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EXHIBIT 4.4
[EXECUTION COPY]
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KITTY HAWK, INC.,
as Issuer
EACH SUBSIDIARY
OF KITTY HAWK, INC. LISTED
ON THE SIGNATURE PAGES HEREOF
as Guarantors
and
BANK ONE, NA
as Trustee and Collateral Trustee
-------------------------
Indenture
Dated as of November 15, 1997
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$340,000,000
9.95% Senior Secured Notes Due 2004
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[CONFORMED COPY]
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KITTY HAWK, INC.,
as Issuer
EACH SUBSIDIARY
OF KITTY HAWK, INC. LISTED
ON THE SIGNATURE PAGES HEREOF
as Guarantors
and
BANK ONE, NA
as Trustee and Collateral Trustee
-------------------------
Indenture
Dated as of November 15, 1997
-------------------------
$340,000,000
9.95% Senior Secured Notes Due 2004
================================================================================
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CROSS-REFERENCE TABLE
TIA Sections Indenture Sections
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Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.03; 7.08
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.03
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.03
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.05; 7.06; 11.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . 4.15; 7.05; 11.02
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . 4.20; 11.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 10.01
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . 11.03
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . 11.03
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 10.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 4.20; 11.04
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 7.05; 11.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
Section 316(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . 6.06
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . 6.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 9.03
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . 6.09
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . 6.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(c) . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of the Indenture.
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TABLE OF CONTENTS*
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.02. Incorporation by Reference of Trust Indenture Act . . . 27
SECTION 1.03. Rules of Construction . . . . . . . . . . . . . . . . . 27
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.02. Restrictive Legends . . . . . . . . . . . . . . . . . . 29
SECTION 2.03. Execution, Authentication and Denominations . . . . . . 30
SECTION 2.04. Registrar and Paying Agent . . . . . . . . . . . . . . 31
SECTION 2.05. Paying Agent to Hold Money in Trust . . . . . . . . . . 32
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . 33
SECTION 2.07. Book-Entry Provisions for Global Notes . . . . . . . . 33
SECTION 2.08. Special Transfer Provisions . . . . . . . . . . . . . . 35
SECTION 2.09. Replacement Notes . . . . . . . . . . . . . . . . . . . 37
SECTION 2.10. Outstanding Notes . . . . . . . . . . . . . . . . . . . 38
SECTION 2.11. Temporary Notes . . . . . . . . . . . . . . . . . . . . 39
SECTION 2.12. Cancellation . . . . . . . . . . . . . . . . . . . . . 39
SECTION 2.13. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . 39
SECTION 2.14. Defaulted Interest . . . . . . . . . . . . . . . . . . 39
SECTION 2.15. Record Date . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 2.16 Computation of Interest . . . . . . . . . . . . . . . . 40
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption . . . . . . . . . . . . . . . . . . 40
SECTION 3.02. Notices to Trustee . . . . . . . . . . . . . . . . . . 41
SECTION 3.03. Selection of Notes to Be Redeemed . . . . . . . . . . . 41
SECTION 3.04. Notice of Redemption . . . . . . . . . . . . . . . . . 42
SECTION 3.05. Effect of Notice of Redemption . . . . . . . . . . . . 43
SECTION 3.06. Deposit of Redemption Price . . . . . . . . . . . . . . 43
SECTION 3.07. Payment of Notes Called for Redemption . . . . . . . . 43
SECTION 3.08. Notes Redeemed in Part . . . . . . . . . . . . . . . . 43
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(1) Note: The Table of Contents shall not for any purposes be deemed to be
a part of the Indenture.
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes . . . . . . . . . . . . . . . . . . . 43
SECTION 4.02. Maintenance of Office or Agency . . . . . . . . . . . . 44
SECTION 4.03. Limitation on Indebtedness . . . . . . . . . . . . . . 44
SECTION 4.04. Limitation on Restricted Payments . . . . . . . . . . . 47
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries . . . . . . . . 49
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock
of Restricted Subsidiaries . . . . . . . . . . . . 51
SECTION 4.07. Issuances of Guarantees by New Restricted Subsidiaries . 51
SECTION 4.08. Limitation on Transactions with Shareholders and
Affiliates . . . . . . . . . . . . . . . . . . . 51
SECTION 4.09. Limitation on Liens . . . . . . . . . . . . . . . . . . 52
SECTION 4.10. Limitation on Sale-Leaseback Transactions . . . . . . . 53
SECTION 4.11. Limitation on Asset Sales . . . . . . . . . . . . . . . 54
SECTION 4.13. Events of Loss . . . . . . . . . . . . . . . . . . . . 55
SECTION 4.14. Repurchase of Notes upon a Change of Control
Triggering Event . . . . . . . . . . . . . . . . 55
SECTION 4.15. Commission Reports and Reports to Holders . . . . . . . 56
SECTION 4.16. Limitation on Collateral Sales; Event of Loss . . . . . 56
SECTION 4.17. Existence . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 4.18. Payment of Taxes and Other Claims . . . . . . . . . . . 57
SECTION 4.19. Maintenance of Properties and Insurance . . . . . . . . 58
SECTION 4.20. Compliance Certificates . . . . . . . . . . . . . . . . 58
SECTION 4.21. Waiver of Stay, Extension or Usury Laws . . . . . . . . 58
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc. . . . . . . . . . . . . . 59
SECTION 5.02. Successor Substituted . . . . . . . . . . . . . . . . . 60
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . 60
SECTION 6.02. Collateral Access Events . . . . . . . . . . . . . . . 62
SECTION 6.03. Acceleration . . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.04. Other Remedies . . . . . . . . . . . . . . . . . . . . 63
SECTION 6.05. Waiver of Past Defaults . . . . . . . . . . . . . . . . 64
SECTION 6.06. Control by Majority . . . . . . . . . . . . . . . . . . 64
SECTION 6.07. Limitation on Suits . . . . . . . . . . . . . . . . . . 64
SECTION 6.08. Rights of Holders to Receive Payment . . . . . . . . . 65
SECTION 6.09. Collection Suit by Trustee . . . . . . . . . . . . . . 65
SECTION 6.10. Trustee May File Proofs of Claim . . . . . . . . . . . 65
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SECTION 6.11. Priorities . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 6.12. Undertaking for Costs . . . . . . . . . . . . . . . . . 66
SECTION 6.13. Restoration of Rights and Remedies . . . . . . . . . . 66
SECTION 6.14. Rights and Remedies Cumulative . . . . . . . . . . . . 67
SECTION 6.15. Delay or Omission Not Waiver . . . . . . . . . . . . . 67
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Rights of Trustee . . . . . . . . . . . . . . . . . . . 67
SECTION 7.02. Actions of Trustee . . . . . . . . . . . . . . . . . . 69
SECTION 7.03. Individual Rights of Trustee . . . . . . . . . . . . . 70
SECTION 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . 70
SECTION 7.05. Notice of Default or Collateral Access Events . . . . . 70
SECTION 7.06. Reports by Trustee to Holders . . . . . . . . . . . . . 71
SECTION 7.07. Compensation and Indemnity . . . . . . . . . . . . . . 71
SECTION 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . 72
SECTION 7.09. Successor Trustee by Merger, Etc. . . . . . . . . . . . 73
SECTION 7.10. Eligibility . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 7.11. Money Held in Trust . . . . . . . . . . . . . . . . . . 73
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations . . . . . . . . . 73
SECTION 8.02. Defeasance and Discharge of Indenture . . . . . . . . . 74
SECTION 8.03. Defeasance of Certain Obligations . . . . . . . . . . . 76
SECTION 8.04. Application of Trust Money . . . . . . . . . . . . . . 78
SECTION 8.05. Repayment to Company . . . . . . . . . . . . . . . . . 78
SECTION 8.06. Reinstatement . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders . . . . . . . . . . . . . . 79
SECTION 9.02. With Consent of Holders . . . . . . . . . . . . . . . . 79
SECTION 9.03. Revocation and Effect of Consent . . . . . . . . . . . 81
SECTION 9.04. Notation on or Exchange of Notes . . . . . . . . . . . 81
SECTION 9.05. Trustee to Sign Amendments, Etc. . . . . . . . . . . . 81
SECTION 9.06. Conformity with Trust Indenture Act . . . . . . . . . . 82
ARTICLE TEN
PLEDGED SECURITIES
SECTION 10.01. Security . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 10.02. Release upon Termination of the Company's Obligations . 83
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ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act of 1939 . . . . . . . . . . . . . 84
SECTION 11.02. Notices . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 11.03. Certificate and Opinion As to Conditions Precedent . . 85
SECTION 11.04. Statements Required in Certificate or Opinion . . . . 85
SECTION 11.05. Acts of Holders . . . . . . . . . . . . . . . . . . . 86
SECTION 11.06. Rules by Trustee, Paying Agent or Registrar . . . . . 87
SECTION 11.07. Payment Date Other Than a Business Day . . . . . . . . 87
SECTION 11.08. Governing Law . . . . . . . . . . . . . . . . . . . . 87
SECTION 11.09. No Adverse Interpretation of Other Agreements . . . . 87
SECTION 11.10. No Recourse Against Others . . . . . . . . . . . . . . 87
SECTION 11.11. Successors . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 11.12. Duplicate Originals . . . . . . . . . . . . . . . . . 88
SECTION 11.13. Separability . . . . . . . . . . . . . . . . . . . . . 88
SECTION 11.14. Table of Contents, Headings, Etc. . . . . . . . . . . 88
ARTICLE TWELVE
MEETINGS OF HOLDERS
SECTION 12.01. Purposes for Which Meetings May Be Called . . . . . . 88
SECTION 12.02. Manner of Calling Meetings . . . . . . . . . . . . . . 88
SECTION 12.03. Call of Meetings by the Company or Holders . . . . . . 89
SECTION 12.04. Who May Attend and Vote at Meetings . . . . . . . . . 89
SECTION 12.05. Quorum; Action . . . . . . . . . . . . . . . . . . . . 89
SECTION 12.06. Regulations May Be Made by Trustee; Conduct
of the Meeting; Voting Rights; Adjournment . . . 90
SECTION 12.07. Voting at the Meeting and Record to Be Kept . . . . . 91
SECTION 12.08. Exercise of Rights of Trustee or Holders May
Not Be Hindered or Delayed by Call of Meeting . . 91
SECTION 12.09. Procedures Not Exclusive . . . . . . . . . . . . . . . 91
ARTICLE THIRTEEN
GUARANTEES
SECTION 13.01. Guarantees . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 13.02. Severability . . . . . . . . . . . . . . . . . . . . . 93
SECTION 13.03. Limitation of Guarantors' Liability . . . . . . . . . 93
SECTION 13.04. Contribution . . . . . . . . . . . . . . . . . . . . . 93
SECTION 13.05. Subrogation . . . . . . . . . . . . . . . . . . . . . 94
SECTION 13.06. Reinstatement . . . . . . . . . . . . . . . . . . . . 94
SECTION 13.07. Release of a Guarantor . . . . . . . . . . . . . . . . 94
SECTION 13.08. Benefits Acknowledged. . . . . . . . . . . . . . . . . 94
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ARTICLE FOURTEEN
COVENANTS RELATING TO THE AIRCRAFT
SECTION 14.01. Registration of Aircraft. . . . . . . . . . . . . . . 95
SECTION 14.02. Insurance. . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 14.03. Maintenance, Lease and Possession. . . . . . . . . . . 97
SECTION 14.04. Liens. . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 14.05. Certain Further Limitations on Leasing or Other
Relinquishment of Possession. . . . . . . . . . 98
SECTION 14.06. Trustee's Acknowledgment of Company's Right to
Foreign Registration. . . . . . . . . . . . . . . 99
ARTICLE FIFTEEN
SECURITY
SECTION 15.01. Registration; Replacement and Pooling of
Parts; Alterations, Modifications and Additions. 101
SECTION 15.02. [Intentionally Omitted] . . . . . . . . . . . . . . 103
SECTION 15.03. Inspection . . . . . . . . . . . . . . . . . . . . . 103
SECTION 15.04. Requisition for Use . . . . . . . . . . . . . . . . 104
SECTION 15.05. Substitution of Collateral. . . . . . . . . . . . . 104
SECTION 15.06. Release of Collateral. . . . . . . . . . . . . . . . 105
SECTION 15.07. Discontinuance of Proceedings . . . . . . . . . . . 105
SECTION 15.09. Termination of Interest in Collateral . . . . . . . 105
EXHIBIT A Form of Note A-1
EXHIBIT B [Intentionally Omitted]
EXHIBIT C Form of Certificate to Be Delivered in Connection with
Transfers to Non-QIB Accredited Investors C-1
EXHIBIT D Form of Certificate to Be Delivered in Connection with
Transfers Pursuant to Regulation S D-1
SCHEDULE A AIA Aircraft
SCHEDULE B-1 Aircraft Leasing Aircraft
SCHEDULE B-2 Leases of the Aircraft Leasing Aircraft
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INDENTURE, dated as of November 15, 1997, between Kitty Hawk, Inc., a
Delaware corporation, as Issuer (the "Company"), each Subsidiary of the
Company, other than American International Cargo, but including American
International Airways, Inc., a Michigan corporation ("AIA"), Kitty Hawk
Aircargo, Inc., a Texas corporation ("Aircargo), and Aircraft Leasing, Inc., a
Texas corporation ("Leasing"), each as owners of certain aircraft pledged to
secure the obligations hereunder (collectively, the "Guarantors") and Bank One,
NA, a national banking association, as trustee and collateral trustee
(individually, the "Trustee" and "Collateral Trustee" and, collectively, where
the context so requires, the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of up to $340,000,000 aggregate principal
amount of the Company's 9.95% Senior Secured Notes Due 2004 (the "Notes")
issuable. The Notes will be secured pursuant to the terms of an Escrow and
Security Agreement (as defined herein) by certain other assets, including
certain Pledged Securities (as defined herein) as provided by Article Ten of
this Indenture. All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done, and the Company
has done all things necessary to make the Notes, when executed by the Company
and authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the valid obligations of the Company as hereinafter provided.
Each Guarantor has duly authorized the guarantee of up to $340,000,000
aggregate principal amount of the Notes (the "Guarantees") and upon the
issuance of the Exchange Notes, if any, up to $340,000,000 aggregate principal
amount of the Exchange Notes (the "Guarantees").
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act of 1939, as amended, that are required to be a part
of and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.
AMERICAN INTERNATIONAL AIRWAYS, INC.
GRANTING CLAUSE
NOW, THEREFORE, THIS INDENTURE WITNESSETH, for and in consideration of
the premises and the purchase of the Notes by the Holders thereof, to secure
the prompt payment of the principal of and interest on, and all other amounts
due with respect to, all Notes from time to time outstanding under this
Indenture and the performance and observance by the Company of all the
agreements, covenants and provisions for the benefit of the Holders in this
Indenture and the Notes contained, and the prompt payment of any and all
amounts from time to time owing under this Indenture by the Company to the
Trustee, and for the uses and purposes and subject to the terms and provisions
hereof, and in consideration of the premises and the covenants herein
contained, and the acceptance of the Notes by the Holders and of the sum of $1
paid to the Company by the Collateral Trustee at or before the delivery hereof,
the receipt whereof is hereby acknowledged, AIA has granted, sold, assigned,
transferred, conveyed, pledged and confirmed, and does hereby grant, assign,
transfer, convey, pledge and confirm, unto the Collateral Trustee and its
successors and assigns, for the security and benefit of the Holders and the
Trustee as aforesaid, a first priority security interest in all
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estate, right, title and interest of AIA in, to and under the following
described property, rights and privileges (which, collectively, including all
property hereafter specifically subjected to the Lien of this Indenture by any
agreement supplemental hereto, or otherwise expressly subject to the terms and
provisions hereof, shall constitute a portion of the Collateral (as defined
herein)), to wit:
(i) seven Boeing 747s and eight Lockheed L-1011s, along with
the Engines, as specified on Schedule A hereto
(collectively, the "AIA Aircraft");
(ii) all insurance and requisition proceeds and other similar
payments with respect to each of the AIA Aircraft;
(iii) all monies or securities deposited or required to be
deposited with the Trustee;
(iv) any purchase agreements and any related documentation to
the extent assignable for each Aircraft
(v) all logs, data and records related to the Aircraft; and
(vi) all proceeds of the foregoing, other than accounts.
PROVIDED, HOWEVER, that notwithstanding any of the foregoing provisions, so
long as no Event of Default shall have occurred and be continuing under this
Indenture, (a) the Collateral Trustee shall not take or cause to be taken any
action contrary to the Company's right hereunder to quiet enjoyment of the AIA
Aircraft and related hush kits, and to possess, use, retain and control the AIA
Aircraft and related hush kits and all revenues, income and profits derived
therefrom.
AIA HABENDUM CLAUSE
TO HAVE AND TO HOLD ALL and singular and aforesaid property unto the
Collateral Trustee and its successors and assigns, in trust for the benefit and
security of the Holders and the Trustee and for the uses and purposes and
subject to the terms and provisions set forth in this Indenture; provided,
however, that the Lien of this Indenture shall be subject to discharge as
provided in Section 8.02.
AIA does hereby constitute the Collateral Trustee the true and lawful
attorney of AIA, irrevocably, with full power (in the name of AIA or otherwise)
to ask, 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 this Indenture and
any documents related hereto and all other property which now or hereafter
constitutes part of the AIA Collateral, 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 Collateral Trustee may
deem to be necessary or advisable in the premises; providing, however, that the
Collateral Trustee shall not exercise any such rights except upon the
occurrence of an Event of Default under this Indenture.
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AIA agrees that at any time and from time to time, upon the written
request of the Collateral Trustee or the Holder of a majority in principal
amount of the Notes outstanding, AIA 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 Collateral Trustee or such Holder of a majority in
principal amount of the Notes outstanding may reasonably deem desirable in
obtaining the full benefits of the assignment hereunder and the rights and
powers granted herein.
AIRCRAFT LEASING, INC.
GRANTING CLAUSE
NOW, THEREFORE, THIS INDENTURE WITNESSETH, for and in consideration of
the premises and the purchase of the Notes by the Holders thereof, to secure
the prompt payment of the principal of and interest on, and all other amounts
due with respect to, all Notes from time to time outstanding under this
Indenture and the performance and observance by the Company of all the
agreements, covenants and provisions for the benefit of the Holders in this
Indenture and the Notes contained, and the prompt payment of any and all
amounts from time to time owing under this Indenture by the Company to the
Trustee, and for the uses and purposes and subject to the terms and provisions
hereof, and in consideration of the premises and the covenants herein
contained, and the acceptance of the Notes by the Holders and of the sum of $1
paid to the Company by the Collateral Trustee at or before the delivery hereof,
the receipt whereof is hereby acknowledged, Leasing has granted, sold,
assigned, transferred, conveyed, pledged and confirmed, and does hereby grant,
assign, transfer, convey, pledge and confirm, unto the Collateral Trustee and
its successors and assigns, for the security and benefit of the Holders and the
Trustee as aforesaid, a first priority security interest in all estate, right,
title and interest of Leasing in, to and under the following described
property, rights and privileges (which, collectively, including all property
hereafter specifically subjected to the Lien of this Indenture by any agreement
supplemental hereto, or otherwise expressly subject to the terms and provisions
hereof, shall constitute a portion of the Collateral (as defined herein)), to
wit:
(i) eleven Boeing 727s, along with the Engines, as specified
on Schedule B-1 hereto (collectively, the "Leasing
Aircraft");
(ii) all insurance and requisition proceeds and other similar
payments with respect to each of the Leasing Aircraft;
(iii) all monies or securities deposited or required to be
deposited with the Trustee;
(iv) any purchase agreements and any related documentation to
the extent assignable for each Aircraft
(v) all logs, data and records related to the Leasing
Aircraft;
(vi) all Leases of the Leasing Aircraft, including without
limitation, those described on Schedule B-2 attached
hereto; and
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(vii) all proceeds of the foregoing, other than accounts.
PROVIDED, HOWEVER, that notwithstanding any of the foregoing provisions, so
long as no Event of Default shall have occurred and be continuing under this
Indenture, (a) the Collateral Trustee shall not take or cause to be taken any
action contrary to the Company's right hereunder to quiet enjoyment of the
Leasing Aircraft and related hush kits, and to possess, use, retain and control
the Leasing Aircraft and related hush kits and all revenues, income and profits
derived therefrom.
LEASING HABENDUM CLAUSE
TO HAVE AND TO HOLD ALL and singular and aforesaid property unto the
Collateral Trustee and its successors and assigns, in trust for the benefit and
security of the Holders and the Trustee and for the uses and purposes and
subject to the terms and provisions set forth in this Indenture; provided,
however, that the Lien of this Indenture shall be subject to discharge as
provided in Section 8.02.
Leasing does hereby constitute the Collateral Trustee the true and
lawful attorney of Leasing, irrevocably, with full power (in the name of
Leasing or otherwise) to ask, 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 this Indenture and any documents related hereto and all
other property which now or hereafter constitutes part of the Leasing
Collateral, 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 Collateral Trustee may deem to be necessary or advisable
in the premises; providing, however, that the Collateral Trustee shall not
exercise any such rights except upon the occurrence of an Event of Default
under this Indenture.
Leasing agrees that at any time and from time to time, upon the written
request of the Collateral Trustee or the Holder of a majority in principal
amount of the Notes outstanding, Leasing 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 Collateral Trustee or such Holder of a
majority in principal amount of the Notes outstanding may reasonably deem
desirable in obtaining the full benefits of the assignment hereunder and the
rights and powers granted herein.
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KITY HAWK AIRCARGO, INC.
GRANTING CLAUSE
NOW, THEREFORE, THIS INDENTURE WITNESSETH, for and in consideration of
the premises and the purchase of the Notes by the Holders thereof, to secure
the prompt payment of the principal of and interest on, and all other amounts
due with respect to, all Notes from time to time outstanding under this
Indenture and the performance and observance by the Company of all the
agreements, covenants and provisions for the benefit of the Holders in this
Indenture and the Notes contained, and the prompt payment of any and all
amounts from time to time owing under this Indenture by the Company to the
Trustee, and for the uses and purposes and subject to the terms and provisions
hereof, and in consideration of the premises and the covenants herein
contained, and the acceptance of the Notes by the Holders and of the sum of $1
paid to the Company by the Collateral Trustee at or before the delivery hereof,
the receipt whereof is hereby acknowledged, Aircargo has granted, sold,
assigned, transferred, conveyed, pledged and confirmed, and does hereby grant,
assign, transfer, convey, pledge and confirm, unto the Collateral Trustee and
its successors and assigns, for the security and benefit of the Holders and the
Trustee as aforesaid, a first priority security interest in all estate, right,
title and interest of Aircargo in, to and under the following described
property, rights and privileges (which, collectively, including all property
hereafter specifically subjected to the Lien of this Indenture by any agreement
supplemental hereto, or otherwise expressly subject to the terms and provisions
hereof, shall constitute a portion of the Collateral (as defined herein)), to
wit:
(i) two Boeing 727s, along with the Engines, as specified on
Schedule C hereto (collectively, the "Aircargo Aircraft");
(ii) all insurance and requisition proceeds and other similar
payments with respect to each of the Aircargo Aircraft;
(iii) all monies or securities deposited or required to be
deposited with the Trustee;
(iv) any purchase agreements and any related documentation to
the extent assignable for each Aircraft
(v) all logs, data and records related to the Aircargo
Aircraft; and
(vi) all proceeds of the foregoing, other than accounts.
