
(D) the Lessee on behalf of the Owner Trustee has
delivered to the Indenture Trustee an officer's certificate
and an opinion of counsel, each stating that all conditions
precedent provided for relating to the satisfaction and
discharge of this Agreement contemplated by this Section 10.01
have been complied with;
the Owner Trustee shall direct the Indenture Trustee to execute and deliver to
or as directed in writing by the Owner Trustee an appropriate instrument
releasing the Aircraft and the Engines and all other property or proceeds
constituting part of the Indenture Estate from the Lien of this Agreement and
the Indenture Trustee shall execute and deliver such instrument as aforesaid;
provided, however, that this Agreement and the trusts created hereby shall
earlier terminate and this Agreement shall be of no further force or effect
upon any sale or other final disposition by the Indenture Trustee of all
property constituting part of the Indenture Estate and the final distribution
by the Indenture Trustee of all monies or other property or proceeds
constituting part of the Indenture Estate in accordance with the terms hereof.
Except as aforesaid otherwise provided, this Agreement and the trusts created
hereby shall continue in full force and effect in accordance with the terms
hereof.
Section 10.02. Survival of Certain Obligations.
Notwithstanding the provisions of Section 10.01, the obligations of the
Indenture Trustee contained in Sections 2.01 through 2.08, Section 7.01,
Section 9.10, Section 10.03 and Section 10.04 and the other rights, duties,
immunities and privileges hereunder of the Indenture Trustee shall survive.
Section 10.03. Monies to Be Held in Trust. All moneys and
Permitted Investments deposited with the Indenture Trustee pursuant to Section
10.01 shall be held in trust and applied by it, in accordance with the
provisions of the Equipment Notes and this Agreement, to the payment either
directly or through any Paying Agent, as the Indenture Trustee may determine,
to the Noteholders, of all sums due and to become due thereon for principal,
Break Amount, if any, Make-Whole Amount, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
Section 10.04. Monies to Be Returned to Owner Trustee. The
Indenture Trustee and any Paying Agent shall promptly pay or return to the
Owner Trustee upon request of the Owner Trustee any money or Permitted
Investments held by them at any time that are not required for the payment of
the amounts described above in Section 10.03 on the Equipment Notes for which
money or Permitted Investments have been deposited pursuant to Section 10.01.
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[Trust Indenture and Security Agreement (1994 737 B)]
ARTICLE 11
AMENDMENTS AND WAIVERS
Section 11.01. Amendments to this Agreement Without Consent
of Noteholders. The Owner Trustee and the Indenture Trustee may enter into one
or more agreements supplemental hereto without the consent of any Noteholder
for any of the following purposes:
(1) to correct any mistake or cure any ambiguity, defect or
inconsistency herein or in the Equipment Notes or to make any change
not inconsistent with the provisions hereof; provided that such change
does not adversely affect the interests of any Noteholder;
(2) to evidence the succession of another party as the Owner
Trustee in accordance with the terms of the Trust Agreement or to
evidence (in accordance with Article 9) the succession of a new
trustee hereunder, the removal of the trustee hereunder or the
appointment of any co-trustee or co-trustees or any separate or
additional trustee or trustees;
(3) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee or to make any other
provisions with respect to matters or questions arising hereunder so
long as such action shall not adversely affect the interests of the
Noteholders;
(4) to correct or amplify the description of any property at
any time subject to the Lien of this Agreement or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subject to the Lien of this Agreement or to subject to
the Lien of this Agreement the Airframe or Engines or airframe or
engines substituted for the Airframe or Engines in accordance herewith
or with the Lease; provided that Trust Supplements entered into for
the purpose of subjecting to the Lien of this Agreement the Airframe
or Engines in accordance with the Lease need only be executed by the
Owner Trustee and the Indenture Trustee;
(5) to add to the covenants of the Owner Trustee, for the
benefit of the Noteholders, or to surrender any rights or power herein
conferred upon the Owner Trustee or the Owner Participant;
(6) to add to the rights of the Noteholders;
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[Trust Indenture and Security Agreement (1994 737 B)]
(7) to provide for the assumption by the Lessee of the
obligations of the Owner Trustee hereunder in accordance with the
terms and conditions applicable thereto specified in Section 7.03; or
(8) to include on the Equipment Notes any legend as may be
required by applicable law.
