*
Aircraft N171UA
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FIRST AMENDED AND RESTATED
TRUST INDENTURE AND SECURITY AGREEMENT
(1989 I)
Dated as of July 20, 2000
between
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity except as expressly set forth
herein,
but solely as Owner Trustee,
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION,
as Indenture Trustee
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United Air Lines, Inc.
1989 I Equipment Trust
One Boeing 747-422 Aircraft
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TABLE OF CONTENTS
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Page
RECITALS........................................................................................................ 1
GRANTING CLAUSE................................................................................................. 2
HABENDUM CLAUSE................................................................................................. 6
ARTICLE 1
DEFINITIONS............................................................................................ 8
Section 1.01. Definitions............................................................................ 8
ARTICLE 2
THE EQUIPMENT NOTES.................................................................................... 22
Section 2.01. Equipment Notes; Title and Terms....................................................... 22
Section 2.02. Execution and Authentication........................................................... 24
Section 2.03. Registrar and Paying Agent............................................................. 25
Section 2.04. Transfer and Exchange.................................................................. 25
Section 2.05. Noteholder Lists; Ownership of Equipment Notes......................................... 26
Section 2.06. Mutilated, Destroyed, Lost or Stolen Equipment Notes................................... 27
Section 2.07. Cancellation........................................................................... 27
Section 2.08. Payment on Equipment Notes............................................................. 27
Section 2.09. Payment from Indenture Estate Only; Non-Recourse Obligations........................... 28
Section 2.10. Subordination.......................................................................... 29
Section 2.11. Termination of Interest in the Indenture Estate........................................ 29
Section 2.12. Withholding Taxes...................................................................... 30
ARTICLE 3
RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS IN THE INDENTURE ESTATE................................. 31
Section 3.01. [Reserved for Potential Future Use].................................................... 31
Section 3.02. Payment in Case of Redemption or Purchase of Equipment Notes........................... 31
Section 3.03. Application of Basic Rent.............................................................. 32
Section 3.04. Application of Certain Payments in Case of Requisition or Event of Loss................ 34
Section 3.05. Payments During Continuance of Indenture Event of Default.............................. 35
Section 3.06. Payments for Which Application Is Provided in Other Documents.......................... 38
Section 3.07. Payments for Which No Application Is Otherwise Provided................................ 39
Section 3.08. Application of Payments................................................................ 39
ARTICLE 4
COVENANTS OF OWNER TRUSTEE............................................................................. 40
Section 4.01. Covenants of the Owner Trustee......................................................... 40
ARTICLE 5
DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN THE INDENTURE ESTATE DURING
CONTINUATION OF LEASE................................................................................... 41
Section 5.01. Disposition, Substitution and Release of Property Included in the Indenture Estate
During Continuation of Lease............................................................ 41
ARTICLE 6
REDEMPTION OF EQUIPMENT NOTES........................................................................... 42
Section 6.01. Redemption of Equipment Notes upon Certain Events....................................... 42
Section 6.02. Redemption Price........................................................................ 43
Section 6.03. Notice of Redemption to Noteholders..................................................... 44
Section 6.04. Deposit of Redemption Price............................................................. 44
Section 6.05. Equipment Notes Payable on Redemption Date.............................................. 45
Section 6.06. No Prepayment or Redemption............................................................. 45
ARTICLE 7
MATTERS CONCERNING THE LESSEE........................................................................... 45
Section 7.01. Repayment of Monies for Equipment Note Payments Held by the Indenture Trustee........... 45
Section 7.02. Change in Registration.................................................................. 46
Section 7.03. Assumption of Obligations of Owner Trustee by the Lessee................................ 47
Section 7.04. Selection of Funding Period............................................................. 49
ARTICLE 8
DEFAULTS AND REMEDIES................................................................................... 50
Section 8.01. Indenture Events of Default............................................................. 50
Section 8.02. Acceleration; Rescission and Annulment.................................................. 53
Section 8.03. Other Remedies Available to Indenture Trustee........................................... 53
Section 8.04. Waiver of Owner Trustee................................................................. 59
Section 8.05. Waiver of Existing Defaults............................................................. 60
Section 8.06. Control by Majority..................................................................... 60
Section 8.07. Rights of Noteholders to Receive Payment................................................ 61
Section 8.08. Indenture Trustee May File Proofs of Claim.............................................. 61
ARTICLE 9
INDENTURE TRUSTEE....................................................................................... 61
Section 9.01. Duties of Indenture Trustee............................................................. 61
Section 9.02. Rights of Indenture Trustee............................................................. 61
Section 9.03. Individual Rights of Indenture Trustee.................................................. 62
Section 9.05. Notice of Defaults...................................................................... 63
Section 9.06. Compensation and Indemnity.............................................................. 64
Section 9.07. Replacement of Indenture Trustee........................................................ 64
ii
Section 9.08 Successor Indenture Trustee Agents by Merger, etc....................................... 66
Section 9.09. Eligibility; Disqualification........................................................... 66
Section 9.10. Trustee's Liens......................................................................... 66
ARTICLE 10
TERMINATION OF TRUST INDENTURE.......................................................................... 67
Section 10.01. Termination of Indenture................................................................ 67
Section 10.02. Survival of Certain Obligations......................................................... 68
Section 10.03. Monies to Be Held in Trust.............................................................. 68
Section 10.04. Monies to Be Returned to Owner Trustee.................................................. 68
ARTICLE 11
AMENDMENTS AND WAIVERS.................................................................................. 69
Section 11.01. Amendments to this Agreement Without Consent of Noteholders............................. 69
Section 11.02. Amendments to this Agreement with Consent of Noteholders................................ 70
Section 11.03. Revocation and Effect of Consents....................................................... 72
Section 11.04. Notation on or Exchange of Equipment Notes.............................................. 72
Section 11.05. Indenture Trustee Protected............................................................. 72
Section 11.06. Amendments, Waivers, etc. of Other Operative Documents.................................. 72
Section 11.07. Notices to Liquidity Providers.......................................................... 75
ARTICLE 12
MISCELLANEOUS........................................................................................... 76
Section 12.01. Notices................................................................................. 76
Section 12.02. GOVERNING LAW........................................................................... 77
Section 12.03. No Recourse Against Others.............................................................. 77
Section 12.04. Execution in Counterparts............................................................... 78
Section 12.05. Section 1110............................................................................ 78
Section 12.06. Effectiveness........................................................................... 78
SIGNATURES....................................................................................................... 78
Exhibit A-1 Form of Existing Equipment Notes
Exhibit A-2 Form of Pass Through Equipment Notes
Exhibit B Form of Trust Agreement and Trust Indenture
and Security Agreement Supplement
Annex I
Annex II
iii
FIRST AMENDED AND RESTATED
TRUST INDENTURE AND SECURITY AGREEMENT
(1989 I)
This FIRST AMENDED AND RESTATED TRUST INDENTURE AND SECURITY
AGREEMENT (1989 I) (this "Agreement"), dated as of July 20, 2000 between STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust company (the "Owner
Trustee"), not in its individual capacity except as expressly provided herein,
but solely as Owner Trustee under the Trust Agreement, and STATE STREET BANK AND
TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a national banking
association (the "Indenture Trustee"), as Indenture Trustee hereunder, amends
and restates in its entirety that certain Trust Indenture and Security Agreement
(1989 I) dated as of August 1, 1989 (the "Initial Indenture") between BancBoston
United Leasing LLC ("Original Lessor"), United Air Lines, Inc., as Lessee, and
State Street Bank and Trust Company of Connecticut, National Association, as
Successor Trustee to The Connecticut Bank and Trust Company, National
Association, as Indenture Trustee ("Original Indenture Trustee"), as
supplemented by that certain Trust Agreement and Trust Indenture and Security
Agreement Supplement No. 1 (1989 I) dated August 16, 1989 (the "Supplement") and
as amended by that certain First Amendment to Trust Indenture and Security
Agreement (1989 I) dated as of February 1, 1990 (the "First Amendment"), between
Original Lessor, Lessee and Original Indenture Trustee. The Initial Indenture,
as supplemented by the Supplement and as amended by the First Amendment and
further documents described in the attached Annex I and Annex II, is referred to
as the "Original Indenture."
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 Initial Indenture and the Supplement were
recorded by the FAA on August 17, 1989 and assigned Conveyance No. Q40443;
WHEREAS, the First Amendment was recorded by the FAA on
February 16, 1990 and assigned Conveyance No. M22314;
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
WHEREAS, pursuant to that certain Assignment and Assumption
Agreement (1989 I) dated as of July 20, 2000 between the Owner Trustee and the
Original Lessor, the Original Lessor assigned to the Owner Trustee, and the
Owner Trustee assumed, all of the obligations of the Original Lessor under the
Lessor Documents, all as more specifically set forth in the Assignment and
Assumption Agreement;
WHEREAS, the parties desire by this Agreement, among other
things, to (i) amend and restate in its entirety the Original Indenture, (ii)
provide for the issuance by the Owner Trustee on the Refinancing Date of the
Series A-1, Series B and Series C-2 Pass Through 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 hereunder
or under the Equipment Notes, of the principal of, Make-Whole Amount (on and
after the Refinancing Date only), if any, premium (prior to the Refinancing Date
only), 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, on and after
the Refinancing Date, 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
2
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 Aircraft (including the Airframe and the Engines
originally installed thereon), and all replacements thereof and
substitutions therefor in which the Lessor shall from time to time
acquire an interest, whether under the Lease or the Japanese Lease or
both or any such replacements or substitutions therefor, as provided in
this Agreement;
(2) the Lease, the Original Lease (as more fully described in
Annex I hereto) and all Rent, including, without limitation, all
amounts of Basic Rent, Supplemental Rent, and payments of any kind
thereunder; the Participation Agreement (including all amounts payable
to the Lessor thereunder); the Assignment and Assumption Agreement; the
Japanese Lease; the Japanese Lease Supplement; the Purchase Agreement;
the Lessor's Purchase Agreement; the Lessor's Consent and Agreement;
the Primary Lessor Mortgage, the Primary Lessor's Comfort Letter, the
Omnibus Agreement, and the Japanese Assumption Agreement (each to the
extent assigned by the Japanese Lease Assignment); the Japanese Lease
Assignment; the Japanese Lease Assignment Supplement; all other
documents and property and interest therein assigned by the Japanese
Lease Assignment; each notice, letter agreement or other document
related to any of the foregoing entered into by or for the benefit of
the Owner Trustee (or assigned to the Owner Trustee); including,
without limitation, (x) all rights of the Lessor to receive any
payments or other amounts or 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 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 Lessor, whether acting under any such
document or by statute or at law or in equity, or otherwise, arising
out of any Lease Event of Default or any default under the Japanese
Lease, and (y) any right to restitution from the Lessee or the Primary
Lessor in respect of any determination of invalidity of any such
document;
3
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
(3) all rents, issues, profits, revenues and other income of
the property subjected or required to be subjected to the lien of this
Agreement;
(4) all requisition proceeds with respect to the Aircraft or
any part thereof (to the extent of the Lessor's interest therein
pursuant to the terms of the Lease) and all insurance proceeds with
respect to the Aircraft or any part thereof, but excluding any
insurance maintained by the Lessee, Owner Participant or Owner Trustee
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 by or for the account of the Lessor pursuant to any term of any
Operative Document and held or required to be held by the Indenture
Trustee hereunder and all rights of the Lessor in and to the Deposited
Cash and all investment income thereon;
(6) all rights of the Lessor to amounts paid or payable by the
Lessee to the Lessor under the Participation Agreement and all rights
of the Lessor to enforce payments of any such amounts thereunder; and
(7) all proceeds of the foregoing.