PROVIDED, HOWEVER, that notwithstanding any of the foregoing provisions, so
long as no Event of Default shall have occurred and be continuing under this
Indenture, (a) the Collateral Trustee shall not take or cause to be taken any
action contrary to the Company's right hereunder to quiet enjoyment of the
Aircargo Aircraft and related hush kits, and to possess, use, retain and
control the Aircargo Aircraft and related hush kits and all revenues, income
and profits derived therefrom.
4A
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AIRCARGO HABENDUM CLAUSE
TO HAVE AND TO HOLD ALL and singular and aforesaid property unto the
Collateral Trustee and its successors and assigns, in trust for the benefit and
security of the Holders and the Trustee and for the uses and purposes and
subject to the terms and provisions set forth in this Indenture; provided,
however, that the Lien of this Indenture shall be subject to discharge as
provided in Section 8.02.
Aircargo does hereby constitute the Collateral Trustee the true and
lawful attorney of Aircargo, irrevocably, with full power (in the name of
Aircargo or otherwise) to ask, 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 this Indenture and any documents related hereto and all
other property which now or hereafter constitutes part of the Aircargo
Collateral, 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 Collateral Trustee may deem to be necessary or advisable
in the premises; providing, however, that the Collateral Trustee shall not
exercise any such rights except upon the occurrence of an Event of Default
under this Indenture.
Aircargo agrees that at any time and from time to time, upon the written
request of the Collateral Trustee or the Holder of a majority in principal
amount of the Notes outstanding, Aircargo 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 Collateral Trustee or such Holder of a
majority in principal amount of the Notes outstanding may reasonably deem
desirable in obtaining the full benefits of the assignment hereunder and the
rights and powers granted herein.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows:
4B
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"ACMI Agreement" means a charter agreement pursuant to which the Company
or any Owner supplies aircraft, crew, maintenance and insurance under which the
Company or Owner retains operational control and maintains the Aircraft under
its operation specifications and, in no event, shall be deemed a lease of the
Aircraft.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition by a Restricted Subsidiary and not Incurred in connection
with, or in anticipation of, such Person becoming a Restricted Subsidiary or
such Asset Acquisition; provided that Indebtedness of such Person which is
redeemed, defeased, retired or otherwise repaid at the time of or immediately
upon consummation of the transactions by which such Person becomes a Restricted
Subsidiary or such Asset Acquisition shall not be Acquired Indebtedness.
"Adjusted Consolidated Net Income" means, for any period, the aggregate
net income (or loss) of the Company and its Restricted Subsidiaries for such
period determined in conformity with GAAP; provided that the following items
shall be excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income of any Person that is not a Restricted
Subsidiary, except to the extent of the amount of dividends or other
distributions actually paid to the Company or any of its Restricted
Subsidiaries by such Person during such period; (ii) solely for the purposes of
calculating the amount of Restricted Payments that may be made pursuant to
clause (C) of the first paragraph of Section 4.04 (and in such case, except to
the extent includable pursuant to clause (i) above), the net income (or loss)
of any Person accrued prior to the date it becomes a Restricted Subsidiary or
is merged into or consolidated with the Company or any of its Restricted
Subsidiaries or all or substantially all of the property and assets of such
Person are acquired by the Company or any of its Restricted Subsidiaries; (iii)
the net income of any Restricted Subsidiary to the extent that the declaration
or payment of dividends or similar distributions by such Restricted Subsidiary
of such net income is not at the time permitted (unless such permission could,
as determined by the chief financial officer of the Company in good faith, be
readily and reasonably obtained) by the operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary; (iv) any
gains or losses (on an after-tax basis) attributable to Asset Sales; (v) except
for purposes of calculating the amount of Restricted Payments that may be made
pursuant to clause (C) of the first paragraph of Section 4.04, any amount paid
or accrued as dividends on Preferred Stock of the Company or any Restricted
Subsidiary owned by Persons other than the Company and any of its Restricted
Subsidiaries; and (vi) all extraordinary gains and extraordinary losses.
"Adjusted Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its
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Restricted Subsidiaries (excluding intercompany items) and (ii) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other like intangibles, all as set forth on the most recent quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries,
prepared in conformity with GAAP and filed with the Commission or provided to
the Trustee pursuant to Section 4.15.
"Adjusted Net Assets" has the meaning provided in Section 13.04.
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; provided that, with
respect to the Company, ownership of Capital Stock representing more than 10%
of the voting power of the Company's Capital Stock shall be deemed control.
"Agent" means any Registrar, Paying Agent, authenticating agent or
co-Registrar appointed as such pursuant to the provisions hereof.
"Agent Members" has the meaning provided in Section 2.07(a).
"Aircraft" means each of the Airframes together with the Engines
relating thereto and hush kits, if any, installed thereon, upon which the
Trustee has been granted a security interest and mortgage lien by the Owner
thereof pursuant to this Indenture and any Airframes which may from time to
time be substituted for such Airframes pursuant to the terms of this Indenture.
"Airframes" means each of the nine Boeing 747 Aircraft, eight Lockheed
L-1011 Aircraft and thirteen Boeing 727 Aircraft (except Engines or engines
from time to time installed on such Aircraft) initially pledged to secure the
Company's obligations under this Indenture and the Notes and any Aircraft
(except Engines or engines from time to time installed on such Aircraft) which
may from time to time be substituted for such Aircraft (except Engines or
engines from time to time installed on such Aircraft) pursuant to this
Indenture.
"Asset Acquisition" means (i) an investment by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged into or consolidated with the
Company or any of its Restricted Subsidiaries; provided that such Person's
primary business is related, ancillary or complementary to the businesses of
the Company and its Restricted Subsidiaries on the date of such investment or
(ii) an acquisition by the Company or any of its Restricted Subsidiaries of the
property and assets of any Person other than the Company or any of its
Restricted Subsidiaries that constitute substantially all of a division or line
of business of such Person; provided that the property and assets acquired are
related, ancillary or complementary to the businesses of the Company and its
Restricted Subsidiaries on the date of such acquisition.
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"Asset Disposition" means the sale or other disposition, outside the
ordinary course of business, by the Company or any of its Restricted
Subsidiaries (other than to the Company or another Restricted Subsidiary) of
(i) all or substantially all of the Capital Stock of any Restricted Subsidiary
of the Company or (ii) all or substantially all of the assets that constitute a
division or line of business of the Company or any of its Restricted
Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transaction) in one transaction
or a series of related transactions by the Company or any of its Restricted
Subsidiaries to any Person other than the Company or any of its Restricted
Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary (other than director's qualifying shares), (ii) all or substantially
all of the property and assets of an operating unit or business of the Company
or any of its Restricted Subsidiaries or (iii) any other property and assets of
the Company or any of its Restricted Subsidiaries outside the ordinary course
of business of the Company or such Restricted Subsidiary and, in each case,
that is not governed by Article Five; provided that "Asset Sale" shall not
include (a) sales or other dispositions of inventory, receivables and other
current assets, (b) sales or other dispositions of assets for consideration at
least equal to the fair market value of the assets sold or disposed of, to the
extent that the consideration received would satisfy clause (B) of Section
4.11, (c) leases of aircraft, including the Aircraft and any engines, including
the Engines, pursuant to the provisions of Section 14.03 or similar
arrangements, including pooling or interchange arrangements as described
therein, (d) sales, transfers or other dispositions of assets that have a fair
market value of less than $20.0 million from the Closing Date through the final
stated maturity of the Notes, (e) Sales or Events of Loss and (f) sales of
collateral which is pledged to secure the New Credit Facility or Term Loan, so
long as the proceeds are applied to reduce the aggregate Indebtedness
thereunder.
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Aviation Act" means the Federal Aviation Act of 1958, as amended, and
recodified in Subtitle VII of Title 49 of the United States Code, and
applicable regulations thereunder.
"Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code of 1978,
as amended, or any similar United States federal or state or foreign law
relating to bankruptcy, insolvency, receivership, winding-up, liquidation,
reorganization or relief of debtors or any amendment to, succession to or
change in any such law.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of such Board of Directors.
"Board Resolution" means a copy of a resolution, certified by the
Secretary of the Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification, and
delivered to the Trustee.
7
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"Borrowing Base" shall have the meaning given to such term in the New
Credit Facility, as in effect from time to time.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the Corporate
Trust Office of the Trustee, are authorized by law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present
value of the rental obligations of such Person as lessee, in conformity with
GAAP, is required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of
the rental obligations under a Capitalized Lease.
"Cash Equivalents" means (i) United States dollars or foreign currency
that is readily exchangeable into United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than 12
months from the date of acquisition, (iii) certificates of deposit and
Eurodollar time deposits with maturities of 12 months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding 12 months and
overnight bank deposits, in each case with any domestic commercial bank having
capital and surplus in excess of $500 million and a ▇▇▇▇▇ Bank Watch Rating of
"B" or better, (iv) repurchase obligations with a term of not more than seven
days for the underlying securities of the types described in clauses (ii) and
(iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above, and (v) commercial paper having
the highest rating obtainable from ▇▇▇▇▇'▇ Investors Service, Inc. or Standard
& Poor's Corporation and in each case maturing not more than 90 days after the
date of acquisition.
"Change of Control" means such time as (i) a "person" or "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the
ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act)
of more than 35% of the total voting power of the Voting Stock of the Company
on a fully diluted basis and such ownership represents a greater percentage of
the total voting power of the Voting Stock of the Company, on a fully diluted
basis, than is held by the Existing Stockholders on such date or (ii)
individuals who on the Closing Date constitute the Board of Directors (together
with any new directors whose election by the Board of Directors or whose
nomination by the Board of Directors for election by the Company's stockholders
was approved by a vote of at least two-thirds of the members of the Board of
Directors then in office who either were members of the Board of Directors on
the Closing Date or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the members of the
Board of Directors then in office.
8
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"Change of Control Triggering Event" means both the occurrence of a
Change of Control and a Rating Decline.
"Closing Date" means the date on which the Notes are originally issued
under this Indenture.
"Collateral" means (i) the Aircraft, including Engines, as specified on
Schedule S, A, B-1, and C hereto, (ii) all insurance and requisition proceeds
and other similar payments with respect to each of the Aircraft, (iii) all
monies or securities deposited or required to be deposited with the Trustee,
(iv) any purchase agreements and any related documentation to the extent
assignable for each Aircraft, (v) all logs, data and records related to the
Aircraft, (vi) the Pledged Securities on deposit in the Escrow Account, the
Escrow Account and certain related assets, as described in the Escrow and
Security Agreement, (vii) all rights of any Owner under any Lease relating to
any Aircraft, including those specified on Schedule B-2 hereto, and (viii) all
proceeds of the foregoing. other than accounts. The Collateral shall also
include the Optioned Aircraft or Eligible Aircraft described in the Escrow and
Security Agreement, when acquired by AIA, which AIA will ▇▇▇▇▇ ▇ ▇▇▇▇ and
security interest on to the Collateral Trustee upon their acquisition.
"Collateral Access Event" means any Collateral Access Event in Section
6.02.
"Collateral Trustee" means the Person named as the "Collateral Trustee"
in the first paragraph of this Indenture until a successor Collateral Trustee
shall have become such pursuant to the applicative provisions of this
Indenture, and thereafter "Collateral Trustee" shall mean such Collateral
Trustee.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the TIA, then the body performing such
duties at such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's equity, other than Preferred Stock of
such Person, whether now outstanding or issued after the Closing Date,
including, without limitation, all series and classes of such common stock.
"Common Stock Offering" means the public offering by the Company and
certain selling stockholders of 3,000,000 shares of Common Stock of the Company
consummated on November 19, 1997.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to Article Five of this Indenture and,
thereafter, means the successor.
"Company Order" means a written request or order signed in the name of
the Company by its Chairman, its President or a Vice President and delivered to
the Trustee.
9
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"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses or
sales of assets), (iii) depreciation expense, (iv) amortization expense and (v)
all other non-cash items reducing Adjusted Consolidated Net Income (other than
items that will require cash payments and for which an accrual or reserve is,
or is required by GAAP to be, made), all as determined on a consolidated basis
for the Company and its Restricted Subsidiaries otherwise in conformity with
GAAP; provided that, if any Restricted Subsidiary is not a Wholly Owned
Restricted Subsidiary, Consolidated EBITDA shall be reduced (to the extent not
otherwise reduced hereunder) by an amount equal to (A) the amount of the
Adjusted Consolidated Net Income attributable to such Restricted Subsidiary
multiplied by (B) the percentage ownership interest in the income of such
Restricted Subsidiary not owned on the last day of such period by the Company
or any of its Restricted Subsidiaries.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and
Indebtedness that is Guaranteed or secured by the Company or any of its
Restricted Subsidiaries) and all but the principal component in respect of
Capitalized Lease Obligations paid, accrued or scheduled to be paid or to be
accrued by the Company and its Restricted Subsidiaries during such period;
excluding, however, (i) any amount of such interest of any Restricted
Subsidiary if the net income of such Restricted Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income pursuant to clause (iii) of the
definition thereof (but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Adjusted Consolidated
Net Income pursuant to clause (iii) of the definition thereof) and (ii) any
premiums, fees and expenses (and any amortization thereof) payable in
connection with the offering of the Notes and the establishment of the New
Credit Facility and the Term Loan and the other transactions contemplated by
the Transactions and Refinancing, all as determined on a consolidated basis
(without taking into account Unrestricted Subsidiaries) in conformity with
GAAP.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company (which shall be as of a date
not more than 90 days prior to the date of such computation, and which shall
exclude Unrestricted Subsidiaries), less any amounts attributable to
Disqualified Stock or any equity security convertible into or exchangeable for
Indebtedness, the cost of treasury stock and the principal amount of any
promissory notes receivable from the sale of the Capital Stock of the Company
or any of its Restricted Subsidiaries, each item to be determined in conformity
with GAAP (excluding the effects of foreign currency exchange adjustments under
Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 52).
"Convention" means the Convention International Recognition of Rights in
Aircraft, as amended or recodified from time to time.
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"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at c/o First Chicago Trust Company, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust and Agency Group.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees, and their
respective successors, until a successor Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Depositary" shall mean or include each Person who is then a Depositary
hereunder.
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder
of such class or series of Capital Stock at any time prior to the Stated
Maturity of the Notes or (iii) convertible into or exchangeable for Capital
Stock referred to in clause (i) or (ii) above or Indebtedness having a
scheduled maturity prior to the Stated Maturity of the Notes other than Capital
Stock issued to employees; provided that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to repurchase or redeem such Capital Stock
upon the occurrence of an "asset sale" or "change of control" occurring prior
to the Stated Maturity of the Notes shall not constitute Disqualified Stock if
the "asset sale" or "change of control" provisions applicable to such Capital
Stock are no more favorable to the holders of such Capital Stock than the
provisions contained in Section 4.11 and Section 4.14 and such Capital Stock
specifically provides that such Person will not repurchase or redeem any such
stock pursuant to such provision prior to the Company's repurchase of such
Notes as are required to be repurchased pursuant to Section 4.11 and Section
4.14.
"Eligible Aircraft" means one or more aircraft that would be useful in
the Company's business and having a value (or fair value or similar measure)
determined by an aircraft appraisal firm of national standing equal to or in
excess of the price paid therefor by the Company.
"Engines" means for each of the Boeing 747 Airframes, each of the 36
▇▇▇▇▇ & ▇▇▇▇▇▇▇ JT9D-7A Engines and each of the 20 JT9D-7J Engines relating
thereto, as more specifically described on Schedule A or B-1 hereto, and any
engines which may from time to time be substituted for such engines pursuant to
this Indenture; and with respect to the Boeing 727 Airframes means each of the
9 ▇▇▇▇▇ & Whitney JT8D-B Engines, each of the 3 JT8D-15A Engines, each of the 3
JT8D-15/15A Engines, each of the 12 JT8D-15 Engines, each of the 6 JT8D-9A
Engines, and each of the 6 JT8D-9A/7B Engines relating thereto, as more
specifically described on Schedule A or B-1 hereto, and any engines
11
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which may from time to time be substituted for such engines pursuant to this
Indenture and with respect to the Lockheed ▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇, each of the 24
Rolls Royce RB211-524 Engines relating thereto, as more specifically described
on Schedule A or B-1 hereto, and any engines which may from time to time be
substituted for such Engines pursuant to this Indenture.
"Escrow Account" means an account established with the Trustee pursuant
to the terms of the Escrow and Security Agreement for the deposit of the
Pledged Securities to be purchased by the Company with the net proceeds from
the sale of the Notes.
"Escrow and Security Agreement" means the Escrow and Security Agreement,
dated as of the Closing Date, made by the Company and the Guarantors in favor
of the Trustee, governing the disbursement of funds from the Escrow Account and
granting a security interest in certain assets, including the Pledged
Securities, as such agreement may be amended, restated, supplemented or
otherwise modified from time to time.
"Event of Default" has the meaning provided in Section 6.01.
"Event of Loss" with respect to the Aircraft or Engine means any of the
following events: (i) payment of an insurance settlement with respect to such
property on the basis of an actual or constructive total loss; (ii) destruction
or damage beyond repair; provided that, if it was not clear whether damage
constitutes damage beyond repair, an Event of Loss will be deemed to occur when
it is determined by the Company that such damage is beyond repair; (iii) theft
or disappearance for a period in excess of 120 days, unless the location of the
Aircraft is known and the Company is diligently pursuing its recovery; (iv) the
condemnation or taking of title to such Aircraft by the United States
government or any foreign government or instrumentality or agency thereof; (v)
the requisition or taking of use of such Aircraft or airframe by a foreign
government or instrumentality or agency for a continuous period of more than
six months; (vi) with respect to an Engine only, the requisition for use by any
government or the divestiture of title resulting from the installation of such
Engine on an airframe leased to the Company or purchased by the Company subject
to a conditional sale agreement, in either case, under circumstances where the
Trustee's security interest in such Engine is adversely affected thereby; or
(vii) "grounding" of such Aircraft for a period of twelve consecutive months
(or such shorter period determined by the Company) due to an action by a
governmental body, unless prior to and after the expiration of such period, the
Company is diligently carrying forward all necessary steps to permit normal
use.
"Excess Proceeds" has the meaning provided in Section 4.11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Exchange Notes" means any securities of the Company containing terms
substantially identical to the Notes (except that such Exchange Notes shall be
registered under the Securities Act) that are issued and exchanged for the
Notes pursuant to an exchange offer consummated in accordance with the
Registration Rights Agreement.
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"Excluded Restricted Subsidiary" means any Restricted Subsidiary
principally engaged in a business similar to that of the Company or any of its
Restricted Subsidiaries or any business reasonably related thereto and
domiciled outside the United States of America if the issuance of a Guarantee
by such Subsidiary would, as determined in good faith in a resolution of the
Board of Directors, create a material tax disadvantage or would be illegal
under applicable law.
"Existing Stockholders" means Mr. M. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, his spouse and
children and any trust the sole beneficiaries of which consist of the foregoing
persons.
"fair market value" means the price that would be paid in an arm's-
length transaction between an informed and willing seller under no compulsion
to sell and an informed and willing buyer under no compulsion to buy, as
determined in good faith by the Board of Directors, whose determination shall
be conclusive if evidenced by a Board Resolution.
"Fraudulent Conveyance Act" means any statute based on or substantially
similar to the Uniform Fraudulent Conveyance Act.
"Fraudulent Transfer Act" means any statute based on or substantially
similar to the Uniform Fraudulent Transfer Act.
"Funding Guarantor" has the meaning provided in Section 13.04.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession. The numbers used to
calculate all ratios and perform all computations contained or referred to in
this Indenture shall be computed in conformity with GAAP applied on a
consistent basis, except that calculations made for purposes of determining
compliance with the terms of the covenants and with other provisions of this
Indenture shall be made without giving effect to (A) the amortization of any
expenses incurred in connection with the offering of the Notes and (B) except
as otherwise provided, the amortization of any amounts required or permitted by
Accounting Principles Board Opinion Nos. 16 and 17.
"Global Notes" has the meaning provided in Section 2.01.
"Guarantee" means, without duplication, any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services (unless such purchase arrangements are on arm's-
length
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terms and are entered into in the ordinary course of business), to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered
into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term "Guarantee" shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means all Restricted Subsidiaries of the Company other than
AIC and any Excluded Restricted Subsidiary; provided that, upon the release and
discharge of any Guarantor from its Guarantee in accordance with this
Indenture, such Guarantor shall cease to be a Guarantor.
"Holder" or "Noteholder" means the registered holder of any Note.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Acquired Indebtedness; provided that
neither the accrual of interest nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto, but excluding obligations with
respect to letters of credit (including trade letters of credit) securing
obligations (other than obligations described in clause (i) or (ii) above or
(v), (vi) or (vii) below) entered into in the ordinary course of business of
such Person to the extent such letters of credit are not drawn upon or, if
drawn upon, to the extent such drawing is reimbursed no later than the third
Business Day following receipt by such Person of a demand for reimbursement),
(iv) all obligations of such Person to pay the deferred and unpaid purchase
price of property or services, which purchase price is due more than six months
after the date of placing such property in service or taking delivery and title
thereto or the completion of such services, except Trade Payables and accrued
expenses, (v) all Capitalized Lease Obligations, (vi) all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided that the amount of such
Indebtedness shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness, (vii) all
Indebtedness of other Persons Guaranteed by such Person to the extent such
Indebtedness is Guaranteed by such Person and (viii) to the extent not
otherwise included in this definition, obligations under Currency Agreements
and Interest Rate Agreements. The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all unconditional
obligations as described above and, with respect to contingent obligations, the
maximum liability upon the occurrence of the contingency giving rise to the
obligation, provided that (A) the amount outstanding at any time of any
Indebtedness issued with original issue discount is the face amount of such
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25
Indebtedness less the then remaining unamortized portion of the original issue
discount of such Indebtedness as determined in conformity with GAAP, (B) money
borrowed and set aside at the time of the Incurrence of any Indebtedness in
order to prefund the payment of the interest on such Indebtedness shall be
deemed not to be "Indebtedness" and (C) Indebtedness shall not include any
liability for federal, state, local or other taxes.