Section 11.02. Amendments to this Agreement with Consent of
Noteholders. (a) With the written consent of a Majority in Interest of
Noteholders, the Owner Trustee and the Indenture Trustee may enter into such
supplemental agreements to add any provisions to or to change or eliminate any
provisions of this Agreement or of any such supplemental agreements or to
modify the rights of the Noteholders; provided, however, that, an amendment
under this Section 11.02 may not without the consent of each of the Noteholders
of the applicable Series of Equipment Notes and in the case of the Series A or
Series B Equipment Notes, the applicable Primary Liquidity Provider:
(1) reduce the principal amount of, Break Amount, if any,
Make-Whole Amount, if any, or any installment of
interest on, such Series of Equipment Notes; or
(2) change the date on which any principal amount of, any
Amortization Amount payable with respect to, Break
Amount, if any, Make-Whole Amount, if any, or interest
on such Series of Equipment Notes, is due or payable; or
(3) with respect to each Series of Equipment Notes, create
any Lien on the Indenture Estate prior to or pari passu
with the Lien thereon under this Agreement except such
as are permitted by this Agreement, or deprive any
Noteholder of the benefit of the Lien on the Indenture
Estate created by this Agreement; or
(4) with respect to such Series of Equipment Notes, reduce
the percentage in principal amount of the outstanding
Equipment Notes, the consent of whose Noteholders is
required for any such supplemental agreement, or the
consent of whose Noteholders is required for any waiver
(of compliance with certain provisions of this Agreement
or of certain defaults hereunder or their consequences)
provided for in this Agreement; or
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[Trust Indenture and Security Agreement (1994 737 B)]
(5) make any change in Article 3 or Article 6 or Sections
8.01 (except to add Indenture Events of Default) 8.05,
8.08 or Section 11.02(a).
(b) It is not necessary under this Section 11.02 for the
Noteholders to consent to the particular form of any proposed supplemental
agreement, but it is sufficient if they consent to the substance thereof.
(c) Promptly after the execution by the Owner Trustee and the
Indenture Trustee of any supplemental agreement pursuant to the provisions of
this Section 11.02, the Indenture Trustee shall transmit by first-class mail a
notice, setting forth in general terms the substance of such supplemental
agreement, to all Noteholders, as the names and addresses of such Noteholders
appear on the Register. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental agreement.
Section 11.03. Revocation and Effect of Consents. Until an
amendment or waiver becomes effective, a consent to it by a Noteholder is a
continuing consent by the Noteholder and every subsequent Noteholder, even if
notation of the consent is not made on any Equipment Note. However, any such
Noteholder or subsequent Noteholder may revoke the consent as to his Equipment
Note if the Indenture Trustee receives the notice of revocation before the date
the amendment or waiver becomes effective. After an amendment or waiver
becomes effective, it shall bind every Noteholder affected by such amendment or
waiver.
Section 11.04. Notation on or Exchange of Equipment Notes.
The Indenture Trustee may place an appropriate notation about an amendment or
waiver on any Equipment Note thereafter executed. The Indenture Trustee in
exchange for such Equipment Notes may execute new Equipment Notes that reflect
the amendment or waiver.
Section 11.05. Indenture Trustee Protected. The Indenture
Trustee need not sign any supplemental agreement that adversely affects its
rights.
Section 11.06. Amendments, Waivers, etc. of Other Operative
Documents.
(a) Subject to Section 11.01, without the consent of a Majority in
Interest of Noteholders, the Owner Trustee and the Indenture Trustee may not
modify, amend or supplement any of the Operative Documents, or give any
consent, waiver, authorization or approval thereunder, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions thereof or of modifying in any manner the rights of the respective
parties thereunder; provided, however, that the actions specified in subsection
(b) of this Section 11.06 may be taken without the consent of the Indenture
Trustee or any Noteholder.