The Original Lessor has previously delivered to the Indenture Trustee
the original executed counterpart of the Original Lease and the initial Lease
Supplement, the First Amendment to Lease, as well as the Japanese Assumption
Agreement, the Japanese Lease, the Japanese Lease Supplement, the Japanese Lease
Assignment and the Japanese Lease Assignment Supplement, and, concurrently with
the delivery hereof, Owner Trustee is delivering the original counterpart of the
Lease (to each of which a chattel paper receipt is attached), and the Original
Lessor has previously delivered to the Indenture Trustee executed copies of the
Lessor's Purchase Agreement and the Lessor's 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
4
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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;
(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 exercise the
following rights of the "Lessor" under the Lease: (a) to the exclusion
of the Indenture Trustee, the right to (i) exercise all rights of the
"Lessor" under the Lease (other than the right to receive any funds to
be paid to the Lessor under the Lease (other than funds that constitute
Excepted Payments)) and (ii) 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; (b) to the exclusion of the Indenture Trustee, the right to
waive the opinion required pursuant to Section 8(e)(ii)(C) of the
Participation Agreement; and (c) the non-exclusive right to exercise
the rights of the "Lessor" to terminate the Japanese Lease Assignment
and to exercise the purchase right thereunder;
(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, and Excess Amount as
provided in Section 3(c) of the Lease, (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
5
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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.
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 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, except, on and after
the Refinancing Date only, as provided in Section 2.10 and Article 3, 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
6
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 ▇▇▇▇▇▇'▇ ▇▇▇▇ of Sale and the
Lessor's Consent and Agreement, the Lessor's Purchase Agreement, and all other
Operative Documents 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, 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
7
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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.
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," "Owner Participant," "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;
8
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
(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 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, (i) with respect to any Series
---------------------
of Pass Through Equipment Notes, the amortization schedule for such Series as
set forth on Exhibit ▇-▇, ▇-▇ or B-4 of the Note Purchase Agreement, as the case
may be, and (ii) with respect to any Existing Equipment Note, the amortization
schedule of such Existing Equipment Note attached thereto on the date hereof.
"Assignment and Assumption Agreement" means that certain
-----------------------------------
Assignment and Assumption Agreement (1989 I) dated as of July 20, 2000, between
the Owner Trustee and the Owner Participant.
9
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
"Average Life Date" shall mean, for each Equipment Note to be
-----------------
redeemed, the date which follows the redemption date by a period equal to the
Remaining Weighted Average Life at the redemption date of such Equipment Note.
"Bankruptcy Code" shall have the meaning specified therefor in
---------------
the Lease.
"Basic Pass Through Trust Agreement" means the Pass Through
----------------------------------
Trust Agreement to be entered into 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.
"Business Day" shall have the meaning specified therefor in
------------
the Lease.
"Citizen of the United States" 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)(iii) 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.
"Debt Rate" shall mean (i) with respect to the Existing
---------
Equipment Notes, the interest rate applicable thereto as determined in
accordance with the terms thereof and (ii) with respect to any Series of Pass
Through Equipment Notes, the rate per annum specified for such Series under the
heading "Interest Rate" in the related Exhibit B of the Note Purchase Agreement
for such Series.
10
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
"Deposited Cash" shall mean the aggregate of (i) cash
--------------
deposited with the Indenture Trustee as provided in Section 3.01 and (ii) when
required or indicated by the context, any Permitted Investment purchased by the
use of such Deposited Cash pursuant to the provisions of Section 9.04(b).
"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 each Existing
-------------- ---------------
Equipment Note and, on and after the Refinancing Date only, the Pass Through
Equipment Notes.
"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 or trust 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 or trust 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 9(b) of the Lease, (vi) amounts or expenses paid or payable to,
11
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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; provided, that "Excluded Payments" shall not include any amount
payable to the Owner Trustee under clause (i) or (ii) above to the extent that
treating such amount as an "Excluded Payment" would result in the Trust Estate
or the Indenture Estate suffering any liability, loss, claim, or expense or
would result in a failure to reimburse the Trust Estate or the Indenture Estate
for any liability, loss, or expense previously suffered by it or otherwise in
any way result in a diminution of the Trust Estate or the Indenture Estate.
"Existing Equipment Notes" means the Series A Certificates
------------------------
issued and outstanding under the Original Indenture on the Effective Date.
"Federal Aviation Act" shall have the meaning specified
--------------------
therefor in the Lease.
"Federal Aviation Administration" and "FAA" shall have the
------------------------------- ---
meaning specified therefor in the Lease.
"Funding Period" in respect of the Existing Equipment Notes
--------------
only, shall mean a period commencing on the date of issuance of the Existing
Equipment Notes and ending on (but excluding) February 15, 2000 or thereafter a
period of from one to ten years, in increments of one-half years, but the final
Funding Period need not be an increment of one-half years, elected by Lessee on
behalf of the Owner Trustee, as set forth in the form of Existing Equipment
Note, provided that (i) the first of any such other Funding Periods shall
commence on February 15, 2000, and end on the August 15 or February 15
corresponding to the length of the Funding Period elected by Lessee on behalf of
the Owner Trustee, as set forth in the form of Existing Equipment Note, and each
succeeding Funding Period shall commence on the date immediately following the
expiration of the preceding Funding Period and end on the date determined as
aforesaid, (ii) there shall be no more than five (5) Funding Periods (excluding
for this purpose the initial Funding Period ending on February 15, 2000), (iii)
no Funding Period shall include or extend beyond the maturity date of the
Existing Equipment Notes, and (iv) the provisions of Section 7.04 of this
Agreement shall be complied with upon the selection of each new Funding Period.
"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.
12
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
"Indenture Event of Default" shall have the meaning specified
--------------------------
therefor in Article 8.
"Indenture Indemnitee" means (i) the Indenture Trustee in its
--------------------
individual capacity and as Indenture Trustee, (ii) each separate or additional
trustee appointed pursuant to this Agreement, (iii) the Subordination Agent,
(iv) each Liquidity Provider, (v) on and after the Refinancing Date only, each
Pass Through Trustee, (vi) each Noteholder, and (vii) each of the respective
directors, officers, employees, agents and servants of the persons described in
clauses (i) through (vi) inclusive above.
"Indenture Supplement" means a supplement to this Agreement in
--------------------
the form of Exhibit B hereto.
"Indenture Trustee" means State Street Bank and Trust Company
-----------------
of Connecticut, 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 Liquidity Providers and the
Subordination Agent, to be entered into on the Refinancing Date, 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 (a) with respect to the Existing
---------------------
Equipment Notes, each February 15 and August 15, commencing February 15, 1990,
so long as the Existing Equipment Notes remain Outstanding; and (b) with respect
to the Pass Through Equipment Notes, January 1, 2001 and each January 1 and July
1 of each year thereafter.
"Interest Period" means, (a) with respect to the Existing
---------------
Equipment Notes, the periods set forth in Exhibit A to the Original Indenture;
and (b) with respect to each Series of Pass Through 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 semi-annual 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.
"Japanese Assumption Agreement" shall have the meaning
-----------------------------
specified therefor in the Lease.
13
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
"Japanese Lease" shall have the meaning specified therefor in
--------------
the Lease.
"Japanese Lease Assignment" shall have the meaning specified
-------------------------
therefor in the Lease.
"Japanese Lease Assignment Supplement" shall have the meaning
------------------------------------
specified therefor in the Lease.
"Japanese Lease Supplement" shall have the meaning specified
-------------------------
therefor in the Lease.
"Lease" means the First Amended and Restated Lease Agreement
-----
(1989 I), dated as of July 20, 2000 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 mean the date on which
-----------------------
Stipulated Loss Value (as defined in the Lease) is to be paid pursuant to
Section 10(a) of 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.
"Lessor's Consent and Agreement" shall have the meaning
------------------------------
specified therefor in the Lease.
"Lessor's Purchase Agreement" shall have the meaning specified
---------------------------
therefor in the Lease.
"Lien" means any mortgage, pledge, lien, charge, encumbrance,
----
lease, security interest or claim.
14
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
"Liquidity Facilities" means the three Revolving Credit
--------------------
Agreements (consisting of a separate Revolving Credit Agreement with the
applicable Liquidity Provider with respect to each of the Class A-1 Trust, the
Class A-2 Trust and the Class B Trust) between the Subordination Agent, as
borrower, and such Liquidity Provider, each to be dated as of the Refinancing
Date, 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 Liquidity Facility shall be effective unless consented to by Owner
Trustee or Lessee, as the case may be.
"Liquidity Provider" means Landesbank Hessen-Thuringen
------------------
Girozentrale as the Liquidity Provider under the Class A-1 Liquidity Facility,
the Class A-2 Liquidity Facility and the Class B Liquidity Facility (as such
terms are defined in the Intercreditor Agreement) or any successor thereto.
"Majority in Interest of Noteholders" means, subject, on and
-----------------------------------
after the Refinancing Date only, 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" means, on and after the Refinancing Date
-----------------
only, with respect to each Pass Through Equipment Note, an amount (as determined
by an independent investment banker of national standing selected by Lessee)
equal to the excess, if any determined under the following calculation:
(1) the present value of the remaining scheduled payments of
principal and interest from the determination date to
maturity of such Pass Through Equipment Note computed by
discounting the payments on a semi-annual basis on each
Interest Payment Date (assuming a 360-day year of twelve
30-day months) using a discount rate equal to the
Treasury Yield, minus
(2) the outstanding principal amount of such Pass Through
Equipment Note plus accrued interest to the date of
determination.