"Indenture" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures
supplemental to this Indenture entered into pursuant to the applicable
provisions of this Indenture.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Interest Coverage Ratio" means, on any Transaction Date, the ratio of
(i) the aggregate amount of Consolidated EBITDA for the then most recent four
fiscal quarters prior to such Transaction Date for which reports have been
filed with the Commission pursuant to Section 4.15 (the "Four Quarter Period")
to (ii) the aggregate Consolidated Interest Expense during such Four Quarter
Period. In making the foregoing calculation, (A) pro forma effect shall be
given to any Indebtedness Incurred or repaid during the period (the "Reference
Period") commencing on the first day of the Four Quarter Period and ending on
the Transaction Date (other than Indebtedness Incurred or repaid under a
revolving credit or similar arrangement to the extent of the commitment
thereunder (or under any predecessor revolving credit or similar arrangement)
in effect on the last day of such Four Quarter Period unless any portion of
such Indebtedness is projected, in the reasonable judgment of the senior
management of the Company, to remain outstanding for a period in excess of 12
months from the date of the Incurrence thereof), in each case as if such
Indebtedness had been Incurred or repaid on the first day of such Reference
Period; (B) Consolidated Interest Expense attributable to interest on any
Indebtedness (whether existing or being Incurred) computed on a pro forma basis
and bearing a floating interest rate shall be computed as if the rate in effect
on the Transaction Date (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months or, if shorter, at least equal to the remaining
term of such Indebtedness) had been the applicable rate for the entire period;
(C) pro forma effect shall be given to Asset Dispositions and Asset
Acquisitions (including giving pro forma effect to the application of proceeds
of any Asset Disposition) that occur during such Reference Period as if they
had occurred and such proceeds had been received on the first day of such
Reference Period; and (D) pro forma effect shall be given to asset dispositions
and asset acquisitions (including giving pro forma effect to the application of
proceeds of any asset disposition) that have been made by any Person that has
become a Restricted Subsidiary or has been merged with or into the Company or
any Restricted Subsidiary during such Reference Period and that would have
constituted Asset Dispositions or Asset Acquisitions had such transactions
occurred when such Person was a Restricted Subsidiary as if such asset
dispositions or asset acquisitions were Asset Dispositions or Asset
Acquisitions that occurred on the first day of such Reference Period; provided
that, to the extent that clause (C) or (D) of this sentence requires that pro
forma effect be given to an Asset Acquisition or Asset Disposition, such pro
forma calculation shall be based upon the four full fiscal quarters immediately
preceding the Transaction
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26
Date of the Person, or division or line of business of the Person, that is
acquired or disposed for which financial information is available.
"Interest Payment Date" means each semiannual interest payment date on
May 15 and November 15 of each year, commencing May 15, 1998.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement, including, without limitation, any fuel hedging or
fuel protection agreement.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (including, without limitation, by way of Guarantee
or similar arrangement; but excluding advances to customers in the ordinary
course of business that are, in conformity with GAAP, recorded as accounts
receivable on the balance sheet of the Company or its Restricted Subsidiaries)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other similar instruments issued by, such Person and shall
include (i) the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary and (ii) the fair market value of the Capital Stock (or any other
Investment), held by the Company or any of its Restricted Subsidiaries, of (or
in) any Person that has ceased to be a Restricted Subsidiary, including,
without limitation, by reason of any transaction permitted by clause (iii) of
Section 4.06; provided that the fair market value of the Investment remaining
in any Person that has ceased to be a Restricted Subsidiary shall be deemed not
to exceed the aggregate amount of Investments previously made in such Person
valued at the time such Investments were made less the net reduction of such
Investments. For purposes of the definition of "Unrestricted Subsidiary" and
Section 4.04, (i) "Investment" shall include the fair market value of the
assets (net of liabilities (other than liabilities to the Company or any of its
Restricted Subsidiaries)) of any Restricted Subsidiary at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary, (ii) the fair
market value of the assets (net of liabilities (other than liabilities to the
Company or any of its Restricted Subsidiaries)) of any Unrestricted Subsidiary
at the time that such Unrestricted Subsidiary is designated a Restricted
Subsidiary shall be considered a reduction in outstanding Investments and (iii)
any property transferred to or from an Unrestricted Subsidiary shall be valued
at its fair market value at the time of such transfer.
"Kalitta Companies" means American International Airways, Inc., a
Michigan corporation, Kalitta Flying Service, Inc., a Michigan corporation,
Flight One Logistics, Inc., a Michigan corporation, O.K. Turbines, Inc., a
Michigan corporation, American International Travel, Inc., a Michigan
corporation and American International Cargo, a co-partnership formed under the
laws of Michigan.
"Lease" means those certain leases (excluding, in all events any ACMI
Agreement), specified on Schedule B-2 hereto and any lease by the Owner of the
Aircraft pertaining to
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the Aircraft or such other substitute aircraft which becomes Collateral
pursuant to the terms hereof, which extends for a period in excess of six
months.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof or any agreement
to give any security interest), but excluding any operating lease.
"Merger" means the mergers of the Kalitta Companies (other than American
International Cargo) with and into certain Subsidiaries of Kitty Hawk pursuant
to that certain Agreement and Plan of Merger dated September 22, 1997, as
amended by Amendment No. 1 dated October 23, 1997 and Amendment No. 2 dated
October 29, 1997.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or Cash Equivalents, including
payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or Cash Equivalents (except to the extent such
obligations are financed or sold with recourse to the Company or any Restricted
Subsidiary) and proceeds from the conversion of other property received when
converted to cash or Cash Equivalents, net of (i) brokerage commissions and
other fees and expenses (including fees and expenses of counsel and investment
bankers) related to such Asset Sale, (ii) provisions for all taxes (whether or
not such taxes will actually be paid or are payable) as a result of such Asset
Sale without regard to the consolidated results of operations of the Company
and its Restricted Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
that either (A) is secured by a Lien on the property or assets sold or (B) is
required to be paid as a result of such sale and (iv) appropriate amounts to be
provided by the Company or any Restricted Subsidiary as a reserve against any
liabilities associated with such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as determined in conformity with GAAP and
(b) with respect to any issuance or sale of Capital Stock, the proceeds of such
issuance or sale in the form of cash or Cash Equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or Cash Equivalents (except to the extent such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary) and proceeds
from the conversion of other property received when converted to cash or Cash
Equivalents, net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
"New Credit Facility" means the $100 million senior secured revolving
credit facility with ▇▇▇▇▇ Fargo Bank (Texas), National Association,
individually and as agent for
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other lenders, as amended, refinanced or substituted from time to time;
provided that Affiliates of the Company cannot constitute the majority of the
lenders thereunder.
"New York Debtor and Creditor Law" means the New York Debtor and
Creditor Law as from time to time in effect.
"Noise Regulations" means FAA noise standard regulations primarily
promulgated under the Airport Noise and Capacity Act of 1990.
"Note Guarantee" means the Guarantee by the Guarantors of the Company's
obligations under the Notes and this Indenture and any other Guarantee of such
obligations by any Person.
"Note Offering" means the offering by the Company of $340,000,000
aggregate principal amount of 9.95% Senior Secured Notes Due 2004 of the
Company being issued pursuant to the terms of this Indenture.
"Notes" means any of the securities, as defined in the first paragraph
of the recitals hereof, that are authenticated and delivered under this
Indenture.
"Offer to Purchase" means an offer to purchase Notes by the Company from
the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that
all Notes validly tendered will be accepted for payment on a pro rata basis;
(ii) the purchase price and the date of purchase (which shall be a Business Day
no earlier than 30 days nor later than 60 days from the date such notice is
mailed) (the "Payment Date"); (iii) that any Note not tendered will continue to
accrue interest pursuant to its terms; (iv) that, unless the Company defaults
in the payment of the purchase price, any Note accepted for payment pursuant to
the Offer to Purchase shall cease to accrue interest on and after the Payment
Date; (v) that Holders electing to have a Note purchased pursuant to the Offer
to Purchase will be required to surrender the Note, together with the form
entitled "Option of the Holder to Elect Purchase" on the reverse side of the
Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the Business Day immediately preceding the
Payment Date; (vi) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a telegram, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Notes delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased; and (vii) that Holders
whose Notes are being purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered; provided
that each Note purchased and each new Note issued shall be in a principal
amount of $1,000 or integral multiples thereof. On the Payment Date, the
Company shall (i) accept for payment on a pro rata basis Notes or portions
thereof tendered pursuant to an Offer to Purchase; (ii) deposit with the Paying
Agent money sufficient to pay the purchase price of all Notes or portions
thereof so accepted; and (iii) deliver, or cause to be delivered, to the
Trustee all Notes or
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portions thereof so accepted together with an Officers' Certificate specifying
the Notes or portions thereof accepted for payment by the Company. The
Company, Depositary or Paying Agent shall promptly mail or deliver to the
Holders of Notes so accepted payment in an amount equal to the purchase price,
and the Trustee shall promptly authenticate and mail or deliver to such Holders
a new Note equal in principal amount to any unpurchased portion of the Note
surrendered; provided that each Note purchased and each new Note issued shall
be in a principal amount of $1,000 or integral multiples thereof. The Company
will publicly announce the results of an Offer to Purchase as soon as
practicable after the Payment Date. The Trustee shall act as the Paying Agent
for an Offer to Purchase. The Company will comply with Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable, in the event that the Company
is required to repurchase Notes pursuant to an Offer to Purchase.
"Officer" means with respect to the Company, the Chairman of the Board,
the President, any Vice President, the Chief Financial Officer, the Treasurer
or any Assistant Treasurer, or the Secretary or any Assistant Secretary.
"Officers' Certificate" means a certificate signed on behalf of the
Company by an Officer. Each Officers' Certificate (other than certificates
provided pursuant to TIA Section 314(a)(4)) shall include the statements
provided for in TIA Section 314(e).
"Opinion of Counsel" means a written opinion signed by legal counsel who
is reasonably acceptable to the Trustee. Such counsel may be an employee of or
counsel to the Company or the Trustee. Each such Opinion of Counsel shall
include the statements provided for in TIA Section 314(e). Opinions of Counsel
may have qualifications customary for similar opinions.
"Optioned Boeing 747s" means the two used Boeing 747s which the Company
has an option to acquire.
"Owner" means either AIA, Leasing or Aircargo, as the case may be, as
the registered owner of the Aircraft or such other registered owner of aircraft
which is substituted as Collateral pursuant to the provisions hereof.
"Parts" means all appliances, parts, instruments, appurtenances,
accessories, furnishings and other equipment of whatever nature other than
complete Engines or engines which are from time to time incorporated or
installed in or attached to the Airframe or any Engine, exclusive of any items
leased by the Company from third parties.
"Paying Agent" has the meaning provided in Section 2.04, except that,
for the purposes of Article Eight, the Paying Agent shall not be the Company or
a Subsidiary of the Company or an Affiliate of any of them. The term "Paying
Agent" includes any additional Paying Agent.
"Permitted Air Carrier" means (i) a United States "air carrier" within
the meaning of the Aviation Act or (ii) an air carrier which, among other
things, (A) is duly organized and operating pursuant to a license or
authorization issued under the laws of any
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Permitted Country and (B) will perform or cause to be performed maintenance or
engine preventative maintenance, and inspections for such Aircraft, Airframe or
any Engine in accordance with standards which are approved by the aeronautical
authority in the country or registration of the Aircraft.
"Permitted Aircraft Lease" by any Person means a lease of aircraft owned
by such Person to a third party on terms which permit the lessor to reacquire
possession of such aircraft, with good and marketable title thereto free and
clear of any adverse claim in favor of the lessee, upon a material breach of
such lease by the lessee.
"Permitted Country" means, with respect to any Aircraft, any country for
which (i) an insurer of national or international standing has provided
significant insurance coverage for such Aircraft or (ii) the United States
government has assumed liability, including, without limitation, a significant
portion of the cost of replacing such Aircraft, for operation of such Aircraft
within such country.
"Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary (other than an Excluded Restricted Subsidiary) or a
Person which will, upon the making of such Investment, become a Restricted
Subsidiary (other than an Excluded Restricted Subsidiary) or be merged or
consolidated with or into or transfer or convey all or substantially all its
assets to, the Company or a Restricted Subsidiary (other than an Excluded
Restricted Subsidiary); provided that such person's primary business is
related, ancillary or complementary to the businesses of the Company or its
Restricted Subsidiaries on the date of such Investment; (ii) Cash Equivalents
and Temporary Cash Investments; (iii) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses in accordance with GAAP; (iv) stock, obligations or
securities received in satisfaction of judgments; (v) loans or advances to
employees of the Company or any Restricted Subsidiary not to exceed $1 million
at any time outstanding; (vi) Investments of up to $25.0 million in Permitted
Joint Ventures; and (vii) Investments in Excluded Restricted Subsidiaries the
aggregate amount of which does not at any time outstanding exceed 10% of
Adjusted Consolidated Net Tangible Assets.
"Permitted Joint Ventures" means any Unrestricted Subsidiary or any
other Person in which the Company or a Restricted Subsidiary owns an ownership
interest, directly or indirectly (other than a Restricted Subsidiary) and whose
business is related or ancillary to the business of the Company or any of its
Restricted Subsidiaries at the time of determination.
"Permitted Liens" means (i) Liens for taxes, assessments, governmental
charges or claims that are being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made; (ii) statutory and common law Liens
of landlords and carriers, warehousemen, mechanics, suppliers, materialmen,
repairmen or other similar Liens arising in the ordinary course of business and
with respect to amounts not yet delinquent or being contested in good faith by
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31
appropriate legal proceedings promptly instituted and diligently conducted and
for which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made; (iii) Liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security; (iv)
Liens incurred or deposits made to secure the performance of tenders, bids,
leases, statutory or regulatory obligations, bankers' acceptances, surety and
appeal bonds, government contracts, performance and return-of-money bonds and
other obligations of a similar nature incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed money); (v)
easements, rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
interfere with the ordinary course of business of the Company or any of its
Restricted Subsidiaries; (vi) Liens (including extensions and renewals thereof)
upon real or personal property acquired after the Closing Date; provided that
(a) such Lien is created solely for the purpose of securing Indebtedness
Incurred, in accordance with Section 4.03, to finance the cost (including the
cost of improvement or construction) of the item of property or assets subject
thereto and such Lien is created prior to, at the time of or within six months
after the later of the acquisition, the completion of construction or the
commencement of full operation of such property, (b) the principal amount of
the Indebtedness secured by such Lien does not exceed 100% of such cost and (c)
any such Lien shall not extend to or cover any property or assets other than
such item of property or assets and any improvements on such item; (vii) leases
or subleases granted to others that do not materially interfere with the
ordinary course of business of the Company and its Restricted Subsidiaries,
taken as a whole; (viii) Liens encumbering property or assets under
construction arising from progress or partial payments by a customer of the
Company or its Restricted Subsidiaries relating to such property or assets;
(ix) any interest or title of a lessor in the property subject to any
Capitalized Lease or operating lease; (x) Liens arising from filing Uniform
Commercial Code financing statements regarding leases; (xi) Liens on property
of, or on shares of Capital Stock or Indebtedness of, any Person existing at
the time such Person becomes, or becomes a part of, any Restricted Subsidiary;
provided that such Liens do not extend to or cover any property or assets of
the Company or any Restricted Subsidiary other than the property or assets
acquired; (xii) Liens in favor of the Company or any Restricted Subsidiary;
(xiii) Liens arising from the rendering of a final judgment or order against
the Company or any Restricted Subsidiary that does not give rise to an Event of
Default; (xiv) Liens securing reimbursement obligations with respect to letters
of credit that encumber documents and other property relating to such letters
of credit and the products and proceeds thereof; (xv) Liens in favor of customs
and revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; (xvi) Liens encumbering
customary initial deposits and margin deposits, and other Liens that are within
the general parameters customary in the industry and incurred in the ordinary
course of business, in each case, securing Indebtedness under Interest Rate
Agreements and Currency Agreements and forward contracts, options, future
contracts, futures options or similar agreements or arrangements designed
solely to protect the Company or any of its Restricted Subsidiaries from
fluctuations in interest rates, currencies or the price of commodities; (xvii)
Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business in
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32
accordance with the past practices of the Company and its Restricted
Subsidiaries prior to the Closing Date; (xviii) Liens to secure Indebtedness
incurred pursuant to clause (vii) of the second paragraph of Section 4.03;
provided the assets securing such Indebtedness were or are acquired with the
proceeds of such Indebtedness; (xix) Liens on or sales of receivables; and (xx)
Liens created pursuant to the terms of any aircraft lease or any lease or
pooling or interchange arrangement relating to an Engine incurred in compliance
with Section 14.03; provided that no such Liens exist with respect to the
Collateral except as otherwise permitted pursuant to the terms hereof.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Physical Notes" has the meaning provided in Section 2.01.
"Pledged Securities" means the U.S. Government Obligations to be
purchased by the Company or any Guarantor (or on their respective behalf) and
held in the Escrow Account in accordance with the Escrow and Security
Agreement.
"principal" of a debt security, including the Notes, means the principal
amount due on the Stated Maturity as shown on such debt security.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.02.
"Public Equity Offering" means an underwritten primary public offering
of Common Stock of the Company pursuant to an effective registration statement
under the Securities Act.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Rating Agencies" means (i) S&P and (ii) Moody's and (iii) if S&P or
Moody's or both shall not make a rating of the Notes publicly available, a
nationally recognized United States securities rating agency or agencies, as
the case may be, selected by the Company, which shall be substituted for S&P or
Moody's or both, as the case may be.
"Rating Category" means (i) with respect to S&P, any of the following
categories: ▇, ▇▇▇, ▇▇, ▇, ▇▇▇, ▇▇, ▇ and D (or equivalent successor
categories); (ii) with respect to Moody's, any of the following categories: ▇,
▇▇▇, ▇▇, ▇, ▇▇▇, ▇▇, C and D (or equivalent successor categories); and (iii)
the equivalent of any such category of S&P or Moody's used by another Rating
Agency. In determining whether the rating of the Notes has decreased by one or
more gradations, gradations with Rating Categories (+ and -- for S&P; 1, 2 and
3 for Moody's; or equivalent gradations for another Rating Agency) shall be
taken into account (e.g., with respect to S&P, a decline in a rating from BB+
to BB, as well as from BB-- to B+, will constitute a decrease of one
gradation).
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"Rating Date" means the date which is 90 days prior to the earlier of
(x) Change of Control and (y) public notice of the occurrence of a Change of
Control or of the intention by the Company or any Person to effect a Change of
Control.
"Rating Decline" means the decrease (as compared with the Rating Date)
by one or more gradations (including gradations within the Rating Categories as
well as between Rating Categories) of the rating of the Notes by either Rating
Agency on, or within six months after, the date of public notice of the
occurrence of a Change of Control or of the intention of the Company or of any
Person to effect a Change of Control (which period shall be extended for so
long as the rating of the Notes is under publicly announced consideration for
possible downgrade by any of the Rating Agencies); provided, however, that in
the event the Notes are not rated by two Rating Agencies at the time a Change
of Control occurs, a Rating Decline shall be deemed to have occurred.
"Redemption Date", when used with respect to any Note to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which such Note is to be redeemed pursuant to this
Indenture.
"Refinancings" means the refinancing of substantially all of the
currently outstanding indebtedness of the Company and the Kalitta Companies
with a portion of the net proceeds of the Notes and the concurrent public
offering of Common Stock of the Company and the incurrence of the Term Loan.
"Registrar" has the meaning provided in Section 2.04.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of November 19, 1997, between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.,
Incorporated, BT Alex. ▇▇▇▇▇ Incorporated and Fieldstone FPCG Services, L.P.,
as such agreement may be amended, modified or supplemented from time to time.
"Registration Statement" means the Registration Statement pursuant to
which the Exchange Notes are offered and exchanged for the Notes.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the May 1 or November 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Released Indebtedness" means, with respect to any Asset Sale,
Indebtedness (i) which is owed by the Company or any Restricted Subsidiary (the
"Obligors") prior to such Asset Sale, (ii) which is assumed by the purchaser or
any affiliate thereof in connection with such Asset Sale and (iii) with respect
to which each such Obligor receives written, unconditional releases from each
creditor, no later than the closing date of such Asset Sale.
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"Responsible Officer", when used with respect to the Trustee, means the
chairman of the board of directors, the chairman of the executive committee of
the board of directors, the chairman of the trust committee, the president, any
vice president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller or any
assistant controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers
(including any officer within the Corporate Trust and Agency Group (or any
successor group) of the Trustee) and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"Restricted Payments" has the meaning provided in Section 4.04.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale" has the meaning provided in Section 4.17.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Security Registrar" has the meaning provided in Section 2.04.
"Shelf Registration Statement" has the meaning provided in the
Registration Rights Agreement.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
"S&P" means Standard & Poor's Ratings Service and its successors.
"Stated Maturity" means, (i) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding
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Voting Stock is owned, directly or indirectly, by such Person and one or more
other Subsidiaries of such Person.
"Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or
obligations fully and unconditionally guaranteed by the United States of
America or any agency thereof, (ii) time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America, any state thereof or any foreign
country recognized by the United States of America, and which bank or trust
company has capital, surplus and undivided profits aggregating in excess of $50
million (or the foreign currency equivalent thereof) and has outstanding debt
which is rated "A" (or such similar equivalent rating) or higher by at least
one nationally recognized statistical rating organization (as defined in Rule
436 under the Securities Act) or any money-market fund sponsored by a
registered broker dealer or mutual fund distributor, (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (i) above entered into with a bank meeting the
qualifications described in clause (ii) above, (iv) commercial paper, maturing
not more than 90 days after the date of acquisition, issued by a corporation
(other than an Affiliate of the Company) organized and in existence under the
laws of the United States of America, any state thereof or any foreign country
recognized by the United States of America with a rating at the time as of
which any investment therein is made of "P-1" (or higher) according to Moody's
or "A-1" (or higher) according to S&P, and (v) securities with maturities of
six months or less from the date of acquisition issued or fully and
unconditionally guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority
thereof, and rated at least "A" by S&P or Moody's.