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[Trust Indenture and Security Agreement (1994 737 B)]
(b) Subject to the provisions of subsection (c) of this Section
11.06, the Owner Trustee and the Indenture Trustee at any time and from time to
time without the consent of the Indenture Trustee or of any Noteholder may:
(1) so long as no Indenture Event of Default shall have
occurred and be continuing, modify, amend or supplement the Lease, or
give any consent, waiver, authorization or approval with respect
thereto, except that without compliance with subsection (a) of this
Section 11.06 the parties to the Lease shall not modify, amend or
supplement, or give any consent, waiver, authorization or approval for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions thereof or of modifying in any
manner the rights of the respective parties thereunder, with respect
to the following provisions of the Lease as in effect on the date
hereof: Section 2, Section 3(a) (if the result thereof would be to
shorten the term of the Lease to a period shorter than the period
ending with the maturity date of any series of Equipment Notes),
Section 3(c)(iv), Section 3(d) (except to the extent such Section
relates to amounts payable (whether directly or pursuant to the
Indenture) to Persons other than Noteholders, the Primary Liquidity
Providers and the Indenture Trustee in its individual capacity),
Section 3(e) (except insofar as it relates to the address or account
information of the Owner Trustee or the Indenture Trustee) (other than
as such Sections 3(a), 3(d) and 3(e) may be amended pursuant to
Section 3(c) of the Lease in effect on the date hereof), Section 4,
Section 6, Section 7(a), Sections 9(b) through (d) (except that
further restrictions may be imposed on the Lessee), Section 10
(except that additional requirements may be imposed on the Lessee),
Section 11 (except for Section 11(e) and except that additional
insurance requirements may be imposed on the Lessee), Section 12
(except in order to increase the Lessee's liabilities or enhance the
Lessor's rights thereunder), Section 13, Section 14 (except to impose
additional or more stringent Lease Events of Default), Section 15
(except to impose additional remedies), Section 16 (except to impose
additional requirements on the Lessee), Section 18, Section 19 (to the
extent such modification, amendment or supplement affects the rights
and interests of the Owner Trustee or the Indenture Trustee under
Section 1110 of the Bankruptcy Code), Section 20, Section 22 and any
definition of terms used in the Lease, to the extent that any
modification of such definition would result in a modification of the
Lease not permitted pursuant to this subsection (b); provided that in
the event an Indenture Event of Default shall have occurred and be
continuing, the Indenture Trustee shall have all rights of the Owner
Trustee as "Lessor" under the Lease to modify, amend or supplement the
Lease or give any consent, waiver, authorization or approval
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[Trust Indenture and Security Agreement (1994 737 B)]
thereunder, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions thereof or of
modifying in any manner the rights of the "Lessor" thereunder;
provided further that without the prior written consent of the Owner
Trustee, and whether or not an Indenture Event of Default shall have
occurred and be continuing, no such action (including a consent to an
assignment by the Lessee under Section 13 of the Lease) shall be taken
with respect to any of the provisions of Sections 1 (to the extent any
modification of a definition contained therein would result in a
modification of the Lease not permitted by this provision), 3(c), 4,
5, 6 (to the extent such action would reduce the Lessee's
obligations), 7, 8, 9, 10, 11, 12, 13, 14, 15, 16 (insofar as it
relates to the Lessor), 18, 19 and 21 of the Lease, or with respect to
any other Section of the Lease to the extent such action with respect
to such other Section shall affect the amount or timing of any amounts
payable by the Lessee under the Lease as in effect on the date hereof
(or as subsequently modified with the consent of the Owner Trustee)
which, absent the occurrence and continuance of an Indenture Event of
Default, will be distributable to the Owner Trustee under Article 3;
and provided further that the parties to the Lease may take any such
action without the consent of the Indenture Trustee or any Noteholder
to the extent such action relates to the payment of amounts
constituting, or the Owner Trustee's, the Owner Participant's or the
Lessee's rights or obligations with respect to, Excluded Payments;
(2) modify, amend or supplement the Trust Agreement, or give
any consent, waiver, authorization or approval with respect thereto,
in each case only to the extent any such action shall not adversely
impact the interests of the Noteholders;
(3) modify, amend or supplement the Participation Agreement,
or give any consent, waiver, authorization or approval with respect
thereto, except that without compliance with subsection (a) of this
Section 11.06 the parties to the Participation Agreement shall not
modify, amend or supplement, or give any consent, waiver,
authorization or approval for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions thereof
or of modifying in any manner the rights of the respective parties
thereunder, with respect to the following provisions of the
Participation Agreement as originally executed: Section 1(b), Section
7 (insofar as such Section 7 relates to the Indenture Trustee, any
Primary Liquidity Provider and the Noteholders), Section 8, Section
11, Section 17(f) and any definition of terms used in the
Participation Agreement, to the extent that any modification of such
definition would result in a modification of the Participation
Agreement not permitted pursuant to this subsection (b); and
(4) modify, amend or supplement any of said agreements in
order to cure any ambiguity, to correct or supplement any provisions
thereof which may be
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[Trust Indenture and Security Agreement (1994 737 B)]
defective or inconsistent with any other provision thereof or of any
provision of this Agreement, or to make any other provision with
respect to matters or questions arising thereunder or under this
Agreement which shall not be inconsistent with the provisions of this
Agreement, provided the making of any such other provision shall not
adversely affect the interests of the Noteholders.