15
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
For purposes of determining the Make-Whole Amount, the "Treasury Yield" means,
--------------
at the date of determination with respect to any Pass Through Equipment Note,
the interest rate (expressed as a semi-annual equivalent and as a decimal and,
in the case of United States Treasury bills, converted to a bond equivalent
yield) determined to be the annual rate equal to the semi-annual yield to
maturity for United States Treasury securities maturing on the Average Life Date
of such Pass Through Equipment Note and trading in the public securities markets
either as determined by interpolation between most recent weekly average yield
to maturity for two series of United States Treasury securities trading in the
public securities markets, (1) one maturing as close as possible to, but earlier
than, the Average Life Date of such Pass Through Equipment Note and (2) the
other maturing as close as possible to, but later than, the Average Life Date of
such Pass Through Equipment Note, in each case as published in the most recent
H.15(519) or, if a weekly average yield to maturity for United States Treasury
securities maturing on the Average Life Date of such Pass Through Equipment Note
is reported in the most recent H.15(519), the weekly average yield to maturity
as published in such H.15(519). As used in the definition of "Treasury Yield",
"H.15(519)" means, the weekly statistical release designated as such, or any
---------
successor publication, published by the Board of Governors of the Federal
Reserve System. The date of determination of Make-Whole Amount is the third
(3rd) Business Day prior to the applicable payment date. The "most recent
-----------
H.15(519)" means the H.15(519) published prior to the close of business on the
---------
third business day prior to the applicable payment or redemption date.
"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-1,
Series B or Series C-2 Pass Through 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).
"Note Purchase Agreement" means that certain 747 Leased
-----------------------
Equipment Note Purchase Agreement to be entered into on or before the
Refinancing Date among State Street Bank and Trust Company, as Owner Trustee,
BancBoston United Leasing LLC, as Owner Participant, United Airlines, Inc., as
Lessee, and State Street Bank and Trust Company of Connecticut, National
Association, as Pass Through Trustee under each Pass Through Trust Agreement,
Subordination Agent and Indenture Trustee.
"Omnibus Agreement" shall have the meaning specified therefor
-----------------
in the Lease.
"Original Lease" shall mean the documents described in Annex
--------------
II hereto.
16
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
"Outstanding" when used with respect to Equipment Notes,
-----------
means, as of the date of determination, all Equipment Notes theretofore executed
and delivered under this Agreement other than:
(i) Equipment Notes theretofore cancelled by the Indenture
Trustee or delivered to the Indenture Trustee for cancellation pursuant to
Section 2.08 or otherwise;
(ii) Equipment Notes for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Indenture
Trustee in trust for the Holders of such Equipment Notes; provided that, if such
Equipment Notes are to be redeemed, notice of such redemption has been duly
given pursuant to this Agreement or provision therefor satisfactory to the
Indenture Trustee has been made; and
(iii) Equipment Notes in exchange for or in lieu of which
other Equipment Notes have been executed and delivered pursuant to this
Agreement;
provided, however, that in determining whether the Holders of the holders of the
requisite principal amount of Equipment Notes Outstanding have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Equipment Notes owned by or pledged to Lessee or any Affiliate of Lessee shall
be disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Equipment Notes which the Indenture Trustee knows to be so owned or so pledged
shall be disregarded. Equipment Notes owned by Lessee which have been pledged in
good faith may be regarded as Outstanding if Lessee establishes to the
satisfaction of the Indenture Trustee the pledgee's right to act with respect to
such Equipment Notes and that the pledgee is not Lessee or an Affiliate thereof.
"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, 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.
"Participation Agreement" shall have the meaning specified
-----------------------
therefor in the Lease.
"Parts" shall have the meaning specified therefor in the
-----
Lease.
17
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
"Pass Through Agreements" means the Pass Through Trust
-----------------------
Agreements, the Note Purchase Agreement, the Intercreditor Agreement, the
Registration Rights Agreement and the Liquidity Facilities.
"Pass Through Equipment Notes" means any equipment note or
----------------------------
notes issued on or after the Refinancing Date under this Agreement, pursuant to
the terms of the Note Purchase Agreement, including each of the Series A-1,
Series B and Series C-2 Pass Through Equipment Notes issued hereunder,
substantially in the form of Exhibit A-2 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.
"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 to be entered into by and between the Lessee
and a Pass Through Trustee as contemplated by the Note Purchase Agreement.
"Pass Through Trust Supplement" shall have the meaning
-----------------------------
specified for the term "Trust Supplement" in the Basic Pass Through Trust
Agreement.
"Pass Through Trustee" means State Street Bank and Trust
--------------------
Company of Connecticut, 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, or Make-Whole Amount (on and after the Refinancing Date only), if any,
or premium (prior to the Refinancing Date only) 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 2%.
"Paying Agent" means any Person acting as Paying Agent
------------
hereunder pursuant to Section 2.03.
"Payment Date" means, with respect to any Series of Pass
------------
Through Equipment Notes, each Interest Payment Date listed on the Amortization
Schedule for such Series of Pass Through Equipment Notes set forth in the Note
Purchase Agreement.
18
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
"Permitted Investment" means (a) investments in obligations
--------------------
of, or guaranteed by, the United States Government having maturities no later
than 90 days following the date of such investment; (b) investments in open
market commercial paper of any corporation incorporated under the laws of the
United States of America or any state thereof with a short- term unsecured debt
rating issued by Moody's and Standard & Poor's of at least "A-1" and "P-1,"
respectively, having maturities no later than 90 days following the date of such
investment; or (c) investments in negotiable certificates of deposit, time
deposits, banker's acceptances, commercial paper or other direct obligations of,
or obligations guaranteed by, commercial banks organized under the laws of the
United States or of any political subdivision thereof (or any U.S. branch of a
foreign bank) with issuer ratings of at least "B/C" by Thomson Bankwatch, having
maturities no later than 90 days following the date of such investment;
provided, however, that: (x) all Permitted Investments that are bank obligations
-------- -------
shall be denominated in U.S. dollars; and (y) the aggregate amount of Permitted
Investments at any one time that are bank obligations issued by any one bank
shall not be in excess of 5% of such bank's capital and surplus; provided
--------
further that (1) any investment of the types described in clauses (a), (b) and
------- --- ---
(c) above may be made through a repurchase agreement in commercially reasonable
---
form with a bank or other financial institution qualifying as an Eligible
Institution so long as such investment is held by a third party custodian also
qualifying as an Eligible Institution, 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.
"Prepayment Discount Rate" with respect to the Existing
------------------------
Equipment Notes only, shall mean that yield quoted by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital
Markets, or such other entity appointed by Lessee and approved by the Indenture
Trustee three Business Days prior to the date of redemption of the Existing
Equipment Notes at 11:00 a.m., New York time, equal to the semi-annual bid yield
to maturity on a U.S. Treasury Note issued within six months prior to the date
of redemption of the Existing Equipment Notes (as quoted on the Reference Page)
with a remaining term equal to the length of the existing Funding Period. If
there is no such U.S. Treasury Note with such a term, then the Prepayment
Discount Rate shall be interpolated from the semi-annual bid yield to maturity
on a U.S. Treasury Note issued within six months prior to the date of redemption
of the Existing Equipment Notes with a remaining term longer than but closest to
the length of the existing Funding Period and the semi-annual bid yield to
maturity on a U.S. Treasury Note issued within six months prior to the date of
redemption of the Existing
19
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
Equipment Notes with a remaining term shorter than but closest to the length of
the existing Funding Period.
"Primary Lender" shall have the meaning specified therefor in
--------------
the Lease.
"Primary Lessor" shall have the meaning specified therefor in
--------------
the Lease.
"Primary Lessor Comfort Letter" shall have the meaning
-----------------------------
specified therefor in the Lease.
"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.
"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.
"Reference Page" shall mean the Telerate U.S. Treasury and
--------------
Money Markets p. 5 or any successor or alternate publication then reporting
yields on U.S. Treasury Notes.
"Refinancing Date" has the meaning specified therefor in the
----------------
Lease.
"Register" shall have the meaning specified therefor in
--------
Section 2.03.
"Registrar" means any person acting as Registrar hereunder
---------
pursuant to Section 2.03.
"Remaining Weighted Average Life" means, on the redemption
-------------------------------
date for an Pass Through Equipment Note which is being redeemed, the number of
days equal to the quotient obtained by dividing (a) the sum of the products
obtained by multiplying (i) the amount of each then remaining installment of
principal, including the payment due on the maturity date of such
20
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
Pass Through Equipment Note, by (ii) the number of days from and including the
redemption date to but excluding the scheduled payment date of such principal
installment; by (b) the then unpaid principal amount of such Pass Through
Equipment Note.
"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
-----------------
2.10(c).
"Series" means any of Series A-1, Series B, or Series C-2.
------
"Series A-1" or "Series A-1 Pass Through Equipment Notes"
---------- ---------------------------------------
means the Pass Through Equipment Notes issued hereunder and designated as
"Series A-1," in the original principal amount and maturities and bearing
interest as specified in the Note Purchase Agreement.
"Series B" or "Series B Pass Through Equipment Notes" means
-------- -------------------------------------
the Pass Through Equipment Notes issued hereunder and designated as "Series B,"
in the original principal amount and maturities and bearing interest as
specified in the Note Purchase Agreement.
"Series C-2" or "Series C-2 Pass Through Equipment Notes"
---------- ---------------------------------------
means the Pass Through Equipment Notes issued hereunder and designated as
"Series C-2," in the original principal amount and maturities and bearing
interest as specified in the Note Purchase Agreement.
"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 State Street Bank and Trust
-------------------
Company of Connecticut, National Association, as Subordination Agent under the
Intercreditor Agreement, or any successor thereto.
21
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
"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.
"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 (1989 I), 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 B 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.
------------- ----
ARTICLE 2
THE EQUIPMENT NOTES
Section 2.01. Equipment Notes; Title and Terms. (a) The
--------------------------------
aggregate principal amount of Existing Equipment Notes which may be Outstanding
under this Agreement is limited to $94,416,264.24. The Existing Equipment Notes
shall be substantially in the form set forth in Exhibit A-1. The Existing
Equipment Notes shall be dated the Issuance Date, and shall be issued in the
maturities and principal amounts, and shall bear the interest rates per annum,
to be
22
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
specified in the First Amendment to the Original Indenture. The Existing
Equipment Notes shall be issued in registered form only. The Existing Equipment
Notes shall upon original issuance be issued in minimum denominations of
$5,000,000 and integral multiples of $100,000 in excess of $5,000,000. The
Existing Equipment Notes are not redeemable prior to maturity except as provided
in this Agreement. Interest accrued on the Existing Equipment Notes shall be
calculated, in respect of the Existing Equipment Notes, on the basis of a 360-
day calendar year consisting of twelve 30-day months. The principal of, premium,
if any, and interest on the Existing Equipment Notes shall be payable at the
principal corporate trust office of the Indenture Trustee or at any office or
agency maintained for such purpose pursuant to Section 2.04; provided that,
interest may be payable at the option of the Indenture Trustee or the Paying
Agent by check mailed by the Indenture Trustee or the Paying Agent to the
address of the Holder entitled thereto as such address shall appear in the
Register. Upon the satisfaction of the conditions precedent set forth in the
Note Purchase Agreement, the Existing Equipment Notes shall be redeemed and
cancelled and the Pass Through Equipment Notes shall be issued hereunder, as
more particularly described in the Note Purchase Agreement.
