EXHIBIT 4(a)(xix)
Owned Aircraft Indenture
N7__UW
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INDENTURE AND SECURITY AGREEMENT
(N7__UW)
Dated as of __________ __, 199_
Between
US AIRWAYS, INC.
Owner
and
STATE STREET BANK AND TRUST COMPANY
Indenture Trustee
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EQUIPMENT NOTES COVERING
ONE AIRBUS A319-___ AIRCRAFT
BEARING U.S. REGISTRATION ▇▇▇▇ N7__UW
OWNED BY US AIRWAYS, INC.
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . 5
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
THE EQUIPMENT NOTES . . . . . . . . . . . . . 6
SECTION 2.01. Form of Equipment Notes . . . . . . . . . . . . . . . . . 6
SECTION 2.02. Issuance and Terms of Equipment Notes . . . . . . . . . 11
SECTION 2.03. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.04. Method of Payment . . . . . . . . . . . . . . . . . . . 13
SECTION 2.05. Application of Payments . . . . . . . . . . . . . . . . 16
SECTION 2.06. Termination of Interest in Indenture Estate . . . . . . 17
SECTION 2.07. Registration, Transfer and Exchange of Equipment Notes . 17
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment
Notes . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.09. Payment of Expenses on Transfer; Cancellation . . . . . 19
SECTION 2.10. Mandatory Redemptions of Equipment Notes . . . . . . . . 20
SECTION 2.11. Voluntary Redemptions of Equipment Notes . . . . . . . . 20
SECTION 2.12. Redemptions; Notice of Redemption . . . . . . . . . . . 20
SECTION 2.13. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.14. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.15. Subordination . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE INDENTURE ESTATE . . . . . . . . 22
SECTION 3.01. Basic Distributions. . . . . . . . . . . . . . . . . . . 22
SECTION 3.02. Event of Loss; Optional Redemption . . . . . . . . . . . 22
SECTION 3.03. Payments After Event of Default . . . . . . . . . . . . 23
SECTION 3.04. Certain Payments . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.05. Other Payments . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.06. Payments to Owner . . . . . . . . . . . . . . . . . . . 27
ARTICLE IV
CERTAIN COVENANTS OF OWNER; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE . . . . . . . 27
SECTION 4.01. Certain Covenants of Owner . . . . . . . . . . . . . . . 27
SECTION 4.02. Event of Default . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.03. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.04. Remedies . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.05. Return of Aircraft, Etc . . . . . . . . . . . . . . . . 31
SECTION 4.06. Remedies Cumulative . . . . . . . . . . . . . . . . . . 33
SECTION 4.07. Discontinuance of Proceedings . . . . . . . . . . . . . 33
SECTION 4.08. Waiver of Past Defaults . . . . . . . . . . . . . . . . 33
SECTION 4.09. Appointment of Receiver . . . . . . . . . . . . . . . . 34
SECTION 4.10. Indenture Trustee Authorized to Execute Bills of
Sale, Etc . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 4.11. Rights of Note Holders to Receive Payment . . . . . . . 35
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE . . . . . . . . . 35
SECTION 5.01. Notice of Event of Default . . . . . . . . . . . . . . . 35
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.03. Indemnification . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.04. No Duties Except as Specified in Indenture or
Instructions . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.05. No Action Except Under Indenture or
Instructions . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.06. Replacement Airframes and Replacement Engines . . . . . 38
SECTION 5.07. Indenture Supplements for Replacements . . . . . . . . . 40
SECTION 5.08. Effect of Replacement . . . . . . . . . . . . . . . . . 40
SECTION 5.09. Investment of Amounts Held by Indenture Trustee . . . . 41
ARTICLE VI
THE INDENTURE TRUSTEE . . . . . . . . . . . 41
SECTION 6.01. Acceptance of Trusts and Duties . . . . . . . . . . . . 41
SECTION 6.02. Absence of Duties . . . . . . . . . . . . . . . . . . . 42
SECTION 6.03. No Representations or Warranties as to Aircraft
or Documents . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.04. No Segregation of Monies; No Interest . . . . . . . . . 43
SECTION 6.05. Reliance; Agreements; Advice of Counsel . . . . . . . . 43
SECTION 6.06. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.07. Compensation . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.08. Instructions from Note Holders . . . . . . . . . . . . . 44
ARTICLE VII
OPERATING COVENANTS OF THE OWNER . . . . . . . . 45
SECTION 7.01. Liens . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.02. Registration, Maintenance, Operation and
Registration; Possession and Leases; Insignia . . . . . 45
SECTION 7.03. Replacement and Pooling of Parts; Alterations,
Modifications and Additions . . . . . . . . . . . . . . 51
SECTION 7.04. Insurance . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 7.05. Inspection . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.06. Filings; Delivery of Financial Statements . . . . . . . 55
ARTICLE VIII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER . . . . . 56
SECTION 8.01. Scope of Indemnification . . . . . . . . . . . . . . . . 56
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES . . . . . . . . . 57
SECTION 9.01. [Reserved.] . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 9.02. Resignation of Indenture Trustee; Appointment of
Successor. . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 9.03. Appointment of Additional and Separate Trustees . . . . 59
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
AND OTHER DOCUMENTS . . . . . . . . . . . 61
SECTION 10.01. Instructions of Majority; Limitations. . . . . . . . . . 61
SECTION 10.02. Trustees Protected. . . . . . . . . . . . . . . . . . . 63
SECTION 10.03. Documents Mailed to Note Holders. . . . . . . . . . . . 63
SECTION 10.04. No Request Necessary for Indenture Supplement. . . . . . 63
ARTICLE XI
MISCELLANEOUS . . . . . . . . . . . . . 63
SECTION 11.01. Termination of Indenture. . . . . . . . . . . . . . . . 63
SECTION 11.02. No Legal Title to Indenture Estate in Note Holders. . . 64
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is Binding. . . . 64
SECTION 11.04. Indenture for Benefit of Owner, Indenture . . . . . . . 65
SECTION 11.05. Notices. . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.06. Severability. . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.07. No Oral Modification or Continuing Waivers. . . . . . . 66
SECTION 11.08. Successors and Assigns. . . . . . . . . . . . . . . . . 66
SECTION 11.09. Headings. . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 11.10. Normal Commercial Relations. . . . . . . . . . . . . . 66
SECTION 11.11. Governing Law; Counterpart Form. . . . . . . . . . . . 67
SECTION 11.12. Voting By Note Holders. . . . . . . . . . . . . . . . . 67
SECTION 11.13. Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . 67
EXHIBIT A INDENTURE SUPPLEMENT . . . . . . . . . . . . . . . EXHIBIT A-1
EXHIBIT B INSURANCE . . . . . . . . . . . . . . . . . . . . . EXHIBIT B-1
SCHEDULE I SERIES A . . . . . . . . . . . . . . . . . . . SCHEDULE I-2
SERIES B . . . . . . . . . . . . . . . . . . . SCHEDULE I-3
SERIES C . . . . . . . . . . . . . . . . . . . SCHEDULE I-4
SCHEDULE II PASS THROUGH TRUST AGREEMENT AND PASS
THROUGH TRUST SUPPLEMENTS . . . . . . . . . . SCHEDULE II-1
INDENTURE AND SECURITY AGREEMENT
(N7__UW)
INDENTURE AND SECURITY AGREEMENT (N7__UW), dated as of
_________ __, 199_ ("Indenture") between US AIRWAYS, INC., a Delaware
corporation (together with its successors and permitted assigns, "Owner"),
and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as
Indenture Trustee hereunder (together with its successors hereunder, the
"Indenture Trustee").
W I T N E S S E T H
WHEREAS, the parties desire by this Indenture, among other
things, (i) to provide for the issuance by Owner to the Pass Through
Trustees (or their designee) of the Equipment Notes evidencing the
participation of the Pass Through Trustees in the payment of Owner's Cost
for the Aircraft, as provided in the Participation Agreement and (ii) to
provide for the assignment, mortgage and pledge by Owner to the Indenture
Trustee, as part of the Indenture Estate hereunder, among other things, of
all of Owner's right, title and interest in and to the Aircraft, as
security for, among other things, Owner's obligations to the Indenture
Trustee, for the ratable benefit and security of the Note Holders, subject
to Section 2.15 and Article III hereof;
WHEREAS, all things have been done to make the Equipment Notes,
when executed by Owner and authenticated and delivered by the Indenture
Trustee hereunder, the valid, binding and enforceable obligations of Owner;
and
WHEREAS, all things necessary to make this Indenture the valid,
binding and legal obligation of Owner 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 INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure (i) the prompt payment of the Principal Amount
of, interest on, Make-Whole Amount, if any, and all other amounts due with
respect to, all Equipment Notes from time to time outstanding hereunder and
(ii) the performance and observance by Owner of all the agreements,
covenants and provisions herein and in the Participation Agreement and the
Equipment Notes contained, for the benefit of the Note Holders, the Loan
Participants and each of the Indenture Indemnitees and the prompt payment
of all amounts from time to time owing hereunder and under the
Participation Agreement to the Note Holders, the Loan Participants or any
Indenture Indemnitee by Owner (the "Secured Obligations") and for the uses
and purposes and subject to the terms and provisions hereof, and in
consideration of the premises and of the covenants herein contained, and of
the acceptance of the Equipment Notes by the holders thereof, and for other
good and valuable consideration the receipt and adequacy whereof are hereby
acknowledged, Owner has granted, bargained, sold, assigned, transferred,
conveyed, mortgaged, pledged and confirmed, and does hereby grant, bargain,
sell, assign, transfer, convey, mortgage, pledge and confirm, unto the
Indenture Trustee, its successors in trust and assigns, for the security
and benefit of the Note Holders, a first priority security interest in and
mortgage lien on all right, title and interest of Owner in, to and under
the following described property, rights and privileges, to wit:
(1) the Aircraft (including the Airframe and the Engines and
all replacements thereof and substitutions therefor to which Owner shall
from time to time acquire title as provided herein), all as more
particularly described in the Indenture Supplement executed and delivered
with respect to the Aircraft or any such replacements or substitutions
therefor, as provided in this Indenture;
(2) the Purchase Agreement (to the extent specified in the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement and the ▇▇▇▇ of Sale;
(3) all rents, issues, profits, revenues and other income of
the property subjected or required to be subjected to the Lien of this
Indenture;
(4) all insurance and requisition proceeds with respect to the
Aircraft, including but not limited to the insurance required under Section
7.04;
(5) all monies and securities from time to time deposited or
required to be deposited with the Indenture Trustee pursuant to any terms
of this Indenture or required hereby to be held by the Indenture Trustee
hereunder; and
(6) all proceeds of the foregoing.
Concurrently with the delivery hereof, Owner is delivering to
the Indenture Trustee executed copies of the Participation Agreement and
the Purchase Agreement Assignment with the Consent and Agreement attached
thereto.
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, and its successors and assigns, in trust for
the benefit and security of the Note Holders and the Indenture Indemnitees
except as provided in Section 2.15 and Article III hereof without any
preference, distinction or priority of any one Equipment Note over any
other by reason of priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses
and purposes and in all cases and as to all property specified in
paragraphs (1) through (6) inclusive above, subject to the terms and
provisions set forth in this Indenture.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, Owner shall remain liable under each of the
Indenture Agreements to which it is a party to perform all of the
obligations assumed by it thereunder, except to the extent prohibited or
excluded from doing so pursuant to the terms and provisions thereof, and
the Indenture Indemnitees, Indenture Trustee and the Note Holders shall
have no obligation or liability under the Indenture Agreements, by reason
of or arising out of the assignment hereunder, nor shall the Indenture
Indemnitees, Indenture Trustee or the Note Holders be required or obligated
in any manner to perform or fulfill any obligations of Owner under or
pursuant to any of the Indenture Agreements to which it 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.
Owner does hereby constitute the Indenture Trustee the true and
lawful attorney of Owner, irrevocably, granted for good and valuable
consideration and coupled with an interest and with full power of
substitution, and with full power (in the name of Owner or otherwise) to
ask for, require, demand, receive, compound and give acquittance for any
and all monies and claims for monies (in each case including insurance and
requisition proceeds) due and to become due under or arising out of the
Indenture Agreements, and all other property which now or hereafter
constitutes part of the Indenture Estate, to endorse any checks or other
instruments or orders in connection therewith and to file any claims or to
take any action or to institute any proceedings which the Indenture Trustee
may deem to be necessary or advisable in the premises. Without limiting the
generality of the foregoing, but subject to the rights of Owner hereunder,
during the continuance of any Event of Default under this Indenture, the
Indenture Trustee shall have the right under such power of attorney to
accept any offer in connection with the exercise of remedies as set forth
herein of any purchaser to purchase the Airframe and Engines and upon such
purchase to execute and deliver in the name of and on behalf of Owner an
appropriate ▇▇▇▇ of sale and other instruments of transfer relating to the
Airframe and Engines, when purchased by such purchaser, and to perform all
other necessary or appropriate acts with respect to any such purchase, and
in its discretion to file any claim or take any other action or
proceedings, either in its own name or in the name of Owner or otherwise,
which the Indenture Trustee may deem necessary or appropriate to protect
and preserve the right, title and interest of the Indenture Trustee in and
to such rents and other sums and the security intended to be afforded
hereby; provided, however, that no action of the Indenture Trustee pursuant
to this paragraph shall increase the obligations or liabilities of Owner to
any Person beyond those obligations and liabilities specifically set forth
in this Indenture and in the other Operative Documents. Owner agrees that
promptly upon receipt thereof, it will transfer to the Indenture Trustee
any and all monies from time to time received by it constituting part of
the Indenture Estate, for distribution by the Indenture Trustee pursuant to
this Indenture.
Owner agrees that at any time and from time to time, upon the
written request of the Indenture Trustee, Owner will promptly and duly
execute and deliver or cause to be duly executed and delivered any and all
such further instruments and documents as the Indenture Trustee may
reasonably deem necessary or desirable to perfect, preserve or protect the
mortgage, security interests and assignments created or intended to be
created hereby or to obtain for the Indenture Trustee the full benefits of
the assignment hereunder and of the rights and powers herein granted.
Owner does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that it will not
assign or pledge, so long as the assignment hereunder shall remain in
effect, and the Lien hereof shall not have been released pursuant to
Section 11.01 hereof, any of its right, title or interest hereby assigned,
to anyone other than the Indenture Trustee, and that it will not, except as
otherwise provided in this Indenture, (i) enter into any agreement amending
or supplementing any Indenture Agreement, (ii) execute any waiver or
modification of, or consent under, the terms of, or exercise any rights,
powers or privileges under, any Indenture Agreement, (iii) settle or
compromise any claim arising under any Indenture Agreement or (iv) submit
or consent to the submission of any dispute, difference or other matter
arising under or in respect of any Indenture Agreement to arbitration
thereunder.
Owner does hereby further agree that it will not without the
written consent of the Indenture Trustee sell, mortgage, transfer, assign
or hypothecate (other than to the Indenture Trustee hereunder) its interest
in the Airframe and Engines or any part thereof or in any amount to be
received by it from the use or disposition of the Airframe and Engines,
other than amounts distributed to it pursuant to Article III hereof.
It is hereby further agreed that any and all property described
or referred to in the granting clauses hereof which is hereafter acquired
by Owner shall ipso facto, and without any further conveyance, assignment
or act on the part of Owner 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 Owner contained in the foregoing
paragraphs.
Owner does hereby agree that it will not violate any covenant
or agreement made by it therein, herein or in any of the other Owner
Documents.
IT IS HEREBY COVENANTED AND AGREED by and between the parties
hereto as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. For all purposes of this Indenture,
capitalized terms used but not defined herein shall have the respective
meanings set forth or incorporated by reference, and shall be construed and
interpreted in the manner described, in Annex A.
ARTICLE II
THE EQUIPMENT NOTES
SECTION 2.01. Form of Equipment Notes.
The Equipment Notes shall be substantially in the form set forth
below:
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE
SECURITIES LAWS OF ANY STATE. ACCORDINGLY, THIS EQUIPMENT NOTE MAY
NOT BE SOLD UNLESS EITHER REGISTERED UNDER THE ACT AND SUCH
APPLICABLE STATE LAWS OR AN EXEMPTION FROM SUCH REGISTRATIONS IS
AVAILABLE.
US AIRWAYS, INC. SERIES [___] NON-RECOURSE EQUIPMENT NOTE DUE [___]
ISSUED IN CONNECTION WITH THE AIRBUS A- AIRCRAFT BEARING UNITED
STATES REGISTRATION NUMBER _____.
No.____ Date: [______,__] $________________
INTEREST RATE MATURITY DATE
[____] [___________,_____]
US AIRWAYS, INC., hereby promises to pay to ___________, or the
registered assignee thereof, the principal sum of $_________ (the
"Principal Amount"), together with interest on the amount of the Principal
Amount remaining unpaid from time to time (calculated on the basis of a
year of 360 days comprised of twelve 30-day months) from the date hereof
until paid in full at a rate per annum equal to the Interest Rate indicated
above. The Principal Amount of this Equipment Note shall be payable on the
dates and in the installments as set forth in Schedule I hereto. Accrued
but unpaid interest shall be due and payable in semi-annual installments
commencing _______ __, ____, and thereafter on _______ __ and ______ __ of
each year, to and including _______, _____. Notwithstanding the foregoing,
the final payment made on this Equipment Note shall be in an amount
sufficient to discharge in full the unpaid Principal Amount and all accrued
and unpaid interest on, and any other amounts due under, this Equipment
Note. Notwithstanding anything to the contrary contained herein, if any
date on which a payment under this Equipment Note becomes due and payable
is not a Business Day then such payment shall not be made on such scheduled
date but shall be made on the next succeeding Business Day with the same
force and effect as if made on such scheduled date and if such payment is
made on such next succeeding Business Day, no interest shall accrue on the
amount of such payment from and after such scheduled date.
For purposes hereof, the term "Indenture" means the Indenture and
Security Agreement (N7__UW), dated as of ___________ __, 199_, between
Owner and State Street Bank and Trust Company (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 comprised of
twelve 30-day months) on any overdue Principal Amount, any overdue 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).
There shall be maintained a Equipment Note Register for the purpose
of registering transfers and exchanges of Equipment Notes at the Corporate
Trust Office of the Indenture Trustee or at the office of any successor in
the manner provided in Section 2.07 of the Indenture.