(c) No modification, amendment, supplement, consent, waiver,
authorization or approval with respect to the Lease or the Participation
Agreement, whether effected pursuant to subsection (a) or pursuant to
subsection (b) of this Section 11.06 and anything in such subsections or
elsewhere in this Agreement to the contrary notwithstanding, shall, without the
consent of the holder of each outstanding Equipment Note affected thereby,
(1) modify, amend or supplement the Lease in such a way as
to extend the time of payment of Basic Rent, Termination Value,
Stipulated Loss Value or any other Rents assigned to the Indenture
Trustee hereunder or any other amounts payable to the Indenture
Trustee for its own account or for the account of the Noteholders
(subject in any event to clause (iv) of Section 3(c) of the Lease)
upon the occurrence of an Event of Loss or Termination Value and any
other amounts payable to the Indenture Trustee for its own account or
for the account of the Noteholders (subject in any event to clause
(iii) of Section 3(c) of the Lease) upon termination of the Lease with
respect to the Aircraft, payable under, or as provided in, the Lease
as in effect on the date hereof, release or reduce the amount of any
installment of Basic Rent or Supplemental Rent so that the same is
less than the payment of principal of, Break Amount, if any,
Make-Whole Amount, if any, and interest on the Equipment Notes, as the
case may be, to be made from such installment of Basic Rent or
Supplemental Rent, or reduce the aggregate amount of Stipulated Loss
Value, EBO Percentage, Special Termination Value Percentages, or any
other amounts payable under, or as provided in, the Lease as in effect
on the date hereof upon the occurrence of an Event of Loss so that the
same is less than the accrued interest on and the principal as of the
Lease Loss Payment Date, and Break Amount, if any, and Make-Whole
Amount, if any, of the Equipment Notes at the time Outstanding or
reduce the amount of Termination Value and any other amounts payable
under, or as provided in, the Lease as in effect on the date hereof
upon termination of the Lease with respect to the Aircraft so that the
same is less than the accrued interest on and principal as of the
Lease Termination Date and Break Amount, if any, and Make-Whole
Amount, if any, of Equipment Notes at the time outstanding, or
(2) modify, amend or supplement the Lease in such a way as
to, or consent to any assignment of the Lease or give any consent,
waiver, authorization or approval which would, release the Lessee from
its obligations in respect of payment of Basic
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[Trust Indenture and Security Agreement (1994 737 B)]
Rent or Supplemental Rent, or Stipulated Loss Value and any other
amounts payable to the Indenture Trustee for its own account or the
account of the Noteholders (subject in any event to clause (iii) of
Section 3(c) of the Lease) or any Primary Liquidity Provider upon the
occurrence of an Event of Loss, or Termination Value and any other
amounts payable to the Indenture Trustee for its own account or the
account of the Noteholders (subject in any event to clause (iii) of
Section 3(c) of the Lease) of the Lease with respect to the Aircraft,
payable under, or as provided in, the Lease as in effect on the date
hereof except for any such assignment pursuant to Section 8(u) of the
Participation Agreement, and except as provided in the Lease as in
effect on the date hereof.
Section 11.07. Notices to Primary Liquidity Providers. Any
request made to any Noteholder for consent to any amendment or supplement
pursuant to this Article 11 shall be promptly furnished by the Indenture
Trustee to each Primary Liquidity Provider.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Notices. (a) Unless otherwise specifically
provided for herein, all notices required under the terms and provisions of
this Agreement shall be in English and in writing, and any such notice may be
given by hand-delivery, overnight courier service, mail, or telecopier (to be
confirmed by hand delivery, overnight courier service or mail) addressed as
indicated below and any such notice shall be effective, in the case of
hand-delivery, when delivered, in the case of overnight courier service, one
Business Day after delivery with charges paid to a courier service with
instructions for overnight delivery, in the case of mail, three Business Days
after delivery to the postal service with certified or registered mail charges
paid, and, in the case of telecopier, upon confirmed transmittal:
if to the Lessee, to:
United Air Lines, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and Treasurer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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[Trust Indenture and Security Agreement (1994 737 B)]
or if by overnight courier, to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and Treasurer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Indenture Trustee, to:
First Security Bank,
National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Owner Trustee, to:
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to the Owner Participant
if to the Owner Participant, to its address set forth in the
Participation Agreement.