(b) On the Refinancing Date, the Pass Through Equipment Notes
shall be issued in three separate series designated as Series A-1, Series B and
Series C-2, 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 the Note Purchase Agreement, as the case may be. Each
Series A-1, Series B and Series C-2 Pass Through Equipment Note shall be issued
to the Subordination Agent as nominee for the Pass Through Trustee under the
applicable Pass Through Trust Agreement. The Issuance Date for the Series A-1,
Series B and Series C-2 Pass Through Equipment Notes will be determined pursuant
to the Note Purchase Agreement.
On and after the Refinancing Date only, 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 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-1 Pass Through Equipment
Notes and Series B Pass Through Equipment Notes, and the denominator of which
shall be the sum of the then outstanding aggregate principal amount of all
"Series A-1 and Series A-2 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 Liquidity Facility minus Investment Earnings
from such Downgrade Advance multiplied by (y) the fraction specified in the
foregoing clause (i); (iii) (x) the amount equal to interest on any Non-
Extension Advance (other than any Applied Non-Extension Advance) payable under
Section 3.07 of each Liquidity Facility minus Investment Earnings from such Non-
Extension Advance multiplied by (y) the fraction specified in the foregoing
clause (i); (iv) (x) any amounts owed to the Liquidity Providers by the
Subordination
23
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
Agent as borrower under Section 3.01 (other than in respect of an Unpaid
Advance, an Applied Non-Extension Advance or an Applied Downgrade Advance),
3.02, 3.03 (other than in respect of an Unpaid Advance, an Applied Non-Extension
Advance or an Applied Downgrade Advance) 7.05 or 7.07 of each Liquidity Facility
(or similar provisions of any succeeding liquidity facility) multiplied by (y)
the fraction specified in the foregoing clause (i); (v) if any payment default
shall have occurred and be continuing with respect to interest on any Series A-1
Pass Through Equipment Note and Series B Pass Through Equipment Note, (x) the
excess, if any, of (1) the sum of (x) the amount equal to interest on any Unpaid
Advance, an Applied Non-Extension Advance or an Applied Downgrade Advance
payable under Section 3.07 of each Liquidity Facility plus (y) any other amounts
payable in respect of such Unpaid Advance, Non-Extension Advance or Applied
Downgrade Advance under Section 3.01, 3.03 or 3.09 of the applicable Liquidity
Facility over (2) the sum of Investment Earnings from any such Unpaid Advance,
Non-Extension 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, Non-Extension Advance or Applied Downgrade Advance
was made, multiplied by (y) a fraction the numerator of which shall be the then
aggregate overdue amounts of interest on the Series A-1 Pass Through Equipment
Notes and Series B Pass Through Equipment Notes (other than interest becoming
due and payable solely as a result of acceleration of any such Equipment Notes)
and the denominator of which shall be the then aggregate overdue amounts of
interest on all "Series A-1 and Series A-2 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"); (vi) Owner Trustee's pro rata share of all compensation and
reimbursement of expenses, disbursements and advances payable by Owner Trustee
under the Pass Through Trust Agreements; and (vii) Owner Trustee's pro rata
share of all compensation and reimbursement of expenses and disbursements
payable to the Subordination Agent under the Intercreditor Agreement except with
respect to any income or franchise taxes incurred by the Subordination Agent in
connection with the transactions contemplated by the Intercreditor Agreement.
For purposes of this paragraph, the terms "Applied Downgrade Advance", "Applied
Non-Extension Advance", "Downgrade Advance", "Final Advance", "Investment
Earnings" and "Unpaid Advance" shall have the meanings specified in each
Liquidity Facility or the Intercreditor Agreement referred to therein. As used
herein, "Owner Trustee's pro rata share" means as of any time a fraction, the
numerator of which is the principal balance then outstanding of the Pass Through
Equipment Notes and the denominator of which is the aggregate principal balance
then outstanding of all "Trust Owned Notes" (as such term is defined in the
Intercreditor 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 an authorized officer in its Corporate Trust Department.
24
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
(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.
(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 (in the case of the
Pass Through Equipment Notes only), 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
25
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
same date as the Equipment Note or Equipment Notes being replaced which the
Noteholder making the exchange is entitled to receive.
All Equipment Notes issued upon any registration of transfer or
exchange of Equipment Notes shall be the valid obligations of the Owner 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. 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 its
attorney duly authorized in writing, and the Indenture Trustee shall require an
opinion of counsel from each such Noteholder as to compliance of any such
transfer with the Securities Act of 1933, as amended, and the securities laws of
any state. The Indenture Trustee shall make a notation on each new Equipment
Note of the amount of all payments of principal previously made on the old
Equipment Note or Equipment Notes with respect to which such new Equipment Note
is issued and the date to which interest on such old Equipment Note or Equipment
Notes has been paid. 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 Operative
Document and, on and after the Refinancing Date only, Pass Through 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 (i) to register the transfer
of or to exchange any Equipment Note during a period beginning at the opening of
business 15 Business Days before the day of the mailing of a notice of
redemption of Equipment Notes pursuant to Section 6.01 or 6.02 and ending at the
close of business on the day of such mailing, or (ii) to register the transfer
of or to exchange any Equipment Note subject to redemption pursuant to such
Section 6.01 or 6.02.
26
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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, the Paying Agent and the Registrar may deem and
treat the Person in whose name any Equipment Note is registered as the absolute
owner of such Equipment Note for the purpose of receiving payment of principal
(including, subject to the provisions herein regarding the applicable Record
Dates, Amortization Amounts) of, Make-Whole Amount (on and after the Refinancing
Date only), if any, premium (prior to the Refinancing Date only), 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.
27
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
Section 2.08. Payment on Equipment Notes. The principal amount
--------------------------
of, interest on, Make-Whole Amount, if any, and other amounts due under each
Equipment Note or hereunder will be payable in Dollars by wire transfer of
immediately available funds not later than 11:00 a.m., Chicago, Illinois time,
on the due date of payment to the Indenture Trustee at the Corporate Trust
Department for distribution among the Noteholders in the manner provided herein.
The Owner 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
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 Debt 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
28
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 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 (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 shall
--------
be liable hereunder in its individual capacity, (i) for its own willful
misconduct or gross negligence and (ii) 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 shall be
released from all further duties and obligations hereunder, without prejudice to
any claims against State Street Bank and Trust Company or such predecessor Owner
Trustee for any default by State Street Bank and Trust Company or such
predecessor Owner Trustee, respectively, in the performance of its obligations
hereunder prior to such appointment.
Section 2.10. Subordination. With respect to the Pass Through
-------------
Equipment Notes only:
(a) The Indenture Trustee and, by acceptance of its Pass Through
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 Pass Through Equipment Notes of any
Series (other than Series A-1), 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-1 Pass Through Equipment Notes until
all amounts in respect of the Series A-1 Pass Through Equipment Notes have been
paid in full, (ii) after all amounts in
29
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
respect of Series A-1 Pass Through Equipment Notes have been paid in full, the
Noteholders of Series B Pass Through Equipment Notes until all amounts in
respect of the Series B Pass Through Equipment Notes have been paid in full, and
(iii) after all amounts in respect of the Series A-1 Pass Through Equipment
Notes and Series B Pass Through Equipment Notes have been paid in full, the
Noteholders of Series C-2 Pass Through Equipment Notes until all amounts in
respect of the Series C-2 Pass Through Equipment Notes have been paid in full.
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, Make-Whole Amount (on and after the Refinancing Date only), if any,
premium (prior to the Refinancing Date only), 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 or shall secure 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
under the Note Purchase Agreement 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.
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, Make-Whole Amount (on and
after the Refinancing Date only), if any, premium (prior to the Refinancing Date
only), if any, and other amounts due hereunder or under each Equipment Note (and
such exclusion and payment of withholding tax shall constitute payment in
respect of such Equipment Note) any and all United States withholding taxes
applicable thereto as required by law. The Indenture Trustee agrees to act as
such withholding agent and, in connection therewith, whenever any present or
future United States taxes or similar charges are required to be withheld with
respect to any amounts payable hereunder or in respect of the Equipment Notes,
to withhold such amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the Noteholders, that it will file any necessary
United States withholding tax returns or statements when due, and that as
promptly as possible after the payment thereof (but in no event later than 30
days after the due date thereof) it will deliver to each Noteholder (with a copy
to the Owner 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.
30
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 ▇-▇▇▇▇, ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8 EXP (or such
successor form or forms as may be required by the United States Treasury
Department) for the calendar year in which the payment hereunder or under the
Equipment Note(s) held by such Noteholder is made (but prior to the making of
such payment), and has not notified the Indenture Trustee of the withdrawal or
inaccuracy of such form prior to the date of such payment (and the Indenture
Trustee has no reason to believe that any information set forth in such form is
inaccurate), the Indenture Trustee shall withhold only the amount, if any,
required by law (after taking into account any applicable exemptions properly
claimed by the Noteholder) to be withheld from payments hereunder or under the
Equipment Notes held by such Noteholder in respect of United States federal
income tax (and such payment of withholding tax shall constitute payment in
respect of such Equipment Note). If a Noteholder 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 certificates 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.
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. (a) So long as the Existing Equipment Notes are Outstanding, in
---------------
the event the Equipment Notes
31
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
are redeemed in accordance with the provisions of Section 6.01 or Section 6.02,
the Indenture Trustee will apply on the Redemption Date any amounts then held by
it in the Trust Indenture Estate and received by it from Lessee, in the
following order of priority:
first, so much of such aggregate amount as shall be required to
-----
pay the Redemption Price pursuant to Section 6.01 or Section 6.02, as
redemption of the Existing Equipment Notes on the Redemption Date; and
second, the balance, if any, of such aggregate amount remaining
------
shall be distributed to the Owner Trustee, for distribution in
accordance with the terms of the Lease and the Participation
Agreement.
(b) On and after the issuance of the Pass Through 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-1 Pass Through
Equipment Notes pursuant to Section 6.01 on the Redemption Date shall
be applied to the redemption or purchase of the Series A-1 Pass Through
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 Pass Through
Equipment Notes pursuant to Section 6.01 on the Redemption Date shall
be applied to the redemption or purchase of the Series B Pass Through
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-2 Pass Through
Equipment Notes pursuant to Section 6.01 on the Redemption Date shall
be applied to the redemption or purchase of the Series C-2 Pass Through
Equipment Notes on the Redemption Date; and
fifth, the balance, if any, thereof remaining thereafter shall be
-----
distributed to the Owner Trustee free and clear of the Lien hereof to
be held or distributed to the Owner Participant in accordance with the
terms of the Trust Agreement.