The Principal Amount and interest and other amounts due hereunder
shall be payable in Dollars in immediately available funds at the Corporate
Trust Office of the Indenture Trustee, or as otherwise provided in the
Indenture. Each such payment shall be made on the date such payment is due
and without any presentment or surrender of this Equipment Note, except
that in the case of any final payment with respect to this Equipment Note,
the Equipment Note shall be surrendered promptly thereafter to the
Indenture Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment Note, agrees
that, except as provided in the Indenture, each payment of an installment
of the Principal Amount, Make-Whole Premium, if any, and interest received
by it hereunder shall be applied, first, to the payment of accrued interest
on this Equipment Note (as well as any interest on any overdue Principal
Amount, any overdue Make-Whole Amount, if any, or, to the extent permitted
by Law, any overdue interest and other amounts hereunder) to the date of
such payment, second, to the payment of the Principal Amount of this
Equipment Note (or portion hereof) then due (other than by reason of
redemption), third, to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under the Indenture, and fourth, the balance,
if any, remaining thereafter, to the payment of the Principal Amount hereof
remaining unpaid and due by reason of redemption. The amounts paid
pursuant to clause fourth of the preceding sentence shall be applied to
installments of the Principal Amount of this Equipment Note remaining
unpaid in the inverse order of their normal maturity.
This Equipment Note is one of the Equipment Notes referred to in
the Indenture which have been or are to be issued by Owner pursuant to the
terms of the Indenture. The Indenture Estate is held by the Indenture
Trustee as security, in part, for the Equipment Notes. The provisions of
this Equipment Note are subject to the Indenture. Reference is hereby made
to the Indenture and the Participation Agreement for a complete statement
of the rights and obligations of the holder of, and the nature and extent
of the security for, this Equipment Note and the rights and obligations of
the holders of, and the nature and extent of the security for, any other
Equipment Notes executed and delivered under the Indenture, 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 and the
Participation Agreement each holder hereof agrees by its acceptance of this
Equipment Note.
As provided in the Indenture and subject to certain limitations
therein set forth, this Equipment Note is exchangeable for a like aggregate
Principal Amount of Equipment Notes of different authorized denominations,
as requested by the holder surrendering the same.
Prior to the due presentment for registration of transfer of this
Equipment Note, Owner and the Indenture Trustee shall deem and treat the
Person in whose name this Equipment Note is registered on the Equipment
Note Register as the absolute owner and holder hereof for the purpose of
receiving all amounts payable with respect to this Equipment Note and for
all purposes, and neither of Owner nor the Indenture Trustee shall be
affected by notice to the contrary.
This Equipment Note is subject to redemption as provided in
Sections 2.10, 2.11 and 2.12 of the Indenture but not otherwise.
[The indebtedness evidenced by this Equipment Note is, to the
extent and in the manner provided in the Indenture, subordinate and subject
in right of payment to the prior payment in full of the Secured Obligations
(as defined in the Indenture) in respect of [Series A Equipment Notes](1)
[Series A and Series B Equipment Notes](2) , and this Equipment Note is issued
subject to such provisions. The Note Holder of this Equipment Note, by
accepting the same, (a) agrees to and shall be bound by such provisions,
(b) authorizes and directs the Indenture Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination
as provided in the Indenture and (c) appoints the Indenture Trustee his
attorney-in-fact for such purpose.](3)
--------------------------
(1) To be inserted in the case of a Series B Equipment Note.
(2) To be inserted in the case of a Series C Equipment Note.
(3) To be inserted for each Equipment Note other than any
Series A Equipment Note.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Indenture Trustee by manual signature, this
Equipment Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, Owner has caused this Equipment Note to be
executed in its corporate name by its officer thereunto duly authorized on
the date hereof.
US AIRWAYS, INC.
By: ____________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OFAUTHENTICATION
This is one of the Equipment Notes referred to in the within-
mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
By: ____________________________
Name:
Title:
SCHEDULE I
EQUIPMENT NOTES AMORTIZATION
Payment Date Principal Amount to be Paid
------------ ---------------------------
[SEE SCHEDULE I TO INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
SECTION 2.02. Issuance and Terms of Equipment Notes.
The Equipment Notes shall be dated the date of issuance thereof,
shall be issued in three separate series consisting of Series A, Series B
and Series C and in the maturities and principal amounts and shall bear
interest as specified in Schedule I hereto. On the date hereof, each
Equipment Note shall be issued to the Pass Through Trustees (or their
designee) under the Pass Through Agreements as set forth in Schedule II
hereto in connection therewith. The Equipment Notes shall be issued in
registered form only. The Equipment Notes shall be issued in denominations
of $1,000 and integral multiples thereof, except that one Equipment Note of
each Series may be in an amount that is not an integral multiple of $1,000.
Each Equipment Note shall bear interest at the Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on the unpaid Principal Amount thereof from time to time
outstanding, payable in arrears on ________ __, ____, and on each ______ __
and ______ __ thereafter until maturity. The Principal Amount of each
Equipment Note shall be payable on the dates and in the installments which
shall be attached as Schedule I to the Equipment Notes. Notwithstanding
the foregoing, the final payment made under each Equipment Note shall be in
an amount sufficient to discharge in full the unpaid Principal Amount and
all accrued and unpaid interest on, and any other amounts due under, such
Equipment Note. Each Equipment Note shall bear interest at the Past Due
Rate (calculated on the basis of a year of 360 days comprised of twelve 30-
day months) on any part of the Principal Amount, Make-Whole Amount, if any,
and to the extent permitted by applicable law, interest and any other
amounts payable thereunder not paid when due for any period during which
the same shall be overdue, in each case for the period the same is overdue.
Amounts shall be overdue if not paid when due (whether at stated maturity,
by acceleration or otherwise). Notwithstanding anything to the contrary
contained herein, if any date on which a payment under any Equipment Note
becomes due and payable is not a Business Day then such payment shall not
be made on such scheduled date but shall be made on the next succeeding
Business Day with the same force and effect as if made on such scheduled
date and if such payment is made on such next succeeding Business Day, no
interest shall accrue on the amount of such payment from and after such
scheduled date.
Owner agrees to pay to the Indenture Trustee for distribution in
accordance with Section 3.04 hereof (i) to the extent not payable (whether or
not in fact paid) under Section 7(a) of the Note Purchase Agreement (as
originally in effect or as amended with the consent of the Owner) an amount
or amounts equal to the fees payable to the Liquidity Provider under
Section 2.03 of each Liquidity Facility and the related Fee Letter (as
defined in the Intercreditor Agreement) multiplied by a fraction the
numerator of which shall be the then outstanding aggregate principal amount
of the Series A Equipment Notes, Series B Equipment Notes and Series C
Equipment Notes and the denominator of which shall be the then outstanding
aggregate principal amount of all "Series A Equipment Notes", "Series B
Equipment Notes" and "Series C Equipment Notes" (in each case as defined in
the relevant Operative Indenture) issued under the Operative Indentures;
(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 Earning 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)
if any payment default shall have occurred and be continuing with respect
to interest on any Series A Equipment Note, Series B Equipment Note or
Series C Equipment Note, (x) the excess, if any, of (1) the amount equal to
interest on any Unpaid Advance, Applied Downgrade Advance or Applied Non-
Extension Advance payable under Section 3.07 of each Liquidity Facility
over (2) the sum of Investment Earnings from any Final Advance plus any
amount of interest at the Past Due Rate actually payable (whether or not
in fact paid) by Owner in respect of the overdue scheduled interest on the
Equipment Notes in respect of which such Unpaid Advance, Applied Downgrade
Advance or Applied Non-Extension 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 Equipment Notes, Series B Equipment Notes and
Series C Equipment Notes (other than interest becoming due and payable
solely as a result of acceleration of any such Equipment Notes) and the
denominator of which shall be the then aggregate overdue amounts of
interest on all "Series A Equipment Notes", "Series B Equipment Notes" and
"Series C Equipment Notes" (in each case as defined in the relevant
Operative Indentures) issued under the Operative Indentures (other than
interest becoming due and payable solely as a result of acceleration of any
such "Equipment Notes") and (v) any other amounts owed to the Liquidity
Provider by the Subordination Agent as borrower under each Liquidity
Facility (other than amounts due as repayment of advances thereunder or as
interest on such advances), except to the extent payable pursuant to clause
(i), (ii), (iii) or (iv) above multiplied by the fraction specified in the
foregoing clause (i). For purposes of this paragraph, the terms "Applied
Downgrade Advance", "Applied Non-Extension Advance", "Cash Collateral
Account", "Downgrade Advance", "Final Advance", "Investment Earnings",
"Non-Extension Advance" and "Unpaid Advance" shall have the meanings
specified in each Liquidity Facility or the Intercreditor Agreement.
The Equipment Notes shall be executed on behalf of Owner by its
President or one of its Vice Presidents, Assistant Vice Presidents or
Assistant Secretaries or other authorized officer. Equipment Notes bearing
the signatures of individuals who were at any time the proper officers of
Owner shall bind Owner, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and
delivery of such Equipment Notes or did not hold such offices at the
respective dates of such Equipment Notes. Owner may from time to time
execute and deliver Equipment Notes with respect to the Aircraft to the
Indenture Trustee for authentication upon original issue and such Equipment
Notes shall thereupon be authenticated and delivered by the Indenture
Trustee upon the written request of Owner signed by a Vice President or
Assistant Vice President or other authorized officer of Owner; provided,
however, that each such request shall specify the aggregate Principal
Amount of all Equipment Notes to be authenticated hereunder on original
issue with respect to the Aircraft. No Equipment Note shall be secured by
or entitled to any benefit under this Indenture or be valid or obligatory
for any purposes, unless there appears on such Equipment Note a certificate
of authentication in the form provided for herein executed by the Indenture
Trustee by the manual signature of one of its authorized officers and such
certificate upon any Equipment Notes shall be conclusive evidence, and the
only evidence, that such Equipment Note has been duly authenticated and
delivered hereunder.
SECTION 2.03. [Reserved].
SECTION 2.04. Method of Payment.
(a) 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., New York City time, on the due date of payment to
the Indenture Trustee at the Corporate Trust Office for distribution among
the Note Holders in the manner provided herein. Owner shall not have any
responsibility for the distribution of such payment to any Note Holder.
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 Note Holder (with a copy to
Owner), all amounts paid by Owner hereunder and under such holder's
Equipment Note or Equipment Notes to such holder or a nominee therefor
(including all amounts distributed pursuant to Article III of this
Indenture) by transferring, or causing to be transferred, by wire transfer
of immediately available funds in Dollars, prior to 2:00 p.m., New York
City time, on the due date of payment, to an account maintained by such
holder with a bank located in the continental United States the amount to
be distributed to such holder, for credit to the account of such holder
maintained at such bank. If the Indenture Trustee shall fail to make any
such payment as provided in the immediately preceding sentence after its
receipt of funds at the place and prior to the time specified above, the
Indenture Trustee, in its individual capacity and not as trustee, agrees to
compensate such holders for loss of use of funds at the Federal Funds Rate
until such payment is made and the Indenture Trustee shall be entitled to
any interest earned on such funds until such payment is made. Any payment
made hereunder shall be made 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
Indenture Trustee for cancellation promptly after such payment.
Notwithstanding any other provision of this Indenture 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., New York City time, at the place of payment.
Prior to the due presentment for registration of transfer of any Equipment
Note, Owner and the Indenture Trustee shall deem and treat the Person in
whose name any Equipment Note is registered on the Equipment Note Register
as the absolute owner and holder of such Equipment Note for the purpose of
receiving payment of all amounts payable with respect to such Equipment
Note and for all other purposes, and neither Owner nor the Indenture
Trustee shall be affected by any notice to the contrary. So long as any
signatory to the Participation Agreement or nominee thereof shall be a
registered Note Holder, all payments to it shall be made to the account of
such Note Holder specified in Schedule I thereto and otherwise in the
manner provided in or pursuant to the Participation Agreement unless it
shall have specified some other account or manner of payment by notice to
the Indenture Trustee consistent with this Section 2.04.
(b) The Indenture Trustee, as agent for Owner, shall exclude and
withhold at the appropriate rate from each payment of Principal Amount of,
interest on, Make-Whole Amount, if any, and other amounts due hereunder or
under each Equipment Note (and such exclusion and withholding shall
constitute payment in respect of such Equipment Note) any and all United
States withholding taxes applicable thereto as required by Law. The
Indenture Trustee agrees to act as such withholding agent and, in
connection therewith, whenever any present or future United States taxes or
similar charges are required to be withheld with respect to any amounts
payable hereunder or in respect of the Equipment Notes, to withhold such
amounts (and such withholding shall constitute payment in respect of such
Equipment Note) and timely pay the same to the appropriate authority in the
name of and on behalf of the Note Holders, 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 it will deliver to each Note
Holder (with a copy to Owner) appropriate receipts showing the payment
thereof, together with such additional documentary evidence as any such
Note Holder may reasonably request from time to time.
If a Note Holder which is a Non-U.S. Person has furnished to the
Indenture Trustee a properly completed and currently effective U.S.
Internal Revenue Service Form 1001 or W-8 (or such successor form or forms
as may be required by the United States Treasury Department) during the
calendar year in which the payment hereunder or under the Equipment Note(s)
held by such holder is made (but prior to the making of such payment), or
in either of the two preceding calendar years, 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 know 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 claimed by the Note Holder)
to be withheld from payments hereunder or under the Equipment Notes held by
such holder in respect of United States federal income tax (and such
withholding shall constitute payment in respect of such Equipment Note).
If a Note Holder (x) which is a Non-U.S. Person has furnished to the
Indenture Trustee a properly completed and currently effective U.S.
Internal Revenue Service Form 4224 in duplicate (or such successor
certificate, form or forms as may be required by the United States Treasury
Department as necessary in order to avoid withholding of United States
federal income tax), during the calendar year in which the payment is made
(but prior to the making of such payment), and has not notified the
Indenture Trustee of the withdrawal or inaccuracy of such certificate or
form prior to the date of such payment (and the Indenture Trustee has no
reason to know that any information set forth in such form is inaccurate)
or (y) which is a U.S. Person has furnished to the Indenture Trustee a
properly completed and currently effective U.S. Internal Revenue Service
Form W-9, if applicable, prior to a payment hereunder or under the
Equipment Notes held by such holder, no amount shall be withheld from
payments in respect of United States federal income tax. If any Note
Holder has notified the Indenture Trustee that any of the foregoing forms
or certificates is withdrawn or inaccurate, or if such holder has not filed
a form claiming an exemption from United States withholding tax or if the
Code or the regulations thereunder or the administrative interpretation
thereof are 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 holder, the Indenture Trustee agrees to
withhold from each payment due to the relevant Note Holder 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 applicable law. Owner shall not be
liable if the Indenture Trustee fails to withhold withholding taxes in
accordance with this Section 2.04 or if any Note Holder provides false or
inaccurate information on any form required to be delivered under this
Section 2.04.
SECTION 2.05. Application of Payments.
In the case of each Equipment Note, each payment of Principal
Amount, Make-Whole Amount, if any, and interest or other amounts due
thereon shall be applied:
First: to the payment of accrued interest on such Equipment Note
(as well as any interest on any overdue Principal Amount, any overdue Make-
Whole Amount, if any, and to the extent permitted by Law, any overdue
interest and any other overdue amounts thereunder) to the date of such
payment;
Second: to the payment of the Principal Amount of such Equipment
Note (or a portion thereof) then due thereunder (other than by reason of
redemption);
Third: to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under such Equipment Note; and
Fourth: the balance, if any, remaining thereafter, to the
payment of the Principal Amount of such Equipment Note remaining unpaid and
due by reason of redemption (provided that such Equipment Note shall not be
subject to redemption except as provided in Sections 2.10, 2.11 and 2.12
hereof).
The amounts paid pursuant to clause "Fourth" above shall be
applied to the installments of Principal Amount of such Equipment Note in
the inverse order of their normal maturity.
SECTION 2.06. Termination of Interest in Indenture Estate.
A Note Holder and Indenture Indemnitees shall not, as such, have
any further interest in, or other right with respect to, the Indenture
Estate when and if the Secured Obligations due to such Note Holder or
Indenture Indemnitee shall have been paid in full.
SECTION 2.07. Registration, Transfer and Exchange of Equipment
Notes.
The Indenture Trustee shall keep a register (the "Equipment Note
Register") in which the Indenture Trustee shall provide for the
registration of Equipment Notes and the registration of transfers of
Equipment Notes. No such transfer shall be given effect unless and until
registration hereunder shall have occurred. The Equipment Note Register
shall be kept at the Corporate Trust Office of the Indenture Trustee. The
Indenture Trustee is hereby appointed "Equipment Note Registrar" for the
purpose of registering Equipment Notes and transfers of Equipment Notes as
herein provided. A holder of any Equipment Note intending to exchange such
Equipment Note shall surrender such Equipment Note to the Indenture Trustee
at the Corporate Trust Office, together with a written request from the
registered holder thereof for the issuance of a new Equipment Note,
specifying, in the case of a surrender for transfer, the name and address
of the new holder or holders. Upon surrender for registration of transfer
of any Equipment Note, Owner shall execute, and the Indenture Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Equipment Notes of a like aggregate Principal
Amount and of the same series. At the option of the Note Holder, Equipment
Notes may be exchanged for other Equipment Notes of any authorized
denominations of a like aggregate Principal Amount, upon surrender of the
Equipment Notes to be exchanged to the Indenture Trustee at the Corporate
Trust Office. Whenever any Equipment Notes are so surrendered for
exchange, Owner shall execute, and the Indenture Trustee shall authenticate
and deliver, the Equipment Notes which the Note Holder making the exchange
is entitled to receive. All Equipment Notes issued upon any registration
of transfer or exchange of Equipment Notes (whether under this Section 2.07
or under Section 2.08 hereof or otherwise under this Indenture) shall be
the valid obligations of Owner evidencing the same respective obligations,
and entitled to the same security and benefits under this Indenture, as the
Equipment Notes surrendered upon such registration of transfer or exchange.
Every Equipment Note presented or surrendered for registration of transfer,
shall (if so required by the Indenture Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by the Note Holder or such holder's
attorney duly authorized in writing, and the Indenture Trustee shall
require evidence satisfactory to it as to the compliance of any such
transfer with the Securities Act, and the securities Laws of any applicable
state. The Indenture Trustee shall make a notation on each new Equipment
Note of the amount of all payments of Principal Amount previously made on
the old Equipment Note or Equipment Notes with respect to which such new
Equipment Note is issued and the date to which interest on such old
Equipment Note or Equipment Notes has been paid. Interest shall be deemed
to have been paid on such new Equipment Note to the date on which interest
shall have been paid on such old Equipment Note, and all payments of the
Principal Amount marked on such new Equipment Note, as provided above,
shall be deemed to have been made thereon. Owner shall not be required to
exchange any surrendered Equipment Notes as provided above during the ten-
day period preceding the due date of any payment on such Equipment Note.