(b) The Lessee, the Owner Trustee, the Indenture Trustee or
the Owner Participant by notice to the others may designate additional or
different addresses for subsequent notices or communications.
(c) Any notice or communication to the Noteholders shall be
mailed by first-class mail to the respective addresses for the Noteholders
shown on the Register kept by the Registrar and to addresses filed with the
Indenture Trustee for other Noteholders. Failure so to mail a notice or
communication or any defect in such notice or communication shall not affect
its sufficiency with respect to other Noteholders of such Equipment Notes of
that or any other Series entitled to receive notice.
(d) If a notice or communication is mailed in the manner
provided above within the time prescribed, it is conclusively presumed to have
been duly given, whether or not the addressee receives it.
(e) If the Lessee mails a notice or communication to the
Noteholders, it shall mail a copy to the Indenture Trustee and to the Paying
Agent at the same time.
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[Trust Indenture and Security Agreement (1994 737 B)]
Section 12.02. GOVERNING LAW. THIS AGREEMENT AND THE
EQUIPMENT NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PROVISIONS OF THE STATE OF ILLINOIS.
Section 12.03. No Recourse Against Others. No director,
officer, employee or stockholder, as such, of the Lessee, the Owner Trustee or
the Owner Participant, as the case may be, shall have any liability for any
obligations of the Lessee, the Owner Trustee or the Owner Participant, as the
case may be, under this Agreement or for any claim based on, in respect of or
by reason of such obligations or their creation. Each Noteholder by accepting
an Equipment Note waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Equipment Notes.
Section 12.04. Execution in Counterparts. This Agreement may
be executed in any number of counterparts, each of which shall be an original
but such counterparts shall together constitute but one instrument.
Section 12.05. Section 1110. It is the intention of the
parties that the Owner Trustee, as lessor under the Lease (and the Indenture
Trustee as assignee of the Owner Trustee's rights hereunder), shall be entitled
to the benefits of Section 1110 of the Bankruptcy Code with respect to the
right to take possession of the Aircraft, Airframe, Engines and Parts as
provided in the Lease in the event of a case under Chapter 11 of the Bankruptcy
Code in which Lessee is a debtor, and in any instance where more than one
construction is possible of the terms and conditions hereof or of any other
pertinent Operative Document, each such party agrees that a construction which
would preserve such benefits shall control over any construction which would
not preserve such benefits.
* * *
78
84
[Trust Indenture and Security Agreement (1994 737 B)]
IN WITNESS WHEREOF, the Owner Trustee and the Indenture
Trustee have caused this Trust Indenture and Security Agreement to be duly
executed by their respective officers thereunto duly authorized.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL
ASSOCIATION, not in its
individual capacity, except
as expressly provided herein,
but solely as Owner Trustee
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Indenture Trustee
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
79
85
Exhibit A to
Trust Indenture and
Security Agreement
Form of Equipment Note
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO
THE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, THIS EQUIPMENT
NOTE MAY NOT BE SOLD UNLESS EITHER REGISTERED UNDER THE ACT
AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM SUCH
REGISTRATIONS IS AVAILABLE.
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
NOT INDIVIDUALLY BUT SOLELY
AS OWNER TRUSTEE
SERIES [______] EQUIPMENT NOTE DUE [_____] ISSUED IN CONNECTION
WITH THE BOEING MODEL ________ AIRCRAFT BEARING UNITED STATES
REGISTRATION NUMBER N_____.
No.______ Date: [___________,____]
Original Principal Amount
Maturity Date
$____________________ ___________________
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, a national banking association, not individually but solely as
Owner Trustee (herein, in such capacity, the "Owner Trustee") for value
received, hereby promises to pay to FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Subordination Agent as nominee for the Pass Through Trustee under the
Intercreditor Agreement, or registered assigns, the principal sum of __________
Dollars ($________) in installments, one such installment to be due and payable
on each Payment Date, each such installment to be in an amount equal to the
amount set forth in Schedule I hereto, together with interest on the unpaid
principal amount hereof from time to time outstanding from and including the
date hereof until such principal amount is paid in full. Interest shall accrue
with respect to each Interest Period at the Applicable Rate (calculated on the
basis of a year consisting of 360 days and the actual number of days elapsed)
in effect for such Interest Period and shall be payable in arrears on each
Interest Payment Date and on the date this Equipment Note is paid in full.