32
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
Section 3.03. Application of Basic Rent. (a) So long as the
-------------------------
Existing Equipment Notes are Outstanding, each amount of Lease Rent received by
the Indenture Trustee from the Owner Trustee or Lessee, together with any amount
received by the Indenture Trustee pursuant to Section 8.03(e), shall, except as
otherwise provided in Section 3.02 or 3.05, be distributed by the Indenture
Trustee in the following order of priority:
first, so much of such aggregate amount as shall be required to
-----
pay in full principal, interest and premium, if any, in respect of all
Outstanding Existing Equipment Notes to the extent then due shall be
distributed to the Persons entitled thereto;
second, so much of such aggregate amount remaining as shall be
------
required to pay any amount due the Indenture Trustee pursuant to
Section 9.07 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 for distribution
in accordance with the terms of the Lease.
(b) On and after the issuance of the Pass Through Equipment
Notes, 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-1
Pass Through Equipment Notes shall be distributed
to the Noteholders of Series A-1 Pass Through
Equipment Notes ratably, without priority of one
over the other, in the proportion that the amount
of such payment or payments then due under all
Series A-1 Pass Through Equipment Notes held by
each such Noteholder bears to the aggregate amount
of the payments then due under all Series A-1 Pass
Through 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
33
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
extent permitted by applicable law, on any overdue
interest) then due under all Series B Pass Through
Equipment Notes shall be distributed to the
Noteholders of Series B Pass Through 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
Pass Through Equipment Notes held by each such
Noteholder bears to the aggregate amount of the
payments then due under all Series B Pass Through
Equipment Notes held by all such Noteholders; and
(iii) after giving effect to paragraphs (i) and (ii)
above, so much of such payment remaining as shall
be required to pay in full the aggregate amount of
the payment or payments of principal amount and
interest (as well as any interest on any overdue
principal amount and, to the extent permitted by
applicable law, on any overdue interest) then due
under all Series C-2 Pass Through Equipment Notes
shall be distributed to the Noteholders of Series
C- 2 Pass Through 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-2 Pass Through Equipment
Notes held by each such Noteholder bears to the
aggregate amount of the payments then due under all
Series C-2 Pass Through 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
-----
the Lien hereof to be held or distributed in accordance with the terms
of 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.
34
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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. (a) So long as the Existing Equipment Notes are Outstanding, all
-------
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), as well as all payments or amounts then held or
thereafter received by the Indenture Trustee as part of the Trust 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 9.07 shall be applied to pay the Indenture Trustee such
amounts;
second, so much of such payments or amounts remaining as shall be
------
required to pay the expenses incurred, or in the judgment of the
Indenture Trustee expected to be
35
incurred, in using, operating, storing, leasing, controlling or
managing the Trust Indenture Estate, and of all maintenance, insurance,
repairs, replacements, alterations, additions and improvements of and
to the Trust Indenture Estate 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 Trust
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 Lessee), all in
accordance with Section 8.03(c), shall be applied for such purposes;
third, so much of such payments or amounts remaining as shall be
-----
required to pay principal, interest and premium, if any, in respect of
all Existing Equipment Notes Outstanding and then due and payable,
whether by declaration of acceleration pursuant to Section 8.02 or
otherwise, shall be applied ratably to the payment of such principal,
interest and premium, if any; and in case such payments or amounts
shall be insufficient to pay in full the whole amount so due and
unpaid, then to the payment of such principal, interest and premium, if
any, without any preference or priority of one Existing Equipment Note
over another, ratably according to the aggregate amount so due for
principal, interest and premium, if any, at the date fixed by the
Indenture Trustee for the distribution of such payments or amounts; and
fourth, 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
Existing Equipment Notes have been accelerated and all amounts due
thereon have been paid, at which time such payments or amounts shall be
distributed to the Owner Trustee without derogation of any rights of
Lessee under the Operative Documents to receive the same; provided that
--------
at such time as one or more Lease Events of Default shall have occurred
and all such Lease Events of Default shall have continued for a period
of one year during which the Existing Equipment Notes shall not have
been accelerated pursuant to Section 8.02, such amounts shall be
distributed to the Owner Trustee for distribution in accordance with
the provisions of the Lease so long as no Indenture Event of Default
exists other than by virtue of such Lease Events of Default.
(b) On and after the issuance of the Pass Through Equipment
Notes, 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:
36
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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;
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-1
Pass Through Equipment Notes, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations owed in respect of the
Series A-1 Pass Through Equipment Notes to the date of distribution, shall be
distributed to the holders of Series A-1 Pass Through Equipment Notes, and in
case the aggregate amount so to be distributed shall be insufficient to pay in
full as aforesaid, then ratably, without priority of one over the other, in the
proportion that the aggregate unpaid principal amount of all Series A-1 Pass
Through Equipment Notes held by each Noteholder plus the accrued but unpaid
interest
37
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
and other amounts due hereunder or thereunder to the date of distribution,
bears to the aggregate unpaid principal amount of all Series A-1 Pass
Through Equipment Notes held by all such Noteholders plus the accrued but
unpaid interest and other amounts due thereon to the date of distribution;
(ii) after giving effect to paragraph (i) above, so much of such
payments or amounts remaining as shall be required to pay in full the
aggregate unpaid principal amount of all Series B Pass Through Equipment
Notes, and the accrued but unpaid interest and other amounts due thereon
and all other Secured Obligations in respect of the Series B Pass Through
Equipment Notes to the date of distribution, shall be distributed to the
holders of Series B Pass Through 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 Pass
Through Equipment Notes held by each Noteholder plus the accrued but unpaid
interest and other amounts due hereunder or thereunder to the date of
distribution, bears to the aggregate unpaid principal amount of all Series
B Pass Through Equipment Notes held by all such holders plus the accrued
but unpaid interest and other amounts due thereon to the date of
distribution; and
(iii) after giving effect to paragraphs (i) and (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-2 Pass Through
Equipment Notes, and the accrued but unpaid interest and other amounts due
thereon and all other Secured Obligations in respect of the Series C-2 Pass
Through Equipment Notes to the date of distribution, shall be distributed
to the Noteholders of Series C-2 Pass Through 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-2
Pass Through Equipment Notes held by each Noteholder plus the accrued but
unpaid interest and other amounts due hereunder or thereunder to the date
of distribution, bears to the aggregate unpaid principal amount of all
Series C-2 Pass Through Equipment Notes held by all such holders plus the
accrued but unpaid interest and other amounts due thereon to the date of
distribution; and
fifth, the balance, if any, of such payments or amounts remaining
-----
thereafter shall be distributed to the Owner Trustee free and clear of the
Lien hereof to be held or distributed in accordance with the terms of 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.
38
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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. 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.
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
39
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
the date of such payment, as provided in such Equipment Note, as well as any
interest on overdue principal, Make-Whole Amount (on and after the Refinancing
Date only), if any, premium (prior to the Refinancing Date only), 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:
(i) the Owner Trustee will duly and punctually pay the
principal of, Make-Whole Amount (on and after the Refinancing Date only), if
any, premium (prior to the Refinancing Date only), 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; provided, however, that all amounts payable under the Equipment Note and
this Agreement shall be made solely from the income and proceeds of the
Indenture Estate;
(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;
40
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
(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.
(vi) the Owner Trustee will furnish to the Indenture Trustee,
promptly upon receipt thereof, duplicates or copies of all reports, notices,
requests, demands, certificates and other documents furnished to the Owner
Trustee under the Lease or the Japanese Lease or any document related to the
Japanese Lease which is not required to be furnished to the Indenture Trustee
directly by the Lessee under any Operative Document.
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 replaced 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 such replaced
Part.
41
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
(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.
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,
together with accrued and unpaid interest thereon to but excluding the
applicable Redemption Date. No Make-Whole Amount or premium 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(a) or 9(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 9(b) of the Lease) 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(a) or 9(b) thereof, the third
Business Day following the Lease Termination Date, if any, 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
42
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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.
Section 6.02. Redemption Price. (a) So long as the Existing Equipment
----------------
Notes are Outstanding, upon the occurrence of an Event of Loss to the Aircraft
if the Aircraft is not replaced pursuant to Section 10(a)(ii) of the Lease, each
Outstanding Existing Equipment Note shall be redeemed in whole at a Redemption
Price equal to 100% of the principal amount of such Existing Equipment Note plus
accrued and unpaid interest thereon to but excluding the applicable Redemption
Date. The Redemption Date for Existing Equipment Notes to be redeemed pursuant
to this Section 6.01(a) shall be the date on which payment of Stipulated Loss
Value is made by Lessee pursuant to Section 10(a)(i) of the Lease.
So long as the Existing Equipment Notes are Outstanding, upon (1)
termination by Lessee, at its option, of the Lease pursuant to Section 9(a) of
the Lease or upon the purchase of the Aircraft by Lessee at its option pursuant
to Section 9(b) of the Lease (unless Lessee shall have elected to assume all of
the rights and obligations of the Owner Trustee hereunder as provided for in
clause (2)(A) of Section 9(b) of the Lease), or (2) the Owner Trustee giving
notice of redemption to the Indenture Trustee pursuant to Section 8.03(e)(ii),
at any time after one or more Lease Events of Default shall have occurred and
shall have continued for 180 days or more but less than one year and no
acceleration has occurred, each Outstanding Existing Equipment Note shall be
redeemed in whole at a Redemption Price as determined below. Such Redemption
Price shall, subject to the second immediately succeeding sentence, be equal to
the greater of (i) the unpaid principal amount of such Existing Equipment Note
and (ii) the present value on the first Business Day immediately preceding the
Redemption Date of all remaining scheduled principal and interest payments due
on such Existing Equipment Note on or prior to the first day of the immediately
succeeding Funding Period (as adjusted for the assumption that all principal
payments payable after the first day of the immediately succeeding Funding
Period would be paid on such first day) discounted to the Redemption Date at the
Prepayment Discount Rate plus 30 basis points, plus in each case accrued and
unpaid interest on the principal of such Existing Equipment Note to but
excluding the applicable Redemption Date. Any excess of
43
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
(ii) over (i) shall be deemed premium. In the event of a redemption of the
Existing Equipment Notes on a date which is the first day immediately following
the end of a Funding Period, the unpaid principal amount of each Existing
Equipment Note shall become due and payable, without premium, together with
accrued and unpaid interest on the principal of such Existing Equipment Note to
but excluding the applicable Redemption Date. The Redemption Date for Existing
Equipment Notes to be redeemed pursuant to the foregoing clause (1) shall be the
Lease Termination Date and the Redemption Date for Existing Equipment Notes to
be redeemed pursuant to the foregoing clause (2) shall be the same date as if
the redemption had occurred pursuant to Section 6.02.