Owner shall in all cases deem the Person in whose name any Equipment Note
shall have been issued and registered as the absolute owner and holder of
such Equipment Note for the purpose of receiving payment of all amounts
payable by Owner with respect to such Equipment Note and for all purposes
until a notice stating otherwise is received from the Indenture Trustee and
such change is reflected on the Equipment Note Register. The Indenture
Trustee will promptly notify Owner of each registration of a transfer of a
Equipment Note. Any such transferee of a Equipment Note, by its acceptance
of a Equipment Note, agrees to the provisions of the Participation
Agreement applicable to Note Holders, and shall be deemed to have
represented and warranted (except as provided above), and covenanted, to
the parties to the Participation Agreement as to the matters represented,
warranted and covenanted by the Purchasers in the Participation Agreement.
Subject to compliance by the Note Holder and its transferee (if any) of the
requirements set forth in this Section 2.07, the Indenture Trustee and the
Owner shall use all reasonable efforts to issue new Equipment Notes upon
transfer or exchange within ten (10) Business Days of the date a Equipment
Note is surrendered for transfer or exchange.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Equipment
Notes.
If any Equipment Note shall become mutilated, destroyed, lost or
stolen, Owner shall, upon the written request of the holder of such
Equipment Note, execute and the Indenture Trustee shall authenticate and
deliver in replacement thereof a new Equipment Note, payable in the same
Principal Amount dated the same date and captioned as issued in connection
with the Aircraft. If the Equipment Note being replaced has become
mutilated, such Equipment Note shall be surrendered to the Indenture
Trustee and a photocopy thereof shall be furnished to Owner. If the
Equipment Note being replaced has been destroyed, lost or stolen, the
holder of such Equipment Note shall furnish to Owner and the Indenture
Trustee such security or indemnity as may be required by them to save Owner
and the Indenture Trustee harmless and evidence satisfactory to Owner and
the Indenture Trustee of the destruction, loss or theft of such Equipment
Note and of the ownership thereof. If a "qualified institutional buyer" of
the type referred to in paragraph (a)(l)(i)(A), (B), (D) or (E) of Rule
144A under the Securities Act (a "QIB") is the holder of any such
destroyed, lost or stolen Equipment Note, then the written indemnity of
such QIB, signed by an authorized officer thereof, in favor of, delivered
to and in form reasonably satisfactory to Owner and the Indenture Trustee
shall be accepted as satisfactory indemnity and security and no further
indemnity or security shall be required as a condition to the execution and
delivery of such new Equipment Note. Subject to compliance by the Note
Holder of the requirements set forth in this Section 2.08, the Indenture
Trustee and Owner shall use all reasonable efforts to issue new Equipment
Notes within ten (10) Business Days of the date of the written request
therefor from the Note Holder.
SECTION 2.09. Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Note Holder for any
registration of transfer or exchange of Equipment Notes, but the Indenture
Trustee, as Equipment Note Registrar, may 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.
(b) The Indenture Trustee shall cancel all Equipment Notes
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Equipment Notes.
SECTION 2.10. Mandatory Redemptions of Equipment Notes.
On the date on which Owner is required pursuant to Section 5.06
to make payment for an Event of Loss with respect to the Aircraft, all of
the Equipment Notes shall be redeemed in whole at a redemption price equal
to 100% of the unpaid Principal Amount thereof, together with all accrued
interest thereon to the date of redemption and all other amounts payable
hereunder or under the Participation Agreement to the Note Holders but
without the Make-Whole Amount.
SECTION 2.11. Voluntary Redemptions of Equipment Notes.
All, but not less than all, of the Equipment Notes may be
redeemed by Owner upon at least twenty (20) days' revocable prior written
notice to the Indenture Trustee, and the Equipment Notes shall be redeemed
in whole at a redemption price equal to 100% of the unpaid Principal Amount
thereof, together with accrued interest thereon to the date of redemption
and all other amounts payable hereunder or under the Participation
Agreement to the Note Holders plus the Make-Whole Amount, if any.
SECTION 2.12. Redemptions; Notice of Redemption.
(a) Neither any redemption of any Equipment Note nor any
purchase by Owner of any Equipment Note may be made except to the extent
and in the manner expressly permitted by this Indenture. No purchase of
any Equipment Note may be made by the Indenture Trustee.
(b) Notice of redemption or purchase with respect to the
Equipment Notes shall be given by the Indenture Trustee by first-class
mail, postage prepaid, mailed not less than fifteen (15) nor more than
sixty (60) days prior to the applicable redemption date, to each Note
Holder of such Equipment Notes to be redeemed or purchased, at such Note
Holder's address appearing in the Equipment Note Register. 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, if any such Equipment Notes are then outstanding, interest on
such Equipment Notes shall cease to accrue on and after such redemption
date, and (4) the place or places where such Equipment Notes are to be
surrendered for payment of the redemption price.
(c) On or before the redemption date, Owner (or any person on
behalf of Owner) 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 by 11:00 a.m. New York City time on
the redemption date in immediately available funds the redemption price of
the Equipment Notes to be redeemed or purchased.
(d) Notice of redemption or purchase having been given as
aforesaid, the Equipment Notes to be redeemed or purchased shall, on the
redemption date, become due and payable at the Corporate Trust Office of
the Indenture Trustee or at any office or agency maintained for such
purposes pursuant to Section 2.07, and from and after such redemption date
(unless there shall be a default in the payment of the redemption price)
any such Equipment Notes then outstanding shall cease to bear interest.
Upon surrender of any such Equipment Note for redemption or purchase in
accordance with said notice, such Equipment Note shall be redeemed at the
redemption price. If any Equipment Note called for redemption or purchase
shall not be so paid upon surrender thereof for redemption, the principal
amount thereof shall, until paid, continue to bear interest from the
applicable redemption date at the interest rate in effect for such
Equipment Note as of such redemption date.
SECTION 2.13. [Reserved].
SECTION 2.14. [Reserved].
SECTION 2.15. Subordination.
(a) Owner and, by acceptance of its Equipment Notes of any
Series, each Note Holder of such Series, hereby agree that no payment or
distribution shall be made on or in respect of the Secured Obligations owed
to such Note Holder 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 4.02(e) hereof, except as expressly
provided in Article III hereof.
(b) By the acceptance of its Equipment Notes of any Series
(other than Series A), each Note Holder of such Series agrees that in the
event that such Note Holder, in its capacity as a Note Holder, shall
receive any payment or distribution on any Secured Obligations in respect
of such Series which it is not entitled to receive under this Section 2.15
or Article III hereof, it will hold any amount so received in trust for the
Senior Holder (as defined in Section 2.15(c) hereof) and will forthwith
turn over such payment to the Indenture Trustee in the form received to be
applied as provided in Article III hereof.
(c) As used in this Section 2.15, the term "Senior Holder" shall
mean, (i) the Note Holders of Series A until the Secured Obligations in
respect of Series A Equipment Notes have been paid in full and (ii) after
the Secured Obligations in respect of Series A Equipment Notes have been
paid in full, the Note Holders of Series B until the Secured Obligations in
respect of Series B Equipment Notes have been paid in full.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF
INCOME FROM THE INDENTURE ESTATE
SECTION 3.01. Basic Distributions
Except as otherwise provided in Sections 3.02 and 3.03 hereof, each
periodic payment of principal or interest on the Equipment Notes received by the
Indenture Trustee shall be promptly distributed in the following order of
priority: (i) so much of such installment or payment as shall be required
to pay in full the aggregate amount of the payment or payments of Principal
Amount and interest and other amounts (as well as any interest on any overdue
Principal Amount and, to the extent permitted by applicable law, on any overdue
interest and any other overdue amounts) then due under all Series A Equipment
Notes shall be distributed to the Noteholders of Series A ratably, without
priority of one over the other, in the proportion that the amount of such
payment or payments then due under each Series A Equipment Note bears to the
aggregate amount of the payments then due under all Series A Equipment Notes;
(ii) after giving effect to paragraph (i) above, so much of such installment
or payment remaining as shall be required to pay in full the aggregate amount
of the payment or payments of Principal Amount and interest and other amounts
(as well as any interest on any overdue Principal Amount and, to the extent
permitted by applicable law, on any overdue interest and other overdue amounts)
then due under all Series B Equipment Notes shall be distributed to the
Noteholders of Series B ratably, without priority of one over the other, in the
proportion that the amount of such payment or payments then due under each
Series B Equipment Note bears to the aggregate amount of the payments then due
under all Series B Equipment Notes; and (iii) after giving effect to paragraph
(ii) above, so much of such installment or payment remaining as shall be
required to pay in full the aggregate amount of the payment or payments of
Principal Amount and interest and other amounts (as well as any interest on any
overdue Principal Amount and, to the extent permitted by applicable law, on any
overdue interest and any other overdue amounts) then due under all Series C
Equipment Notes shall be distributed to the Noteholders of Series C ratably,
without priority of one over the other, in the proportion that the amount of
such payment or payments then due under each Series C Equipment Note bears to
the aggregate amount of the payments then due under all Series C Equipment
Notes.
SECTION 3.02. Event of Loss; Optional Redemption.
Except as otherwise provided in Section 3.03 hereof, any payments
received by the Indenture Trustee with respect to the Aircraft (i) as the
result of an Event of Loss or (ii) in connection with any optional
redemption of the Equipment Notes effected in accordance with the Operative
Documents, shall be applied to redemption of the Equipment Notes, to
payment of the Secured Obligations or to the Indenture Trustee or any Note
Holder under the Participation Agreement by applying such funds in the
following order of priority:
First, (i) to reimburse the Indenture Trustee and the Note
Holders for any reasonable costs or expenses incurred in connection with
such redemption for which they are entitled to reimbursement, or indemnity
by Owner, under the Operative Documents and then (ii) to pay any other
amounts then due to the Indenture Trustee and the Note Holders under this
Indenture, the Participation Agreement or the Equipment Notes; and
Second, (i) to pay the amounts specified in paragraph (i) of
clause "Third" of Section 3.03 hereof plus Make-Whole Amount, if any, then
due and payable in respect of the Series A Equipment Notes; (ii) after
giving effect to paragraph (i) above, to pay the amounts specified in
paragraph (ii) of clause "Third" of Section 3.03 hereof plus Make-Whole
Amount, if any, then due and payable in respect of the Series B Equipment
Notes; and (iii) after giving effect to paragraph (ii) above, to pay the
amounts specified in paragraph (iii) of clause "Third" of Section 3.03
hereof plus Make-Whole Amount, if any, then due and payable in respect of
the Series C Equipment Notes.
SECTION 3.03. Payments After Event of Default.
Except as otherwise provided in Section 3.04 hereof, all payments
received and amounts held or realized by the Indenture Trustee (including
any amounts realized by the Indenture Trustee from the exercise of any
remedies pursuant to Article IV hereof) after both an Event of Default
shall have occurred and be continuing and the Equipment Notes shall have
become due and payable pursuant to Section 4.04(b) hereof, as well as all
payments or amounts then held by the Indenture Trustee as part of the
Indenture Estate, shall be promptly distributed by the Indenture Trustee in
the following order of priority:
First, so much of such payments or amounts as shall be required
to reimburse the Indenture Trustee for any tax, expense or other loss
(including, without limitation, all amounts to be expended at the expense
of, or charged upon the tolls, rents, revenues, issues, products and
profits of, the property included in the Indenture Estate (all such
property being herein called the "Mortgaged Property") pursuant to Section
4.05(b) hereof) incurred by the Indenture Trustee (to the extent not
previously reimbursed), the expenses of any sale, taking or other
proceeding, reasonable attorneys' fees and expenses, court costs, and any
other expenditures incurred or expenditures or advances made by the
Indenture Trustee or the Note Holders in the protection, exercise or
enforcement of any right, power or remedy or any damages sustained by the
Indenture Trustee or any Note Holder, liquidated or otherwise, upon such
Event of Default shall be applied by the Indenture Trustee as between
itself and the Note Holders in reimbursement of such expenses and any other
expenses for which the Indenture Trustee or the Note Holders are entitled
to reimbursement under any Operative Document and all amounts payable to
the other Indenture Indemnitees hereunder and under the Participation
Agreement excluding those amounts described in clauses "Second" and "Third"
below, and in the case the aggregate amount to be so distributed is
insufficient to pay as aforesaid, then ratably, without priority of one
over the other, in proportion to the amounts owed each hereunder;
Second, so much of such payments or amounts remaining as shall be
required to reimburse the then existing or prior Note Holders for payments
made pursuant to Section 5.03 hereof (to the extent not previously
reimbursed) shall be distributed to such then existing or prior Note
Holders 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 Note Holder pursuant to said Section 5.03 hereof; and
Third, (i) so much of such payments or amounts remaining as
shall be required to pay in full the aggregate unpaid Principal Amount of
all Series A Equipment Notes, and the accrued but unpaid interest and other
amounts due thereon and all other Secured Obligations in respect of the
Series A Equipment Notes to the date of distribution, shall be distributed
to the Note Holders of Series A, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series A Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series A Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution; (ii) after giving effect to paragraph (i)
above, so much of such payments or amounts remaining as shall be required
to pay in full the aggregate unpaid Principal Amount of all Series B
Equipment Notes, and the accrued but unpaid interest and other amounts due
thereon and all other Secured Obligations in respect of the Series B
Equipment Notes to the date of distribution, shall be distributed to the
Note Holders of Series B, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series B Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series B Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution; and (iii) after giving effect to paragraph
(ii) above, so much of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid Principal Amount of all Series
C Equipment Notes, and the accrued but unpaid interest and other amounts
due thereon and all other Secured Obligations in respect of the Series C
Equipment Notes to the date of distribution, shall be distributed to the
Note Holders of Series C, and in case the aggregate amount so to be
distributed shall be insufficient to pay in full as aforesaid, then
ratably, without priority of one over the other, in the proportion that the
aggregate unpaid Principal Amount of all Series C Equipment Notes held by
each holder plus the accrued but unpaid interest and other amounts due
hereunder or thereunder to the date of distribution, bears to the aggregate
unpaid Principal Amount of all Series C Equipment Notes held by all such
holders plus the accrued but unpaid interest and other amounts due thereon
to the date of distribution.
No Make-Whole Amount shall be due and payable on the Equipment
Notes as a consequence of the acceleration of the Equipment Notes.
SECTION 3.04. Certain Payments.
(a) Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in this Indenture and for
which such provision is made in the Participation Agreement or any other
Operative Document shall be applied forthwith to the purpose for which such
payment was made in accordance with the terms of the Participation
Agreement or such other Operative Document, as the case may be.
(b) The Indenture Trustee will distribute promptly upon receipt
any indemnity payment received by it from Owner in respect of (i) the
Indenture Trustee in its individual capacity or any other Indenture
Indemnitees, (ii) any Note Holder, (iii) the Subordination Agent, (iv) the
Liquidity Provider, and (v) the Pass Through Trustees, in each case
pursuant to Section 6 of the Participation Agreement, directly to the
Person entitled thereto. Any payment received by the Indenture Trustee
under clause (b) of the third paragraph of Section 2.02 shall be
distributed to the Subordination Agent to be distributed in accordance with
the terms of the Intercreditor Agreement, and any payment received by the
Indenture Trustee under clause (c) of the third paragraph of Section 2.02
shall be distributed directly to the Persons entitled thereto.
SECTION 3.05. Other Payments.
Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in the Participation
Agreement, elsewhere in this Indenture or in any other Operative Document
shall be distributed by the Indenture Trustee in the manner provided in
clause "First" of Section 3.03 hereof. Further, and except as otherwise
provided in Sections 3.02, 3.03 and 3.04 hereof, all payments received and
amounts realized by the Indenture Trustee with respect to the Aircraft, to
the extent received or realized at any time after payment in full of all
Secured Obligations due the Note Holders, shall be distributed by the
Indenture Trustee to Owner.
Second, in the manner provided in clause "Fourth" of Section
3.03 hereof.
SECTION 3.06. Payments to Owner.
Any amounts distributed hereunder by the Indenture Trustee to
Owner shall be paid to Owner (within the time limits contemplated by
Section 2.04(a)) by wire transfer of funds of the type received by the
Indenture Trustee at such office and to such account or accounts of such
entity or entities as shall be designated by notice from Owner to the
Indenture Trustee from time to time.
ARTICLE IV
CERTAIN COVENANTS OF OWNER; EVENTS OF
DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Certain Covenants of Owner.
Owner hereby covenants and agrees that it will duly and
punctually pay the Principal Amount of, Make-Whole Amount, if any, and
interest on and other amounts due under the Equipment Notes and hereunder
in accordance with the terms of the Equipment Notes and this Indenture and
all amounts, if any, payable by it to the Note Holders under the
Participation Agreement.
SECTION 4.02. Event of Default.
"Event of Default" means any of the following events (whatever
the reason for such Event of Default and whether 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) the failure of Owner to pay when due any payment of
Principal Amount of, interest on, Make-Whole Amount, if any, or other
amount due and payable under any Equipment Note or hereunder and such
failure shall have continued unremedied for ten Business Days in the case
of any payment of Principal Amount or interest or Make-Whole Amount, if
any, thereon and, in the case of any other amount, for ten Business Days
after Owner receives written demand from the Indenture Trustee or any Note
Holder; or
(b) any representation or warranty made by Owner herein, in the
Participation Agreement or in any certificate furnished by Owner to the
Indenture Trustee or any Note Holder in connection with the transactions
contemplated by the Operative Documents shall prove to have been false or
incorrect when made in any material respect and continues to be material
and adverse to the interests of the Indenture Trustee or the Note Holders;
and if such misrepresentation is capable of being corrected and if such
correction is being sought diligently, such misrepresentation shall not
have been corrected within sixty (60) days following notice thereof from
the Indenture Trustee or any Note Holder to the Owner; or
(c) other than as provided in (d) below, any failure by Owner to
observe or perform any other covenant or obligation of the Owner for the
benefit of the Indenture Trustee or the Note Holders contained in the
Participation Agreement, the Equipment Notes or this Indenture which is not
remedied within a period of sixty (60) days after notice thereof has been
given to Owner; or
(d) if at any time when the Aircraft is registered under the
laws of the United States, Owner shall not be a Citizen of the United
States, and as the result thereof the registration of the Aircraft under
the Transportation Code, and regulations then applicable thereunder, shall
cease to be effective; provided that no Event of Default shall be deemed to
have occurred under this paragraph (f) unless such circumstances continue
unremedied for more than sixty (60) days after Owner has Actual Knowledge
of the state of facts that resulted in such ineffectiveness and of such
loss of citizenship; or
(e) at any time either (i) the commencement of an involuntary
case or other proceeding in respect of Owner under the federal bankruptcy
Laws, as now constituted or hereafter amended, or any other applicable
federal or state bankruptcy, insolvency or other similar Law in the United
States or seeking the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of Owner or for all
or substantially all of its property, or seeking the winding-up or
liquidation of its affairs and the continuation of any such case or other
proceeding undismissed and unstayed for a period of ninety (90) consecutive
days; or (ii) the commencement by Owner of a voluntary case or proceeding
under the federal bankruptcy Laws, as now constituted or hereafter amended,
or any other applicable federal or state bankruptcy, insolvency or other
similar Law in the United States, or the consent by Owner to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of Owner or
for all or substantially all of its property, or the making by Owner of any
assignment for the benefit of creditors or Owner shall take any action to
authorize any of the foregoing; or
(f) Owner shall fail to carry and maintain or with respect to
the Aircraft (or cause to be carried or maintained) insurance required to
be maintained in accordance with Section 7.04 hereof.