Interest shall be payable with respect to the first but not the
86
[Trust Indenture and Security Agreement (1994 737 B)]
last day of each Interest Period. Notwithstanding the foregoing, the final
payment made on this Equipment Note shall be in an amount sufficient to
discharge in full the unpaid principal amount and all accrued and unpaid
interest on, and any other amounts due under, this Equipment Note.
Notwithstanding anything to the contrary contained herein, if any date on which
a payment under this Equipment Note becomes due and payable is not a Business
Day, then such payment shall not be made on such scheduled date but shall be
made on the next succeeding Business Day and if such payment is made on such
next succeeding Business Day, interest at the then Applicable Rate shall accrue
on the amount of such payment during such extension.
For purposes hereof, the term "Indenture" means the Amended
and Restated Trust Indenture and Security Agreement (1994 737 B), dated as of
December 23, 1997 between the Owner Trustee and First Security Bank, National
Association (the "Indenture Trustee"), as the same may be amended or
supplemented from time to time. All other capitalized terms used in this
Equipment Note and not defined herein shall have the respective meanings
assigned in the Indenture.
This Equipment Note shall bear interest, payable on demand, at
the Past Due Rate (calculated on the basis of a year of 360 days and the actual
number of days elapsed) on any overdue principal amount, any overdue Break
Amount, if any, Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest and any other amounts payable hereunder
which are overdue, in each case for the period the same is overdue. Amounts
shall be overdue if not paid when due (whether at stated maturity, by
acceleration or otherwise).
The interest rate borne by this Equipment Note shall be
subject to adjustments to the extent, and under the circumstances, specified by
the Note Purchase Agreement [and the Registration Rights Agreement](1) as more
particularly set forth in the third paragraph of Section 2.01 of the Indenture.
All payments of principal, Break Amount, if any, Make-Whole
Amount, if any, interest and other amounts, if any, to be made by the Owner
Trustee hereunder and under the Indenture shall be made only from the income
and proceeds from the Indenture Estate and only to the extent that the
Indenture Trustee shall have sufficient income or proceeds from the Indenture
Estate to make such payments. Each holder hereof, by its acceptance of this
Equipment Note, agrees that it will look solely to the income and proceeds from
the Indenture Estate to the extent available for distribution to the holder
hereof as above provided and that, none of the Owner Trustee, the Indenture
Trustee and the Owner Participant is or shall be personally liable or liable in
any manner extending to any assets other than the Indenture Estate to the
holder hereof for any amounts payable or for any
______________
(1) To be inserted only in the case of a Series A or Series B Equipment Note.
A-2
87
[Trust Indenture and Security Agreement (1994 737 B)]
liability under this Equipment Note or the Indenture or, except as provided in
Section 2.09 of the Indenture, under the Participation Agreement or the other
Operative Documents; provided, however, that, nothing herein contained shall
limit, restrict or impair the right of the Indenture Trustee, subject always to
the terms and provisions of the Indenture, to accelerate the maturity of this
Equipment Note upon an Indenture Event of Default under the Indenture, to bring
suit and obtain a judgment against the Owner Trustee on this Equipment Note for
purposes of realizing upon the Indenture Estate and to exercise all rights and
remedies provided under the Indenture or otherwise realize upon the Indenture
Estate.
This Equipment Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose unless this Equipment
Note has been executed on behalf of the Owner Trustee by the manual or
facsimile signature of an authorized officer of the Owner Trustee, and
authenticated by the Indenture Trustee by the manual signature of an authorized
officer or signatory of the Indenture Trustee, in each case as specified in
Section 2.02 of the Indenture.