(b) On and after the issuance of the Pass Through Equipment Notes, 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 (except
in connection with a redemption or purchase under Section 6.01(a) or 8.03(e)(ii)
when no Make-Whole Amount is payable) Make-Whole Amount (on and after the
Refinancing Date only), if any, plus accrued and unpaid interest thereon to but
excluding the applicable Redemption Date.
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 Make-Whole Amount (on and after the
Refinancing Date only), if any, and premium (prior to the Refinancing
Date only), if any, that will be payable with respect to such redemption,
and
44
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
(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.
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.
45
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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, Make-Whole Amount (on
and after the Refinancing Date only), if any, premium (prior to the Refinancing
Date only), 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 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 G 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 and subject to the
provisions of Section 7(a)(3) of the Lease and Section 8(e) of the Participation
Agreement..
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.
46
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 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 9(b) of the Lease 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
47
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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;
(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
48
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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, 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.
49
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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).
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.
Section 7.04. Selection of Funding Period. With respect to
---------------------------
Existing Equipment Notes only:
(a) The election by Lessee of each Funding Period shall be
subject to the provisions of this Section 7.04. Within two Business Days of the
announcement of the applicable Debt Rate for the new Funding Period, Owner
Participant shall deliver to Lessee and the Indenture Trustee a certificate of
an authorized representative of Owner Participant (the "Funding Period Equipment
Note") setting forth the proposed revised schedules of Basic Rent, Stipulated
Loss Value percentages and Termination Value percentages. Within one Business
Day of its receipt of the Funding Period Equipment Note, Lessee may demand a
verification, pursuant to Exhibit E of the Original Lease, of the information
set forth in the Funding Period Equipment Note. Upon the acceptance by Lessee of
the accuracy of the information set forth in the Funding Period Equipment Notes
or the determination pursuant to such verification procedures of such
information, Owner Participant and Lessee will execute an amendment to the Lease
setting forth the new Basic Rent, Stipulated Loss Value percentages and
Termination Value percentages, and, Owner Participant will exchange new Annex A
attachments to the Existing Equipment Notes containing revised amortization
schedules for the Annex A attachments to the Existing Equipment Notes
outstanding immediately prior to such revisions.
(b) In connection with adjustments of Basic Rent, and
Stipulated Loss Value percentages and Termination Value percentages pursuant to
this Section 7.04 and Section 3(c) of the Lease, (i) the Indenture Trustee will
agree to changes in the Amortization Schedule of the Existing Equipment Notes
and (ii) each Existing Equipment Note Holder will exchange the Annex A attached
to its Existing Equipment Notes for new Annex A attachments containing revised
Amortization Schedules; provided, that such changes do not (X) change the final
--------
maturity of any Existing Equipment Notes or (Y) reduce Basic Rent or the
Stipulated Loss Value or Termination Value percentages below the amount
necessary (together with all other amounts simultaneously payable by Lessee) to
permit payment of all amounts payable pursuant to the Existing Equipment Notes
or (Z) increase or decrease by more than six months the weighted average lives
of the Existing Equipment Notes as of the date of their original issuance.
50
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
(c) The Lessee shall pay, on a net after-tax basis, all of the
reasonable expenses of all parties to such adjustments, including without
limitation, the reasonable fees and expenses of such parties' counsel.
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, Make-Whole Amount (on and after the Refinancing Date only), if any,
premium (prior to the Refinancing Date only), 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 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
51
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 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 or Owner Participant Guarantor 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
52
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 or Owner Participant Guarantor 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 Trust
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 Trust 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 or Owner
Participant Guarantor referred to in this Section 8.01(g).
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, but without
53
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
Make-Whole Amount or premium, 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.
(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
54
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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
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
55
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 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
56
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 within 15 days after the same shall become due, and if such
failure of the Lessee to make such payment of Basic Rent shall not constitute
the fourth consecutive such failure or the seventh cumulative such failure, then
as long as no Indenture Event of Default (other than arising from such failure
to pay Basic Rent) 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 expiration of a period of 15 days (the "15-Day Cure Period")
after the later to occur of (x) the expiration of the 15-day period during which
the Lessee failed to make such payment of Basic Rent and (y) the exercise of any
remedies by the Indenture Trustee pursuant to Section 15 of the Lease or under
this Agreement (prior to the expiration of the 15-Day Cure Period the Indenture
Trustee 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), 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, and such payment by the Owner Participant or the Owner Trustee shall be
deemed to cure any Indenture Event of Default which arose from such failure of
the Lessee (but such cure shall not relieve the Lessee of any of its
obligations). If the Lessee shall fail to perform or observe any other covenant,
condition or agreement to be performed or observed by it under the Lease other
than with respect to Excluded Payments, 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 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
expiration of a period of 15 days after 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 (prior to the expiration of which 15-day period the Indenture
Trustee 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), all sums necessary to effect the performance or observance of
such covenant or agreement of the Lessee, together with any interest due thereon
57
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
on account of the delayed payment thereof, and such payment by the Owner
Participant or the Owner Trustee shall be deemed to cure any Indenture Event of
Default which arose from such failure of the Lessee (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 Lessor 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, Make-Whole Amount, if any, and interest at the time due and payable
on the Equipment Notes 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 commencing an action
against the Lessee to require the payment of such amount.
(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, or (B) the Equipment Notes shall have
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 to
exercise any other dispossessory remedy specified in Sections 8.02 or
8.03 hereof or Section 15 of the Lease, 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 determined consistently with the
applicable provisions of Article 6 all Equipment Notes then Outstanding
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
58
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 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 as specified in Section
1110(a)(l)(A) of the Bankruptcy Code (such 60-day 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 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)(2)(A) of the Bankruptcy
Code and cures any default (other than a default of a kind specified in
Section 365(b)(2) of the Bankruptcy Code) within the applicable time
period specified in Section 1110(a)(2)(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) 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). 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.
59
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
(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.
(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
60
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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.
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
61
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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, 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.
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.
62
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
(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.
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
63
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 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) State Street Bank and
Trust Company of Connecticut, 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, Make-Whole Amount (on and after the Refinancing Date only),
if any, premium (prior to the Refinancing Date only), if any, or interest on any
Equipment Note, the Indenture Trustee shall be
64
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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.
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, and Make-Whole Amount (on and after the Refinancing
Date only), if any, or premium (prior to the Refinancing Date only), 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
65
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
effective only upon the successor Indenture Trustee's acceptance of appointment
as provided in this Section.
(b) The Indenture Trustee may resign by giving at least 30
days' prior written notice to the 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
66
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
Equipment Notes outstanding, by mailing written notice of such event by first-
class mail to the Noteholders.
(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.
67
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
ARTICLE 10
TERMINATION OF TRUST INDENTURE
Section 10.01. Termination of Indenture. Subject to Section
------------------------
10.02, upon (or at any time after):
(x) payment in full of the outstanding principal amount of,
Make-Whole Amount (on and after the Refinancing Date only), if any,
premium (prior to the Refinancing Date only), 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, Make-Whole Amount (on and after the Refinancing Date only), if any,
premium (prior to the Refinancing Date only), 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
68
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
same amount and in the same manner and at the same times, as
would have been the case if such option had not been
exercised;
(C) all 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, Make-
Whole Amount (on and after the Refinancing Date only), if any, premium (prior to
the Refinancing Date only), 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.
69
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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;
70
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
(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 provide for compliance with applicable law, including,
without limitation, 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) (1) With respect to the Existing Equipment Notes, with the
-----------
written consent of the holders of a majority of the aggregate principal amount
of the Outstanding Existing Equipment Notes, the Lessee, 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 holders;
provided, however, without the consent of each Certificate Holder affected
-------- -------
thereby, an amendment under this Section 11.02 may not:
(i) change the final maturity of the principal of,
premium, if any, or any installment of interest on, any Existing
Equipment Note; or
(ii) create any Lien on the Trust 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 Certificate Holder
of the benefit of the Lien on the Trust Indenture Estate created by
this Agreement; or
(iii) reduce the percentage in principal amount of the
Outstanding Existing Equipment Note, the consent of whose holders is
required for any such supplemental agreement, or the consent of whose
holders 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
(iv) make any change in Section 8.05 or 8.08 or this
Section 11.02(a).
(2) It is not necessary under this Section 11.02 for the
Certificate Holders to consent to the particular form of any proposed
supplemental agreement, but it is sufficient if they consent to the
substance thereof.
(3) Promptly after the execution by the Owner Trustee, the
Lessee and the Indenture Trustee of any supplemental agreement pursuant
to the provisions of this Section 11.02, the Lessee shall transmit by
first-class mail a notice, setting forth in general terms the substance
of such supplemental agreement, to all Certificate Holders, as
71
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
the names and addresses of such holders appear on the Register. Any
failure of the Lessee to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such
supplemental agreement.
(b) (1) 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, on and after the
-------- -------
Refinancing Date only, an amendment under this Section 11.02 may not without the
consent of each of the Noteholders of the applicable Series of Equipment Notes
and in the case of the Series A-1, Series B or Series C-2 Pass Through Equipment
Notes, the applicable Liquidity Provider:
(i) reduce the principal amount of, Make-Whole Amount
(on and after the Refinancing Date only), if any, premium (prior to the
Refinancing Date only), if any, or any installment of interest on, such
Series of Equipment Notes; or
(ii) change the date on which any principal amount of,
any Amortization Amount payable with respect to, Make-Whole Amount (on
and after the Refinancing Date only), if any, premium (prior to the
Refinancing Date only), if any, or interest on such Series of Equipment
Notes, is due or payable; or
(iii) 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
(iv) 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 to take or approve
any action under this Agreement; or
(v) 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).
(2) 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.
(3) 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
72
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 (acting on instructions
from the Owner Participant) 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.
(b) Subject to the provisions of subsection (c) of this
Section 11.06, the Owner Trustee (acting on instructions from the Owner
Participant) 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
73
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 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 Liquidity Providers (on and after the Refinancing Date
only) 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 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, 21
and 23 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
74
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
Trustee (acting on instructions from the Owner Participant)) 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:
Section 1(b), Section 7 (insofar as such Section 7 relates to the
Indenture Trustee, any Liquidity Provider (on and after the Refinancing
Date only) and the Noteholders), Section 8, Section 11, Section 17 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 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,
75
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
(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, Make-Whole Amount (on and after the Refinancing Date
only), if any, premium (prior to the Refinancing Date only), 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, 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 Make- Whole Amount (on and after the Refinancing Date only),
if any, or premium (prior to the Refinancing Date only), 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
Make-Whole Amount (on and after the Refinancing Date only), if any, or
premium (prior to the Refinancing Date only), 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 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
on or after the Refinancing Date only, any 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 Liquidity Providers. On and after
------------------------------
the Refinancing Date only, any request made to any Noteholder for consent to any
amendment or supplement pursuant
76
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
to this Article 11 shall be promptly furnished by the Indenture Trustee to each
Liquidity Provider at its address set forth in the Intercreditor Agreement.