"Term Loan" means the $45.9 million term loan with ▇▇▇▇▇ Fargo Bank
(Texas), National Association, individually and as agent for other lenders,
entered into as of the Closing Date, together with any other loan or credit
agreements entered into from time to time with one or more banks or other
lenders, for the purpose of refinancing or refunding such Term Loan in an
amount not to exceed $45.9 million (plus premiums, accrued interest, fees and
expenses).
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended (15 U.S. Code Sections 77aaa-77bbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06.
"Trade Payables" means, with respect to any Person, any accounts payable
or any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services.
"Transactions" means the Note Offering, the Merger and the Common Stock
Offering.
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"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date
such Indebtedness is to be Incurred and, with respect to any Restricted
Payment, the date such Restricted Payment is to be made.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture and thereafter means such successor.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of 1978,
as amended and as codified in Title 11 of the United States Code, as amended
from time to time hereafter, or any successor federal bankruptcy law.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below; and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any
Restricted Subsidiary (including any newly acquired or newly formed Subsidiary
of the Company) to be an Unrestricted Subsidiary unless such Subsidiary owns
any Capital Stock of, or owns or holds any Lien on any property of, the Company
or any Restricted Subsidiary; provided that (A) any Guarantee by the Company or
any Restricted Subsidiary of any Indebtedness of the Subsidiary being so
designated shall be deemed an "Incurrence" of such Indebtedness and an
"Investment" by the Company or such Restricted Subsidiary (or both, if
applicable) at the time of such designation, (B) either (I) the Subsidiary to
be so designated has total assets of $1,000 or less or (II) if such Subsidiary
has assets greater than $1,000, such designation would be permitted under
Section 4.04 and (C) if applicable, the Incurrence of Indebtedness and the
Investment referred to in clause (A) of this proviso would be permitted under
Section 4.03 and Section 4.04. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that (i) no
Default or Event of Default shall have occurred and be continuing at the time
of or after giving effect to such designation and (ii) all Liens and
Indebtedness of such Unrestricted Subsidiary outstanding immediately after such
designation would, if Incurred at such time, have been permitted to be Incurred
(and shall be deemed to have been Incurred) for all purposes of this Indenture.
Any such designation by the Board of Directors shall be evidenced to the
Trustee by promptly filing with the Trustee a copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing provisions.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof at any time
prior to the Stated Maturity of the Notes, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
any such U.S.
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Government Obligation held by such custodian for the account of the holder of a
depository receipt; provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of interest on or
principal of the U.S. Government Obligation evidenced by such depository
receipt.
"Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other
than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law and up to 5% of the Capital Stock of such
Subsidiary) by such Person or one or more Wholly Owned Subsidiaries of such
Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the indenture securities means the Company or any
other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
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(iv) words in the singular include the plural, and words in the
plural include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section
or other subdivision;
(vii) all ratios and computations based on GAAP contained in
this Indenture shall be computed in accordance with the definition of
GAAP set forth in Section 1.01; and
(viii) all references to Sections or Articles refer to Sections
or Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating. The Notes and the Trustee's certificate
of authentication shall be substantially in the form annexed hereto as Exhibit
A. The Notes may have notations, legends or endorsements required by law,
stock exchange agreements to which the Company is subject or usage. The
Company shall approve the form of the Notes and any notation, legend or
endorsement on the Notes. Each Note shall be dated the date of its
authentication.
The terms and provisions contained in the form of the Notes annexed
hereto as Exhibit A shall constitute, and are hereby expressly made, a part of
this Indenture. The Company, the Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A (the "Global Notes"),
deposited on behalf of the Holders with the Trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the U.S. Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary or its nominee, as
hereinafter provided.
Notes offered and sold to Institutional Accredited Investors shall be
issued in the form of permanent certificated Notes in registered form in
substantially the form set forth in Exhibit A (the "Physical Notes").
The definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted
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by the rules of any securities exchange on which the Notes may be listed, all
as determined by the Officers executing such Notes, as evidenced by their
execution of such Notes.
SECTION 2.02. Restrictive Legends. Unless and until a Note is
exchanged for an Exchange Note in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, each Global Note and
each Physical Note shall bear the legend, set forth below on the face thereof:
THIS NOTE WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT") AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT,
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCES.
EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON EXEMPTIONS FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES
THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k)
(TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d), IF APPLICABLE) UNDER
THE SECURITIES ACT AS IN EFFECT WITH RESPECT TO SUCH TRANSFER, RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO KITTY HAWK, INC. (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF
NOTES OF LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN
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CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD
REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH
ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Global Note, whether or not an Exchange Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.08 OF THE INDENTURE.
SECTION 2.03. Execution, Authentication and Denominations. The
aggregate principal amount of Notes which may be authenticated and delivered
under this Indenture is limited to up to $340 million at any time outstanding,
subject to the
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provisions of Section 2.09 hereof. The Notes shall be executed by two Officers
of the Company, by facsimile or manual signature, in the name and on behalf of
the Company.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee or authenticating agent authenticates the Note, the
Note shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
Subject to the foregoing, at any time and from time to time after the
execution of this Indenture, the Trustee or an authenticating agent shall upon
receipt of a Company Order authenticate for issuance of Notes in the aggregate
principal amount specified in such Company Order; provided that the Trustee
shall be entitled to receive an Officers' Certificate and an Opinion of Counsel
of the Company that it may reasonably request in connection with such
authentication of Notes. Such Company Order shall specify the amount of Notes
to be authenticated and the date on which the issuance of Notes is to be
authenticated.
The Trustee may appoint an authenticating agent to authenticate Notes.
If the appointment of such authenticating agent is not at the discretion and
for the convenience of the Trustee, then such authenticating agent shall be
compensated by the Company. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such authenticating
agent. An authenticating agent has the same rights as an Agent to deal with
the Company or an Affiliate of the Company.
Neither the Company nor the Trustee shall have any responsibility for
any defect in the CUSIP number that appears on any Note, check, advice of
payment or redemption notice, and any such document may contain a statement to
the effect that CUSIP numbers have been assigned by an independent service for
convenience of reference and that neither the Company nor the Trustee shall be
liable for any inaccuracy in such numbers.
The Notes shall be issuable only in registered form without coupons and
only in denominations of $1,000 in principal amount and any integral multiple
thereof.
SECTION 2.04. Registrar and Paying Agent. The Company shall maintain
an office or agency where Notes may be presented for registration of transfer
or for exchange (the "Registrar"), an office or agency where Notes may be
presented for payment (the "Paying Agent") and an office or agency where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served, which shall be in the Borough of Manhattan, The City
of New York. The Company shall cause the Registrar to keep a register of the
Notes and of their transfer and exchange (the "Security Register"). The
Security Register shall be in written form or any other form capable of being
converted into written form within a reasonable time. The Company may have one
or
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more co-Registrars and one or more additional Paying Agents. The Company or
any of its Subsidiaries or any Affiliate of each may act as Paying Agent or
Registrar.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain
a Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands. The Company may remove any Agent upon written notice to
such Agent and the Trustee; provided that no such removal shall become
effective until (i) the acceptance of an appointment by a successor Agent to
such Agent as evidenced by an appropriate agency agreement entered into by the
Company and such successor Agent and delivered to the Trustee or (ii)
notification to the Trustee that the Trustee shall serve as such Agent until
the appointment of a successor Agent in accordance with clause (i) of this
proviso. The Company, any Subsidiary of the Company, or any Affiliate of any
of them may act as Paying Agent, Registrar or co-Registrar, and/or agent for
service of notice and demands.
The Company initially appoints the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands. If, at any
time, the Trustee is not the Registrar, the Company shall furnish, or cause to
be furnished, to the Trustee at least seven Business Days before each Interest
Payment Date and at such other times as the Trustee may reasonably request, the
names and addresses of the Holders as they appear in the Security Register. At
the option of the Company, payment of interest may be made by check mailed to
the address of the Holders as such address appears in the Security Register.
The Trustee shall act as the Paying Agent for any Offer to Purchase.
SECTION 2.05. Paying Agent to Hold Money in Trust. Not later than each
due date of the principal, premium, if any, and interest on any Notes, the
Company shall deposit with the Paying Agent money in immediately available
funds sufficient to pay such principal, premium, if any, and interest so
becoming due. The Company shall require each Paying Agent other than the
Trustee to agree in writing that such Paying Agent shall hold in trust for the
benefit of the Holders or the Trustee all money held by the Paying Agent for
the payment of principal of, premium, if any, and interest on the Notes
(whether such money has been paid to it by the Company or any other obligor on
the Notes), and such Paying Agent shall promptly notify the Trustee of any
default by the Company (or any other obligor on the Notes) in making any such
payment. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and account for any funds disbursed, and the Trustee
may at any time during the continuance of any payment default, upon written
request to a Paying Agent, require such Paying Agent to pay all money held by
it to the Trustee and to account for any funds disbursed. Upon doing so, the
Paying Agent shall have no further liability for the money so paid over to the
Trustee. If the Company or any Subsidiary of the Company or any Affiliate of
any of them acts as Paying Agent, it will, on or before each due date of any
principal of, premium, if any, or interest on the Notes, segregate and hold in
a separate trust fund for
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the benefit of the Holders a sum of money sufficient to pay such principal,
premium, if any, or interest so becoming due until such sum of money shall be
paid to such Holders or otherwise disposed of as provided in this Indenture,
and will promptly notify the Trustee of its action or failure to act.
SECTION 2.06. Transfer and Exchange. The Notes are issuable only in
registered form. A Holder may transfer a Note by written application to the
Registrar stating the name of the proposed transferee and otherwise complying
with the terms of this Indenture. No such transfer shall be effected until,
and such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Registrar in the Security
Register. Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee, and any agent of the Company shall treat the
person in whose name the Note is registered as the owner thereof for all
purposes whether or not the Note shall be overdue, and neither the Company, the
Trustee, nor any such agent shall be affected by notice to the contrary.
Furthermore, any Holder of a Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Note may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent) and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry. When Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer or to exchange them for an equal principal amount of Notes of other
authorized denominations (including an exchange of Notes for Exchange Notes),
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided that no exchanges of
Notes for Exchange Notes shall occur until a Registration Statement shall have
been declared effective by the Commission (confirmed in an Officers'
Certificate delivered to the Trustee) and that any Notes that are exchanged for
Exchange Notes shall be cancelled by the Trustee. To permit registrations of
transfers and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's request. No service charge shall be made
for any registration of transfer or exchange or redemption of the Notes, but
the Company may require payment of a sum sufficient to cover any transfer tax
or similar governmental charge payable in connection therewith (other than any
such transfer taxes or other similar governmental charge payable upon exchanges
pursuant to Section 2.11, 3.08 or 9.04).
The Registrar shall not be required (i) to issue, register the transfer
of or exchange any Note during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Notes selected
for redemption under Section 3.03 and ending at the close of business on the
day of such mailing, or (ii) to register the transfer of or exchange any Note
so selected for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part.
SECTION 2.07. Book-Entry Provisions for Global Notes. (a) The Global
Notes initially shall (i) be registered in the name of the Depositary for such
Global Notes or the nominee of such Depositary, (ii) be delivered by the
Trustee to the Depositary or pursuant to the Depositary's instructions or held
by the Trustee as custodian for such Depositary and (iii) bear legends as set
forth in Section 2.02.
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Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Note, and the Depositary may be treated by the Company, the Guarantors,
the Trustee and any agent of the Company, the Guarantors or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Guarantors, the
Trustee or any agent of the Company, the Guarantors or the Trustee, from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Global Note may
be transferred in accordance with the rules and procedures of the Depositary
and the provisions of Section 2.08. In addition, Physical Notes shall be
transferred to all beneficial owners in exchange for their beneficial interests
in the Global Notes if (i) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for the Global Notes and a
successor depositary is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request to the foregoing effect from the Depositary.
(c) Any beneficial interest in the Global Notes that is transferred
to a person who takes delivery in the form of an interest in another Global
Note will, upon transfer, cease to be an interest in such Global Note and
become an interest in the other Global Note and, accordingly, will thereafter
be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(d) In connection with any transfer of a beneficial interest in a
Global Note to beneficial owners, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the Global Notes in
an amount equal to the principal amount of the beneficial interest in such
Global Notes to be transferred, and the Company shall execute, and the Trustee
shall authenticate and deliver, one or more Physical Notes of like tenor and
amount.
(e) In connection with the transfer of the entire Global Note to
beneficial owners pursuant to paragraph (b) of this Section, the Global Note
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depositary in exchange for its beneficial
interest in the Global Note, an equal aggregate principal amount of Physical
Notes of authorized denominations.
(f) Any Physical Note delivered in exchange for an interest in the
Global Note pursuant to this Section shall, except as otherwise provided by
paragraph (e) of Section
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2.08, bear the legend regarding transfer restrictions applicable to the
Physical Note set forth in Section 2.02.
(g) The registered holder of a Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
(h) Beneficial owners of interests in a Global Note may receive
Physical Notes (which shall bear the Private Placement Legend if required by
Section 2.02) in accordance with the procedures of the Depositary. In
connection with the execution, authentication and delivery of such Physical
Notes, the Registrar shall reflect on its books and records a decrease in the
principal amount of the relevant Global Note equal to the principal amount of
such Physical Notes and the Company shall execute and the Trustee shall
authenticate and deliver one or more Physical Notes having an equal aggregate
principal amount.
(i) The registered Holder of a Physical Note may exchange such Note
for a beneficial interest in the Global Note in accordance with the procedures
of the Depositary; provided that such Holder has certified to the Registrar
that it is a QIB or such Note has been exchanged for an Exchange Note in
connection with an effective Registration Statement pursuant to the
Registration Rights Agreement. In connection with such exchange, the Registrar
shall reflect on its books and records an increase in the principal amount of
the relevant Global Note equal to the principal amount of such Physical Note
and the Trustee shall cancel the Physical Notes so exchanged.
SECTION 2.08. Special Transfer Provisions. Unless and until a Note is
exchanged for an Exchange Note in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Note to any Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Note,
whether or not such Note bears the Private Placement Legend, if (x) the
requested transfer is after the time period referred to in Rule 144(k)
under the Securities Act as in effect with respect to such transfer or
(y) the proposed transferee has delivered to the Registrar (A) a
certificate substantially in the form of Exhibit C hereto and (B) if the
aggregate principal amount of the Notes being transferred is less than
$250,000 at the time of such transfer, an opinion of counsel acceptable
to the Company that such transfer is in compliance with the Securities
Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar of
(x) the documents, if any, required by paragraph (i) and (y)
instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books
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and records the date and a decrease in the principal amount of the
Global Note in an amount equal to the principal amount of the beneficial
interest in the Global Note to be transferred, and the Company shall
execute, and the Trustee shall authenticate and deliver, one or more
Physical Notes of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Physical Note or an
interest in a Global Note prior to the removal of the Private Placement Legend
to a QIB (excluding Non-U.S. Persons):
(i) If the Note to be transferred consists of (x) Physical
Notes the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for
on the form of Note stating, or has otherwise advised the Company and
the Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Note stating, or has otherwise
advised the Company and the Registrar in writing, that it is purchasing
the Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is
a QIB within the meaning of Rule 144A, and is aware that the sale to it
is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A or (y) an interest in the Global Notes, the
transfer of such interest may be effected only through the book entry
system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the
Note to be transferred consists of Physical Notes, upon receipt by the
Registrar of the documents referred to in clause (i) and instructions
given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the
date and an increase in the principal amount of the Global Notes in an
amount equal to the principal amount of the Physical Notes, to be
transferred, and the Trustee shall cancel the Physical Notes so
transferred.
(c) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of a Note to a Non-U.S.
Person:
(i) The Registrar shall register any proposed transfer to any
Non-U.S. Person if the Note to be transferred is a Physical Note or an
interest in the Global Note only upon receipt of a certificate
substantially in the form of Exhibit D from the proposed transferor;
(ii) (a) If the proposed Transferor is an Agent Member holding
a beneficial interest in a Global Note, upon receipt by the Registrar of
(x) the documents required by paragraph (i) and (y) instructions in
accordance with the Depositary's and the Registrar's procedures, the
Registrar shall reflect on its books
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and records the date and a decrease in the principal amount of such
Global Note in an amount equal to the principal amount of the beneficial
interest in the Global Note to be transferred and the Company shall
execute, and the Trustee shall authenticate and deliver one or more
Physical Notes of like tenor and amount.
(d) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement
Legend, the Registrar shall deliver only Notes that bear the Private Placement
Legend unless either (i) the circumstances contemplated by paragraph (a)(i)(x)
of this Section 2.08 exist or (ii) there is delivered to the Registrar an
Opinion of Counsel reasonably satisfactory to the Company and the Trustee to
the effect that neither such legend nor the related restrictions on transfer
are required in order to maintain compliance with the provisions of the
Securities Act.
(e) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture. The Registrar shall not register a transfer of any Note unless such
transfer complies with the restrictions on transfer of such Note set forth in
this Indenture. In connection with any transfer of Notes, each Holder agrees
by its acceptance of the Notes to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may conclusively rely on a determination made by the Company
with respect to) the sufficiency of any such certifications, legal opinions or
other information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.07 or this Section 2.08.
The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Registrar.
SECTION 2.09. Replacement Notes. If a mutilated Note is surrendered to
the Trustee or if the Holder claims and provides evidence to the Trustee's
reasonable satisfaction that the Note has been lost, destroyed or wrongfully
taken, then, in the absence of notice to the Company or the Trustee that such
Note has been acquired by a bona fide purchaser, the Company shall issue and
the Trustee shall authenticate a replacement Note of like tenor and principal
amount; provided that the requirements of this Section 2.09 are met. If
required by the Trustee or the Company, an indemnity bond must be furnished
that is sufficient in the judgment of both the Trustee and the Company to
protect the Company, the Trustee or any Agent from any loss that any of them
may suffer if a Note is replaced. The Company may charge such Holder for the
expenses of the Company and the Trustee in replacing a Note. In case any such
mutilated, lost, destroyed or wrongfully taken Note has become or is about to
become due and payable, the
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Company in its discretion may pay such Note instead of issuing a new Note in
replacement thereof.
Every replacement Note is an additional obligation of the Company and
shall be entitled to the benefits of this Indenture.
The provisions of this Section 2.09 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies against the Company and the
Trustee with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes.
SECTION 2.10. Outstanding Notes. Notes outstanding at any time are all
Notes that have been authenticated by the Trustee (i) except for those
cancelled by it, those delivered to it for cancellation and those described in
this Section 2.10 as not outstanding and (ii) except to the extent of any
reduction in the principal amount of any Global Note made by the Trustee in
accordance with the provisions hereof.
If a Note is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to each of them that the replaced Note is held by a bona fide
purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on a Redemption Date or the Stated Maturity of the Notes money
sufficient to pay Notes payable on that date, then on and after that date such
Notes cease to be outstanding and interest on them shall cease to accrue.
Notes, or portions thereof, for the payment or redemption of which
moneys or U.S. Government Obligations (as provided for in Article Eight) in the
necessary amount shall have been deposited in trust with the Trustee or with
any Paying Agent (other than the Company) or shall have been set aside,
segregated and held in trust by the Company for the Holders of such Notes (if
the Company shall act as its own Paying Agent), on and after that time shall
cease to be outstanding and, in the case of redemption, interest on such Notes
shall cease to accrue, provided that if such Notes, or portions thereof, are to
be redeemed prior to the maturity thereof, notice of such redemption shall have
been given as herein provided, or provision satisfactory to the Trustee shall
have been made for giving such notice.
A Note does not cease to be outstanding because the Company or one of
its Affiliates holds such Note, provided, however, that, in determining whether
the Holders of the requisite principal amount of the outstanding Notes have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Notes owned by the Company or any other obligor upon the Notes shall
be disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes which
the Trustee has actual knowledge to be so owned shall be so disregarded. Notes
so owned which have been pledged in good faith may be regarded as outstanding
if the pledgee establishes to the satisfaction of the Trustee the pledgee's
right so to act with
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respect to such Notes and that the pledgee is not the Company or any other
obligor upon the Notes.
SECTION 2.11. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and execute and the Trustee shall
authenticate temporary Notes. Temporary Notes shall be substantially in the
form of definitive Notes but may have insertions, substitutions, omissions and
other variations determined to be appropriate by the Officers executing the
temporary Notes, as evidenced by their execution of such temporary Notes. If
temporary Notes are issued, the Company will cause definitive Notes to be
prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 4.02, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall be entitled to
the same benefits under this Indenture as definitive Notes.
SECTION 2.12. Cancellation. The Company at any time may deliver, or
cause to be delivered, Notes to the Trustee for cancellation. The Registrar
and the Paying Agent shall forward to the Trustee any Notes surrendered to them
for transfer, exchange or payment. The Trustee (and no one else) shall cancel
all Notes surrendered for transfer, exchange, payment, replacement or
cancellation and shall destroy them in accordance with its normal procedure
(subject to the record retention requirement of the Exchange Act).
Certification of the destruction of all cancelled Notes shall be delivered to
the Company. The Company may not issue new Notes to replace Notes that it has
redeemed or paid or that have been delivered to the Trustee for cancellation.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP," "CINS" and "ISIN" numbers (if then generally in use), and the Trustee
shall use CUSIP, CINS or ISIN numbers, as the case may be, in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of such
CUSIP, CINS or ISIN numbers either as printed on the Notes or as contained in
any notice of redemption or exchange and that reliance may be placed only on
the other identification numbers printed on the Notes; and provided, further,
that failure to use CUSIP, CINS or ISIN numbers in any notice of redemption or
exchange shall not affect the validity or sufficiency of such notice. The
Company shall promptly notify the Trustee of any change in CUSIP, CINS or ISIN
numbers.
SECTION 2.14. Defaulted Interest. If the Company or any of the
Guarantors default in a payment of interest on the Notes, they shall pay, or
shall deposit with the Paying Agent money in immediately available funds
sufficient to pay the defaulted interest, plus (to the extent lawful) interest
on the defaulted interest, to the Persons who are Holders on a subsequent
special record date. A special record date, as used in this Section 2.14 with
respect to the payment of any defaulted interest, shall mean the 15th day next
preceding the date fixed by the Company for the payment of defaulted interest,
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whether or not such day is a Business Day. At least 15 days before the
subsequent special record date, the Company shall mail to each Holder and to
the Trustee a notice that states the subsequent special record date, the
payment date and the amount of defaulted interest to be paid.
SECTION 2.15. Record Date. The record date for purposes of determining
the identity of Holders of the Notes or consent to any action by vote or
consent authorized or permitted under this Indenture shall be determined as
provided for in TIA Section 316(c).