SECTION 4.03. [Reserved].
SECTION 4.04. Remedies.
(a) Subject to the provisions of Section 2.14 hereof, if an
Event of Default shall have occurred and be continuing and so long as the
same shall continue unremedied, then and in every such case the Indenture
Trustee may, subject to the second paragraph of this Section 4.04(a),
exercise any or all of the rights and powers and pursue any and all of the
remedies pursuant to this Article IV and shall have and may exercise all of
the rights and remedies of a secured party under the Uniform Commercial
Code and may take possession of all or any part of the properties covered
or intended to be covered by the Lien created hereby or pursuant hereto and
may exclude Owner and all persons claiming under Owner wholly or partly
therefrom; provided, however, that during any period the Aircraft is
subject to the Civil Reserve Air Fleet Program and in possession of the
United States Government or an agency or instrumentality of the United
States, the Indenture Trustee shall not, on account of any Event of
Default, be entitled to exercise or pursue any of the powers, rights or
remedies described in this Section 4.04 in such manner as to limit Owner's
control (or any Lessee's control under any Lease) of any Airframe or any
Engines installed thereon, unless at least sixty (60) days (or such lesser
period as may then be applicable under the Air Mobility Command program of
the United States Government) written notice of default hereunder shall
have been given by the Indenture Trustee by registered or certified mail to
Owner (and any Lessee) with a copy addressed to the Contracting Office
Representative of the Air Mobility Command of the United States Air Force
under any contract with Owner (or any Lessee) relating to the Aircraft;
provided further, that the Indenture Trustee shall give Owner twenty (20)
days' prior written notice of its intention to sell the Aircraft. Without
limiting any of the foregoing, it is understood and agreed that the
Indenture Trustee may exercise any right of sale of the Aircraft available
to it, even though it shall not have taken possession of the Aircraft and
shall not have possession thereof at the time of such sale.
(b) If an Event of Default shall have occurred and be
continuing, then and in every such case the Indenture Trustee may (and
shall, upon receipt of a written demand therefor from a Majority in
Interest of Note Holders), subject to Section 4.03 hereof, at any time, by
delivery of written notice or notices to Owner, declare all the Equipment
Notes to be due and payable, whereupon the unpaid Principal Amount of all
Equipment Notes then outstanding, together with accrued but unpaid interest
thereon (without Make-Whole Amount) and other amounts due thereunder, shall
immediately become due and payable without presentment, demand, protest or
notice, all of which are hereby waived; provided that if an Event of
Default referred to in clause (e) of Section 4.02 hereof shall have
occurred and be continuing, then and in every such case the unpaid
Principal Amount then outstanding, together with accrued but unpaid
interest and all other amounts due thereunder and hereunder shall
immediately and without further act become due and payable without
presentment, demand, protest or notice, all of which are hereby waived.
This Section 4.04(b), however, is subject to the condition
that, if at any time after the Principal Amount of the Equipment Notes
shall have become so due and payable, and before any judgment or decree for
the payment of the money so due, or any thereof, shall be entered, all
overdue payments of interest upon the Equipment Notes and all other amounts
payable under the Equipment Notes (except the Principal Amount of the
Equipment Notes which by such declaration shall have become payable) shall
have been duly paid, and every other Default and Event of Default with
respect to any covenant or provision of this Indenture shall have been
cured, then and in every such case a Majority in Interest of Note Holders
may (but shall not be obligated to), by written instrument filed with the
Indenture Trustee, rescind and annul the Indenture Trustee's declaration
and its consequences; but no such rescission or annulment shall extend to
or affect any subsequent Default or Event of Default or impair any right
consequent thereon.
(c) Any Note Holder shall be entitled, at any sale pursuant to
this Section 4.04, to credit against any purchase price bid at such sale by
such holder all or any part of the unpaid obligations owing to such Note
Holder and secured by the Lien of this Indenture (but only to the extent
that such purchase price would have been paid to such Note Holder pursuant
to Article III hereof if such purchase price were paid in cash and the
foregoing provisions of this subsection (c) were not given effect).
(d) In the event of any sale of the Indenture Estate, or any
part thereof, pursuant to any judgment or decree of any court or otherwise
in connection with the enforcement of any of the terms of this Indenture,
the unpaid Principal Amount of all Equipment Notes then outstanding,
together with accrued interest thereon, and other amounts due thereunder,
shall immediately become due and payable without presentment, demand,
protest or notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as the
Pass Through Trustee under any Pass Through Trust Agreement or the
Subordination Agent on its behalf is a Note Holder, the Indenture Trustee
will not be authorized or empowered to acquire title to any Mortgaged
Property or take any action with respect to any Mortgaged Property 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 4.05. Return of Aircraft, Etc.
(a) If an Event of Default shall have occurred and be
continuing, subject to Sections 4.03 and 4.04 hereof, at the request of the
Indenture Trustee, Owner shall promptly execute and deliver to the
Indenture Trustee such instruments and 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 Mortgaged Property included in
the Indenture Estate to which the Indenture Trustee shall at the time be
entitled hereunder. If Owner shall for any reason fail to execute and
deliver such instruments and documents after such request by the Indenture
Trustee, the Indenture Trustee may (i) obtain a judgment conferring on the
Indenture Trustee the right to immediate possession and requiring the Owner
to execute and deliver such instruments and documents to the Indenture
Trustee, to the entry of which judgment Owner hereby specifically consents
to the fullest extent permitted by applicable law, and (ii) pursue all or
part of such Mortgaged Property wherever it may be found and may enter any
of the premises of Owner wherever such Mortgaged Property may be or be
supposed to be and search for such Mortgaged Property and take possession
of and remove such Mortgaged Property. All expenses of obtaining such
judgment or of pursuing, searching for and taking such property shall,
until paid, be secured by the Lien of this Indenture.
(b) Upon every such taking of possession, the Indenture Trustee
may, from time to time, at the expense of the Mortgaged Property, make all
such expenditures for maintenance, use, operation, storage, insurance,
leasing, control, management, disposition, modifications or alterations to
and of the Mortgaged Property, as it may deem proper. In each such case,
the Indenture Trustee shall have the right to maintain, use, operate,
store, insure, lease, control, manage, dispose of, modify or alter the
Mortgaged Property and to carry on the business and to exercise all rights
and powers of Owner relating to the Mortgaged Property, as the Indenture
Trustee shall deem best, including the right to enter into any and all such
agreements with respect to the maintenance, use, operation, storage,
insurance, leasing, control, management, disposition, modification or
alteration of the Mortgaged Property or any part thereof as the Indenture
Trustee may determine, and the Indenture Trustee shall be entitled to
collect and receive directly all tolls, rents, revenues, issues, income,
products and profits of the Mortgaged Property and every part thereof,
except Excluded Payments, without prejudice, however, to the right of the
Indenture Trustee under any provision of this Indenture to collect and
receive all cash held by, or required to be deposited with, the Indenture
Trustee hereunder other than Excluded Payments. Such tolls, rents,
revenues, issues, income, products and profits shall be applied to pay the
expenses of the maintenance, use, operation, storage, insurance, leasing,
control, management, disposition, improvement, modification or alteration
of the Mortgaged Property and of conducting the business thereof, 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 Mortgaged Property or any part thereof, and all other payments
which the Indenture Trustee may be required or authorized to make under any
provision of this Indenture, 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 with respect hereto.
SECTION 4.06. Remedies Cumulative.
Each and every right, power and remedy given to the Indenture
Trustee specifically or otherwise in this Indenture 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 and 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 the pursuance of any remedy shall impair any such right, power
or remedy or be construed to be a waiver of any default on the part of
Owner or to be an acquiescence therein.
SECTION 4.07. Discontinuance of Proceedings.
In case the Indenture Trustee shall have instituted any
proceeding to enforce any right, power or remedy under this Indenture by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, then and in every such case Owner and
the Indenture Trustee shall, subject to any determination in such
proceedings, be restored to their former positions and rights hereunder
with respect to the Mortgaged Property, and all rights, remedies and powers
of the Indenture Trustee or Owner shall continue as if no such proceedings
had been instituted.
SECTION 4.08. Waiver of Past Defaults.
Upon written instruction from a Majority in Interest of Note
Holders, the Indenture Trustee shall waive any past Default hereunder and
its consequences and upon any such waiver such Default shall cease to exist
and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture, but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon;
provided, that in the absence of written instructions from all the Note
Holders, the Indenture Trustee shall not waive any Default (i) in the
payment of the Principal Amount, Make-Whole Amount, if any, and interest
and other amounts due under any Equipment Note then outstanding, or (ii) in
respect of a covenant or provision hereof which, under Article IX hereof,
cannot be modified or amended without the consent of each Note Holder.
SECTION 4.09. Appointment of Receiver.
If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall, as a matter of right, be entitled to the
appointment of a receiver (who may be the Indenture Trustee or any
successor or nominee thereof) for all or any part of the Mortgaged
Property, whether such receivership be incidental to a proposed sale of the
Mortgaged Property or the taking of possession thereof or otherwise, and
Owner hereby consents to the appointment of such a receiver and will not
oppose any such appointment. Any receiver appointed for all or any part of
the Mortgaged Property shall be entitled to exercise all the rights and
powers of the Indenture Trustee with respect to the Mortgaged Property.
SECTION 4.10. Indenture Trustee Authorized to Execute Bills of
Sale, Etc.
Owner irrevocably appoints the Indenture Trustee the true and
lawful attorney-in-fact of Owner in its name and stead and on its behalf,
for the purpose, if an Event of Default shall have occurred and be
continuing, of effectuating in accordance with applicable law any sale,
assignment, transfer or delivery for the enforcement of the Lien of this
Indenture, whether pursuant to foreclosure or power of sale, assignments
and other instruments as may be necessary or appropriate, with full power
of substitution, Owner hereby ratifying and confirming all that such
attorney or any substitute shall do by virtue hereof in accordance with
applicable law. Nevertheless, if so requested by the Indenture Trustee or
any purchaser, Owner 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.
SECTION 4.11. Rights of Note Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Note Holder to receive payment of principal of, and premium, if any,
and interest on a 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 in accordance with the
terms hereof, shall not be impaired or affected without the consent of such
Note Holder.
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default.
If the Indenture Trustee shall have Actual Knowledge of an Event
of Default or of a Default arising from a failure by Owner to pay when due
any payment of Principal Amount of, interest on, or Make-Whole Amount, if
any, due and payable under any Equipment Note, the Indenture Trustee shall
give prompt written notice thereof to the Owner and each Note Holder.
Subject to the terms of Sections 2.14, 4.04, 4.08, 5.02 and 5.03 hereof,
the Indenture Trustee shall take such action, or refrain from taking such
action, with respect to such Event of Default or Default (including with
respect to the exercise of any rights or remedies hereunder) as the
Indenture Trustee shall be instructed in writing by a Majority in Interest
of Note Holders. Subject to the provisions of Section 5.03, if the
Indenture Trustee shall not have received instructions as above provided
within twenty (20) days after mailing notice of such Event of Default to
the Note Holders, the Indenture Trustee may, subject to instructions
thereafter received pursuant to the preceding provisions of this Section
5.01, take such action, or refrain from taking such action, but shall be
under no duty to take or refrain from taking any action, with respect to
such Event of Default or Default as it shall determine advisable in the
best interests of the Note Holders.
SECTION 5.02. Action upon Instructions; Certain Rights and
Limitations.
Subject to the terms of Sections 4.04(a) and (b), 4.08, 5.01 and
5.03 hereof, upon the written instructions at any time and from time to
time of a Majority in Interest of Note Holders, the Indenture Trustee
shall, subject to the terms of this Section 5.02, take such of the
following actions as may be specified in such instructions: (i) give such
notice or direction or exercise such right, remedy or power hereunder as
shall be specified in such instructions; and (ii) give such notice or
direction or exercise such right, remedy or power under the Participation
Agreement, the Purchase Agreement, or any other part of the Indenture
Estate as shall be specified in such instructions.
The Indenture Trustee will execute and Owner will file or cause
to be filed such continuation statements with respect to financing
statements relating to the security interest created hereunder in the
Indenture Estate as specified by Owner pursuant to Section 7(d) of the
Participation Agreement or as may be specified from time to time in written
instructions of a Majority in Interest of Note Holders (which instructions
may, by their terms, be operative only at a future date and which shall be
accompanied by the form of such continuation statement so to be filed). The
Indenture Trustee will furnish to each Note Holder, promptly upon receipt
thereof, duplicates or copies of all reports, notices, requests, demands,
certificates and other instruments furnished to the Indenture Trustee
hereunder.
SECTION 5.03. Indemnification.
The Indenture Trustee shall not be required to take any action or
refrain from taking any action under Sections 5.01 (other than the first
sentence thereof) or 5.02 or Article IV hereof unless the Indenture Trustee
shall have been indemnified to its reasonable satisfaction against any
liability, cost or expense (including counsel fees) which may be incurred
in connection therewith pursuant to a written agreement with one or more
Note Holders. The Indenture Trustee shall not be under any obligation to
take any action under this Indenture and nothing herein or therein shall
require the Indenture Trustee to expend or risk its own funds or otherwise
incur the risk of any financial liability in the performance of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it (the written indemnity of any
Note Holder who is a QIB, signed by an authorized officer thereof, in favor
of, delivered to and in form reasonably satisfactory to Indenture Trustee
shall be accepted as reasonable assurance of adequate indemnity). The
Indenture Trustee shall not be required to take any action under Section
5.01 (other than the first sentence thereof) or 5.02 or Article IV hereof,
nor shall any other provision of this Indenture or any other Operative
Document be deemed to impose a duty on the Indenture Trustee to take any
action, if the Indenture Trustee shall have been advised by counsel that
such action is contrary to the terms hereof or is otherwise contrary to
Law.
SECTION 5.04. No Duties Except as Specified in Indenture or
Instructions.
The Indenture Trustee shall not have any duty or obligation to
use, operate, store, lease, control, manage, sell, dispose of or otherwise
deal with the Aircraft or any other part of the Indenture Estate, or to
otherwise take or refrain from taking any action under, or in connection
with, this Indenture or any part of the Indenture Estate, except as
expressly provided by the terms of this Indenture or as expressly provided
in written instructions from Note Holders as provided in this Indenture;
and no implied duties or obligations shall be read into this Indenture
against the Indenture Trustee. The Indenture Trustee agrees that it will
in its individual capacity and at its own cost and expense (but without any
right of indemnity in respect of any such cost or expense under Section
8.01 hereof), promptly take such action as may be necessary duly to
discharge all liens and encumbrances on any part of the Indenture Estate
which result from claims against it in its individual capacity not related
to the ownership of the Aircraft or the administration of the Indenture
Estate or any other transaction pursuant to this Indenture or any document
included in the Indenture Estate.
SECTION 5.05. No Action Except Under Indenture or
Instructions.
The Indenture Trustee agrees that it will not use, operate,
store, lease, control, manage, sell, dispose of or otherwise deal with the
Aircraft or any other part of the Indenture Estate except in accordance
with the powers granted to, or the authority conferred upon, the Indenture
Trustee pursuant to this Indenture and in accordance with the express terms
hereof.
SECTION 5.06. Replacement Airframes and Replacement Engines.
(a) Event of Loss with Respect to the Aircraft. Upon the
occurrence of an Event of Loss with respect to the Airframe or the Airframe
and the Engines and/or engines then installed thereon, Owner shall
forthwith (and in any event, within fifteen (15) days after such
occurrence) give the Indenture Trustee written notice of such Event of
Loss, and, within sixty (60) days after such Event of Loss, Owner shall
give the Indenture Trustee written notice of its election to perform one of
the following options (it being agreed that if Owner shall not have given
such notice of election within such period, Owner shall be deemed to have
elected the option set forth in clause (i) below). Owner may elect either
to:
(i) redeem the Equipment Notes in the manner
set forth in Section 2.10(a) on the earlier of (x) the Business
Day next succeeding the 120th day following the occurrence of
such Event of Loss or (y) an earlier Business Day irrevocably
specified fifteen (15) days in advance by notice from Owner to
the Indenture Trustee; or
(ii) substitute an aircraft or an airframe or
an airframe and one or more engines, as the case may be; provided
that, if Owner does not perform its obligation to effect such
substitution in accordance with this Section 5.06(a), during the
period of time provided herein, then Owner shall redeem the
Equipment Notes in the manner set forth in Section 2.10(a) on the
Business Day next succeeding the 120th day following the
occurrence of such Event of Loss.
In the event Owner shall elect to substitute an aircraft (or an
airframe or an airframe and one or more engines, as the case may be) Owner
shall, at its sole expense, not later than the Business Day next succeeding
the 120th day following the occurrence of such Event of Loss, (1) furnish
the Indenture Trustee with such evidence as the Indenture Trustee may
reasonably request that Owner holds title to such aircraft (or such
airframe or such airframe and one or more engines which, together with the
Engines constituting a part of the Aircraft but not installed thereon at
the time of such Event of Loss, constitute the Aircraft) free and clear of
all Liens (other than Permitted Liens) and having a value, utility and
remaining useful life at least equal to the Aircraft subject to such Event
of Loss assuming that the Aircraft had been maintained in accordance with
the requirements of this Indenture, and Owner shall cause an Indenture
Supplement to be duly executed by Owner and filed for recording pursuant to
the Transportation Code, or the applicable laws, rules and regulations of
any other jurisdiction in which the Airframe may then be registered as
permitted by Section 7(d) of the Participation Agreement with respect to
such substituted property, (2) cause a financing statement or statements
with respect to such substituted property to be filed in such place or
places as are deemed necessary or desirable by the Indenture Trustee to
perfect the Indenture Trustee's interest therein, (3) furnish the Indenture
Trustee with such evidence of compliance with the insurance provisions
hereof with respect to such substituted property as the Indenture Trustee
may reasonably request and (4) furnish the Indenture Trustee with an
opinion of counsel (which shall be Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
or Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois) and, if not, other
counsel chosen by Owner and reasonably acceptable to the Indenture Trustee)
reasonably satisfactory to the Indenture Trustee to the effect that the
Indenture Trustee will be entitled to the benefits of Section 1110 of the
U.S. Bankruptcy Code with respect to the substitute aircraft, provided that
such opinion need not be delivered to the extent that immediately prior to
such substitution the benefits of Section 1110 of the U.S. Bankruptcy Code
were not, solely by reason of a change in law or governmental
interpretation thereof, available to the Indenture Trustee with respect to
the Aircraft. For all purposes hereof, the property so substituted shall
be deemed part of the property subject to the Lien of this Indenture and
shall be deemed an "Aircraft", "Airframe" and "Engine", as the case may be,
as defined herein.