This Equipment Note is one of the Equipment Notes referred to
in the Indenture which have been or are to be issued by the Owner Trustee
pursuant to the terms of the Indenture. Reference is made to the Indenture and
all supplements and amendments thereto (a copy of which is on file with the
Indenture Trustee at its Corporate Trust Department) for a more complete
statement of the terms and provisions thereof, including a statement of the
properties thereby conveyed, pledged and assigned, the nature and extent of the
security, the respective rights thereunder of the Owner Trustee, the Indenture
Trustee and the Noteholders of the Equipment Notes, and the terms upon which
the Equipment Notes are, and are to be, executed and delivered, as well as for
a statement of the terms and conditions of the trust created by the Indenture,
to all of which terms and conditions in the Indenture each Noteholder hereof
agrees by its acceptance of this Equipment Note.
This Equipment Note is subject to redemption as provided in
Article 6 of the Indenture but not otherwise.
If an Indenture Event of Default shall occur and be
continuing, the principal amount remaining unpaid of the Equipment Notes may be
declared due and payable in the manner and with the effect provided in the
Indenture.
As provided in the Indenture, in certain circumstances this
Equipment Note is transferable, and upon surrender of this Equipment Note for
registration of transfer at the principal corporate trust office of the
Registrar, or at the office or agency maintained for such purpose, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by, the Noteholder or his attorney
duly authorized in writing, one or more new Equipment Notes of the same
maturity and type and of authorized denominations and for the same aggregate
principal amount will be issued to the designated transferee or transferees.
A-3
88
[Trust Indenture and Security Agreement (1994 737 B)]
The Equipment Notes are issuable only as registered Equipment
Notes. As provided in the Indenture and subject to certain limitations therein
set forth, Equipment Notes are exchangeable for a like aggregate principal
amount of Equipment Notes of the same series, maturity and type and of
authorized denominations, as requested by the Noteholder surrendering the same,
upon presentation thereof for such purpose at the principal corporate trust
office of the Registrar, or at an office or agency maintained for such purpose.
No service charge shall be made for any such registration of transfer or
exchange, but the Registrar may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer of this
Equipment Note, the Owner Trustee, the Indenture Trustee, the Paying Agent and
the Registrar may deem and treat the person in whose name this Equipment Note
is registered as the absolute owner hereof for the purpose of receiving payment
of the principal of and interest on this Equipment Note and for all other
purposes whatsoever whether or not this Equipment Note be overdue, and neither
the Owner Trustee, the Indenture Trustee, the Paying Agent nor the Registrar
shall be affected by notice to the contrary.
[The indebtedness evidenced by this Equipment Note is, to the
extent and in the manner provided in the Indenture, subordinate and subject in
right of payment to the prior payment in full of the Secured Obligations (as
defined in the Indenture) in respect of [Series A Equipment Notes](2) [Series A
and Series B Equipment Notes](3) [Series A, Series B and Series C Equipment
Notes](4) and this Equipment Note is issued subject to such provisions](5) .
The Noteholder of this Equipment Note, by accepting the same, (a) agrees to and
shall be bound by such provisions and each other provision applicable to it in
the Indenture, the Participation Agreement, the Note Purchase Agreement and each
other Fundamental Document ,(b) authorizes and directs the Indenture Trustee on
its behalf to take such action as may be
______________
(2) To be inserted in the case of a Series B Equipment Note.
(3) To be inserted in the case of a Series C Equipment Note.
(4) To be inserted in the case of a Series D Equipment Note.
(5) To be inserted for each Equipment Note other than any Series A Equipment
Note.
A-4
89
[Trust Indenture and Security Agreement (1994 737 B)]
necessary or appropriate to effectuate the subordination as provided in the
Indenture and (c) appoints the Indenture Trustee its attorney-in-fact for such
purpose.
AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS EQUIPMENT
NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS OF
THE STATE OF ILLINOIS.
* * *
A-5
90
[Trust Indenture and Security Agreement (1994 737 B)]
IN WITNESS WHEREOF, the Owner Trustee has caused this
Equipment Note to be duly executed in its corporate name by its officer duly
authorized as of the date hereof.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By:
--------------------------------
Name:
Title:
A-6
91
[Trust Indenture and Security Agreement (1994 737 B)]
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the within-mentioned
Indenture.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION,
as Indenture Trustee
By:
-----------------------------------
Authorized officer and signatory
A-7
92
[Trust Indenture and Security Agreement (1994 737 B)]
SCHEDULE I
AMORTIZATION SCHEDULE
Payment Date Principal Amount (Expressed as a
Percentage of Original Principal Amount
[SEE EXHIBIT [B-1] [B-2] [B-3] [B-4] TO INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
A-8