SECTION 2.16 Computation of Interest. Interest on the Notes shall be
computed on the basis of a 360-day year comprised of twelve 30-day months.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption. (a) The Notes will be redeemable,
at the Company's option, in whole or in part, at any time or from time to time,
on or after November 15, 2001 and prior to maturity, upon not less than 30 nor
more than 60 days' prior notice mailed by first class mail to each Holder's
last address as it appears in the Security Register, at the following
Redemption Prices (expressed in percentages of principal amount), plus accrued
and unpaid interest, if any, to the Redemption Date (subject to the right of
Holders of record on the relevant Regular Record Date that is on or prior to
the Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing November 15, of the years set
forth below:
YEAR REDEMPTION PRICE
---- ----------------
2001 . . . . . . . . . . . . . . . . . . 104.975%
2002 . . . . . . . . . . . . . . . . . . 102.488%
2003 . . . . . . . . . . . . . . . . . . 100.000%
(b) In addition, at any time prior to November 15, 2000, the Company
may redeem up to 35% of the principal amount of the Notes with the proceeds of
one or more Public Equity Offerings, at any time or from time to time, at a
Redemption Price (expressed as a percentage of principal amount) of 109.95%,
plus accrued and unpaid interest to the Redemption Date (subject to the rights
of Holders of record on the relevant Regular Record Date that is prior to the
Redemption Date to receive interest due on an Interest Payment Date); provided
that at least $150 million aggregate principal amount of Notes remains
outstanding after each such redemption.
(c) If more than 90% of the outstanding principal amount of the Notes
are tendered pursuant to one or more Offers to Purchase pursuant to the terms
hereof, the balance of the Notes will be redeemable, at the Company's option,
in whole but not in part, at any time thereafter, upon not less than 30 nor
more than 60 days' prior notice
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mailed by first class mail to each Holder's last address as it appears in the
Security Register, at a Redemption Price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the Redemption Date
(subject to the right of Holders of record on a record date that is on or prior
to the Redemption Date to receive interest due on the next Interest Payment
Date).
SECTION 3.02. Notices to Trustee. If the Company elects to redeem
Notes pursuant to Section 3.01(a) or (b), it shall notify the Trustee in
writing of the Redemption Date, the principal amount at Stated Maturity of
Notes to be redeemed and the clause of this Indenture pursuant to which the
redemption shall occur.
The Company shall give each notice provided for in this Section 3.02 in
an Officers' Certificate at least 45 days before the Redemption Date (unless a
shorter period shall be satisfactory to the Trustee).
If the Company is required to make an Offer to Purchase Notes pursuant
to the terms hereof or the Escrow and Security Agreement, it shall furnish to
the Trustee, at least 45 days before the scheduled Redemption Date, an
Officer's Certificate setting forth the section of the Indenture pursuant to
which the Offer to Purchase shall occur, the terms of the offer, the principal
amount of Notes to be purchased, the purchase price, the purchase date and a
statement to the effect that the Company or one of its Restricted Subsidiaries
has effected an Asset Sale and there are Excess Proceeds aggregating more than
10% of Adjusted Consolidated Net Assets or a Change of Control or Event of Loss
has occurred, as applicable.
SECTION 3.03. Selection of Notes to Be Redeemed. If less than all of
the Notes are to be redeemed at any time, the Trustee will select the Notes, or
portions thereof, for redemption in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed
or, if the Notes are not listed on a national securities exchange, on a pro
rata basis, by lot or by such other method as the Trustee in its sole
discretion shall deem to be fair and appropriate; provided that no Note of
$1,000 in principal amount or less shall be redeemed in part. If any Note is
to be redeemed in part only, the notice of redemption relating to such Note
shall state the portion of the principal amount thereof to be redeemed. A new
Note in principal amount equal to the unredeemed portion thereof will be issued
in the name of the Holder thereof upon cancellation of the original Note.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption. Notes in denominations of $1,000 in
principal amount at Stated Maturity may only be redeemed in whole. The Trustee
may select for redemption portions (equal to $1,000 in principal amount at
Stated Maturity or any integral multiple thereof) of Notes that have
denominations larger than $1,000 in principal amount at Stated Maturity.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall promptly
notify the Company and the Registrar promptly in writing of the Notes or
portions of Notes to be called for redemption.
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SECTION 3.04. Notice of Redemption. With respect to any redemption of
Notes pursuant to Section 3.01(a) or (b), at least 30 days but not more than 60
days before a Redemption Date the Company shall mail or cause to be mailed, a
notice of redemption by first class mail (pursuant to the requirements of
Section 11.02) to each Holder whose Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to
the Paying Agent in order to collect the Redemption Price;
(v) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is
to receive payment of the Redemption Price plus accrued and unpaid
interest to the Redemption Date upon surrender of the Notes to the
Paying Agent;
(vi) that, if any Note is being redeemed in part, the portion
of the principal amount (equal to $1,000 in principal amount at Stated
Maturity or any integral multiple thereof) of such Note to be redeemed
and that, on and after the Redemption Date, upon surrender of such Note,
a new Note or Notes in principal amount equal to the unredeemed portion
thereof will be reissued;
(vii) that, if any Note contains a CUSIP, CINS or ISIN number as
provided in Section 2.13, no representation is being made as to the
correctness of the CUSIP, CINS or ISIN number either as printed on the
Notes or as contained in the notice of redemption and that reliance may
be placed only on the other identification numbers printed on the Notes;
and
(viii) the aggregate principal amount at Stated Maturity of Notes
being redeemed.
At the Company's request (which request may be revoked by the Company at
any time prior to the time at which the Trustee shall have given such notice to
the Holders), made in writing to the Trustee, at least 45 days (or such shorter
period as shall be satisfactory to the Trustee) before a Redemption Date, the
Trustee shall give the notice of redemption in the name and at the expense of
the Company. If, however, the Company gives such notice to the Holders, the
Company shall concurrently deliver to the Trustee an Officers' Certificate
stating that such notice has been given.
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SECTION 3.05. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
Redemption Date and at the Redemption Price. Upon surrender of any Notes to
the Paying Agent, such Notes shall be paid at the Redemption Price, plus
accrued and unpaid interest to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed, whether or
not the Holder receives the notice. In any event, failure to give such notice,
or any defect therein, shall not affect the validity of the proceedings for the
redemption of Notes held by Holders to whom such notice was properly given.
SECTION 3.06. Deposit of Redemption Price. On or prior to 10:00 a.m.
New York City time on any Redemption Date, the Company shall deposit with the
Paying Agent (or, if the Company is acting as its own Paying Agent, shall
segregate and hold in trust as provided in Section 2.05) money in immediately
available funds sufficient to pay the Redemption Price of and any accrued and
unpaid interest on all Notes to be redeemed on that date, other than Notes or
portions thereof called for redemption on that date that have been delivered by
the Company to the Trustee for cancellation.
SECTION 3.07. Payment of Notes Called for Redemption. If notice of
redemption has been given in the manner provided above, the Notes or portion of
Notes specified in such notice to be redeemed shall become due and payable on
the Redemption Date at the Redemption Price stated therein, together with
accrued and unpaid interest to such Redemption Date, and on and after such date
(unless the Company shall default in the payment of such Notes at the
Redemption Price and accrued and unpaid interest to the Redemption Date, in
which case the principal, until paid, shall bear interest from the Redemption
Date at the rate prescribed in the Notes), such Notes shall cease to accrue
interest. Upon surrender of any Note for redemption in accordance with a
notice of redemption, such Note shall be paid and redeemed by the Company at
the Redemption Price, together with accrued and unpaid interest to the
Redemption Date; provided that installments of interest whose record date is
prior to the Redemption Date shall be payable to the Holders registered as such
at the close of business on such record date.
SECTION 3.08. Notes Redeemed in Part. Upon surrender of any Note that
is redeemed in part, the Company shall at its expense issue and execute and the
Trustee shall authenticate and deliver for the Holder a new Note equal in
principal amount to the unredeemed portion of such surrendered Note.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes. The Company shall pay or cause to be
paid the principal of, premium, if any, and interest on the Notes on the dates
and in the manner provided in the Notes and this Indenture. An installment of
principal, premium, if any, or interest shall be considered paid on the date
due if the Trustee or Paying Agent (other than the Company, a Subsidiary of the
Company, or any Affiliate of any of them) holds as
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of 10:00 A.M. New York City time on the due date money deposited by the Company
in immediately available funds and designated for and sufficient to pay the
installment. If the Company or any Subsidiary of the Company or any Affiliate
of any of them, acts as Paying Agent, an installment of principal, premium, if
any, or interest shall be considered paid on the due date if the entity acting
as Paying Agent complies with the last sentence of Section 2.05. As provided
in Section 6.10, upon any bankruptcy or reorganization procedure relative to
the Company, the Trustee shall serve as the Paying Agent and conversion agent,
if any, for the Notes.
The Company shall pay interest on overdue principal, premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum specified in the Notes.
SECTION 4.02. Maintenance of Office or Agency. The Company shall
maintain an office or agency (which may be an office of the Trustee or
Registrar) where Notes may be surrendered for registration of transfer or
exchange or for presentation for payment and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.02.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby initially designates the Corporate Trust Office of
the Trustee as such office of the Company in accordance with Section 2.04.
SECTION 4.03. Limitation on Indebtedness. (a) The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness (other than the Notes, the Guarantees and Indebtedness existing on
the Closing Date); provided that the Company and any Restricted Subsidiary may
Incur Indebtedness if, after giving effect to the Incurrence of such
Indebtedness and the receipt and application of the proceeds therefrom, the
Interest Coverage Ratio would be at least 2.25:1 in the case of an Incurrence
during the period ending on the second anniversary of the Closing Date and
2.75:1 in the case of any subsequent Incurrence.
Notwithstanding the foregoing, the Company and any Restricted Subsidiary
(except as specified below), may Incur each and all of the following:
(i) Indebtedness of the Company or any Guarantor outstanding
at any time in an aggregate principal amount not to exceed the greater
of (A) $100
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million, less any amount of such Indebtedness permanently repaid as
provided under Section 4.11 and (B) the Borrowing Base;
(ii) Indebtedness owed (A) to the Company evidenced by an
unsubordinated promissory note or (B) to any Restricted Subsidiary;
provided that any event which results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Company or another Restricted
Subsidiary) shall be deemed, in each case, to constitute an Incurrence
of such Indebtedness not permitted by this clause (ii);
(iii) Indebtedness issued in exchange for, or the net proceeds
of which are used to refinance or refund, then outstanding Indebtedness
(other than Indebtedness Incurred under clause (i), (ii), (iv), (vi) or
(viii) of this paragraph) and any refinancing thereof in an amount not
to exceed the amount so refinanced or refunded (plus premiums, accrued
interest, fees and expenses); provided that Indebtedness the proceeds of
which are used to refinance or refund the Notes or Indebtedness that is
pari passu with, or subordinated in right of payment to, the Notes shall
only be permitted under this clause (iii) if (A) in case the Notes are
refinanced in part or the Indebtedness to be refinanced is pari passu
with the Notes, such new Indebtedness, by its terms or by the terms of
any agreement or instrument pursuant to which such new Indebtedness is
outstanding, is expressly made pari passu with, or subordinate in right
of payment to, the remaining Notes, (B) in case the Indebtedness to be
refinanced is subordinated in right of payment to the Notes, such new
Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is issued or remains
outstanding, is expressly made subordinate in right of payment to the
Notes at least to the extent that the Indebtedness to be refinanced is
subordinated to the Notes and (C) such new Indebtedness, determined as
of the date of Incurrence of such new Indebtedness, does not mature
prior to the Stated Maturity of the Indebtedness to be refinanced or
refunded, and the Average Life of such new Indebtedness is at least
equal to the remaining Average Life of the Indebtedness to be refinanced
or refunded; and provided, further, that in no event may Indebtedness of
the Company be refinanced by means of any Indebtedness of any Restricted
Subsidiary pursuant to this clause (iii);
(iv) Indebtedness (A) in respect of performance, surety or
appeal bonds provided in the ordinary course of business, (B) under
Currency Agreements and Interest Rate Agreements; provided that such
agreements (a) are designed solely to protect the Company or its
Restricted Subsidiaries against fluctuations in foreign currency
exchange rates, fuel rates, or interest rates and (b) do not increase
the Indebtedness of the obligor outstanding at any time other than as a
result of fluctuations in foreign currency exchange rates, fuel rates,
or interest rates or by reason of fees, indemnities and compensation
payable thereunder, and (C) arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or
from Guarantees or letters of credit, surety bonds or performance bonds
securing any obligations of the Company or any of its Restricted
Subsidiaries pursuant to such agreements, in any case Incurred in
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connection with the disposition of any business, assets or Restricted
Subsidiary (other than Guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or Restricted
Subsidiary for the purpose of financing such acquisition), in a
principal amount not to exceed the gross proceeds actually received by
the Company or any Restricted Subsidiary in connection with such
disposition;
(v) Indebtedness of the Company, to the extent the net
proceeds thereof are promptly (A) used to purchase Notes tendered in an
Offer to Purchase made as a result of a Change in Control or (B)
deposited to defease the Notes as described under Sections 8.01, 8.02 or
8.03 hereof;
(vi) Note Guarantees and Guarantees of Indebtedness of the
Company by any Restricted Subsidiary provided the Guarantee of such
Indebtedness is permitted by and made in accordance with Section 4.07;
(vii) Indebtedness of the Company or any Guarantor Incurred to
finance the cost (including the costs of installation) of acquiring
aircraft, engines, spare engines, hush kits, spare parts or equipment
attached thereto or any other aircraft-related asset used or useful in
the business of the Company or any of its Restricted Subsidiaries on the
date of such Incurrence (including acquisitions by way of a Capitalized
Lease and any acquisitions of the Capital Stock of a Person that becomes
a Restricted Subsidiary, to the extent of the fair market value of the
aircraft, engines, equipment related thereto and such aircraft-related
assets of such Person at the time of such Incurrence); provided that (a)
such Indebtedness is created solely for the purpose of financing the
costs (including transaction costs and the costs of improvement or
construction) of property or assets and is Incurred prior to, at the
time of or within 12 months after, the later of the acquisition, the
completion of construction or the commencement of full operation of such
property or assets, and (b) the principal amount of such Indebtedness
does not exceed 100% of such costs;
(viii) the Term Loan; and
(ix) Indebtedness not to exceed $50.0 million in aggregate
principal amount at any one time outstanding.
(b) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that the Company or a Restricted Subsidiary may
Incur pursuant to this Section 4.03 shall not be deemed to be exceeded, with
respect to any outstanding Indebtedness due solely to the result of
fluctuations in the exchange rates of currencies.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, (1) Guarantees, Liens, letters of credit or other
obligations supporting Indebtedness otherwise included in the determination of
such particular amount shall not be included and (2) any Liens granted pursuant
to the equal and ratable provisions referred to in Section 4.09 shall not be
treated as Indebtedness. For purposes of
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determining compliance with this Section 4.03, in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described in the above clauses, the Company, in its sole discretion, shall
classify such item of Indebtedness and only be required to include the amount
and type of such Indebtedness in one of such clauses.
SECTION 4.04. Limitation on Restricted Payments. The Company shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or make any distribution on or with respect to
its Capital Stock (other than (x) dividends or distributions payable solely in
shares of its Capital Stock (other than Disqualified Stock) or in options,
warrants or other rights to acquire shares of such Capital Stock and (y) pro
rata dividends or distributions on Common Stock of Restricted Subsidiaries held
by minority stockholders) held by Persons other than the Company or any of its
Restricted Subsidiaries, (ii) purchase, redeem, retire or otherwise acquire for
value any shares of Capital Stock of (A) the Company or an Unrestricted
Subsidiary (including options, warrants or other rights to acquire such shares
of Capital Stock) held by any Person or (B) a Restricted Subsidiary (including
options, warrants or other rights to acquire such shares of Capital Stock) held
by any Affiliate of the Company (other than a Wholly Owned Restricted
Subsidiary), (iii) make any voluntary or optional principal payment, or
voluntary or optional redemption, repurchase, defeasance, or other acquisition
or retirement for value, of Indebtedness of the Company that is subordinated in
right of payment to the Notes or (iv) make any Investment, other than a
Permitted Investment, in any Person (such payments or any other actions
described in clauses (i) through (iv) above being collectively "Restricted
Payments") if, at the time of, and after giving effect to, the proposed
Restricted Payment: (A) a Default or Event of Default shall have occurred and
be continuing, (B) the Company could not Incur at least $1.00 of Indebtedness
under the first paragraph of Section 4.03 or (C) the aggregate amount of all
Restricted Payments (the amount, if other than in cash, to be determined in
good faith by the Board of Directors, whose determination shall be conclusive
and evidenced by a Board Resolution) made after the Closing Date shall exceed
the sum of (1) 50% of the aggregate amount of the Adjusted Consolidated Net
Income (or, if the Adjusted Consolidated Net Income is a loss, minus 100% of
the amount of such loss) (determined by excluding income resulting from
transfers of assets by the Company or a Restricted Subsidiary to an
Unrestricted Subsidiary) accrued on a cumulative basis during the period (taken
as one accounting period) beginning on the first day of the fiscal quarter
immediately following the Closing Date and ending on the last day of the last
fiscal quarter preceding the Transaction Date for which reports have been filed
with the Commission or provided to the Trustee pursuant to Section 4.15 plus
(2) the aggregate Net Cash Proceeds received by the Company after the Closing
Date from the issuance and sale permitted by this Indenture of its Capital
Stock (other than Disqualified Stock) to a Person who is not a Subsidiary of
the Company, including an issuance or sale permitted by this Indenture of
Indebtedness of the Company for cash subsequent to the Closing Date upon the
conversion of such Indebtedness into Capital Stock (other than Disqualified
Stock) of the Company, or from the issuance to a Person who is not a Subsidiary
of the Company of any options, warrants or other rights to acquire Capital
Stock of the Company (in each case, exclusive of any Disqualified Stock or any
options, warrants or other rights that are redeemable at the option of the
holder, or are required to be redeemed, prior to the Stated
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Maturity of the Notes) plus (3) an amount equal to the net reduction in
Investments (other than reductions in Permitted Investments) in any Person
resulting from payments of interest on Indebtedness, dividends, repayments of
loans or advances, or other transfers of assets, in each case to the Company or
any Restricted Subsidiary or from the Net Cash Proceeds from the sale of any
such Investment (except, in each case, to the extent any such payment or
proceeds are included in the calculation of Adjusted Consolidated Net Income),
or from redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of "Investments"), not to
exceed, in each case, the amount of Investments previously made by the Company
or any Restricted Subsidiary in such Person or Unrestricted Subsidiary plus (4)
$5 million.
The foregoing provision shall not be violated by reason of:
(i) the payment of any dividend within 60 days after the date
of declaration thereof if, at said date of declaration, such payment
would comply with the foregoing paragraph;
(ii) the redemption, repurchase, defeasance or other
acquisition or retirement for value of Indebtedness that is subordinated
in right of payment to the Notes including premium, if any, and accrued
and unpaid interest, with the proceeds of, or in exchange for,
Indebtedness Incurred under clause (iii) of the second paragraph of part
(a) of Section 4.03;
(iii) the repurchase, redemption or other acquisition of Capital
Stock of the Company or an Unrestricted Subsidiary (or options, warrants
or other rights to acquire such Capital Stock) in exchange for, or out
of the proceeds of a substantially concurrent offering of, shares of
Capital Stock (other than Disqualified Stock) of the Company (or
options, warrants or other rights to acquire such Capital Stock);
(iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Company which is subordinated in right of payment to
the Notes in exchange for, or out of the proceeds of, a substantially
concurrent offering of, shares of the Capital Stock (other than
Disqualified Stock) of the Company (or options, warrants or other rights
to acquire such Capital Stock);
(v) payments or distributions, to dissenting stockholders
pursuant to applicable law, pursuant to or in connection with a
consolidation, merger or transfer of assets that complies with Section
5.01;
(vi) Investments acquired in exchange for or out of the
proceeds of a substantially concurrent issuance of Capital Stock (other
than Disqualified Stock) of the Company;
(vii) the repurchase, redemption, retirement, defeasance or
other acquisition for value of subordinated Indebtedness of the Company
in the event of
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a change of control (to the extent required pursuant to the terms of
such Indebtedness when Incurred), if prior thereto or contemporaneously
therewith the Company has made or makes an Offer to Purchase the Notes
and has repurchased and accepted and paid for all Notes validly tendered
and not withdrawn with respect thereto; or
(viii) the repurchase, redemption or other acquisition of Capital
Stock of the Company issued to employees of the Company or any
Restricted Subsidiary, for consideration not to exceed $1.0 million in
any 12-month period and $3.0 million in aggregate;
provided that, except in the case of clauses (i) and (iii), no Default or Event
of Default shall have occurred and be continuing or occur as a consequence of
the actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof, an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof and an Investment referred to in clause (vi)
thereof), and the Net Cash Proceeds from any issuance of Capital Stock referred
to in clauses (iii) and (iv), shall be included in calculating whether the
conditions of clause (C) of the first paragraph of this Section 4.04 have been
met with respect to any subsequent Restricted Payments. In the event the
proceeds of an issuance of Capital Stock of the Company are used for the
redemption, repurchase or other acquisition of the Notes, or Indebtedness that
is pari passu with the Notes, then the Net Cash Proceeds of such issuance shall
be included in clause (C) of the first paragraph of Section 4.04 only to the
extent such proceeds are not used for such redemption, repurchase or other
acquisition of Indebtedness.
Any Restricted Payments made other than in cash shall be valued at fair
market value. The amount of any Investment "outstanding" at any time shall be
deemed to be equal to the amount of such Investment on the date made, less the
return of capital to the Company and its Restricted Subsidiaries with respect
to such Investment (up to the amount of such Investment on the date made).