(b) Event of Loss with Respect to an Engine. Upon the
occurrence of an Event of Loss with respect to an Engine under
circumstances in which there has not occurred an Event of Loss with respect
to the Airframe, Owner shall forthwith (and in any event, within fifteen
days after such occurrence) give the Indenture Trustee written notice
thereof and shall, within one hundred twenty (120) days after the
occurrence of such Event of Loss, (i) cause an Indenture Supplement to be
duly executed by Owner and to be filed for recording pursuant to the
Transportation Code, or the applicable laws, rules and regulations of any
other jurisdiction in which the Airframe may then be registered as
permitted by Section 7(d) of the Participation Agreement with respect to an
Acceptable Alternative Engine and, (ii) furnish the Indenture Trustee with
such evidence of compliance with the insurance provisions hereof with
respect to such replacement engine as the Indenture Trustee may reasonably
request. For all purposes hereof, each such replacement engine shall,
after such conveyance, be deemed part of the property subject to the Lien
of this Indenture hereunder, and shall be deemed an "Engine".
(c) Requisition for Use of an Engine by the United States
Government or the Government of Registry of the Aircraft. In the event of
the requisition for use of an Engine by the United States Government or any
other government of registry of the Aircraft or any agency or
instrumentality of any thereof, Owner shall replace such Engine hereunder
by complying (or causing any Lessee to comply) with the terms of Section
5.06(b) to the same extent as if an Event of Loss had occurred with respect
thereto, and, upon compliance with Section 5.06(b), any payments received
by Owner from such government with respect to such requisition shall be
paid over to, or retained by, Owner.
(d) Application of Payments During Existence of Event of
Default. Any amount referred to in this Section 5.06 which is payable to
or retainable by Owner shall not be paid to or retained by Owner if at the
time of such payment or retention an Event of Default shall have occurred
and be continuing, but shall be held by or paid over to the Indenture
Trustee as security for the obligations of Owner hereunder and, if an Event
of Default has occurred and is continuing hereunder, applied against
Owner's obligations hereunder as and when due. At such time as there shall
not be continuing any such Event of Default, such amount shall be paid to
Owner to the extent not previously applied in accordance with the preceding
sentence.
SECTION 5.07. Indenture Supplements for Replacements.
If a Replacement Airframe or Replacement Engine is being
substituted as contemplated by Section 5.06, Owner and the Indenture
Trustee agree for the benefit of the Note Holders and Owner, subject to
fulfillment of the conditions precedent and compliance by Owner with the
requirements of Section 5.06 hereof with respect to such Replacement
Airframe or Replacement Engine, to execute and deliver an Indenture
Supplement.
SECTION 5.08. Effect of Replacement.
In the event of the substitution of an Airframe or of a
Replacement Engine pursuant to Section 5.06, (a) all provisions of this
Indenture relating to the Airframe or Engine or Engines being replaced
shall be applicable to such Replacement Airframe or Replacement Engine or
Engines with the same force and effect as if such Replacement Airframe or
Replacement Engine or Engines were the same airframe or engine or engines,
as the case may be, as the Airframe or Engine or Engines being replaced but
for the Event of Loss with respect to the Airframe or Engine or Engines
being replaced, and (b) the provisions of this Indenture shall no longer be
applicable to the Airframe or Engine or Engines being replaced, which shall
be released from the Lien of this Indenture.
SECTION 5.09. Investment of Amounts Held by Indenture Trustee.
Any amounts held by the Indenture Trustee pursuant to Section
3.02 or pursuant to any provision of any other Operative Document providing
for amounts to be held by the Indenture Trustee which are not distributed
pursuant to the other provisions of Article III hereof shall be invested by
the Indenture Trustee from time to time in Cash Equivalents as directed by
Owner so long as the Indenture Trustee may acquire the same using its best
efforts. Unless otherwise expressly provided in this Indenture, any income
realized as a result of any such investment, net of the Indenture Trustee's
reasonable fees and expenses in making such investment, shall be held and
applied by the Indenture Trustee in the same manner as the principal amount
of such investment is to be applied and any losses, net of earnings and
such reasonable fees and expenses, shall be charged against the principal
amount invested. The Indenture Trustee shall not be liable for any loss
resulting from any investment required to be made by it under this
Indenture other than by reason of its willful misconduct or gross
negligence, and any such investment may be sold (without regard to its
maturity) by the Indenture Trustee without instructions whenever such sale
is necessary to make a distribution required by this Indenture.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties.
The Indenture Trustee accepts the duties hereby created and
applicable to it and agrees to perform the same but only upon the terms of
this Indenture and agrees to receive and disburse all monies constituting
part of the Indenture Estate in accordance with the terms hereof. The
Indenture Trustee, in its individual capacity, shall not be answerable or
accountable under any circumstances, except (i) for willful misconduct or
gross negligence (other than for the handling of funds, for which the
standard of accountability shall be willful misconduct or negligence), (ii)
as provided in the fourth sentence of Section 2.04(a) hereof and the last
sentence of Section 5.04 hereof, and (iii) for liabilities that may result
from the inaccuracy of any representation or warranty of the Indenture
Trustee (in its individual capacity) in the Participation Agreement or
expressly made hereunder.
SECTION 6.02. Absence of Duties.
Except in accordance with written instructions furnished pursuant
to Section 5.01 or 5.02 hereof, and except as provided in, and without
limiting the generality of, Sections 5.03 and 5.04 hereof, the Indenture
Trustee shall have no duty (i) to see to any registration of the Aircraft
or any recording or filing of this Indenture or any other document, or to
see to the maintenance of any such registration, recording or filing, (ii)
to see to any insurance on the Aircraft or to effect or maintain any such
insurance, whether or not Owner shall be in default with respect thereto,
(iii) to see to the payment or discharge of any lien or encumbrance of any
kind against any part of the Indenture Estate, or (iv) to inspect the
Aircraft at any time or ascertain or inquire as to the performance or
observance of any of Owner's covenants hereunder with respect to the
Aircraft.
SECTION 6.03. No Representations or Warranties as to Aircraft
or Documents.
THE INDENTURE TRUSTEE IN ITS INDIVIDUAL OR TRUST CAPACITY DOES
NOT MAKES AND SHALL NOT BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
TITLE, AIRWORTHINESS, VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION,
DESIGN, QUALITY, DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE
OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE
OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE
ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER. The Indenture Trustee, in its
individual or trust capacity, does not make and shall not be deemed to have
made any representation or warranty as to the validity, legality or
enforceability of this Indenture, the Participation Agreement, the
Equipment Notes, the Purchase Agreement, the Purchase Agreement Assignment,
or the Consent and Agreement, or as to the correctness of any statement
contained in any thereof.
SECTION 6.04. No Segregation of Monies; No Interest.
Any monies paid to or retained by the Indenture Trustee pursuant
to any provision hereof and not then required to be distributed to the Note
Holders or the Owner as provided in Article III hereof need not be
segregated in any manner except to the extent required by Law and Section
5.09 hereof, and may be deposited under such general conditions as may be
prescribed by Law, and the Indenture Trustee shall not be liable for any
interest thereon (except that the Indenture Trustee shall invest all monies
held as directed by Owner so long as no Event of Default has occurred and
is continuing (or in the absence of such direction, by the Majority In
Interest of Note Holders) in Cash Equivalents; provided, however, that any
payments received, or applied hereunder, by the Indenture Trustee shall be
accounted for by the Indenture Trustee so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source thereof.
SECTION 6.05. Reliance; Agreements; Advice of Counsel.
The Indenture Trustee shall not incur any liability to anyone in
acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or
paper believed by it to be genuine and believed by it to be signed by the
proper party or parties. The Indenture Trustee may accept a copy of a
resolution of the Board of Directors of any party to the Participation
Agreement, certified by the Secretary or an Assistant Secretary thereof as
duly adopted and in full force and effect, as conclusive evidence that such
resolution has been duly adopted and that the same is in full force and
effect. As to the aggregate unpaid Principal Amount of Equipment Notes
outstanding as of any date, Owner may for all purposes hereof rely on a
certificate signed by any Vice President or other authorized corporate
trust officer of the Indenture Trustee. As to any fact or matter relating
to the Owner the manner of ascertainment of which is not specifically
described herein, the Indenture Trustee may for all purposes hereof rely on
a certificate, signed by a duly authorized officer of Owner, as to such
fact or matter, and such certificate shall constitute full protection to
the Indenture Trustee for any action taken or omitted to be taken by them
in good faith in reliance thereon. In the administration of the trusts
hereunder, the Indenture Trustee may execute any of the trusts or powers
hereof and perform its powers and duties hereunder directly or through
agents or attorneys and may at the expense of the Indenture Estate, consult
with counsel, accountants and other skilled persons to be selected and
retained by it, and the Indenture Trustee shall not be liable for anything
done, suffered or omitted in good faith by them in accordance with the
advice or opinion of any such counsel, accountants or other skilled
persons.
SECTION 6.06. [Reserved].
SECTION 6.07. Compensation.
The Indenture Trustee shall be entitled to reasonable
compensation, including expenses and disbursements (including the
reasonable fees and expenses of counsel), for all services rendered
hereunder and shall, on and subsequent to an Event of Default hereunder,
have a priority claim on the Indenture Estate for the payment of such
compensation, to the extent that such compensation shall not be paid by
Owner, and shall have the right, on and subsequent to an Event of Default
hereunder, to use or apply any monies held by it hereunder in the Indenture
Estate toward such payments. The Indenture Trustee agrees that it shall
have no right against the Loan Participants or the Note Holders for any fee
as compensation for its services as trustee under this Indenture.
SECTION 6.08. Instructions from Note Holders.
In the administration of the trusts created hereunder, the
Indenture Trustee shall have the right to seek instructions from a Majority
in Interest of Note Holders should any provision of this Indenture appear
to conflict with any other provision herein or should the Indenture
Trustee's duties or obligations hereunder be unclear, and the Indenture
Trustee shall incur no liability in refraining from acting until it
receives such instructions. The Indenture Trustee shall be fully protected
for acting in accordance with any instructions received under this Section
6.08.
ARTICLE VII
OPERATING COVENANTS OF THE OWNER
SECTION 7.01. Liens. Owner will not directly or indirectly
create, incur, assume or suffer to exist any Lien on or with respect to the
Aircraft, title thereto or any interest therein, except (i) the Lien of the
Indenture, the rights of any Lessee under a Lease permitted hereunder and
any other rights of any Person existing pursuant to the Operative
Documents, (ii) the rights of others under agreements or arrangements to
the extent permitted by the terms of Sections 7.02 and 7.03, (iii) Loan
Participant Liens and Indenture Trustee's Liens, (iv) Liens for Taxes of
Owner (or any Lessee) either not yet due or being contested in good faith
by appropriate proceedings so long as such proceedings do not involve any
material risk of the sale, forfeiture or loss of the Airframe or any Engine
or any interest therein, (v) materialmen's, mechanics', workmen's,
repairmen's, employees' or other like Liens arising in the ordinary course
of Owner's (or, if a Lease is then in effect, Lessee's) business (including
those arising under maintenance agreements entered into in the ordinary
course of business) securing obligations that are not overdue for a period
of more than sixty (60) days or are being contested in good faith by
appropriate proceedings so long as such proceedings do not involve any
material risk of the sale, forfeiture or loss of the Airframe or any Engine
or any interest therein, (vi) Liens arising out of any judgment or award
against Owner (or any Lessee), unless the judgment secured shall not,
within sixty (60) days after the entry thereof, have been discharged,
vacated, reversed or execution thereof stayed pending appeal or shall not
have been discharged, vacated or reversed within sixty (60) days after the
expiration of such stay, (vii) any other Lien with respect to which Owner
(or any Lessee) shall have provided a bond, cash collateral or other
security adequate in the reasonable opinion of the Indenture Trustee, and
(viii) Liens approved in writing by the Indenture Trustee. Owner will
promptly, at its own expense, take (or cause to be taken) such actions as
may be necessary duly to discharge any such Lien not excepted above if the
same shall arise at any time.
SECTION 7.02. Registration, Maintenance, Operation and
Registration; Possession and Leases; Insignia.
(a) Registration, Maintenance, Operation and Registration.
(i) Registration and Maintenance. Owner, at
its own cost and expense, shall (or shall cause any Lessee to):
(A) cause the Aircraft to be duly registered in the name of Owner
(or any Lessee), and, subject to clause (ii) of this Section
7.02(a) and Section 7(d) of the Participation Agreement, to
remain duly registered in the name of Owner (or any Lessee) under
the Transportation Code, and shall not register the Aircraft or
permit the Aircraft to be registered under any laws other than
the Transportation Code at any time except as provided in Section
7(d) of the Participation Agreement and, shall cause the Trust
Indenture to be duly recorded and maintained of record as a first
mortgage on the Aircraft; (B) maintain, service, repair and/or
overhaul (or cause to be maintained, serviced, repaired and/or
overhauled) the Aircraft so as to keep the Aircraft in as good an
operating condition as when delivered by the Seller to Owner,
ordinary wear and tear excepted, and as may be necessary to
enable the applicable airworthiness certification for the
Aircraft to be maintained in good standing at all times (other
than during temporary periods of storage or during maintenance or
modification permitted hereunder) under the Transportation Code,
except when all Airbus Model A319 aircraft powered by engines of
the same type as those with which the Airframe shall be equipped
at the time of such grounding and registered in the United States
have been grounded by the FAA (although such certification need
actually be maintained only during such periods as the Aircraft
is registered in the United States), or the applicable laws of
any other jurisdiction in which the Aircraft may then be
registered from time to time in accordance with Section 7(d) of
the Participation Agreement, utilizing, except during any period
that a Lease is in effect, the same manner and standard of
maintenance, service, repair or overhaul used by Owner with
respect to similar aircraft operated by Owner in similar
circumstances and utilizing, during any period that a Lease is in
effect, the same manner and standard of maintenance (including
inspections), service, repair or overhaul used by the Lessee with
respect to similar aircraft operated by the Lessee in similar
circumstances; and (C) maintain or cause to be maintained in
English all records, logs and other materials required to be
maintained in respect of the Aircraft by the FAA or the
applicable regulatory agency or body of any other jurisdiction in
which the Aircraft may then be registered.
(ii) Operation. Owner will not maintain,
use, service, repair, overhaul or operate the Aircraft (or permit
any Lessee to maintain, use, service, repair, overhaul or operate
the Aircraft) in violation of any law or any rule, regulation,
order or certificate of any government or governmental authority
(domestic or foreign) having jurisdiction over the Aircraft, or
in violation of any airworthiness certificate, license or
registration relating to the Aircraft issued by any such
authority, except to the extent Owner (or, if a Lease is then in
effect, any Lessee) is contesting in good faith the validity or
application of any such law, rule, regulation or order in any
reasonable manner which does not involve any material risk of
sale, forfeiture or loss of the Aircraft. Owner will not operate
the Aircraft, or permit any Lessee to operate the Aircraft, in
any area excluded from coverage by any insurance required by the
terms of Section 7.04; provided, however, that the failure of
Owner to comply with the provisions of this sentence shall not
give rise to an Event of Default hereunder if indemnification
complying with Section 7.04 has been provided or where such
failure is attributable to extraordinary circumstances involving
an isolated occurrence or series of incidents not in the ordinary
course of the regular operations of Owner (or any Lessee) such as
a hijacking, medical emergency, equipment malfunction, weather
condition, navigational error or other causes beyond the
reasonable control of Owner (or any Lessee).
(b) Possession and Leases. Owner will not, without the prior
written consent of the Indenture Trustee, lease or otherwise in any manner
deliver, transfer or relinquish possession of the Airframe or any Engine or
install or permit any Engine to be installed on any airframe other than the
Airframe or enter into any Wet Lease, and so long as Owner (or any Lessee)
shall comply with the provisions of Section 7.02(a) and Section 7.04
hereof, Owner may (or may permit any Lessee to), without the prior written
consent of the Indenture Trustee:
(i) subject the Airframe and the Engines or
engines then installed thereon to interchange agreements or any
Engine to pooling or similar arrangements, in each case customary
in the airline industry and entered into by Owner (or, if a Lease
is then in effect, by Lessee) in the ordinary course of its
business;
(ii) deliver possession of the Airframe or
any Engine to the manufacturer thereof (or for delivery thereto)
or to any organization (or for delivery thereto) for testing,
service, repair, maintenance or overhaul work on the Airframe or
Engine or any part of any thereof or for alterations or
modifications in or additions to such Airframe or Engine to the
extent required or permitted by the terms of Section 7.03 hereof;
(iii) install an Engine on an airframe owned
by Owner (or any Lessee) free and clear of all Liens, except:
(A) Permitted Liens and those which apply only to the engines
(other than Engines), appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment
(other than Parts) installed on such airframe (but not to the
airframe as an entirety), (B) the rights of third parties under
interchange agreements or pooling or similar arrangements which
would be permitted under clause (i) above, provided that the
first priority Lien of the Indenture shall not be divested or
impaired as a result thereof and (C) mortgage liens or other
security interests, provided that (as regards this clause (C))
the documents creating such mortgage liens or other security
interests (or, if applicable, another written agreement governing
such mortgage liens or other security interests) effectively
provide that such Engine shall not become subject to the lien of
such mortgage or security interest, notwithstanding the
installation thereof on such airframe;
(iv) install an Engine on an airframe leased
to Owner (or any Lessee) or purchased by Owner (or any Lessee)
subject to a conditional sale or other security agreement,
provided that (x) such airframe is free and clear of all Liens,
except: (A) the rights of the parties to the lease or conditional
sale or other security agreement covering such airframe, or their
assignees, and (B) Liens of the type permitted by clause (iii) of
this paragraph (b) and (y) such lease, conditional sale or other
security agreement effectively provides that such Engine shall
not become subject to the lien of such lease, conditional sale or
other security agreement, notwithstanding the installation
thereof on such airframe;
(v) install an Engine on an airframe owned
by Owner (or any Lessee), leased to Owner (or any Lessee) or
purchased by Owner (or any Lessee) subject to a conditional sale
or other security agreement under circumstances where neither
clause (iii) nor clause (iv) of this paragraph (b) is applicable,
provided that such installation shall be deemed an Event of Loss
with respect to such Engine and Owner shall (or shall cause any
Lessee to) comply with Section 5.06(b) in respect thereof;
(vi) [Reserved.]