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: (▇▇▇) ▇▇▇-▇▇▇▇
or if by overnight courier, to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and Treasurer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Indenture Trustee, to:
State Street Bank and Trust Company
of Connecticut, National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square
Hartford, CT 06103
Attention: Corporate Trust Department
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
77
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
if to the Owner Trustee, to:
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
or if by overnight courier to:
▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
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.
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
78
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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.
Section 12.06. Effectiveness. As of July 20, 2000, this
-------------
Agreement shall amend and restate the Original Indenture in its entirety, and
the Original Indenture, except as expressly provided herein, shall be superseded
in its entirety by this Agreement.
* * *
79
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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, not in its individual
capacity, except as expressly
provided herein, but solely as
Owner Trustee
By: _____________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, as Indenture Trustee
By: _____________________________
Name:
Title:
80
Exhibit A-1 to
Trust Indenture and
Security Agreement
Form of Existing Equipment Note
-------------------------------
February 6, 1990
$_______________ No.____________
1989 EQUIPMENT TRUST CERTIFICATE, SERIES A
DUE FEBRUARY 15, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ AND TRUST COMPANY,
Not in its Individual Capacity but solely
as Owner Trustee under the First Amended
and Restated Trust Indenture and
Security Agreement (1989 I) dated
as of July 20, 2000
with
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT
NATIONAL ASSOCIATION,
Not in its Individual Capacity
but Solely as Indenture Trustee Under
the First Amended and Restated
Trust Indenture and Security Agreement
(1989 I) dated as of July 20, 2000
and
UNITED AIR LINES, INC., as Lessee
State Street Bank and Trust Company, not in its individual capacity
but solely as the Owner Trustee (the "Owner Trustee") under the First Amended
and Restated Trust Indenture and Security Agreement (1989 I) dated as of July
20, 2000 between State Street Bank and Trust Company, as Owner Trustee, and
State Street Bank and Trust Company of Connecticut, National Association, as
Indenture Trustee, for value received, hereby promises to pay to _____________,
or registered assigns, the principal sum of __________________ Dollars and to
pay interest thereon at the Debt Rate (as defined below) from February 6, 1990
or from the most recent date to which interest has been paid or duly provided
for, semi-annually, on February 15 and August 15 in each year, commencing
February 15, 1990, until the principal hereof is paid or made available for
payment. The original principal sum of this Series A Certificate shall be
payable in installments on the dates set forth in Annex A hereto equal to the
corresponding percentage of the Original Amount (all terms used herein which are
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
defined in the Trust Indenture and Security Agreement are used herein as so
defined) of this Series A Certificates set forth in Annex A hereto. The interest
so payable, and punctually paid or duly provided for, on any such Interest
Payment Date will, as provided in the Trust Indenture and Security Agreement, be
paid to the Person in whose name this Certificate (or one or more predecessor
Certificates) is registered at the close of business on the Record Date for
payment of such interest, which shall be the February 1 or August 1 (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder hereof on such Record Date (or to
the Person in whose name this Certificate is registered upon issuance) and may
be paid to the Person in whose name this Certificate (or one or more predecessor
Certificates) is registered at the close of business on a special record date
for the payment of such Defaulted Interest to be fixed by the Indenture Trustee,
notice whereof shall be given to the Holders not less than 10 days prior to such
special record date, all as more fully provided in the Trust Indenture and
Security Agreement.
As used herein Debt Rate shall mean 10.43% per annum for the initial
Funding Period and thereafter shall be for each Funding Period the Applicable
Treasury Note Yield plus 2.00 percentage points. The Lessee on behalf of the
Owner Trustee shall specify the length of each Funding Period (other than the
initial Funding Period) by delivering written notice to the Indenture Trustee
and the Owner Trustee not less than sixty (60) nor more than one hundred twenty
(120) days prior to the commencement of such Funding Period. If Lessee on behalf
of the Owner Trustee fails to give the notice contemplated by this paragraph,
the Funding Period shall be for a period of one year (subject to provisions (i)
and (ii) of the definition of "Funding Period"). The Lessee shall promptly
notify the Indenture Trustee and the Owner Trustee of the determination of such
Debt Rate. Upon receipt of such notice, the Indenture Trustee shall promptly
notify each Series A Certificate Holder as to the length of each new Funding
Period and the applicable Debt Rate.
Any amount not paid when due under this Certificate shall bear
interest, payable on demand, at a rate equal to 1.00% per annum in excess of the
Debt Rate applicable in respect of this Certificate (the "Past Due Rate").
Except as otherwise expressly provided in the Trust Indenture and
Security Agreement, all amounts payable by the Indenture Trustee and the Owner
Trustee hereunder and under the Trust Indenture and Security Agreement shall be
made only from the income and proceeds of the Trust Indenture Estate. Each
Holder hereof, by its acceptance of this Certificate, agrees that (a) it will
look solely to the income and proceeds of the Trust Indenture Estate for payment
of such amounts, to the extent available for distribution to the Holder hereof
as provided in the Trust Indenture and Security Agreement, and (b) neither the
Owner Trustee nor the Indenture Trustee is or shall be personally liable to the
Holder hereof for any amount payable hereunder or under the Trust Indenture and
Security Agreement or, except as provided in the Trust Indenture and Security
Agreement in the case of the Indenture
A-2
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
Trustee and the Owner Trustee, for any liability under the Trust Indenture and
Security Agreement.
Payment of the principal of, premium, if any, and interest on this
Certificate will be made in immediately available funds at the principal
corporate trust office of the Indenture Trustee, or the office or agency
maintained by the Indenture Trustee for such purpose, or as otherwise provided
in the Trust Indenture and Security Agreement, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts. Each such payment shall be made on the date such
payment is due and without any presentment or surrender of this Certificate,
except that in the case of any final payment with respect to this Certificate,
the Certificate shall be surrendered promptly thereafter by the Indenture
Trustee to the Owner Trustee for cancellation. Payments otherwise due on a day
which is not a Business Day shall be due on the immediately succeeding Business
Day without adjustment in the amount due.
State Street Bank and Trust Company is not acting in its individual
capacity hereunder, but solely as Owner Trustee under the Trust Indenture and
Security Agreement.
State Street Bank and Trust Company of Connecticut, National Association is
not acting individually hereunder, but solely as Indenture Trustee under the
Trust Indenture and Security Agreement.
Reference is hereby made to the further provisions of this Certificate set
forth below, which further provisions shall for all Purposes have the same
effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Trust
Indenture and Security Agreement or be valid or obligatory for any purpose
unless this Certificate has been executed by the Owner Trustee, and
authenticated in the manner specified in Section 2.02 of the Trust Indenture and
Security Agreement.
This Certificate is one of the 1989 Equipment Trust Certificates, Series A
issued pursuant to the Trust Indenture and Security Agreement.
A-3
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
IN WITNESS WHEREOF, the Owner Trustee has caused this Certificate to
be executed in its corporate name by its officer thereunto duly authorized on
the date hereof.
STATE STREET BANK AND TRUST
COMPANY
By:____________________________
Name:__________________________
Title:_________________________
This Certificate is one of a duly authorized issue of Certificates
issued and to be issued under the Trust Indenture and Security Agreement,
designated as 1989 Equipment Trust Certificate, Series A limited in aggregate
principal amount to $94,416,264.24.
Reference is made to the Trust Indenture and Security Agreement and
all supplements and amendments thereto (a copy of which is on file with the
Indenture Trustee at its principal corporate trust office) for a 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, Lessee, the
Indenture Trustee and the Holders, and the terms upon which the Certificates
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 Trust Indenture and Security
Agreement, to all of which terms and conditions in the Trust Indenture and
Security Agreement each Holder hereof agrees by its acceptance of this
Certificate.
As more fully provided in the Trust Indenture and Security Agreement,
the Certificates are subject to redemption, under the following circumstances,
at a redemption price equal to the unpaid principal amount thereof, premium, if
any, plus accrued interest thereon to the Redemption Date:
(a) in whole at any time upon the occurrence of an Event of Loss to
the Aircraft if such Aircraft is not replaced;
(b) in the event of a termination by Lessee, at its option, of the
Lease with respect to the Aircraft, if the Lease shall be terminated pursuant to
Section 9(a) thereof;
(c) in whole, if Lessee purchases the Aircraft pursuant to Section
9(b) of the Lease;
A-4
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
(d) in whole at any time on or after February 15, 1995, if Lessee
shall have requested the Owner Trustee, and the Owner Trustee shall have
consented to such request, to effect a redemption pursuant to Section 17 of the
Participation Agreement;
(e) in whole, in the event that the Owner Trustee gives notice of
redemption to the Indenture Trustee pursuant to Section 8.03(e)(ii) of the Trust
Indenture and Security Agreement: (i) at any time after one or more Events of
Default shall have occurred and shall have continued for a period of 180 days or
more but less than one year, during which period the Certificates shall not have
been accelerated; or (ii) at any time after acceleration of the Certificates, or
at any time after one or more Lease Events of Default shall have occurred and
shall have continued for a period of one year or more, during which period the
Certificates shall not have been accelerated.
If an Indenture Event of Default shall occur and be continuing, the
principal of the Certificates may be declared due and in the manner and with the
effect provided in the Trust Indenture and Security Agreement. If, and only if,
such Indenture Event of Default constitutes a Lease Event of Default, the
Indenture Trustee may, subject to Section 8.03 of the Trust Indenture and
Security Agreement declare the Lease to be in default, and may, to the exclusion
of the Owner Trustee, exercise one or more of the remedies of the Owner Trustee
provided in the Lease. Such remedies include the right to repossess and use or
operate the Aircraft, to sell or relet the Aircraft free and clear of Lessee's
rights and retain the proceeds and to require Lessee to pay as liquidated
damages (i) any unpaid Lease Rent plus an amount equal to the excess of the
Termination Value of the Aircraft over the discounted fair market rental value
thereof for the remainder of the term for the Aircraft, (ii) any unpaid Lease
Rent plus the excess of the Termination Value of the Aircraft over the fair
market sales value thereof or (iii) if the Aircraft has been sold, any unpaid
Lease Rent plus the excess of the Termination Value thereof over the net sales
proceeds.
The Owner Trustee may cure any default by Lessee under the Lease
arising from the failure of Lessee to make payments of Basic Rent under the
Lease, provided that such failure of Lessee is not the fourth consecutive such
failure, or the seventh or subsequent cumulative such failure. The Owner Trustee
may cure any other default by Lessee in the performance of its obligations under
the Lease which can be cured by the payment of money, by making such payment on
behalf of Lessee.