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. The Company shall not, and shall not permit
any Restricted Subsidiary other than a Guarantor to, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any such Restricted Subsidiary to (i)
pay dividends or make any other distributions permitted by applicable law on
any Capital Stock of such Restricted Subsidiary owned by the Company or any
other Restricted Subsidiary, (ii) pay any Indebtedness owed to the Company or
any other Restricted Subsidiary, (iii) make loans or advances to the Company or
any other Restricted Subsidiary or (iv) transfer any of its property or assets
to the Company or any other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions:
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(i) existing on the Closing Date in any agreement, and any
extensions, refinancing, renewals or replacements of any such agreement;
provided that the encumbrances and restrictions in any such extensions,
refinancing, renewals or replacements are no less favorable in any
material respect to the Holders, when looked at in the aggregate, than
those encumbrances or restrictions that are then in effect and that are
being extended, refinanced, renewed or replaced;
(ii) existing under or by reason of applicable law;
(iii) existing with respect to any Person or the property or
assets of such Person acquired by the Company or any Restricted
Subsidiary, existing at the time of such acquisition and not incurred in
contemplation thereof, which encumbrances or restrictions are not
applicable to any Person or the property or assets of any Person other
than such Person or the property or assets of such Person so acquired;
(iv) in the case of clause (iv) of the first paragraph of this
Section 4.05, (A) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset, (B)
existing by virtue of any transfer of, agreement to transfer, option or
right with respect to, or Lien on, any property or assets of the Company
or any Restricted Subsidiary not otherwise prohibited by this Indenture
or (C) arising or agreed to in the ordinary course of business, not
relating to any Indebtedness, and that do not, individually or in the
aggregate, detract from the value of property or assets of the Company
or any Restricted Subsidiary in any manner material to the Company or
any Restricted Subsidiary;
(v) with respect to a Restricted Subsidiary and imposed
pursuant to an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock of, or
property and assets of, such Restricted Subsidiary; or
(vi) contained in the terms of any Indebtedness or any
agreement pursuant to which such Indebtedness was issued if (A) the
encumbrance or restriction applies only in the event of a payment
default or a default with respect to a financial covenant contained in
such Indebtedness or agreement, (B) the encumbrance or restriction is
not materially more disadvantageous to the Holders of the Notes than is
customary in comparable financings (as determined by the Company) and
(C) the Company determines that any such encumbrance or restriction will
not materially affect the Company's ability to make principal or
interest payments on the Notes.
Nothing contained in this Section 4.05 shall prevent the Company or any
Restricted Subsidiary from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 4.09 or (2) restricting the sale
or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure
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Indebtedness of the Company or any of its Restricted Subsidiaries, including,
without limitation, the Collateral in accordance with the terms hereof.
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries. The Company shall not sell, and shall not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of
Capital Stock of a Restricted Subsidiary (including options, warrants or other
rights to purchase shares of such Capital Stock) except (i) to the Company or a
Restricted Subsidiary; (ii) issuances of director's qualifying shares or sales
to foreign nationals of shares of Capital Stock of foreign Restricted
Subsidiaries, to the extent required by applicable law; (iii) if, immediately
after giving effect to such issuance or sale, such Restricted Subsidiary would
no longer constitute a Restricted Subsidiary and any Investment in such Person
remaining after giving effect to such issuance or sale would have been
permitted to be made under Section 4.04 if made on the date of such issuance or
sale or (iv) issuances or sales of Common Stock of a Restricted Subsidiary if
the Net Cash Proceeds thereof are applied in accordance with clause (A) or (B)
of Section 4.11.
SECTION 4.07. Issuances of Guarantees by New Restricted Subsidiaries.
The Company shall provide to the Trustee, on the date that any Person (other
than an Excluded Restricted Subsidiary) becomes a Restricted Subsidiary, a
supplemental indenture to this Indenture, executed by such new Restricted
Subsidiary, providing for a full and unconditional guarantee on a senior basis
by such new Restricted Subsidiary of the Company's obligations under the Notes
and this Indenture to the same extent as that set forth in this Indenture;
provided that, in the case of any new Restricted Subsidiary that becomes a
Restricted Subsidiary through the acquisition of a majority of its voting
Capital Stock by the Company or any other Restricted Subsidiary, such guarantee
may be subordinated to the extent required by the obligations of such new
Restricted Subsidiary existing on the date of such acquisition that were not
incurred in contemplation of such acquisition.
SECTION 4.08. Limitation on Transactions with Shareholders and
Affiliates. The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into, renew or extend any
transaction (including, without limitation, the purchase, sale, lease or
exchange of property or assets, or the rendering of any service) with any
Affiliate of the Company or any Restricted Subsidiary, except upon fair and
reasonable terms no less favorable to the Company or such Restricted Subsidiary
than could be obtained, at the time of such transaction or, if such transaction
is pursuant to a written agreement, at the time of the execution of the
agreement providing therefor, in a comparable arm's-length transaction with a
Person that is not such a holder or an Affiliate.
The foregoing limitation does not limit, and shall not apply to:
(i) transactions (A) approved by a majority of the
disinterested members of the Board of Directors or (B) for which the
Company or a Restricted Subsidiary delivers to the Trustee a written
opinion of a nationally recognized investment
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banking firm stating that the transaction is fair to the Company or such
Restricted Subsidiary from a financial point of view;
(ii) any transaction solely between the Company and any of its
Restricted Subsidiaries or solely between Restricted Subsidiaries;
(iii) the payment of reasonable and customary regular fees to
directors of the Company who are not employees of the Company;
(iv) any payments or other transactions pursuant to any tax-
sharing agreement between the Company and any other Person with which
the Company files a consolidated tax return or with which the Company is
part of a consolidated group for tax purposes;
(v) any Restricted Payments not prohibited by Section 4.04;
(vi) the execution of, and transactions pursuant to, employment
agreements entered into in the ordinary course of the Company's or its
Restricted Subsidiaries' business that are consistent with the Company's
or such Restricted Subsidiaries' past practice;
(vii) transactions pursuant to agreements existing on the
Closing Date, as in effect on the Closing Date; or
(viii) grants of stock options, restricted stock and other non-
cash equity incentive compensation.
Notwithstanding the foregoing, any transaction covered by the first
paragraph of this Section 4.08 and not covered by clauses (ii) through (v) of
this paragraph, (a) the aggregate amount of which exceeds $3 million in value,
must be approved or determined to be fair in the manner provided for in clause
(i)(A) or (B) above and (b) the aggregate amount of which exceeds $10 million
in value, must be determined to be fair in the manner provided for in clause
(i)(B) above.
SECTION 4.09. Limitation on Liens. Other than the rights of the
Trustee under this Indenture, the Company will not, and will not permit any
Restricted Subsidiary to, create, incur, assume or suffer to exist any Lien on
any of its assets or properties of any character, including, without
limitation, the Collateral, without making effective provision for all of the
Notes and all other amounts due under this Indenture to be directly secured
equally and ratably with (or, if the obligation or liability to be secured by
such Lien is subordinated in right of payment to the Notes, prior to) the
obligation or liability secured by such Lien.
The foregoing limitation does not apply to:
(i) Liens granted on the Closing Date on assets whenever
acquired, and substitutions and replacements for such Liens;
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(ii) Liens granted after the Closing Date on any assets or
Capital Stock of the Company or its Restricted Subsidiaries created in
favor of the Holders;
(iii) Liens with respect to the assets of a Restricted
Subsidiary granted by such Restricted Subsidiary to the Company or a
Restricted Subsidiary to secure Indebtedness owing to the Company or
such other Restricted Subsidiary;
(iv) Liens securing Indebtedness which is Incurred to refinance
secured Indebtedness which is permitted to be Incurred under clause
(iii) of the second paragraph of Section 4.03; provided that such Liens
do not extend to or cover any property or assets of the Company or any
Restricted Subsidiary other than the property or assets securing the
Indebtedness being refinanced;
(v) Liens on any property or assets of a Restricted Subsidiary
securing Indebtedness of such Restricted Subsidiary permitted under
Section 4.03;
(vi) Permitted Liens;
(vii) Liens on assets having a fair market value not in excess
(on the date any such Lien is incurred) of 20% of Adjusted Consolidated
Net Tangible Assets; or
(viii) Liens on Capital Stock of Subsidiaries in favor of the
lenders incurred under clause (i) of the second paragraph of Section
4.03.
SECTION 4.10. Limitation on Sale-Leaseback Transactions. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
sale-leaseback transaction involving any of its assets or properties whether
now owned or hereafter acquired, whereby the Company or a Restricted Subsidiary
sells or transfers such assets or properties and then or thereafter leases such
assets or properties or any part thereof or any other assets or properties
which the Company or such Restricted Subsidiary, as the case may be, intends to
use for substantially the same purpose or purposes as the assets or properties
sold or transferred.
The foregoing restriction does not apply to any sale-leaseback
transaction if:
(i) the lease is for a period, including renewal rights, of
not in excess of three years;
(ii) the lease secures or relates to industrial revenue or
pollution control bonds;
(iii) the transaction is solely between the Company and any
Restricted Subsidiary or solely between Restricted Subsidiaries; or
(iv) the Company or such Restricted Subsidiary, within 12
months after the sale or transfer of any assets or properties is
completed, applies an amount not
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less than the net proceeds received from such sale in accordance with
clause (A) or (B) of subsection (ii) of Section 4.11.
SECTION 4.11. Limitation on Asset Sales. The Company shall not, and
shall not permit any Restricted Subsidiary to, consummate any Asset Sale,
unless
(i) the consideration received by the Company or such
Restricted Subsidiary (including the amount of any Released
Indebtedness) is at least equal to the fair market value of the assets
sold or disposed of; and
(ii) at least 75% of the consideration received (excluding the
amount of any Released Indebtedness) consists of cash or Cash
Equivalents or Temporary Cash Investments. In the event and to the
extent that the Net Cash Proceeds received by the Company or any of its
Restricted Subsidiaries from one or more Asset Sales occurring on or
after the Closing Date in any period of 12 consecutive months exceed 10%
of Adjusted Consolidated Net Tangible Assets (determined as of the date
closest to the commencement of such 12-month period for which a
consolidated balance sheet of the Company and its Subsidiaries has been
filed with the Commission pursuant to Section 4.15), then the Company
shall or shall cause the relevant Restricted Subsidiary to (i) within 12
months after the date Net Cash Proceeds so received exceed 10% of
Adjusted Consolidated Net Tangible Assets (A) apply an amount equal to
such excess Net Cash Proceeds to permanently repay unsubordinated
Indebtedness of the Company, or any Restricted Subsidiary providing a
Note Guarantee or Indebtedness of any other Restricted Subsidiary, in
each case owing to a Person other than the Company or any of its
Restricted Subsidiaries or (B) invest an equal amount, or the amount not
so applied pursuant to clause (A) (or enter into a definitive agreement
committing to so invest within 12 months after the date of such
agreement), in property or assets (other than current assets) of a
nature or type or that are used in a business (or in a company having
property and assets of a nature or type, or engaged in a business)
similar or related to the nature or type of the property and assets of,
or the business of, the Company and its Restricted Subsidiaries existing
on the date of such investment and (ii) apply (no later than the end of
the 12-month period referred to in clause (i)) such excess Net Cash
Proceeds (to the extent not applied pursuant to clause (i)) as provided
in the following paragraph of this Section 4.11.
The amount of such excess Net Cash Proceeds required to be applied (or
to be committed to be applied) during such 12-month period as set forth in
clause (ii) above and not applied as so required by the end of such period
shall constitute "Excess Proceeds."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to
this Section 4.11 totals at least 10% of Adjusted Consolidated Net Tangible
Assets, the Company must commence, not later than the fifteenth Business Day of
such month, and consummate an Offer to Purchase from the Holders on a pro rata
basis an aggregate principal amount of Notes equal to the Excess Proceeds on
such date, at a purchase price equal to 100% of the principal amount of the
Notes, plus, in each case, accrued interest (if any) to the Payment
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Date. If the aggregate principal amount of Notes tendered pursuant to an Offer
to Purchase pursuant to this covenant is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for general corporate purposes.
Upon completion of such Offer to Purchase, the amount of Excess Proceeds shall
be reset at zero.
SECTION 4.12 [Left Blank]
SECTION 4.13. Events of Loss. If an Event of Loss occurs with respect
to an Aircraft, the Company shall either make an Offer to Purchase a pro rata
portion of the Notes or the Company shall subject a replacement aircraft to the
Lien on the Collateral pursuant to this Indenture. In the event the Company
elects to replace an Aircraft, it must do so within 365 days of the Event of
Loss with an aircraft having a value at least equal to, and in as good
operating condition and repair and as airworthy as, the Aircraft subject to the
Event of Loss, assuming such Aircraft was in the condition and repair required
by this Indenture immediately prior to the occurrence of the Event of Loss, all
as determined by the chief financial officer of the Company in good faith. In
the event the Company elects not to replace such Aircraft, the Company is
required to make an Offer to Purchase, not later than 365 days after the
occurrence of such Event of Loss, a pro rata amount (based on the ratio borne
by the initial appraised value of such Aircraft to the initial aggregate
appraised value) of the outstanding principal amount of the Notes at 100% of
the principal amount thereof together with accrued and unpaid interest thereon.
In the event of an Event of Loss with respect to the Aircraft for which no
initial appraisal was conducted, the "initial appraised value" for the purpose
of the prior sentence will be determined, in good faith, by the chief financial
officer of the Company, as evidenced by an Officer's Certificate delivered to
the Trustee. Upon such payment, the Lien on the Collateral pursuant to this
Indenture with respect to such Aircraft shall terminate and be released and the
Trustee shall execute and deliver to the Company any and all such documentation
necessary or required to evidence same.
If an Event of Loss occurs with respect to an Engine alone, the Company
shall replace such Engine with another engine suitable for installation and use
on the Aircraft with respect to which such Engine was used, as determined by
the chief financial officer of the Company in good faith, as evidenced by an
Officer's Certificate delivered to the Trustee.
SECTION 4.14. Repurchase of Notes upon a Change of Control Triggering
Event. Upon the occurrence of a Change of Control Triggering Event, the
Company must commence, within 30 days of the occurrence of a Change of Control
Triggering Event, and consummate an Offer to Purchase for all Notes then
outstanding, at a purchase price equal to 101% of the principal amount thereof,
plus accrued interest (if any) to the Payment Date.
The Company shall not be required to make a Change of Control Offer upon
a Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in this Indenture applicable to a Change of Control Offer made by the
Company, and purchases all Notes
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validly tendered and not withdrawn under such Change of Control Offer, in
accordance with the terms hereof.
The Change of Control provisions described above will be applicable
whether or not any other provisions of this Indenture are also applicable.
SECTION 4.15. Commission Reports and Reports to Holders. At all times,
whether or not the Company is then required to file reports with the
Commission, the Company shall file with the Commission all such reports and
other information as it would be required to file with the Commission by
Section 13(a) or 15(d) under the Securities Exchange Act of 1934 if it were
subject thereto. The Company shall supply the Trustee and each Holder or shall
supply to the Trustee for forwarding to each such Holder, without cost to such
Holder, copies of such reports and other information. In addition, at all
times prior to the consummation of an exchange offer pursuant to the
effectiveness of a Registration Statement or a Shelf Registration Statement,
upon the request of any Holder or any prospective purchaser of the Notes
designated by a Holder, the Company shall supply to such Holder or such
prospective purchaser the information required under Rule 144A under the
Securities Act.
SECTION 4.16. Limitation on Collateral Sales; Event of Loss. Neither
Company nor any Owner will transfer, convey, sell, lease or otherwise dispose
of (other than by lease, in compliance with Section 14.03 hereof) (a "Sale")
any Aircraft or Engine unless (i) the Owner thereof receives (x) consideration,
consisting solely of cash, at the time of such Sale at least equal to the fair
market value of the Aircraft or Engine disposed of (determined by the chief
financial officer of the Company in good faith, as evidenced by an Officer's
Certificate delivered to the Trustee) or (y) an Aircraft or Engine having a
value at least equal to, and in as good operating condition and repair and as
airworthy as, the Aircraft or Engine subject to the Sale, assuming such
Aircraft or Engine, as the case may be, was in the condition and repair
required by this Indenture immediately prior to such Sale (determined by the
chief financial officer of the Company in good faith, as evidenced by an
Officer's Certificate delivered to the Trustee). If any Owner consummates a
Sale for cash, or if an Event of Loss occurs, with respect to any Aircraft or
Engine, the Trustee will receive and hold, and if received by the Owner, the
Owner will pay over to the Trustee, the proceeds of such Sale or Event of Loss.
The Owner may, within 365 days after such Sale or Event of Loss, subject to the
Lien created pursuant to this Indenture, substitute an Aircraft or Engine,
having a value at least equal to, and in as good operating condition and repair
and as airworthy as, the Aircraft or Engine subject to the Sale or Event of
Loss, assuming such Aircraft or Engine was in the condition and repair required
by this Indenture immediately prior to the occurrence of such Sale or Event of
Loss (determined by the chief financial officer of the Company in good faith,
as evidenced by an Officer's Certificate delivered to the Trustee), and the
Trustee shall, upon receipt of evidence of such substitution pursuant to an
Officer's Certificate and receipt of documentation in the reasonable judgment
of the Trustee necessary or required for the creation of a Lien, in favor of
the Holders, on such substitute Collateral, pay to the Owner the proceeds of
such Sale or Event of Loss and any related additional amounts held by it. In
the event the Company elects not to replace such Aircraft (or in the event such
Aircraft or Engine is not replaced within 365 days after such Sale or Event of
Loss), the Trustee
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shall refund to the Owner, and the Company shall be required to apply, an
amount equal to the proceeds received from such Sale or Event of Loss to make
an Offer to Purchase Notes in accordance with Section 4.13; provided that with
respect to the proceeds of any Sale or Event of Loss with respect to an
Aircraft, in no event shall any Owner be required to so apply, and the Owner
shall be permitted to retain, amounts, if any, in excess of the initial
appraised value of such Aircraft. Notwithstanding the foregoing, if the Owner
consummates a Sale, or an Event of Loss occurs, with respect to an Engine
alone, the Owner must replace such Engine with another engine suitable for
installation and use on the Aircraft, and having a value at least equal to and
in as good operating condition as, the Engine subject to the Sale or Event of
Loss, assuming such Engine was of the value and in the condition and repair
required by this Indenture immediately prior to the occurrence of such Sale or
Event of Loss (as determined by the chief financial officer of the Company in
good faith). Any cash received in connection with a Sale or an Event of Loss
shall be held by the Trustee and invested as directed by the Company in Cash
Equivalents or Temporary Cash Investments until applied in accordance with this
covenant. Upon payment to the Trustee of the proceeds from the Sale or an
Event of Loss with respect to an Aircraft as required by this Section 4.16, the
Lien created pursuant to this Indenture with respect to such Aircraft (but not
the proceeds with respect thereto) shall terminate and be released and the
Trustee shall execute and deliver to the Company all such documentation
necessary or required to evidence such.
SECTION 4.17. Existence. Subject to Articles Four and Five of this
Indenture, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and the existence of
each of its Restricted Subsidiaries in accordance with the respective
organizational documents of the Company and each such Subsidiary as each shall
be amended from time to time and the rights (whether pursuant to charter,
partnership certificate, agreement, statute or otherwise), licenses and
franchises of the Company and each such Subsidiary; provided that the Company
shall not be required to preserve any such right, license or franchise, or the
existence of any Restricted Subsidiary, if the maintenance or preservation
thereof is no longer desirable in the conduct of the business of the Company or
any of its Restricted Subsidiaries; and provided further that any Restricted
Subsidiary may consolidate with, merge into, or sell, convey, transfer, lease
or otherwise dispose of all or part of its property and assets to the Company
or any Wholly Owned Restricted Subsidiary.
SECTION 4.18. Payment of Taxes and Other Claims. The Company shall pay
or discharge and shall cause each of its Restricted Subsidiaries to pay or
discharge, or cause to be paid or discharged, before the same shall become
delinquent (i) all material taxes, assessments and governmental charges levied
or imposed upon (a) the Company or any such Restricted Subsidiary, (b) the
income or profits of any such Restricted Subsidiary which is a corporation or
(c) the property of the Company or any such Restricted Subsidiary and (ii) all
material lawful claims for labor, materials and supplies that, if unpaid, might
by law become a lien upon the property of the Company or any such Restricted
Subsidiary; provided that the Company shall not be required to pay or
discharge, or cause to be paid or discharged, any such tax, assessment, charge
or claim the amount, applicability or validity of which is being contested in
good faith by appropriate proceedings.
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SECTION 4.19. Maintenance of Properties and Insurance. The Company
shall cause all properties used or useful in the conduct of its business or the
business of any Restricted Subsidiary and material to the Company and its
Restricted Subsidiaries taken as a whole, to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided that nothing in
this Section 4.19 shall prevent the Company or any such Restricted Subsidiary
from discontinuing the use, operation or maintenance of any of such properties
or disposing of any of them, if such discontinuance or disposal is, in the
judgment of the Board of Directors or the board of directors of such Restricted
Subsidiary having managerial responsibility for any such property, desirable in
the conduct of the business of the Company or such Restricted Subsidiary.
Without limiting or increasing the Company's obligations pursuant to
Section 4.12 hereof, the Company shall provide or cause to be provided, for
itself and its Restricted Subsidiaries, insurance (including appropriate self-
insurance) against loss or damage of the kinds customarily insured against by
corporations similarly situated and owning like properties, including, but not
limited to, products liability insurance and public liability insurance, with
reputable insurers or with the government of the United States of America, or
an agency or instrumentality thereof, in such amounts, with such deductibles
and by such methods as the Company in good faith shall determine to be
reasonable and appropriate in the circumstances.
SECTION 4.20. Compliance Certificates. (a) The Company and each
Guarantor shall deliver to the Trustee, on or before a date not more than 90
days after the end of each fiscal year, an Officers' Certificate stating
whether or not the signers know of any Default, Event of Default or a
Collateral Access Event that occurred during such fiscal year. In the case of
the Officers' Certificate delivered within 90 days of the end of the Company's
fiscal year, such certificate shall comply with the applicable provisions of
the TIA. If any of the signers of the Officers' Certificate have knowledge of
such a Default, Event of Default or a Collateral Access Event, the certificate
shall describe any such Default, Event of Default or a Collateral Access Event
and its status. The first certificate to be delivered pursuant to this Section
4.20(a) shall be for the first fiscal year beginning after the execution of
this Indenture.
(b) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any
Default, Event of Default or a Collateral Access Event, an Officers'
Certificate specifying such Default, Event of Default or a Collateral Access
Event and what action the Company is taking or proposes to take with respect
thereto.