(vii) subject (or permit any Lessee to
subject) the Airframe or any Engine to the Civil Reserve Air
Fleet Program and transfer (or permit any Lessee to transfer)
possession of the Airframe or any Engine to the United States
Government or any instrumentality or agency thereof pursuant to
the Civil Reserve Air Fleet Program, so long as Owner (or any
Lessee) shall (A) promptly notify the Indenture Trustee upon
subjecting the Airframe or any Engine to the Civil Reserve Air
Fleet Program in any contract year and provide the Indenture
Trustee with the name and address of the Contracting Office
Representative for the Air Mobility Command of the United States
Air Force to whom notice must be given pursuant to Section
4.04(a) hereof, and (B) promptly notify the Indenture Trustee
upon transferring possession of the Airframe or any Engine to the
United States of America or any agency or instrumentality thereof
pursuant to such program;
(viii) [Reserved.]
(ix) transfer possession of the Airframe or
any Engine to the United States Government or any instrumentality
or agency thereof pursuant to a contract, a copy of which shall
be provided to the Indenture Trustee; or
(x) enter into any Lease with (A) any U.S.
Domiciled Person, (B) any Permitted Sublessee or (C) any other
Person approved in writing by the Indenture Trustee, which
approval shall not be unreasonably withheld; provided, however,
that no Lease entered into pursuant to this clause (x) shall (i)
be to a Lessee that, at the time of entering into such Lease, is
subject to bankruptcy, insolvency, liquidation, reorganization,
dissolution or similar proceedings; and provided, further, with
respect to a sublease under subclauses (B) or (C) of this clause
(x), Owner shall deliver to the Indenture Trustee an opinion of
counsel to the effect that (I) the terms of the Lease, including
the subordination provisions thereof, constitute valid and
binding obligations of the Lessee and (subject to customary
bankruptcy and equitable remedies exceptions and to other similar
exceptions customary in such opinions) enforceable against Lessee
(it being understood that such opinion may be an opinion as to
the form of the Lease only and may assume due authorization,
execution, delivery, requisite approvals and absence of conflicts
with laws, contracts or organizational documents) under the laws
of the jurisdiction governing the sublease, (II) that there is no
tort liability of the owner of an aircraft not in possession
thereof under the laws of the jurisdiction of the proposed Lessee
other than tort liability which might have been imposed on such
owner under the laws of the United States or any state thereof
(it being understood that in the event such opinion cannot be
given such opinion requirement shall be waived if insurance
reasonably satisfactory to the Indenture Trustee, in its
individual capacity, is proved at Lessee's expense), and (III)
unless Owner shall have agreed to provide insurance covering the
risk of requisition of use of the Aircraft by the government of
the jurisdiction of the proposed Lessee, 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 of the Aircraft in the event of the
requisition by such government of such use.
The rights of any Lessee or other transferee who receives
possession by reason of a transfer permitted by this paragraph (b) (other
than the transfer of an Engine which is deemed an Event of Loss) shall be
subject and subordinate to, and any Lease permitted by this paragraph (b)
shall be expressly subject and subordinate to the Indenture Trustee's
rights to repossess and to void such Lease upon such repossession, and
Owner shall remain primarily liable hereunder for the performance of all of
the terms of this Indenture and the terms of any such Lease shall not
permit any Lessee to take any action not permitted to be taken by Owner
hereunder with respect to the Aircraft. No pooling agreement, sublease or
other relinquishment of possession of the Airframe or any Engine or Wet
Lease shall in any way discharge or diminish any of Owner's obligations
hereunder or constitute a waiver of the Indenture Trustee's rights or
remedies hereunder.
Any Wet Lease or similar arrangement under which Owner maintains
operational control of the Aircraft shall not constitute a delivery,
transfer or relinquishment of possession of the Aircraft for purposes of
this section.
(c) Insignia. On or prior to the Delivery Date, or as soon as
practicable thereafter, Owner agrees to affix and maintain (or cause to be
affixed and maintained), at its expense, in the cockpit of the Airframe
adjacent to the airworthiness certificate therein and on each Engine a
nameplate bearing the inscription:
Mortgaged To
State Street Bank and Trust Company,
as Indenture Trustee
(such nameplate to be replaced, if necessary, with a nameplate reflecting
the name of any successor Indenture Trustee, as permitted under the
Operative Documents). Except as above provided, Owner will not allow the
name of any Person to be placed on the Airframe or on any Engine as a
designation that might be interpreted as a claim of ownership; provided
that nothing herein contained shall prohibit Owner (or any Lessee) from
placing its customary colors and insignia on the Airframe or any Engine.
SECTION 7.03. Replacement and Pooling of Parts; Alterations,
Modifications and Additions.
(a) Replacement of Parts. Owner, at its own cost and expense,
will promptly replace or cause to be replaced all Parts which may from time
to time be incorporated or installed in or attached to the Airframe or any
Engine and which may from time to time become worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently
rendered unfit for use for any reason whatsoever, except as otherwise
provided in paragraph (c) of this Section 7.03 or if the Airframe or an
Engine to which a Part relates has suffered an Event of Loss. In addition,
Owner (or any Lessee) may, at its own cost and expense, remove in the
ordinary course of maintenance, service, repair, overhaul or testing, any
Parts, whether or not worn out, lost, stolen, destroyed, seized,
confiscated, damaged beyond repair or permanently rendered unfit for use,
provided that Owner (or any Lessee), except as otherwise provided in
paragraph (c) of this Section 7.03, will, at its own cost and expense,
replace such Parts as promptly as practicable. All replacement Parts shall
be free and clear of all Liens (except for Permitted Liens and except in
the case of replacement property temporarily installed on an emergency
basis) and shall be in as good operating condition as, and shall have a
value and utility at least equal to, the Parts replaced assuming such
replaced Parts were in the condition and repair required to be maintained
by the terms hereof. Except as otherwise provided in paragraph (c) of this
Section 7.03, all Parts at any time removed from the Airframe or any Engine
shall remain the property of Owner, no matter where located. Immediately
upon any replacement part becoming incorporated or installed in or attached
to the Airframe or any Engine as above provided, without further act
(subject only to Permitted Liens and any pooling arrangement to the extent
permitted by paragraph (b) of this Section 7.03 and except in the case of
replacement property temporarily installed on an emergency basis), such
replacement Part shall become subject to the Lien of this Indenture and be
deemed part of the Airframe or such Engine for all purposes hereof to the
same extent as the Parts originally incorporated or installed in or
attached to the Airframe or such Engine, and title to the replaced Part
shall thereupon vest in Owner (or, if a Lease is then in effect, any
Lessee), free and clear of the Lien of this Indenture and shall no longer
be deemed a Part hereunder.
(b) Pooling of Parts. Any Part removed from the Airframe or any
Engine as provided in paragraph (a) of this Section 7.03 may be subjected
by Owner (or any Lessee) to a normal pooling arrangement customary in the
airline industry of which Owner (or, if a Lease is then in effect, any
Lessee) is a party entered into in the ordinary course of Owner's (or any
Lessee's) business; provided that the Part replacing such removed Part
shall be incorporated or installed in or attached to such Airframe or
Engine in accordance with such paragraph (a) as promptly as practicable
after the removal of such removed Part. In addition, any replacement Part
when incorporated or installed in or attached to the Airframe or any Engine
in accordance with such paragraph (a) may be owned by any third party
subject to such a normal pooling arrangement, provided that Owner (or any
Lessee), at its expense, as promptly thereafter as practicable, either (i)
causes title to such replacement Part to vest in Owner in accordance with
such paragraph (a) free and clear of all Liens except Permitted Liens
(other than pooling arrangements) or (ii) replaces such replacement Part by
incorporating or installing in or attaching to the Airframe or Engine a
further replacement Part owned by Owner (or any Lessee) free and clear of
all Liens except Permitted Liens (other than pooling arrangements) and by
causing title to such further replacement Part to vest in Owner in
accordance with such paragraph (a).
(c) Alterations, Modifications and Additions. Owner, at its own
expense, will make (or cause to be made) such alterations and modifications
in and additions to the Airframe and Engines as may be required from time
to time to meet the applicable standards of the FAA or any applicable
regulatory agency or body of any other jurisdiction in which the Aircraft
may then be registered as permitted by Section 7(d) of the Participation
Agreement; provided, however, that Owner (or, if a Lease is then in effect,
any Lessee) may, in good faith, contest the validity or application of any
such law, rule, regulation or order in any reasonable manner which does not
adversely affect the Indenture Trustee. In addition, Owner (or any
Lessee), at its own expense, may from time to time add further parts or
accessories and make such alterations and modifications in and additions to
the Airframe or any Engine as Owner (or any Lessee) may deem desirable in
the proper conduct of its business, including, without limitation, removal
of Parts which Owner (or any Lessee) has determined in its reasonable
judgment to be obsolete or no longer suitable or appropriate for use on the
Airframe or such Engine (such parts, "Obsolete Parts"); provided that no
such alteration, modification or addition shall materially diminish the
value, utility or remaining useful life of the Airframe or such Engine
below the value, utility or remaining useful life thereof immediately prior
to such alteration, modification or addition (it being agreed that the
modification that makes an Engine a CFM 56-5B-5/P engine shall be deemed
not to diminish the value, utility and remaining useful life of an Engine),
assuming the Airframe or such Engine was then in the condition required to
be maintained by the terms of this Indenture, except that the value (but
not the utility or remaining useful life) of the Airframe or any Engine may
be reduced by the value of Obsolete Parts which shall have been removed so
long as the aggregate value of all Obsolete Parts which shall have been
removed and not replaced shall not exceed $350,000 in aggregate value at
the time of removal. Owner (or any Lessee) may remove or suffer to be
removed any Part incorporated or installed in or attached or added to the
Airframe or an Engine as the result of any such alteration or modification,
provided that such additional Part (i) is in addition to, and not in
replacement of or substitution for, any Part originally incorporated or
installed in or attached to the Airframe or any Engine at the time of
delivery thereof hereunder or any Part in replacement of, or substitution
for, any such Part, (ii) is not required to be incorporated or installed in
or attached or added to the Airframe or any Engine pursuant to the terms of
Section 7.02 or the first sentence of this paragraph (c) and (iii) can be
removed from the Airframe or such Engine without diminishing or impairing
the value, utility or remaining useful life which the Airframe or such
Engine would have had at the time of removal had such alteration,
modification or addition not occurred.
(d) Certain Matters Regarding Passenger Convenience Equipment.
Owner may install on the Airframe, subject to the requirements of Section
7.03(c) above, Passenger Convenience Equipment that is (i) owned by another
Person and leased to Owner, (ii) sold to Owner by another Person subject to
a conditional sale contract or other retained security interest,
(iii) leased to Owner pursuant to a lease which is subject to a security
interest in favor of another Person or (iv) installed on the Aircraft
subject to a license granted to Owner by another Person, and in any such
case (A) the Indenture Trustee will not acquire or claim, as against any
such other Person, any right, title or interest in any such Passenger
Convenience Equipment solely as a result of its installation on the
Airframe, (B) Owner shall notify such Person of the Indenture Trustee's
respective interest in the Aircraft, and (C) upon the occurrence of any
default under the applicable lease, conditional sale agreement, security
agreement or license, such Person shall not be entitled to repossess such
Passenger Convenience Equipment unless it shall, in connection with such
repossession, undertake to restore the Aircraft to the condition it would
have been in had the installation of such Passenger Convenience Equipment
not occurred.
SECTION 7.04. Insurance.
(a) Owner's Obligation to Insure. Owner shall comply with, or
cause to be complied with, each of the provisions of Exhibit B, which
provisions are hereby incorporated by this reference as if set forth in
full herein.
(b) [Reserved.]
(c) Indemnification by Government in Lieu of Insurance.
Notwithstanding any provisions of this Section 7.04 requiring insurance,
the Indenture Trustee agrees to accept, in lieu of insurance against any
risk with respect to the Aircraft, indemnification from, or insurance
provided by, the United States Government or any agency or instrumentality
thereof, or, upon the written consent of the Indenture Trustee, other
government of registry of the Aircraft or agency or instrumentality
thereof, against such risk in an amount which, when added to the amount of
insurance against such risk maintained by Owner (or any Lessee) shall be at
least equal to the amount of insurance against such risk otherwise required
by this Section 7.04 (taking into account self-insurance permitted by
Exhibit B hereto).
(d) Application of Payments During Existence of an Event of
Default. Any amount referred to in paragraph (b) of Exhibit B hereto which
is payable to or retainable by Owner (or any Lessee) shall not be paid to
or retained by Owner (or any Lessee) if at the time of such payment or
retention an Event of Default shall have occurred and be continuing, but
shall be held by or paid over to the Indenture Trustee as security for the
obligations of Owner hereunder if the Indenture Trustee declares this
Indenture to be in default pursuant to Section 4.02 hereof, applied against
Owner's obligations hereunder as and when due. At such time as there shall
not be continuing any such Event of Default, such amount shall be paid to
Owner to the extent not previously applied in accordance with the preceding
sentence.
SECTION 7.05. Inspection.
At all reasonable times and upon at least 15 days' prior written
notice to Owner, the Indenture Trustee, or its authorized representatives,
may inspect the Aircraft and inspect and make copies of the books and
records of Owner and any Lessee required to be maintained by the FAA or the
regulatory agency or body of another jurisdiction in which the Aircraft is
then registered relating to the maintenance of the Aircraft (the Indenture
Trustee's risk and expense) and shall keep any information or copies
obtained thereby confidential and shall not disclose the same to any
Person, except (A) to the Certificate Holders and to prospective and
permitted transferees of the Certificate Holders' or the Indenture
Trustee's interest (and such prospective and permitted transferee's
counsel, independent insurance advisors or other agents) who agree to hold
such information confidential, (B) to the Certificate Holders' or the
Indenture Trustee's counsel, independent insurance advisors or other agents
who agree to hold such information confidential, or (C) as may be required
by any statute, court or administrative order or decree or governmental
ruling or regulation, provided, however, that any and all disclosures
permitted by clause (C) above shall be made only to the extent necessary to
meet the specific requirements or needs of the Persons for whom such
disclosures are hereby permitted. Any such inspection of the Aircraft
shall be subject to Owner's safety and security rules applicable to the
location of the Aircraft, shall be a visual, walk-around inspection of the
interior and exterior of the Aircraft and shall not include opening any
panels, bays or the like without the express consent of Owner (except in
connection with a heavy maintenance visit when a panel, bay or the like is
scheduled or required to be opened), which consent Owner may in its sole
discretion withhold; provided that no exercise of such inspection right
shall interfere with the normal operation or maintenance of the Aircraft
by, or the business of, Owner (or any Lessee). The Indenture Trustee shall
not have any duty to make any such inspection nor shall it incur any
liability or obligation by reason of not making such inspection. Except
during the continuance of an Event of Default, all inspections by the
Indenture Trustee and its authorized representatives provided for under
this Section 7.05 shall be limited to one (1) inspection of any kind
contemplated by this Section 7.05 during any calendar year.
SECTION 7.06. Filings; Delivery of Financial Statements.
Forthwith upon the execution and delivery of each Indenture
Supplement from time to time required by the terms hereof and upon
execution and delivery of any amendment to this Indenture, Owner will cause
such Indenture Supplement (and, in the case of the initial Indenture
Supplement and the Indenture as well) or amendment to be duly filed and
recorded, and maintained of record, in accordance with the applicable laws
of the government of registry of the Aircraft. Owner agrees to furnish to
the Indenture Trustee promptly after execution and delivery of any
supplement and amendment hereto (except for any such supplement or
amendment which does not require or receive the approval of Owner pursuant
to the Operative Documents and is not required pursuant to the terms of the
Operative Documents), an opinion of counsel (which may be Owner's General
Counsel, Deputy General Counsel, Assistant General Counsel or Associate
General Counsel) reasonably satisfactory to the Indenture Trustee as to the
due recording or filing of such supplement or amendment. Owner will
deliver to the Indenture Trustee (a) within sixty (60) days after the end
of each of the first three quarterly periods of each fiscal year of Owner,
the publicly filed Form 10-Q report of Owner; and (b) within one hundred
twenty (120) days after the close of such fiscal year, the publicly filed
annual report and Form 10-K report of Owner.
ARTICLE VIII
INDEMNIFICATION OF INDENTURE TRUSTEE BY OWNER
SECTION 8.01. Scope of Indemnification.
Owner hereby agrees, except as otherwise provided in Section
2.04(b) hereof, to assume liability for, and does hereby indemnify,
protect, save and keep harmless the Indenture Trustee (in its individual
and trust capacities), and its successors, assigns, agents and servants,
from and against any and all liabilities, obligations, losses, damages,
penalties, taxes (excluding any taxes payable by the Indenture Trustee on
or measured by any compensation received by the Indenture Trustee for its
services under this Indenture), claims, actions, suits, costs, expenses or
disbursements (including reasonable legal fees and expenses) of any kind
and nature whatsoever, which may be imposed on, incurred by or asserted
against the Indenture Trustee (whether or not also indemnified against by
any other Person under any other document) in any way relating to or
arising out of this Indenture or any other Operative Document to which it
is a party or the enforcement of any of the terms of any thereof, or in any
way relating to or arising out of the manufacture, purchase, acceptance,
non-acceptance, rejection, ownership, delivery, lease, possession, use,
operation, condition, sale, return or other disposition of the Aircraft or
any Engine (including, without limitation, latent or other defects, whether
or not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the
administration of the Indenture Estate or the action or inaction of the
Indenture Trustee hereunder. Notwithstanding the foregoing, the Indenture
Trustee shall not be entitled to any indemnification for any Expenses to
the extent relating to or arising from the willful misconduct or gross
negligence (or negligence in the case of handling funds) of the Indenture
Trustee in the performance of its duties hereunder or resulting from the
inaccuracy of any representation or warranty of the Indenture Trustee (in
its individual capacity) referred to in Section 6.03 hereof, or as provided
in Section 6.01 hereof or in the last sentence of Section 5.04 hereof, or
as otherwise excluded by the terms of Section 6(b) of the Participation
Agreement from Owner's indemnities under such Section. In addition, if
necessary, the Indenture Trustee shall be entitled to indemnification from
the Indenture Estate for any liability, obligation, loss, damage, penalty,
claim, action, suit, cost, expense or disbursement indemnified against
pursuant to this Section 7.01 to the extent not reimbursed by Owner or
others, but without releasing any of them from their respective agreements
of reimbursement; and to secure the same the Indenture Trustee shall have a
prior Lien on the Indenture Estate. Owner shall be subrogated to the
Indenture Trustee's rights, if any, to payment from Owner for amounts
payable by the Owner under this Section 7.01.
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 9.01. [Reserved.]
SECTION 9.02. Resignation of Indenture Trustee; Appointment of
Successor.