The right of the Holder of this Certificate to institute action for
any remedy under the Trust Indenture and Security Agreement, including the
enforcement of payment of any amount due hereon, is subject to certain
restrictions specified in the Trust Indenture and Security Agreement.
In addition, the Owner Trustee and the Indenture Trustee will be
discharged from their respective obligations in respect of the Certificates
(except for certain obligations to register the transfer or exchange of
Certificates, replace stolen, lost or mutilated Certificates,
A-5
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
maintain paying agencies and hold moneys for payment in trust), and the
Indenture Trustee may thereupon cause the release of the Trust Indenture Estate
from the Lien of the Trust Indenture and Security Agreement, if (a) the Owner
Trustee or Lessee deposits or causes to be deposited irrevocably with the
Indenture Trustee, in trust, money or U.S. Government Obligations which through
the payment of interest and principal in respect thereof in accordance with
their terms will provide money in an amount sufficient to pay principal of,
premium, if any, and interest on the Outstanding Certificates on the dates such
payments are due in accordance with the terms of the Certificates and (b)
certain other conditions are satisfied, including the receipt of either a
private ruling issued by the Internal Revenue Service or an opinion of counsel,
based on a ruling published by the Internal Revenue Service after the date
hereof, in either case to the effect that the deposit and related defeasance
would not cause the Holders to recognize income, gain or loss for Federal income
tax purposes.
As provided in the Trust Indenture and Security Agreement and subject
to certain limitations therein set forth, this Certificate is transferable, and
upon surrender of this Certificate 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 Holder or
his attorney duly authorized in writing, one or more new Certificates of the
same maturity and of authorized denominations and for the same aggregate
principal amount will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons. As provided in the Trust Indenture and Security Agreement and subject
to certain limitations therein set forth, Certificates are exchangeable for a
like aggregate principal amount of Certificates of the same maturity and of
authorized denominations, as requested by the Holder 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
Certificate, the Owner Trustee, the Indenture Trustee, any Paying Agent, the
Registrar and Lessee may deem and treat the person in whose name this
Certificate is registered as the absolute owner hereof for the purpose of
receiving payment of the principal of and interest on this Certificate and for
all other purposes whatsoever, whether or not this Certificate be overdue, and
neither the Owner Trustee, the Indenture Trustee, any Paying Agent, the
Registrar nor Lessee shall be affected by notice to the contrary.
AS PROVIDED IN THE TRUST INDENTURE AND SECURITY AGREEMENT, THE TRUST
INDENTURE AND SECURITY AGREEMENT AND THIS
A-6
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF ILLINOIS.
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Indenture and Security Agreement.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, as Indenture
Trustee
By:________________________________
Name:______________________________
Title:_____________________________
THIS CERTIFICATE 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 CERTIFICATE MAY NOT BE SOLD UNLESS EITHER REGISTERED UNDER THE
ACT AND SUCH APPLICABLE STATE LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE.
▇-▇
▇▇▇▇▇▇▇ ▇-▇ to
Trust Indenture and
Security Agreement
Form of Pass Through 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
REGISTRATION IS AVAILABLE.
STATE STREET BANK AND TRUST COMPANY,
NOT INDIVIDUALLY BUT SOLELY
AS OWNER TRUSTEE
SERIES [______] EQUIPMENT NOTE DUE [_____] ISSUED IN CONNECTION
WITH THE BOEING MODEL 747-422 AIRCRAFT BEARING UNITED STATES
REGISTRATION NUMBER N171UA.
No.______ Date: [___________,____]
Original Principal Amount Maturity Date
-------------
$________________________ _____________
STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company,
not individually but solely as Owner Trustee (herein, in such capacity, the
"Owner Trustee") for value received, hereby promises to pay to STATE STREET BANK
AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, as Subordination Agent
as nominee for the Pass Through Trustee under the Intercreditor Agreement, or
registered assigns, the principal sum of __________ Dollars ($________) 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 Debt Rate (calculated on the basis of a year of 360 days
consisting of twelve (12) thirty-day months) 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 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
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 Debt 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 (1989 I), dated as of July 20,
2000 between the Owner Trustee and State Street Bank and Trust Company of
Connecticut, National Association (the "Indenture Trustee"), as the same may be
amended or supplemented from time to time. All other capitalized terms used in
this Equipment Note and not defined herein shall have the respective meanings
assigned in the Indenture.
This Equipment Note shall bear interest, payable on demand, at the
Past Due Rate (calculated on the basis of a year of 360 days consisting of
twelve (12) thirty-day months) on any overdue principal amount, Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest and any other amounts payable hereunder which are overdue, in each case
for the period the same is overdue. Amounts shall be overdue if not paid when
due (whether at stated maturity, by acceleration or otherwise).
All payments of principal, 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 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.
A-9
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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 on this Equipment Note 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.
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
A-10
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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-1 Equipment Notes]/1/ [Series A-1 and
Series B Equipment Notes]/2/ and this Equipment Note is issued subject to such
provisions]/3/ . 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 Operative Document and Pass Through Document,
(b) authorizes and directs the Indenture Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Indenture Trustee 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.
* * *
_________________
/1/ To be inserted in the case of a Series B Equipment Note.
/2/ To be inserted in the case of a Series C-2 Equipment Note.
/3/ To be inserted for each Equipment Note other than any Series A-1
Equipment
Note.
A-11
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
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, not in its individual capacity but solely
as Owner Trustee
By:_______________________________________________
Name:
Title:
A-12
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, as Indenture Trustee
By:__________________________________
Authorized officer and signatory
A-13
[First Amended and Restated Trust Indenture
and Security Agreement (1989 I)]
SCHEDULE I
AMORTIZATION SCHEDULE
SCHEDULE I TO THE FIRST AMENDED AND RESTATED TRUST INDENTURE AND
SECURITY AGREEMENT (1989 I) HAS BEEN INTENTIONALLY OMITTED FROM THE
FIRST AMENDED AND RESTATED TRUST INDENTURE AND SECURITY AGREEMENT
(1989 I) ON FILE WITH THE FAA
A-14
[Trust Indenture and Security Agreement (1989 I)]
EXHIBIT B
---------
TRUST AGREEMENT AND TRUST INDENTURE AND
SECURITY AGREEMENT SUPPLEMENT
(1989 I)
This TRUST AGREEMENT AND TRUST INDENTURE AND SECURITY AGREEMENT SUPPLEMENT
(1989 I), dated (herein called the "Trust Supplement") of STATE STREET BANK AND
TRUST COMPANY, not in its individual capacity, but solely as Owner Trustee
(herein called the "Owner Trustee"), under the Trust Agreement (1989 I), dated
as of July 20, 2000 (as amended to date herein called the "Trust Agreement"),
between the Owner Trustee and the Owner Participant named therein.
WITNESSETH:
WHEREAS, the Trust Agreement provides for the execution and delivery of one
or more, supplements thereto substantially in the form hereof, which shall
particularly describe the Aircraft (such term and other terms defined in the
Indenture referred to below used herein as therein defined) included in the
property covered by the Trust Agreement;
WHEREAS, the Amended and Restated Trust Indenture and Security Agreement
(1989 I) dated as of July 20, 2000 (herein called the "Indenture"), between the
Owner Trustee and STATE STREET BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, as
Indenture Trustee (herein called the "Indenture Trustee"), provides for the
execution and delivery of a supplement thereto substantially in the form hereof,
which shall particularly describe the Aircraft, and shall specifically mortgage
such Aircraft to the Indenture Trustee; and
WHEREAS, each of the Trust Agreement and Indenture relates to the Airframe
and Engines described below, and a counterpart of the Indenture is attached
hereto and made a part hereof and this Trust Supplement, together with such
counterpart of the Indenture, is being filed for recordation on the date hereof
with the Federal Aviation Administration as one document;
NOW, THEREFORE, this Trust Supplement Witnesseth, subject to Section
2.11(b) of the Indenture that, to secure the prompt payment by the Owner
Trustee, as and when required under the Indenture or the Equipment Notes, of the
principal of, Make-Whole Amount (on and after the Refinancing Date only), if
any, premium (prior to the Refinancing Date only), if any, and interest on, and
all other amounts due with respect to, all Equipment Notes from time to time
outstanding under the Indenture and to secure the performance and observance by
the Owner Trustee of all the agreements, covenants and provisions contained in
the Indenture and in the
[Trust Indenture and Security Agreement (1989 I)]
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 under the Indenture, 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 (such obligations being collectively referred to
herein as the "Secured Obligations") and for the uses and purposes and subject
to the terms and provisions of the Indenture, and in consideration of the
premises and of the covenants contained in the Indenture, and of the acceptance
of the Equipment Notes by the Noteholders and of other good and valuable
consideration the receipt and adequacy whereof are hereby acknowledged, the
Owner 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
the following described property:
AIRFRAME
One Airframe Identified as follows:
FAA
Registration Manufacturer's
Manufacturer Model Number Serial Number
------------ ----- ------ -------------
The Boeing Company
together with all Parts which are from time to time incorporated or installed in
or attached thereto or which have been removed therefrom, but where title to
which remains vested in the Owner Trustee in accordance with the Lease.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated take-
off horsepower or the equivalent thereof, whether or not such engines shall be
installed in or attached to the Airframe or any other airframe, identified as
follows:
Manufacturer's
Manufacturer Model Serial Numbers
B-2
[Trust Indenture and Security Agreement (1989 I)]
in each case, together with all Parts which are from time to time incorporated
or installed in or attached thereto or which have been removed therefrom, but
where title to which remains vested in the Owner Trustee in accordance with the
Lease.
As further security for the obligations referred to above and secured
by the Indenture and hereby, the Owner Trustee hereby confirms that the Lien of
the Indenture over the Trust Indenture Estate includes the Lease Supplement of
even date herewith covering the property described above.
Notwithstanding any provision hereof, no Excluded Payment shall
constitute security for any of the aforementioned obligations.
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 the Noteholders from time to time without,
except as provided in Section 2.10 and Article 3 of the Indenture, any
preference, distinction or priority 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 the Indenture.
This Trust Supplement shall be construed as supplemental to the
Indenture and to the Trust Agreement and shall form a part of each, and the
Trust Agreement and the Indenture are each hereby incorporated by reference
herein and each is hereby ratified, approved and confirmed.
* * *
B-3
[Trust Indenture and Security Agreement (1989 I)]
IN WITNESS WHEREOF, the Owner Trustee has caused this Trust Supplement
to be duly executed by one of its officers, thereunto duly authorized, on the
day and year first above written.
STATE STREET BANK AND TRUST
COMPANY, not in its individual capacity
but solely as Owner Trustee
By:___________________________________
Title:
B-4