SECTION 4.21. Waiver of Stay, Extension or Usury Laws. Each of the
Company, the Guarantors and any other obligor on the Notes covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any
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usury law or other law that would prohibit or forgive the Company from paying
all or any portion of the principal of, premium, if any, or interest on the
Notes as contemplated herein, wherever enacted, now or at any time hereafter in
force, or that may affect the covenants or the performance of this Indenture;
and each of the Company, the Guarantors and any other obligor on the Notes (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc. The Company shall not
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into the
Company unless:
(i) the Company shall be the continuing Person, or the Person
(if other than the Company) formed by such consolidation or into which
the Company is merged or that acquired or leased such property and
assets of the Company shall be a corporation organized and validly
existing under the laws of the United States of America or any
jurisdiction thereof and shall expressly assume, by a supplemental
indenture, executed and delivered to the Trustee, all of the obligations
of the Company on all of the Notes and under this Indenture;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a
pro forma basis the Company, or any Person becoming the successor
obligor of the Notes, as the case may be, could Incur at least $1.00 of
Indebtedness under the first paragraph of Section 4.03; provided that
this clause (iii) shall not apply to a consolidation, merger or sale of
all (but not less than all) of the assets of the Company if all Liens
and Indebtedness of the Company or any Person becoming the successor
obligor of the Notes, as the case may be, and its Restricted
Subsidiaries outstanding immediately after such transaction would, if
Incurred at such time, have been permitted to be Incurred (and all such
Liens and Indebtedness, other than Liens or Indebtedness of the Company
and its Restricted Subsidiaries outstanding immediately prior to the
transaction, shall be deemed to have been Incurred) for all purposes of
this Indenture; and
(iv) the Company delivers to the Trustee an Officers'
Certificate (attaching the arithmetic computations to demonstrate
compliance with clause (iii), if applicable) and Opinion of Counsel, in
each case stating that such consolidation,
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merger or transfer and such supplemental indenture complies with this
provision and that all conditions precedent provided for herein relating
to such transaction have been complied with.
SECTION 5.02. Successor Substituted. Upon any consolidation or merger,
or any sale, conveyance, transfer or other disposition of all or substantially
all of the property and assets of the Company in accordance with Section 5.01,
the successor Person formed by such consolidation or into which the Company is
merged or to which such sale, conveyance, transfer or other disposition is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company; provided that the Company shall
not be released from the obligation to pay the principal of and interest on the
Notes.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. An "Event of Default" shall occur
with respect to the Notes if:
(a) the Company defaults in the payment of principal of (or
premium, if any, on) any Note when the same becomes due and payable at
maturity, upon acceleration, redemption or otherwise;
(b) the Company defaults in the payment of interest on any
Note when the same becomes due and payable, and such default continues
for a period of 30 days;
(c) the Company defaults in the performance or breaches the
provisions of Article Five or fails to make or consummate an Offer to
Purchase in accordance with Section 4.11, Section 4.13 or Section 4.14
hereof;
(d) the Company or any Guarantor defaults in the performance
of or breaches any other covenant or agreement of the Company in this
Indenture or under the Notes (other than a default specified in clause
(a), (b) or (c) above) and such default or breach continues for a period
of 30 consecutive days after written notice by the Trustee or the
Holders of 25% or more in aggregate principal amount of the Notes;
(e) there occurs with respect to any issue or issues of
Indebtedness of the Company or any Guarantor or Significant Subsidiary
having an outstanding principal amount of $10 million or more in the
aggregate for all such issues of all such Persons, whether such
Indebtedness now exists or shall hereafter be created, (I) an event of
default that has caused the holder thereof to declare such Indebtedness
to be due and payable prior to its Stated Maturity and such Indebtedness
has not been discharged in full or such acceleration has not been
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rescinded or annulled within 30 days of such acceleration and/or (II)
the failure to make a principal payment at the final (but not any
interim) fixed maturity and such defaulted payment shall not have been
made, waived or extended within 30 days of such payment default;
(f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $10 million in the aggregate for all
such final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company or any Guarantor or Significant Subsidiary
and shall not be paid or discharged, and there shall be any period of 30
consecutive days following entry of the final judgment or order that
causes the aggregate amount for all such final judgments or orders
outstanding and not paid or discharged against all such Persons to
exceed $10 million during which a stay of enforcement of such final
judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect;
(g) a court having jurisdiction in the premises enters a
decree or order for (A) relief in respect of the Company, any Guarantor
or any Significant Subsidiary in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or
any Significant Subsidiary or for all or substantially all of the
property and assets of the Company or any Significant Subsidiary or (C)
the winding up or liquidation of the affairs of the Company or any
Significant Subsidiary and, in each case, such decree or order shall
remain unstayed and in effect for a period of 30 consecutive days;
(h) the Company, any Guarantor or any Significant Subsidiary
(A) commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consents
to the entry of an order for relief in an involuntary case under any
such law, (B) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Company or any Significant Subsidiary or for all
or substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) effects any general assignment for the
benefit of creditors; or
(i) any Note Guarantee shall cease to be, or shall be asserted
in writing by the Company or any Guarantor not to be, in full force and
effect or enforceable in accordance with its terms.
If the last day of the period referred to in clause (b), (d), (e), (f)
or (g) of the immediately preceding paragraph is not a Business Day, then the
first Business Day following such day shall be deemed to be the last day of the
period referred to in such clauses. Any "day" will be deemed to end as of
11:59 p.m., New York City time.
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SECTION 6.02. Collateral Access Events. A "Collateral Access Event"
shall occur with respect to the Notes if:
(a) the Company fails to make a payment of principal or any
payment of interest, or premium when due, and the continuation of such
failure unremedied for 15 days;
(b) The Company fails to procure and maintain property and
liability insurance in accordance with the provisions of this Indenture
and the continuation of such failure, in the case of maintenance of such
insurance, until the earlier of (i) 60 days after notice to the Company
or the Trustee that such insurance is subject to lapse or cancellation
or (ii) the date such lapse or cancellation is effective as to the
Trustee;
(c) The Company or any Owner operates the Aircraft after
receipt of notice that the insurance required by this Indenture has been
canceled;
(d) the Company fails to perform any covenants contained in
this Indenture and such failure continues for a period of 60 days after
notice to the Company by the Trustee or by Holders of 25% of outstanding
Notes under this Indenture, unless such failure is curable and the
Company is diligently proceeding to correct such failure and shall in
fact correct such failure within 180 days after delivery of such notice;
(e) any representation or warranty made by the Company in this
Indenture, if any, or in any document or certificate furnished to the
Trustee or the Holders under this Indenture, shall be incorrect in any
material respect as of the date made and shall be material at the time
of determination and shall not have been remedied within 60 days after
notice has been given to the Company by the Trustee or Holders of 25% of
outstanding Notes under this Indenture;
(f) a court having jurisdiction in the premises enters a
decree or order for (A) relief in respect of the Company, any Guarantor
or any Significant Subsidiary in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or
any Significant Subsidiary or for all or substantially all of the
property and assets of the Company or any Significant Subsidiary or (C)
the winding up or liquidation of the affairs of the Company or any
Significant Subsidiary and, in each case, such decree or order shall
remain unstayed and in effect for a period of 30 consecutive days; and
(g) the Company, any Guarantor or any Significant Subsidiary
(A) commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consents
to the entry of an order for relief in an involuntary case under any
such law, (B) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee,
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sequestrator or similar official of the Company or any Significant
Subsidiary or for all or substantially all of the property and assets of
the Company or any Significant Subsidiary or (C) effects any general
assignment for the benefit of creditors.
If the last day of the period referred to in clause (b), (d), (e) or (f)
of the immediately preceding paragraph is not a Business Day, then the first
Business Day following such day shall be deemed to be the last day of the
period referred to in such clauses. Any "day" will be deemed to end as of
11:59 p.m., New York City time.
SECTION 6.03. Acceleration. If an Event of Default (other than an
Event of Default specified in clause (g) or (h) of Section 6.01 that occurs
with respect to the Company) or a Collateral Access Event (other than a
Collateral Access Event specified in clause (f) or (g) of Section 6.02) occurs
and is continuing under this Indenture, the Trustee or the Holders of at least
25% in aggregate principal amount of the Notes, then outstanding, by written
notice (a "Notice of Default or Collateral Access Event") to the Company (and
to the Trustee if such notice is given by the Holders), may, and the Trustee at
the request of such Holders shall, declare the principal of, premium, if any,
and accrued interest on the Notes to be immediately due and payable. Upon a
declaration of acceleration, such principal of, premium, if any, and accrued
interest shall be immediately due and payable. In the event of a declaration of
acceleration because an Event of Default set forth in clause (e) of Section
6.01 or clause (c) of Section 6.02 has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if
the event of default triggering such Event of Default pursuant to such clause
(e) or (c) shall be remedied or cured by the Company or, with respect to clause
(c) of Section 6.01 only, by the Company or the relevant Significant Subsidiary
or waived by the holders of the relevant Indebtedness, within 60 days after the
declaration of acceleration with respect thereto. If an Event of Default
specified in clause (g) or (h) of Section 6.01 or a Collateral Access Event
specified in clause (f) or (g) of Section 6.02 occurs with respect to the
Company, the principal of, premium, if any, and accrued interest on the Notes
then outstanding shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration, but before a
judgment or decree for the payment of the money due has been obtained by the
Trustee, the Holders of at least a majority in aggregate principal amount of
the outstanding Notes by written notice to the Company and to the Trustee may
waive all past Defaults and rescind and annul such declaration of acceleration
and its consequences if (i) all existing Events of Default, other than the
nonpayment of the principal of, premium, if any, and interest on the Notes that
have become due solely by such declaration of acceleration, have been cured or
waived and (ii) the rescission would not conflict with any judgment or decree
of a court of competent jurisdiction.
SECTION 6.04. Other Remedies. Upon receipt of a Notice of Default or
Collateral Access Event, the Trustee shall exercise such remedies available to
it under applicable law, including any remedies of a secured party under
applicable law or otherwise provided in this Indenture to collect the payment
of principal of, premium, if any, or interest on the
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Notes or to enforce the performance of any provision of the Notes, the Escrow
and Security Agreement or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding.
SECTION 6.05. Waiver of Past Defaults. The Holders of at least a
majority in aggregate principal amount of then outstanding Notes (including
pursuant to consents obtained pursuant to a purchase, tender or exchange offer
of Notes), by notice to the Trustee, may waive an existing Default, Event of
Default or a Collateral Access Event and its consequences, except a Default in
the payment of principal of, premium, if any, or interest on any Note as
specified in clause (a) or (b) of Section 6.01 (including in connection with an
Offer to Purchase) or in respect of a covenant or provision of this Indenture
or any Guarantee which cannot be modified or amended without the consent of the
Holder of each outstanding Note affected. Upon any such waiver, such Default
shall cease to exist, and any Event of Default or Collateral Access Event
arising therefrom shall be deemed to have been cured, for every purpose of this
Indenture and the Guarantees; but no such waiver shall extend to any subsequent
or other Default, Event of Default or Collateral Access Event or impair any
right consequent thereto.
SECTION 6.06. Control by Majority. The Holders of at least a majority
in aggregate principal amount of the outstanding Notes, by notice to the
Trustee, may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee; provided that the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that may involve the
Trustee in personal liability, or that the Trustee determines in good faith may
be unduly prejudicial to the rights of Holders not joining in the giving of
such direction; and provided further that the Trustee may take any other action
it deems proper that is not inconsistent with any directions received from
Holders of Notes pursuant to this Section 6.06.
SECTION 6.07. Limitation on Suits. A Holder may not institute any
proceeding, judicial or otherwise, with respect to this Indenture, the Notes or
the Note Guarantees, or for the appointment of a receiver or trustee, or for
any other remedy hereunder, unless:
(i) such Holder has previously given to the Trustee written
notice of a continuing Event of Default or Collateral Access Event;
(ii) the Holders of at least 25% in aggregate principal amount
of outstanding Notes shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default or Collateral
Access Event in its own name as Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee
indemnity satisfactory to the Trustee against any costs, liabilities or
expenses to be incurred in compliance with such request;
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(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes have not given the
Trustee a direction that is inconsistent with such written request.
For purposes of Section 6.06 of this Indenture and this Section 6.07,
the Trustee shall comply with TIA Section 316(a) in making any determination of
whether the Holders of the required aggregate principal amount of outstanding
Notes have concurred in any request or direction of the Trustee to pursue any
remedy available to the Trustee or the Holders with respect to this Indenture
or the Notes or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.08. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder of a Note to
receive payment of the principal amount of, premium, if any, or interest on
such Holder's Note on or after the respective due dates expressed on such Note
(including in a notice with respect to an Offer to Purchase), or to bring suit
for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.09. Collection Suit by Trustee. If an Event of Default in
payment of principal, premium or interest specified in clause (a) or (b) of
Section 6.01 or a Collateral Access Event in clause (a) of Section 6.02 occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company, any Guarantor (in accordance
with the applicable Note Guarantee) or any other obligor of the Notes for the
whole amount of principal, premium, if any, and accrued interest remaining
unpaid, together with interest on overdue principal, premium, if any, and, to
the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate specified in the Notes, and
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.10. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor of the Notes, including any Guarantor), its
creditors or its property and shall be entitled and empowered to collect and
receive any monies, securities or other property payable or deliverable upon
conversion or exchange of the Notes or upon any such claims and to distribute
the same, and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar
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official in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.07. Nothing herein contained shall be
deemed to empower the Trustee to authorize or consent to, or accept or adopt on
behalf of any Holder, any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.11. Priorities. If the Trustee collects any money pursuant
to this Article Six, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07,
including payment of all compensation, expense and liabilities incurred,
and all advances made, by the Trustee and the costs and expenses of
collection;
Second: to Holders for amounts then due and unpaid for principal
amount of, premium, if any, and accrued interest on the Notes in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Notes for principal, premium, if any,
and accrued interest, respectively; and
Third: to the Company or any other obligors of the Notes or as a
court of competent jurisdiction may direct.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.11.
SECTION 6.12. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.12 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.08 of this Indenture, or a
suit by Holders of more than 10% in principal amount of the outstanding Notes.
SECTION 6.13. Restoration of Rights and Remedies. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder,
then, and in every such case, subject to any determination in such proceeding,
the Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Company, the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
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SECTION 6.14. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes in Section 2.09, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
SECTION 6.15. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder to exercise any right or remedy accruing upon any
Event of Default or any Collateral Access Event shall impair any such right or
remedy or constitute a waiver of any such Event of Default or any Collateral
Access Event or an acquiescence therein. Every right and remedy given by this
Article Six or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Rights of Trustee. (i) Except during the continuance of
an Event of Default or a Collateral Access Event,
(a) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee;
(b) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth and correctness of the statements and
certificates or opinions furnished to it and conforming to the
requirements of this Indenture; but in the case of any such certificates
or opinions which by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture; and
(c) for purposes of meeting the legal requirements of any
jurisdictions in which any part of the Collateral may at the time be
located, the Trustee will have the power to appoint a co-trustee or
separate trustee of all or any part of the Collateral. To the extent
permitted by law, all rights, powers, duties and obligations conferred
or imposed upon the Trustee will be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-
trustee jointly, or, in any jurisdiction in which the Trustee will be
incompetent or unqualified to perform certain acts, singly upon such
separate trustee or co-trustee who shall exercise and perform such
rights, powers, duties and obligations solely at the direction of the
Trustee.
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(ii) In case an Event of Default or a Collateral Access Event has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and
skill in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(iii) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(a) this Subsection shall not be construed to limit the effect
of Subsection (i) of this Section;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
outstanding Notes, relating to the time, method and place of conducting
any proceeding for exercising any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Notes.
(iv) Subject to TIA Sections 315(a) through (d):
(a) the Trustee may rely upon any document believed by it to
be genuine and to have been signed or presented by the proper person.
The Trustee need not investigate any fact or matter stated in the
document;
(b) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, which shall
conform to Section 11.04. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
certificate or opinion;
(c) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in compliance with
such request or direction;
(d) the Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within
its rights or powers; provided that the Trustee's conduct does not
constitute negligence or bad faith;
(e) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it
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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;
(f) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed), may, in the
absence of bad faith on its part, rely upon an Officers' Certificate;
(g) the Trustee may consult with counsel and the advice of
such counsel or any opinion of counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(h) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney;
(i) the Trustee may execute any of the trusts or powers
hereunder either directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(j) the Trustee may conclusively rely as to the identity and
addresses of Holders and other matters contained therein on the register
of the Notes maintained by the Registrar pursuant to Section 2.04 hereof
and shall not be affected by notice to the contrary; and
(k) unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
SECTION 7.02. Actions of Trustee. The Trustee may, and upon the
request of a majority of the Holders shall, take such actions (including the
giving of direction or notice) as are permitted or required to be taken by the
Trustee under this Indenture including, but not limited to, the following:
(i) sending notice of a Collateral Access Event (which, if
required by this Indenture, shall specify the applicable section of this
Indenture under which any such event arises);
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(ii) sending a Notice of Default or Collateral Access Event
pursuant to Section 6.03 of this Indenture; and
(iii) exercising any or all remedies under this Indenture;
provided, however, that without the consent of each Holder, the Trustee will
not take any action which, pursuant to Section 9.01 hereof, expressly requires
the consent of each Holder affected thereby.
SECTION 7.03. Individual Rights of Trustee. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not the Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to TIA Sections 310(b) and 311.
SECTION 7.04. Trustee's Disclaimer. The Trustee (i) shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, (ii) shall not be accountable for the Company's
use of the proceeds from the Notes, (iii) shall not be responsible for the use
or application of any money received by any Paying Agent other than the
Trustee, and (iv) shall not be responsible for any statement in the Notes other
than its certificate of authentication.
SECTION 7.05. Notice of Default or Collateral Access Events. If any
Default, Event of Default or Collateral Access Event occurs and is continuing
and if such Default, Event of Default or Collateral Access Event is known to a
Responsible Officer of the Trustee, the Trustee shall mail to each Holder in
the manner and to the extent provided in TIA Section 313(c) notice of the
Default, Event of Default or Collateral Access Event within 45 days after it
occurs, unless such Default, Event of Default or Collateral Access Event has
been cured or waived; provided, however, that, except in the case of a default
in the payment of the principal of, premium, if any, or interest on any Note,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders.
The Trustee shall not be deemed to have knowledge of any Default, Event
of Default or Collateral Access Event except (i) a default described in Section
6.01(a) or (b) so long as the Trustee is the Paying Agent or (ii) any Default,
Event of Default or Collateral Access Event of which the Trustee shall have
received written notification or a Responsible Officer charged with the
administration of this Indenture shall have obtained actual knowledge, and such
notification shall not be deemed to include receipt of information obtained in
any report or other reports and documents furnished under Section 4.20 of this
Indenture which reports and documents the Trustee shall have no duty to
examine.
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SECTION 7.06. Reports by Trustee to Holders. Within 60 days after each
May 15, beginning with May 15, 1998, the Trustee shall mail to each Holder as
provided in TIA Section 313(c) a brief report dated as of such May 15, if
required by TIA Section 313(a).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee such compensation as shall be agreed upon in writing for its services
hereunder. The compensation of the Trustee shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, expenses and
advances incurred or made by it in addition to compensation for its services.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee (including its agents, officers,
directors and employees) for, and hold it harmless against, any loss or
liability or expense incurred by it without negligence or bad faith on its part
in connection with the acceptance or administration of this Indenture and its
duties under this Indenture and the Notes, including the costs and expenses of
defending itself against any claim or liability and of complying with any
process served upon it or any of its officers in connection with the exercise
or performance of any of its powers or duties under this Indenture and the
Notes. The Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity. The Company shall defend
the claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay reasonable fees and expenses of such
counsel. The Company need not pay for any settlements made without its
consent; provided that such consent shall not be unreasonably withheld. The
Company need not reimburse any expense or indemnity against any loss or
liability incurred by the Trustee through negligence or bad faith.
The Trustee shall have a claim prior to the Notes on all money or
property held or collected by the Trustee, in its capacity as Trustee, for any
amount owing it pursuant to this Section 7.07, except money or property held in
trust to pay principal of, premium, if any, and interest on particular Notes.
If the Trustee incurs expenses or renders services after the occurrence
of an Event of Default specified in clause (g) or (h) of Section 6.01 or a
Collateral Access Event specified in clauses (g) and (h) of Section 6.02, the
expenses and the compensation for the services (including the reasonable fees
and expenses of its agents and counsel) will be intended to constitute expenses
of administration under Title 11 of the United States Bankruptcy Code or any
applicable federal or state law for the relief of debtors.
To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the
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Trustee under this Section 7.07 out of the estate in any such proceeding, shall
be denied for any reason, other than solely because of the misconduct of the
Trustee or its Agents, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties that the Holders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise.
The provisions of this Section 7.07 shall survive the termination of
this Indenture.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
SECTION 7.08. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.
The Trustee may resign by so notifying the Company in writing at least
30 days prior to the date of the proposed resignation. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Trustee in writing and may appoint a successor Trustee with
the consent of the Company. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged a bankrupt or an insolvent;
(iii) a receiver or other public officer takes charge of the
Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in aggregate principal amount of the outstanding
Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company. If the successor Trustee does not take office within
30 days after the retiring Trustee resigns or is removed, the retiring Trustee,
the Company or the Holders of a majority in principal amount of the outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.07, (i) the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, (ii) the resignation or removal of the
retiring Trustee shall become effective and (iii) the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. A
successor Trustee shall mail notice of its succession to each Holder.
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If the Trustee fails to comply with Section 7.10, any Holder who
satisfies the requirements of TIA Section 310(b) may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect provided in this Section.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligation under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
SECTION 7.10. Eligibility. Any Trustee serving hereunder shall be a
bank or trust company, within or without the state, which is authorized by law
to perform all of the duties imposed upon it hereby and which either (i) has a
reported capital and surplus aggregating at least $25 million or (ii) is a
wholly owned subsidiary of a bank, a trust company or a bank holding company
having a reported capital and surplus aggregating at least $25 million, and
shall at all times satisfy the requirements of TIA Section 310(a)(1).
SECTION 7.11. Money Held in Trust. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law and except for money held in trust
under Article Eight of this Indenture.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations. Except as
otherwise provided in this Section 8.01, the Company and the Guarantors may
terminate their obligations under the Notes, the Note Guarantees and this
Indenture and obtain a release of the Collateral if:
(i) all Notes previously authenticated and delivered (other
than destroyed, lost or stolen Notes that have been replaced or Notes
that are paid pursuant to Section 4.01 or Notes for whose payment money
or securities have theretofore been held in trust and thereafter repaid
to the Company, as provided in Section 8.05) have been delivered to the
Trustee for cancellation and the Company or the Guarantors have paid all
sums payable by them hereunder; or
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(ii) (A) the Notes have become due and payable, mature within
one year or all of them are to be called for redemption within one year
under arrangements satisfactory to the Trustee for giving the notice of
redemption, (B) the Company or any Guarantor irrevocably deposits in
trust with the Trustee during such one-year period, under the terms of
an irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds solely for the benefit of the Holders for that
purpose, money or U.S. Government Obligations sufficient (in the opinion
of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee),
without consideration of any reinvestment of any interest thereon, to
pay, through the payment of principal and interest in accordance with
their terms not later than one day prior to the relevant due date,
principal, premium, if any, and interest on the Notes to maturity or
redemption, as the case may be, and to pay all other sums payable by it
hereunder, (C) no Default, Event of Default or Collateral Access Event
with respect to the Notes shall have occurred and be continuing on the
date of such deposit, (D) such deposit will not result in a breach or
violation of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it
is bound and (E) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the satisfaction
and discharge of this Indenture have been complied with;
provided that, if simultaneously with the deposit of the money and/or U.S.