(a) The Indenture Trustee or any successor thereto may resign at
any time without cause by giving at least 30 days' prior written notice to
Owner and each Note Holder, such resignation to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In
addition, a Majority in Interest of Note Holders may at any time (but only
with the consent of Owner, which consent shall not be unreasonably
withheld, except that such consent shall not be necessary if an Event of
Default shall have occurred and be continuing) remove the Indenture Trustee
without cause by an instrument in writing delivered to Owner and the
Indenture Trustee, and the Indenture Trustee shall promptly notify each
Note Holder thereof in writing, such removal to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In the
case of the resignation or removal of the Indenture Trustee, a Majority in
Interest of Note Holders may appoint a successor Indenture Trustee by an
instrument signed by such holders, which successor, so long as no Event of
Default shall have occurred and be continuing, shall be subject to Owner's
reasonable approval. If a successor Indenture Trustee shall not have been
appointed within 30 days after such notice of resignation or removal, the
Indenture Trustee, Owner or any Note Holder may apply to any court of
competent jurisdiction to appoint a successor Indenture Trustee to act
until such time, if any, as a successor shall have been appointed as above
provided. The successor Indenture Trustee so appointed by such court shall
immediately and without further act be superseded by any successor
Indenture Trustee appointed as above provided.
(b) Any successor Indenture Trustee, however appointed, shall
execute and deliver to the predecessor Indenture Trustee and Owner an
instrument accepting such appointment and assuming the obligations of the
Indenture Trustee under the Participation Agreement arising from and after
the time of such appointment, and thereupon such successor Indenture
Trustee, without further act, shall become vested with all the estates,
properties, rights, powers and duties of the predecessor Indenture Trustee
hereunder in the trust hereunder applicable to it with like effect as if
originally named the Indenture Trustee herein; but nevertheless upon the
written request of such successor Indenture Trustee, such predecessor
Indenture Trustee shall execute and deliver an instrument transferring to
such successor Indenture Trustee, upon the trusts herein expressed
applicable to it, all the estates, properties, rights and powers of such
predecessor Indenture Trustee, and such predecessor Indenture Trustee shall
duly assign, transfer, deliver and pay over to such successor Indenture
Trustee all monies or other property then held by such predecessor
Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed, shall be
a bank or trust company having its principal place of business in the
United States and having (or whose obligations under the Operative
Documents are guaranteed by an affiliated entity having) a combined capital
and surplus of at least $100,000,000, if there be such an institution
willing, able and legally qualified to perform the duties of the Indenture
Trustee hereunder upon reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Indenture Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the Indenture Trustee may
be transferred, shall, subject to the terms of paragraph (c) of this
Section 9.02, be a successor Indenture Trustee and the Indenture Trustee
under this Indenture without further act.
SECTION 9.03. Appointment of Additional and Separate Trustees.
(a) Whenever (i) the Indenture Trustee shall deem it necessary
or desirable in order to conform to any law of any jurisdiction in which
all or any part of the Indenture Estate shall be situated or to make any
claim or bring any suit with respect to or in connection with the Indenture
Estate, this Indenture, any other Indenture Agreement, the Equipment Notes
or any of the transactions contemplated by the Participation Agreement,
(ii) the Indenture Trustee shall be advised by counsel satisfactory to it
that it is so necessary or prudent in the interests of the Note Holders
(and the Indenture Trustee shall so advise Owner), or (iii) the Indenture
Trustee shall have been requested to do so by a Majority in Interest of
Note Holders, then in any such case, the Indenture Trustee and, upon the
written request of the Indenture Trustee, Owner, shall execute and deliver
an indenture supplemental hereto and such other instruments as may from
time to time be necessary or advisable either (1) to constitute one or more
bank or trust companies or one or more persons approved by the Indenture
Trustee, either to act jointly with the Indenture Trustee as additional
trustee or trustees of all or any part of the Indenture Estate, or to act
as separate trustee or trustees of all or any part of the Indenture Estate,
in each case with such rights, powers, duties and obligations consistent
with this Indenture as may be provided in such supplemental indenture or
other instruments as the Indenture Trustee or a Majority in Interest of
Note Holders may deem necessary or advisable, or (2) to clarify, add to or
subtract from the rights, powers, duties and obligations theretofore
granted any such additional and separate trustee, subject in each case to
the remaining provisions of this Section 9.03. If Owner shall not have
taken any action requested of it under this Section 9.03(a) that is
permitted or required by its terms within 15 days after the receipt of a
written request from the Indenture Trustee so to do, or if an Event of
Default shall have occurred and be continuing, the Indenture Trustee may
act under the foregoing provisions of this Section 9.03(a) without the
concurrence of Owner; and Owner hereby irrevocably appoints (which
appointment is coupled with an interest) the Indenture Trustee, its agent
and attorney-in-fact to act for it under the foregoing provisions of this
Section 9.03(a) in either of such contingencies. The Indenture Trustee
may, in such capacity, execute, deliver and perform any such supplemental
indenture, or any such instrument, as may be required for the appointment
of any such additional or separate trustee or for the clarification of,
addition to or subtraction from the rights, powers, duties or obligations
theretofore granted to any such additional or separate trustee. In case
any additional or separate trustee appointed under this Section 9.03(a)
shall die, become incapable of acting, resign or be removed, all the
assets, property, rights, powers, trusts, duties and obligations of such
additional or separate trustee shall revert to the Indenture Trustee until
a successor additional or separate trustee is appointed as provided in this
Section 9.03(a).
(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon
the Indenture Trustee in respect of the custody, investment and payment of
monies and all monies received by any such additional or separate trustee
from or constituting part of the Indenture Estate or otherwise payable
under any Operative Document to the Indenture Trustee shall be promptly
paid over by it to the Indenture Trustee. All other rights, powers, duties
and obligations conferred or imposed upon any additional or separate
trustee shall be exercised or performed by the Indenture Trustee and such
additional or separate trustee jointly except to the extent that applicable
Law of any jurisdiction in which any particular act is to be performed
renders the Indenture Trustee incompetent or unqualified to perform such
act, in which event such rights, powers, duties and obligations (including
the holding of title to all or part of the Indenture Estate in any such
jurisdiction) shall be exercised and performed by such additional or
separate trustee. No additional or separate trustee shall take any
discretionary action except on the instructions of the Indenture Trustee or
a Majority in Interest of Note Holders. No trustee hereunder shall be
personally liable by reason of any act or omission of any other trustee
hereunder, except that the Indenture Trustee shall be liable for the
consequences of its lack of reasonable care in selecting, and Indenture
Trustee's own actions in acting with, any additional or separate trustee.
Each additional or separate trustee appointed pursuant to this Section 9.03
shall be subject to, and shall have the benefit of Articles IV through IX
and Article XI hereof insofar as they apply to the Indenture Trustee. The
powers of any additional or separate trustee appointed pursuant to this
Section 9.03 shall not in any case exceed those of the Indenture Trustee
hereunder.
(c) If at any time the Indenture Trustee shall deem it no longer
necessary or desirable in order to conform to any such law or take any such
action or shall be advised by such counsel that it is no longer so
necessary or desirable in the interest of the Note Holders, or in the event
that the Indenture Trustee shall have been requested to do so in writing by
a Majority in Interest of Note Holders, the Indenture Trustee and, upon the
written request of the Indenture Trustee, Owner, shall execute and deliver
an indenture supplemental hereto and all other instruments and agreements
necessary or proper to remove any additional or separate trustee. The
Indenture Trustee may act on behalf of Owner under this Section 9.03(c)
when and to the extent it could so act under Section 9.03(a) hereof.
ARTICLE X
SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE
AND OTHER DOCUMENTS
SECTION 10.01. Instructions of Majority; Limitations.
(a) Except with respect to Excluded Payments, Owner agrees it
shall not enter into any amendment of or supplement to Article 12 of the
Purchase Agreement (to the extent assigned by the Purchase Agreement
Assignment), the Purchase Agreement Assignment, the Consent and Agreement,
or execute and deliver any written waiver or modification of, or consent
under, the terms of the Lease, the Purchase Agreement (to the extent
assigned by the Purchase Agreement Assignment), the Purchase Agreement
Assignment, the Consent and Agreement, unless such supplement, amendment,
waiver, modification or consent is consented to in writing by the Indenture
Trustee and a Majority in Interest of Note Holders.
(b) Without limiting the provisions of Section 10.01(a) hereof
the Indenture Trustee agrees with the Note Holders that it shall not enter
into any amendment, waiver or modification of, supplement or consent to
this Indenture, the Purchase Agreement (to the extent assigned by the
Purchase Agreement Assignment), the Purchase Agreement Assignment, the
Consent and Agreement or the Participation Agreement, or any other
agreement included in the Indenture Estate, unless such supplement,
amendment, waiver, modification or consent is consented to in writing by a
Majority in Interest of Note Holders, or does not adversely effect the Note
Holders, but upon the written request of a Majority in Interest of Note
Holders, the Indenture Trustee shall from time to time enter into any such
supplement or amendment, or execute and deliver any such waiver,
modification or consent, as may be specified in such request and as may be
(in the case of any such amendment, supplement or modification), to the
extent such agreement is required, agreed to by Owner or, as may be
appropriate, the Manufacturer; provided, however, that, without the consent
of each holder of an affected Equipment Note then outstanding, no such
amendment of or supplement to this Indenture, the Purchase Agreement (to
the extent assigned by the Purchase Agreement Assignment), the Purchase
Agreement Assignment, the Consent and Agreement or the Participation
Agreement or waiver or modification of the terms of, or consent under, any
thereof, shall (i) modify any of the provisions of this Section 10.01, or
of Sections 2.02, 2.10, 2.11, 2.15, 4.02, 4.04(c), 4.04(d), 5.02 or 5.06
hereof, the definitions of "Event of Default", "Default", "Majority in
Interest of Note Holders", "Make-Whole Amount" or "Note Holder", or the
percentage of Note Holders required to take or approve any action
hereunder, (ii) reduce the amount, or change the time of payment or method
of calculation of any amount, of Principal Amount, Make-Whole Amount, if
any, or interest with respect to any Equipment Note, or alter or modify the
provisions of Article III hereof with respect to the order of priorities in
which distribution thereunder shall be made as among the Note Holders and
Owner, (iii) reduce, modify or amend any indemnities in favor of the Note
Holders, (iv) consent to any change in the Indenture which would permit
redemption of Equipment Notes earlier than permitted under Section 2.10 or
2.11 hereof or the purchase of the Equipment Notes or (v) permit the
creation of any Lien on the Indenture Estate or any part thereof other than
Permitted Liens or deprive any Note Holder of the benefit of the Lien of
this Indenture on the Indenture Estate, except as provided in connection
with the exercise of remedies under Article IV hereof. Without the consent
of Owner, no amendment or supplement to this Indenture or waiver or
modification of the terms hereof shall adversely affect Owner.
(c) At any time after the date hereof, Owner and the Indenture
Trustee may enter into one or more agreements supplemental hereto without
the consent of any Note Holder for any of the following purposes: (i) (a)
to cure any 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 Note Holder in
its capacity solely as Note Holder) or (b) to cure any ambiguity or correct
any mistake; (ii) to evidence the succession of a new trustee hereunder
pursuant hereto, the removal of the trustee hereunder or the appointment of
any co-trustee or co-trustees or any separate or additional trustee or
trustees; (iii) 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 Note Holders in its
capacity solely as Note Holder; (iv) to correct or amplify the description
of any property at any time subject to the Lien of this Indenture or better
to assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subject to the Lien of this Indenture, the
Airframe or Engines or any Replacement Airframe or Replacement Engine; (v)
to add to the covenants of Owner for the benefit of the Note Holders, or to
surrender any rights or power herein conferred upon Owner; (vi) to add to
the rights of the Note Holders; and (vii) to include on the Equipment Notes
any legend as may be required by law.
SECTION 10.02. Trustees Protected.
If, in the opinion of the institution acting as Indenture Trustee
hereunder, any document required to be executed by it pursuant to the terms
of Section 10.01 hereof adversely affects any right, duty, immunity or
indemnity with respect to such institution under this Indenture, such
institution may in its discretion decline to execute such document.
SECTION 10.03. Documents Mailed to Note Holders.
Promptly after the execution by the Owner or the Indenture
Trustee of any document entered into pursuant to Section 10.01 hereof, the
Indenture Trustee shall mail, by first class mail, postage prepaid, a copy
thereof to Owner and to each Note Holder at its address last set forth in
the Equipment Note Register, but the failure of the Indenture Trustee to
mail such copies shall not impair or affect the validity of such document.
SECTION 10.04. No Request Necessary for Indenture Supplement.
No written request or consent of the Indenture Trustee or the
Note Holders pursuant to Section 10.01 hereof shall be required to enable
Owner to enter into any Indenture Supplement specifically required by the
terms hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Termination of Indenture.
Upon (or at any time after) payment in full of the Principal
Amount of, Make-Whole Amount, if any, and interest on and all other amounts
due under all Equipment Notes and provided that there shall then be no
other Secured Obligations due to the Note Holders, the Indenture
Indemnitees and the Indenture Trustee hereunder or under the Participation
Agreement, Owner shall direct the Indenture Trustee to execute and deliver
to or as directed in writing by Owner an appropriate instrument releasing
the Aircraft and the Engines from the Lien of this Indenture and releasing
the Purchase Agreement and the Purchase Agreement Assignment with the
Consent and Agreement attached thereto from the assignment and pledge
thereof hereunder and the Indenture Trustee shall execute and deliver such
instrument as aforesaid and give written notice thereof to Owner; provided,
however, that this Indenture and the trusts created hereby shall earlier
terminate and this Indenture 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 Indenture and
the trusts created hereby shall continue in full force and effect in
accordance with the terms hereof.
SECTION 11.02. No Legal Title to Indenture Estate in Note
Holders.
No holder of a Equipment Note shall have legal title to any part
of the Indenture Estate. No transfer, by operation of law or otherwise, of
any Equipment Note or other right, title and interest of any Note Holder in
and to the Indenture Estate or hereunder shall operate to terminate this
Indenture or entitle such holder or any successor or transferee of such
holder to an accounting or to the transfer to it of any legal title to any
part of the Indenture Estate.
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is
Binding.
Any sale or other conveyance of the Indenture Estate, or any part
thereof (including any part thereof or interest therein), by the Indenture
Trustee made pursuant to the terms of this Indenture shall bind the Note
Holders and shall be effective to transfer or convey all right, title and
interest of the Indenture Trustee, Owner and such holders in and to such
Indenture Estate or part thereof. No purchaser or other grantee shall be
required to inquire as to the authorization, necessity, expediency or
regularity of such sale or conveyance or as to the application of any sale
or other proceeds with respect thereto by the Indenture Trustee.
SECTION 11.04. Indenture for Benefit of Owner, Indenture
Trustee, Note Holders and the Other Indenture Indemnitees.
Nothing in this Indenture, whether express or implied, shall be
construed to give any person other than Owner, the Indenture Trustee, the
Indenture Indemnitees and the Note Holders, any legal or equitable right,
remedy or claim under or in respect of this Indenture.
SECTION 11.05. Notices.
Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, demands, authorizations, directions,
consents, waivers or documents provided or permitted by this Indenture to
be made, given, furnished or filed shall be in writing, personally
delivered or mailed by certified mail, postage prepaid, or by facsimile or
confirmed telex, and (i) if to Owner, addressed to it at its office at
, (ii) if to the Indenture Trustee, addressed to it at its office
at Two ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Department (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), (iii)
if to any Participant, Owner or any Note Holder, addressed to such party at
such address as such party shall have furnished by notice to the Owner and
the Indenture Trustee, or, until an address is so furnished, addressed to
the address of such party (if any) set forth on the signature pages to the
Participation Agreement or in the Equipment Note Register. Whenever any
notice in writing is required to be given by Owner, any Participant, the
Indenture Trustee or any Note Holder to any of the other of them, such
notice shall be deemed given and such requirement satisfied when such
notice is received, or if such notice is mailed by certified mail, postage
prepaid, three Business Days after being mailed, addressed as provided
above. Any party hereto may change the address to which notices to such
party will be sent by giving notice of such change to the other parties to
this Indenture.
SECTION 11.06. Severability.
Any provision of this Indenture which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 11.07. No Oral Modification or Continuing Waivers.
No term or provision of this Indenture or the Equipment Notes may
be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by Owner and the Indenture Trustee, in
compliance with Section 10.01 hereof. Any waiver of the terms hereof or of
any Equipment Note shall be effective only in the specific instance and for
the specific purpose given.
SECTION 11.08. Successors and Assigns.
All covenants and agreements contained herein shall be binding
upon, and inure to the benefit of, each of the parties hereto and the
permitted successors and assigns of each, all as herein provided. Any
request, notice, direction, consent, waiver or other instrument or action
by any Note Holder shall bind the successors and assigns of such holder.
Each Note Holder by its acceptance of a Equipment Note agrees to be bound
by this Indenture and all provisions of the Participation Agreement
applicable to a Loan Participant or a Note Holder.
SECTION 11.09. Headings.
The headings of the various Articles and Sections herein and in
the table of contents hereto are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
SECTION 11.10. Normal Commercial Relations.
Anything contained in this Indenture to the contrary
notwithstanding, the Indenture Trustee, any Participant or any bank or
other Affiliate of such Participant may conduct any banking or other
financial transactions, and have banking or other commercial relationships,
with Owner, fully to the same extent as if this Indenture were not in
effect, including without limitation the making of loans or other
extensions of credit to Owner for any purpose whatsoever, whether related
to any of the transactions contemplated hereby or otherwise.
SECTION 11.11. Governing Law; Counterpart Form.
THIS INDENTURE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL
IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS INDENTURE IS BEING DELIVERED
IN THE STATE OF NEW YORK. This Indenture may be executed by the parties
hereto in separate counterparts (or upon separate signature pages bound
together into one or more counterparts), each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.12. Voting By Note Holders.
All votes of the Note Holders shall be governed by a vote of a
Majority in Interest of Note Holders, except as otherwise provided herein.
SECTION 11.13. Bankruptcy.
It is the intention of the parties that the Indenture Trustee
shall be entitled to the benefits of Section 1110 with respect to the right
to take possession of the Aircraft, Airframe, Engines and Parts in the
event of a case under Chapter 11 of the Bankruptcy Code in which Owner is a
debtor, and in any instance where more than one construction is possible of
the terms and conditions hereof or 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.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed by their respective officers thereof duly authorized as
of the day and year first above written.
US AIRWAYS, INC.
By:___________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, as
Indenture Trustee
By:____________________________________
Name:
Title:
============================
EXHIBIT A
TO
INDENTURE AND SECURITY AGREEMENT
============================
INDENTURE SUPPLEMENT
(No. N7__UW)
This Indenture Supplement N7__UW) dated _______ __, _____ (herein
called this "Indenture Supplement") of US Airways, Inc.
W I T N E S S E T H:
WHEREAS, the Indenture and Security Agreement N7__UW) dated as of
_________ __, 199_ (as amended and supplemented to the date hereof, the
"Indenture") between Owner and STATE STREET BANK AND TRUST COMPANY, as
Indenture Trustee (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, the Indenture relates to the Airframe and Engines
described below, and a counterpart of the Indenture is attached hereto and
made a part hereof and this Indenture Supplement, together with such
counterpart of the Indenture, is being filed for recordation on the date
hereof with the FAA as one document;
NOW, THEREFORE, this Indenture Supplement witnesseth that Owner
hereby confirms that the Lien of the Indenture on the Indenture Estate
covers all of Owner's right, title and interest in and to the following
described property:
AIRFRAME
One airframe identified as follows:
FAA Registration Manufacturer's
Manufacturer Model Number Number Serial Number
------------ ------------ ---------------- --------------
Airbus A319
together with all of Owner's right, title and interest in and to all Parts
of whatever nature, whether now owned or hereinafter acquired and which are
from time to time incorporated or installed in or attached to said
airframe.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, identified as follows:
Manufacturer's
Manufacturer Model Number Serial Number
------------ -------------- -------------
together with all of Owner's right, title and interest in and to all Parts
of whatever nature, whether now owned or hereafter acquired and which are
from time to time incorporated or installed in or attached to any of such
engines.
Together with all of Owner's right, title and interest in and to
all Parts of whatever nature, which from time to time are included within
the definition of "Airframe" or "Engine", whether now owned or hereafter
acquired, including all substitutions, renewals and replacements of and
additions, improvements, accessions and accumulations to the Airframe and
Engines (other than additions, improvements, accessions and accumulations
which constitute appliances, parts, instruments, appurtenances,
accessories, furnishings or other equipment excluded from the definition of
Parts).
As further security for the obligations referred to above and
secured by the Indenture and hereby, the Owner has granted, bargained,
sold, assigned, transferred, conveyed, mortgaged, pledged and confirmed,
and does hereby grant, bargain, sell, assign, transfer, convey, mortgage,
pledge and confirm, unto the Indenture Trustee, its successors and assigns,
for the security and benefit of the Loan Participants and of the Note
Holders, in the trust created by the Indenture, all of the right, title and
interest of Owner in, to and under the Lease Supplement [of even date
herewith] covering the property described above.
TO HAVE AND TO HOLD all and singular the aforesaid property unto
the Indenture Trustee, its successors and assigns, in trust for the equal
and proportionate benefit and security of the Note Holders, except as
provided in Section 2.15 and Article III of the Indenture without any
preference, distinction or priority of any one Equipment Note over any
other by reason of priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses
and purposes and subject to the terms and provisions set forth in the
Indenture.
This Indenture Supplement shall be construed as supplemental to
the Indenture and shall form a part thereof. The Indenture is each hereby
incorporated by reference herein and is hereby ratified, approved and
confirmed.
This Indenture Supplement is being delivered in the State of New
York.
AND, FURTHER, Owner hereby acknowledges that the Aircraft
referred to in this Indenture Supplement has been delivered to Owner and is
included in the property of Owner covered by all the terms and conditions
of the Trust Agreement, subject to the pledge and mortgage thereof under
the Indenture.
IN WITNESS WHEREOF, Owner has caused this Indenture Supplement to
be duly executed by one of its officers, thereunto duly authorized, on the
day and year first above written.
US AIRWAYS, INC.
By:_________________________________
Name:
Title:
===================================
EXHIBIT B
TO
INDENTURE AND SECURITY AGREEMENT
===================================
INSURANCE
The portion of this Exhibit appearing below this text will be
intentionally deleted from the FAA filing counterpart as the parties hereto
deem it to contain confidential information.
(a) Public Liability and Property Damage Insurance. (1) Except
as provided in clause (2) of this Paragraph (a), and subject to self-
insurance to the extent permitted by subsection (d) of this Exhibit B,
Owner will carry or cause to be carried with respect to the Aircraft at its
or any Lessee's expense (i) comprehensive airline liability (including,
without limitation, passenger, contractual, bodily injury and property
damage liability) insurance (exclusive of manufacturer's product liability
insurance) and (ii) cargo liability insurance, (A) in an amount not less
than the greater of (x) the amounts of comprehensive airline liability
insurance from time to time applicable to aircraft owned or leased, and
operated by Owner (or, if a Lease is then in effect, by Lessee) of the same
type as the Aircraft and (y) $300 million per occurrence, (B) of the type
and covering the same risks as from time to time applicable to aircraft
owned or leased and operated by Owner of the same type as the Aircraft, and
(C) which is maintained in effect with insurers of recognized reputation
and responsibility; provided, however, that Owner need not maintain such
cargo liability insurance, or may maintain such cargo liability insurance
in an amount less than $300 million per occurrence, so long as the amount
of cargo liability insurance, if any, maintained with respect to the
Aircraft is not less than the cargo liability insurance, if any, maintained
for other Airbus Model A319 aircraft owned or leased and operated by Owner.
(2) During any period that the Airframe or an Engine, as the case
may be, is on the ground and not in operation, Owner may carry or cause to
be carried as to such non-operating property, in lieu of the insurance
required by clause (1) above, and subject to the self-insurance to the
extent permitted by subsection (d) hereof, insurance by insurers of
recognized reputation and responsibility otherwise conforming with the
provisions of said clause (1) except that (A) the amounts of coverage shall
not be required to exceed the amounts of comprehensive airline liability
from time to time applicable to property owned or leased by Owner of the
same type as such non-operating property and which is on the ground and not
in operation; and (B) the scope of the risks covered and the type of
insurance shall be the same as from time to time shall be applicable to
aircraft owned or leased by Owner of the same type as such non-operating
property and which is on the ground and not in operation.
(b) Insurance Against Loss or Damage to the Aircraft.
(1) Except as provided in clause (2) of this subsection (b), and subject to
the provisions of subsection (d) of this Exhibit B permitting the self-
insurance, Owner shall maintain or cause to be maintained in effect, at its
or any Lessee's expense, with insurers of recognized responsibility, all-
risk aircraft hull insurance covering the Aircraft and fire and extended
coverage and all-risk aircraft hull insurance covering Engines and Parts
while temporarily removed from the Aircraft and not replaced by similar
components; provided that such insurance shall at all times while the
Aircraft is subject to this Lease be for an amount (taking into account the
self-insurance to the extent permitted by subsection (d) of this Exhibit B)
not less than the Termination Value for the Aircraft; provided further,
that, subject to compliance with subsection (d) of this Exhibit B, such
all-risk property damage insurance covering Engines and Parts temporarily
removed from an Airframe or an airframe or (in the case of Parts) an Engine
need be obtained only to the extent available at reasonable cost (as
reasonably determined by Owner). In the case of a Loss with respect to an
engine (other than an Engine) installed on the airframe in circumstances
which do not constitute an Event of Loss with respect to the Airframe, the
Indenture Trustee shall promptly remit any payment made to it of any
insurance proceeds in respect of such Loss to Owner or any other third
party that is entitled to receive such proceeds.
Unless an Event of Default has occurred and is continuing, all
losses will be adjusted by Owner with the insurers. As between the
Indenture Trustee and Owner, it is agreed that all insurance payments
received as the result of the occurrence of an Event of Loss will be
applied as follows:
(x) if such payments are received with respect to the
Airframe (or the Airframe and the Engines installed thereon), (i)
unless such property is replaced pursuant to the last paragraph
of Section 5.06(a), so much of such payments remaining, after
reimbursement of the Indenture Trustee for reasonable costs and
expenses, as shall not exceed the amounts payable pursuant to
Section 5.06(a) hereof, shall be paid over to, or retained by,
Owner (or if directed by Owner, any Lessee); or (ii) if such
property is replaced pursuant to the last paragraph of Section
5.06(a), such payments shall be paid over to, or retained by,
Owner (or if directed by Owner, any Lessee), provided that Owner
shall have fully performed or, concurrently therewith, will fully
perform the terms of the last paragraph of Section 5.06(a) with
respect to the Event of Loss for which such payments are made;
and
(y) if such payments are received with respect to an Engine
under the circumstances contemplated by Section 5.06(b) hereof,
so much of such payments remaining after reimbursement of the
Indenture Trustee for reasonable costs and expenses, shall be
paid over to, or retained by, Owner (or if directed by Owner, any
Lessee), provided that Owner shall have fully performed or
concurrently therewith will fully perform the terms of Section
5.06(b) with respect to the Event of Loss for which such payments
are made.
As between the Indenture Trustee and Owner, the insurance
payments for any property damage loss to the Airframe or any engine not
constituting an Event of Loss with respect thereto will be applied in
payment for repairs or for replacement property in accordance with the
terms of Sections 7.02 and 7.03, if not already paid for by Owner (or any
Lessee), and any balance (or if already paid for by Owner (or any Lessee),
all such insurance proceeds) remaining after compliance with such Sections
with respect to such loss shall be paid to Owner (or any Lessee if directed
by Owner).
(2) During any period that the Aircraft is on the ground and not
in operation, Owner may carry or cause to be carried, in lieu of the
insurance required by clause (1) above, and subject to self-insurance to
the extent permitted by subsection (d) of this Exhibit B, insurance
otherwise conforming with the provisions of said clause (1) except that the
scope of the risks and the type of insurance shall be the same as from time
to time applicable to aircraft owned or leased by Owner (or, if a Lease is
then in effect, by Lessee) of the same type as the Aircraft similarly on
the ground and not in operation, provided that, subject to self-insurance
to the extent permitted by subsection (d) of this Exhibit B, Owner shall
maintain insurance against risk of loss or damage to the Aircraft in an
amount at least equal to the 100% of the amounts payable upon the
occurrence of an Event of Loss pursuant to Section 5.06(a) hereof during
such period that the Aircraft is on the ground and not in operation.
(3) If Owner (or any Lessee) shall at any time operate or
propose to operate the Aircraft, Airframe or any Engine (i) in any area of
recognized hostilities or (ii) on international routes, and war-risk,
hijacking or allied perils insurance is maintained by Owner (or any Lessee)
with respect to other aircraft owned and operated by Owner (or any Lessee)
on such routes or in such areas, Owner shall maintain or cause to be
maintained war-risk, hijacking and related perils insurance of
substantially the same type carried by major United States commercial air
carriers operating the same or comparable models of aircraft on similar
routes or in such areas and in no event in an amount less than 100% of the
amounts payable upon the occurrence of an Event of Loss pursuant to Section
5.06(a) hereof.
(c) Reports, etc. Owner will furnish, or cause to be furnished,
to the Indenture Trustee and the Pass Through Trustee, on or before the
Delivery Date and on each annual anniversary date of Owner's applicable
insurance, a report, signed by Owner's regular insurance broker or any
other independent firm of insurance brokers reasonably acceptable to the
Indenture Trustee which brokers may be in the regular employ of Owner (the
"Insurance Brokers"), describing in reasonable detail the hull and
liability insurance (and property insurance for detached engines and parts)
then carried and maintained with respect to the Aircraft and stating the
opinion of such firm that the insurance complies with the terms hereof;
provided, that all information contained in the foregoing report shall not
be made available by the Indenture Trustee or the Pass Through Trustee to
anyone except (i) to prospective and permitted transferees of the Indenture
Trustee's or the Pass Through Trustee's interest or their respective
counsel, independent certified public accountants and independent insurance
brokers or other agents, who agree to hold such information confidential,
(ii) the Indenture Trustee's or the Pass Through Trustee's counsel or
independent certified public accountants, independent insurance brokers or
agents who agree to hold such information confidential or (iii) as may be
required by any statute, court or administrative order or decree or
governmental ruling or regulation; provided, however that any disclosure
permitted by clause (iii) above shall be made only to the extent necessary
to meet the specific requirements or needs of the Persons to whom such
disclosures are hereby permitted. Owner will cause such Insurance Broker
to agree to advise the Indenture and the Pass Through Trustee in writing of
any act or omission on the part of Owner of which it has knowledge and
which might invalidate or render unenforceable, in whole or in part, any
insurance on the Aircraft and to advise in writing at least thirty (30)
days (seven (7) days in the case of war risk and allied perils coverage)
and ten (10) days notice with respect to the Electronic Date Recognition
Exclusion Limited Coverage Endorsement, prior to the cancellation or
material adverse change of any insurance maintained pursuant to Section
7.04, provided that if the notice period specified above is not reasonably
obtainable, the Insurance Broker shall provide for as long a period of
prior notice as shall then be reasonably obtainable. In addition, Owner
will also cause such Insurance Brokers to deliver to the Indenture Trustee
and the Pass Through Trustee, on or prior to the date of expiration of any
insurance policy referenced in a previously delivered certificate of
insurance, a new certificate of insurance, substantially in the same form
as delivered by Owner to such parties on the Delivery Date except for such
changes in the report or the coverage consistent with the terms hereof. In
the event that Owner or any Lessee shall fail to maintain or cause to be
maintained insurance as herein provided, the Indenture Trustee may at its
sole option, but shall be under no duty to, provide such insurance and, in
such event, Owner shall, upon demand, reimburse the Indenture Trustee for
the cost thereof to the Indenture Trustee.
(d) Self-Insurance. Owner may self-insure by way of deductible,
premium adjustment or franchise provisions or otherwise (including, with
respect to insurance maintained pursuant to subsection (b) of this Exhibit
B, insuring for an amount that is less than 100% of the amounts payable
upon the occurrence of an Event of Loss pursuant to Section 5.06(a) hereof)
the risks required to be insured against pursuant to Section 7.04 under a
program applicable to all aircraft (whether owned or leased) in Owner's
fleet, but in no case shall the aggregate amount of self-insurance in
regard to subsection (a) and (b) of this Exhibit B exceed for any policy
year, with respect to all of the aircraft (whether owned or leased) in
Owner's fleet (including, without limitation, the Aircraft), the lesser of
(i) 50% of the highest replacement value of any single aircraft in Owner's
fleet or (ii) 1-1/2% of the average aggregate insurable value (during the
preceding policy year) of all aircraft (including, without limitation, the
Aircraft) on which Owner carries insurance, unless an insurance broker of
national standing shall certify that the standard among all other major
United States airlines is a higher level of self-insurance, in which case
Owner may insure the Aircraft to such higher level. In addition to the
foregoing right to self-insure, Owner (and any Lessee) may self-insure to
the extent of any applicable mandatory minimum per aircraft (or, if
applicable, per annum or other period) hull or liability insurance
deductible customary in the airline industry imposed by the aircraft hull
or liability insurer.
(e) Terms of Policies. Any policies of insurance carried in
accordance with subsection (a) or (b) of this Exhibit B and any policies
taken out in substitution or replacement for any of such policies (A) shall
be amended to name the Additional Insureds as their respective interests
may appear, (B) may provide for the self-insurance to the extent permitted
in subsection (d) of this Exhibit B, (C) shall provide that if the insurers
cancel such insurance for any reason whatever or if any material change is
made in such insurance which adversely affects the interest of the
Additional Insureds, or such insurance shall lapse for non-payment of
premium, such cancellation, lapse or change shall not be effective as to
the Additional Insureds for thirty (30) days (ten (10) days in the case of
war risk and allied perils coverage) after issuance to the Additional
Insureds, respectively, of written notice by such insurers of such
cancellation, lapse or change; provided, however, that if any notice period
specified above is not reasonably obtainable, such policies shall provide
for as long a period of prior notice as shall then be reasonably
obtainable, (D) shall provide that in respect of the respective interests
of the Additional Insureds in such policies the insurance shall not be
invalidated by any action or inaction of Owner (or, if any Lease is then in
effect, any Lessee) or any other Person and shall insure the Additional
Insureds regardless of any breach or violation of any warranty, declaration
or condition contained in such policies by Owner (or, if any Lease is then
in effect, any Lessee), (E) shall be primary without right of contribution
from any other insurance which is carried by any Additional Insured, (F)
shall expressly provide that all of the provisions thereof, except the
limits of liability, shall operate in the same manner as if there were a
separate policy covering each insured, (G) shall waive any right of the
insurers to any set-off or counterclaim or any other deduction, whether by
attachment or otherwise, in respect of any liability of any Additional
Insured to the extent of any moneys due to any Additional Insured, and (H)
shall provide that (i) in the event of a loss involving proceeds in excess
of $5,000,000, the proceeds in respect of such loss up to an amount equal
to100% of the amounts payable upon the occurrence of an Event of Loss
pursuant to Section 5.06(a) hereof to the Note Holders shall be payable to
the Indenture Trustee (so long as the Trust Indenture shall not have been
discharged) in the manner set forth in Sections 2.10 and 2.12 (except in
the case of a loss with respect to an Engine installed on an airframe other
than the Airframe, in which case Owner (or any Lessee) shall arrange for
any payment of insurance proceeds in respect of such loss to be held for
the account of the Indenture Trustee (so long as the Trust Indenture shall
not have been discharged) whether such payment is made to Owner (or any
Lessee) or any third party), it being understood and agreed that in the
case of any payment to the Indenture Trustee otherwise than in respect of
an Event of Loss, the Indenture Trustee shall, upon receipt of evidence
satisfactory to it that the damage giving rise to such payment shall have
been repaired or that such payment shall then be required to pay for
repairs then being made, pay the amount of such payment (and all earnings
thereon) to Owner or its order, and (ii) the entire amount of any loss
involving proceeds of $5,000,000 or less or the amount of any proceeds of
any loss in excess of 100% of the amounts payable upon the occurrence of an
Event of Loss pursuant to Section 5.06(a) hereof shall be paid to Owner or
its order unless an Event of Default shall have occurred and be continuing
and the insurers have been notified thereof by the Indenture Trustee.
================================
EXHIBIT C
TO
INDENTURE AND SECURITY AGREEMENT
================================
SCHEDULE OF DOMICILES OF PERMITTED SUBLESSEES
Australia Malta
Austria Mexico
Bahamas Netherlands
Belgium New Zealand
Bermuda Norway
Brazil People's Republic of China
Canada Philippines
Denmark Portugal
Finland Republic of China (Taiwan)*
France Singapore
Germany South Korea
Grenada Spain
Greece Sweden
Iceland Switzerland
India Thailand
Ireland Tobago
Italy Trinidad
Jamaica Turkey
Japan United Kingdom
Luxembourg Venezuela
Malaysia
*So long as on the date of the Sublease such country and the
United States have diplomatic relations at least as good as those in effect
on the Delivery Date.
SCHEDULE I
Principal Amount Interest Rate
--------- ------ -------------
Series A %
Series B %
Series C %
Equipment Notes Amortization
SERIES A
Aircraft: _____
SERIES B
Aircraft: _____
SERIES C
Aircraft: _____
SCHEDULE II
PASS THROUGH TRUST AGREEMENT AND
PASS THROUGH TRUST SUPPLEMENTS
Pass Through Trust Agreement, dated as of December 4, 1998, between US
Airways, Inc. and State Street Bank and Trust Company, as supplemented by
Trust Supplement No. 1998-1A, dated as of December 14, 1998, as
supplemented by Trust Supplement No. 1998-1B, dated as of December 14,
1998, and as supplemented by Trust Supplement No. 1998-1C, dated as of
December 14, 1998