Government Obligations referred to in (B) above, the Company or any Guarantor
has caused an irrevocable, transferrable, standby letter of credit to be issued
by a bank with capital and surplus exceeding the principal amount of the Notes
then outstanding, expiring not earlier than 180 days from its issuance, in
favor of the Trustee which permits the Trustee to draw an amount equal to the
principal, premium, if any, and accrued interest on the Notes through the
expiry date of the letter of credit, then the Company and the Guarantors will
be deemed to have paid and discharged any and all obligations in respect of the
Notes on the date of the deposit and issuance of the letter of credit, and the
Collateral shall be deemed released.
With respect to the foregoing clause (i), the Company's obligations
under Section 7.07 shall survive. With respect to the foregoing clause (ii),
the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.09, 2.14, 4.01,
4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 shall survive until the Notes are no
longer outstanding. Thereafter, only the Company's obligations in Sections
7.07, 8.04, 8.05 and 8.06 shall survive. After any such irrevocable deposit,
the Trustee upon request shall acknowledge in writing the discharge of the
Company's obligations under the Notes and this Indenture except for those
surviving obligations specified above.
SECTION 8.02. Defeasance and Discharge of Indenture. The Company and
the Guarantors will be deemed to have paid and will be discharged from any and
all obligations in respect of the Notes and the Note Guarantees and the
Collateral shall be deemed released on the 123rd day after the date of the
deposit referred to in clause (A) of this Section 8.02, and the provisions of
this Indenture will no longer be in effect with
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respect to the Notes, the Collateral and the Note Guarantees, and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
the same, except as to (i) rights of registration of transfer and exchange,
(ii) substitution of apparently mutilated, defaced, destroyed, lost or stolen
Notes, (iii) rights of Holders to receive payments of principal thereof and
interest thereon, (iv) the Company's obligations under Section 4.02, (v) the
rights, obligations and immunities of the Trustee hereunder and (vi) the rights
of the Holders as beneficiaries of this Indenture with respect to the property
so deposited with the Trustee payable to all or any of them; provided that the
following conditions shall have been satisfied:
(A) the Company or the Guarantors have deposited with the
Trustee, in trust, money and/or U.S. Government Obligations that through
the payment of interest and principal in respect thereof in accordance
with their terms will provide money in an amount sufficient to pay the
principal of, premium, if any, and accrued interest on the Notes on the
Stated Maturity of such payments in accordance with the terms of this
Indenture and the Notes;
(B) the Company has delivered to the Trustee (i) either (x) an
Opinion of Counsel to the effect that Holders will not recognize income,
gain or loss for federal income tax purposes as a result of the
Company's exercise of its option under this Section 8.02 and will be
subject to federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred, which Opinion of Counsel must
be based upon (and accompanied by a copy of) a ruling of the Internal
Revenue Service to the same effect unless there has been a change in
applicable federal income tax law after the Closing Date such that a
ruling is no longer required or (y) a ruling directed to the Trustee
received from the Internal Revenue Service to the same effect as the
aforementioned Opinion of Counsel and (ii) an Opinion of Counsel to the
effect that the creation of the defeasance trust does not violate the
Investment Company Act of 1940 and after the passage of 123 days
following the deposit, the trust fund will not be subject to the effect
of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code or Section 15 of the
New York Debtor and Creditor Law;
(C) immediately after giving effect to such deposit on a pro
forma basis, no Event of Default, or event that after the giving of
notice or lapse of time or both would become an Event of Default, shall
have occurred and be continuing on the date of such deposit or during
the period ending on the 123rd day after the date of such deposit, and
such deposit shall not result in a breach or violation of, or constitute
a default under, any other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(D) if at such time the Notes are listed on a national
securities exchange, the Company has delivered to the Trustee an Opinion
of Counsel to the effect that the Notes will not be delisted as a result
of such deposit, defeasance and discharge; and
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(E) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02 have been complied with;
provided that, if simultaneously with the deposit of the money and/or U.S.
Government Obligations referred to in (A) above, the Company or any Guarantor
has caused an irrevocable, transferrable, standby letter of credit to be issued
by a bank with capital and surplus exceeding the principal amount of the Notes
then outstanding, expiring not earlier than 180 days from its issuance, in
favor of the Trustee which permits the Trustee to draw an amount equal to the
principal, premium, if any, and accrued interest on the Notes through the
expiry date of the letter of credit, then the Company and the Guarantors will
be deemed to have paid and discharged any and all obligations in respect of the
Notes on the date of the deposit and issuance of the letter of credit.
Notwithstanding the foregoing, prior to the end of the 123-day period
referred to in clause (B)(ii) of this Section 8.02, none of the Company's
obligations under this Indenture shall be discharged. Subsequent to the end of
such 123-day period with respect to this Section 8.02, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.09, 2.14, 4.01, 4.02, 7.06,
7.07, 8.04, 8.05 and 8.06 shall survive until the Notes are no longer
outstanding. Thereafter, only the Company's obligations in Sections 7.06, 8.05
and 8.06 shall survive. If and when a ruling from the Internal Revenue Service
or an Opinion of Counsel referred to in clause (B)(i) of this Section 8.02 is
able to be provided specifically without regard to, and not in reliance upon,
the continuance of the Company's obligations under Section 4.01, then the
Company's obligations under such Section 4.01 shall cease upon delivery to the
Trustee of such ruling or Opinion of Counsel and compliance with the other
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02.
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Notes and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
SECTION 8.03. Defeasance of Certain Obligations. The Company may omit
to comply with any term, provision or condition set forth in clauses (iii) and
(iv) of Section 5.01, all the covenants under Article Four (excluding Sections
4.01 and 4.02) and Article Fourteen hereof, and clause (c) of Section 6.01, and
such clauses (iii) and (iv) of Section 5.01, clause (d) of Section 6.01, and
such other covenants and clauses (e) and (f) of Section 6.01 shall be deemed
not to be Events of Default, in each case with respect to the Notes, if:
(i) the Company has deposited with the Trustee in trust, money
and/or U.S. Government Obligations that, through the payment of interest
and principal in respect thereof in accordance with their terms, will
provide, not later than one day before the due date of any payment
referred to in this clause (i), money in an amount sufficient in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the
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Trustee to pay the principal of, premium, if any, and accrued interest
on the Notes on the Stated Maturity of such payments in accordance with
the terms of this Indenture and the Notes and shall have irrevocably
instructed the Trustee to apply such money to the payment of such
principal, premium and interest;
(ii) immediately after giving effect to such deposit on a pro
forma basis, no Event of Default, or event that after the giving of
notice or lapse of time or both would become an Event of Default, shall
have occurred and be continuing on the date of such deposit or during
the period ending on the 123rd day after the date of such deposit, and
such deposit shall not result in a breach or violation of, or constitute
a default under, any other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound; it being understood that after such 123-day
period the Collateral shall be released;
(iii) the Company has delivered to the Trustee an Opinion of
Counsel to the effect that (A) the creation of the defeasance trust does
not violate the Investment Company Act of 1940, (B) the Holders will not
recognize income, gain or loss for federal income tax purposes as a
result of such deposit and defeasance of certain obligations and Events
of Default and will be subject to federal income tax on the same amount
and in the same manner and at the same times as would have been the case
if such deposit and defeasance had not occurred and (C) after the
passage of 123 days following the deposit (except, with respect to any
trust funds for the account of any Holder who may be deemed to be an
"insider" for purposes of the United States Bankruptcy Code, after one
year following the deposit), the trust funds will not be subject to the
effect of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code or Section 15
of the New York Debtor and Creditor Law in a case commenced by or
against the Company under either such statute, and either (I) the trust
funds will no longer remain the property of the Company (and therefore
will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally) or (II) if a court were to rule under any such law in any
case or proceeding that the trust funds remained property of the
Company, (a) assuming such trust funds remained in the possession of the
Trustee prior to such court ruling to the extent not paid to the
Holders, the Trustee will hold, for the benefit of the Holders, a valid
and perfected security interest in such trust funds that is not
avoidable in bankruptcy or otherwise except for the effect of Section
552(b) of the United States Bankruptcy Code on interest on the trust
funds accruing after the commencement of a case under such statute, (b)
the Holders will be entitled to receive adequate protection of their
interests in such trust funds if such trust funds are used in such case
or proceeding and (c) no property, rights in property or other interests
granted to the Trustee or the Holders in exchange for, or with respect
to, such trust funds will be subject to any prior rights of holders of
other Indebtedness of the Company or any of its Subsidiaries;
(iv) at such time the Notes are listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel
to the effect that
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the Notes will not be delisted as a result of such deposit, defeasance
and discharge; and
(v) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with;
provided that, if simultaneously with the deposit of the money and/or U.S.
Government Obligations referred to in (i) above, the Company or any Guarantor
has caused an irrevocable, transferrable, standby letter of credit to be issued
by a bank with capital and surplus exceeding the principal amount of the Notes
then outstanding, expiring not earlier than 180 days from its issuance, in
favor of the Trustee which permits the Trustee to draw an amount equal to the
principal, premium, if any, and accrued interest on the Notes through the
expiry date of the letter of credit, then the Company and the Guarantors will
be deemed to have paid and discharged any and all obligations in respect of the
Notes on the date of the deposit and issuance of the letter of credit; and the
Collateral shall be deemed released.
SECTION 8.04. Application of Trust Money. Subject to Sections 8.05 and
8.06, the Trustee or Paying Agent shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the
case may be, and shall apply the deposited money and the money from U.S.
Government Obligations in accordance with the Notes and this Indenture to the
payment of principal of, premium, if any, and interest on the Notes; but such
money need not be segregated from other funds except to the extent required by
law.
SECTION 8.05. Repayment to Company. Subject to Sections 7.07, 8.01,
8.02 and 8.03, the Trustee and the Paying Agent shall promptly pay to the
Company upon request set forth in an Officers' Certificate any excess money
held by them at any time and thereupon shall be relieved from all liability
with respect to such money. The Trustee and the Paying Agent shall pay to the
Company upon written request any money held by them for the payment of
principal, premium, if any, or interest that remains unclaimed for two years;
provided that the Trustee or such Paying Agent before being required to make
any payment may cause to be published at the expense of the Company once in a
newspaper of general circulation in the City of New York, or mail to each
Holder entitled to such money at such Holder's address (as set forth in the
Security Register) notice that such money remains unclaimed and that after a
date specified therein (which shall be at least 30 days from the date of such
publication or mailing) any unclaimed balance of such money then remaining will
be repaid to the Company. After payment to the Company, Holders entitled to
such money must look to the Company for payment as general creditors unless an
applicable law designates another Person, and all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with Section
8.01, 8.02 or 8.03, as the case may be, by reason of any legal proceeding or by
reason of any order or
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judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 8.01, 8.02 or 8.03, as the case may be, until
such time as the Trustee or Paying Agent is permitted to apply all such money
or U.S. Government Obligations in accordance with Section 8.01, 8.02 or 8.03,
as the case may be; provided that, if the Company has made any payment of
principal of, premium, if any, or interest on any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. The Company and the
Guarantors, when authorized by a resolution of its Board of Directors and the
Trustee may amend or supplement this Indenture, the Escrow and Security
Agreement, the Registration Rights Agreement, the Note Guarantees or the Notes
without notice to or the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article Five;
(3) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the TIA;
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee;
(5) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(6) to add one or more subsidiary guarantees on the terms
required by this Indenture; or
(7) to make any change that, in the opinion of the Board of
Directors of the Company evidenced by a Board Resolution, does not
materially and adversely affect the rights of any Holder.
SECTION 9.02. With Consent of Holders. Subject to Sections 6.05 and
6.08 and without prior notice to the Holders, the Company and the Guarantors,
when authorized by its Board of Directors (as evidenced by a Board Resolution),
and the Trustee may amend this Indenture, the Notes or the Escrow and Security
Agreement with the written consent of the Holders of not less than a majority
in principal amount of the Notes then outstanding, and the Holders of not less
than a majority in principal amount of the Notes
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then outstanding by written notice to the Trustee may waive future compliance
by the Company with any provision of this Indenture, the Notes or the Escrow
and Security Agreement.
Notwithstanding the provisions of this Section 9.02, without the consent
of each Holder affected, an amendment or waiver, including a waiver pursuant to
Section 6.05, may not:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note;
(ii) reduce the principal of, or premium, if any, or interest
on, any Note or adversely affect any right of repayment at the option of
any Holder;
(iii) change the place or currency of payment of principal of,
or premium, if any, or interest on, any Note;
(iv) impair the right to institute suit for the enforcement of
any payment on or after the Stated Maturity (or, in the case of a
redemption, on or after the Redemption Date) of any Note;
(v) reduce the above-stated percentage of outstanding Notes
the consent of whose Holders is necessary to modify or amend this
Indenture;
(vi) waive (a) a default in the payment of principal of,
premium, if any, or interest on the Notes or (b) a Collateral Access
Event;
(vii) reduce the percentage or aggregate principal amount of
outstanding Notes the consent of whose Holders is necessary for waiver
of compliance with certain provisions of this Indenture or for waiver of
certain defaults;
(viii) modify Article Ten, the Escrow and Security Agreement or
the Registration Rights Agreement in a manner that adversely affects the
rights of any Holder in any material respect or the distribution of
principal, interest or premium or other monies received or realized by
the Trustee from the Collateral; or
(ix) modify any of the provisions of this Section 9.02, except
to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each outstanding Note affected thereby.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly
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describing the amendment, supplement or waiver. The Company will mail
supplemental indentures to Holders upon request. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver.
SECTION 9.03. Revocation and Effect of Consent. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent
by the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the Note of the consenting Holder, even if notation
of the consent is not made on any Note. However, any such Holder or subsequent
Holder may revoke the consent as to its Note or portion of its Note. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on
receipt by the Trustee of written consents from the Holders of the requisite
percentage principal amount of the outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the
last two sentences of the immediately preceding paragraph, those persons who
were Holders at such record date (or their duly designated proxies) and only
those persons shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such persons
continue to be Holders after such record date. No such consent shall be valid
or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it is of the type described in any of clauses (i)
through (v) of Section 9.02. In case of an amendment or waiver of the type
described in clauses (i) through (v) of Section 9.02, the amendment or waiver
shall bind each Holder who has consented to it and every subsequent Holder of a
Note that evidences the same indebtedness as the Note of the consenting Holder.
SECTION 9.04. Notation on or Exchange of Notes. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Note about the changed terms and return it to the Holder and
the Trustee may place an appropriate notation on any Note thereafter
authenticated. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms. Failure to make the appropriate
notation or issue a new Note shall not affect the validity and effect of such
amendment, supplement or waiver.
SECTION 9.05. Trustee to Sign Amendments, Etc. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture. Subject to the preceding sentence, the Trustee shall sign such
amendment, supplement or waiver if the same does
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not adversely affect the rights of the Trustee. The Trustee may, but shall not
be obligated to, execute any such amendment, supplement or waiver that affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 9.06. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.
ARTICLE TEN
PLEDGED SECURITIES
SECTION 10.01. Security. (a) On the Closing Date, the Company shall
grant to the Trustee on behalf of the Holders an additional security interest
in certain of the Collateral pursuant to the terms of the Escrow and Security
Agreement of even date herewith.
(b) On the Closing Date, the Company shall (i) enter into the Escrow
and Security Agreement and comply with the terms and provisions thereof and
(ii) purchase $56 million of Pledged Securities to be pledged to the Trustee as
security for the benefit of the Holders. The Pledged Securities shall be
pledged by the Company to the Trustee for the benefit of the Holders and shall
be held by the Trustee in the Escrow Account pending disposition pursuant to
the Escrow and Security Agreement.
(c) Each Holder, by its acceptance of a Note, consents and agrees to
the terms of the Escrow and Security Agreement (including, without limitation,
the provisions providing for foreclosure and release of the Pledged Securities)
as the same may be in effect or may be amended from time to time in accordance
with its terms, and authorizes and directs the Trustee to enter into the Escrow
and Security Agreement and to perform its respective obligations and exercise
its respective rights thereunder in accordance therewith. The Company shall do
or cause to be done all such acts and things as may be necessary or proper, or
as may be required by the provisions of the Escrow and Security Agreement, to
assure and confirm to the Trustee the security interest in the Pledged
Securities contemplated hereby, by the Escrow and Security Agreement or any
part thereof, as from time to time constituted, so as to render the same
available for the security and benefit of this Indenture and of the Notes
secured hereby, according to the intent and purposes herein expressed. The
Company shall take, or shall cause to be taken, upon request of the Trustee,
any and all actions reasonably required to cause the Escrow and Security
Agreement to create and maintain, as security for the obligations of the
Company under this Indenture and the Notes, valid and enforceable first
priority liens in and on all the Pledged Securities, in favor of the Trustee,
superior to and prior to the rights of third Persons and subject to no other
Liens.
(d) The Collateral as now or hereafter constituted shall be held for
the equal and ratable benefit of the Holders without preference, priority or
distinction of any thereof over any other by reason of difference in time of
issuance, sale or otherwise, as security for the Notes.
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(e) The release of any Pledged Securities pursuant to the Escrow and
Security Agreement shall not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Pledged Securities are released pursuant to this Indenture and the Escrow and
Security Agreement.
(f) The Trustee may, in its sole discretion and without the consent
of the Holders, on behalf of the Holders, take all actions it deems necessary
or appropriate in order to (i) enforce any of the terms of the Escrow and
Security Agreement and (ii) collect and receive any and all amounts payable in
respect of the obligations of the Company thereunder. The Trustee shall have
power to institute and to maintain such suits and proceedings as the Trustee
may deem expedient to preserve or protect its interests and the interests of
the Holders in the Pledged Securities (including power to institute and
maintain suits or proceedings to restrain the enforcement of or compliance with
any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance
with, such enactment, rule or order would impair the security interest
hereunder or be prejudicial to the interests of the Holders or of the Trustee).
(g) Notwithstanding anything herein to the contrary, the Company
shall not be obligated to comply with the provisions of TIA Section 314(b) or
(d) in connection with the release of the Pledged Securities until such time as
it is legally required that the Indenture be qualified under the TIA. After
such time, to the extent applicable, the Company shall cause TIA Section 314(d)
relating to the release of property or securities from the Lien and security
interest of the Escrow and Security Agreement and relating to the substitution
therefor of any property or securities to be subjected to the Lien and security
interest of the Escrow and Security Agreement to be complied with. Any
certificate or opinion required by TIA Section 314(d) may be made by an officer
of the Company, except in cases where TIA Section 314(d) requires that such
certificate or opinion be made by an independent Person, which Person shall be
an independent engineer, appraiser or other expert selected by the Company.
After such time, the Company shall also cause TIA Section 314(b), relating to
opinions of counsel regarding the Lien under the Escrow and Security Agreement,
to be complied with. The Trustee may, to the extent permitted by Sections 7.01
and 7.02 hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such instruments.
SECTION 10.02. Release upon Termination of the Company's Obligations.
In the event that this Indenture shall be satisfied and discharged in
accordance with Section 8.02, the Trustee shall, on behalf of the Holders,
disclaim and give up any and all rights it has in or to the Collateral and the
Trustee shall not be deemed to hold the Collateral for the benefit of the
Holders.
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ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act of 1939. This Indenture is subject
to the provisions of the TIA that are required to be a part of this Indenture
and shall, to the extent applicable, be governed by such provisions.
SECTION 11.02. Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery addressed as
follows:
if to the Company:
Kitty Hawk, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇/▇▇▇▇ ▇▇▇▇▇ International ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to: (which shall not constitute notice)
▇▇▇▇▇▇ and ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
if to the Trustee:
Bank One, NA
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust and Agency Group
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
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Any notice or communication to a Holder shall be mailed by first class
mail (certified or registered, return receipt requested) to its address shown
on the register kept by the Registrar and shall be sufficiently given to such
Holder if so mailed or delivered within the time presented. Any notice or
communication shall also be so mailed to any Person described in TIA Section
313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. Except for
a notice to the Trustee, which is deemed given only when received, and except
as otherwise provided in this Indenture, if a notice or communication is mailed
in the manner provided in this Section 11.02, it is duly given, whether or not
the addressee receives it.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection
of TIA Section 312(c).
SECTION 11.03. Certificate and Opinion As to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate reasonably satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(ii) an Opinion of Counsel reasonably satisfactory to the
Trustee stating that, in the opinion of such Counsel, all such
conditions precedent have been complied with.
SECTION 11.04. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(i) a statement that the person making such certificate or
opinion has read such covenant or condition;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion
contained in such certificate or opinion is based;
(iii) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with, and such
other opinions as the Trustee may reasonably request; provided, however,
that, with respect to matters
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of fact, an Opinion of Counsel may rely on an Officers' Certificate or
certificates of public officials.
SECTION 11.05. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(b) The ownership of Notes shall be proved by the Security Register.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind every future Holder
of the same Note or the Holder of every Note issued upon the transfer thereof
or in exchange therefor or in lieu thereof, in respect of anything done,
suffered or omitted to be done by the Trustee, any Paying Agent or the Company
in reliance thereon, whether or not notation of such action is made upon such
Note.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver of other act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of such Holders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or
other act, but the Company shall have no obligation to do so. Notwithstanding
TIA Section 316(c), any such record date shall be the record date specified in
or pursuant to such Board Resolution, which shall be a date not more than 30
days prior to the first solicitation of Holders generally in connection
therewith and no later than the date such solicitation is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for purposes of determining
whether Holders of the requisite proportion of Notes then outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other act, and for this purpose the Notes
then outstanding shall be computed as of such record date; provided that no
such request, demand, authorization, direction, notice, consent, waiver or
other act by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not
later than six months after the record date.
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SECTION 11.06. Rules by Trustee, Paying Agent or Registrar. The
Trustee may make reasonable rules for action by or at a meeting of Holders.
The Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.07. Payment Date Other Than a Business Day. If an Interest
Payment Date, Redemption Date, Payment Date for an Offer to Purchase, Stated
Maturity or date of maturity of any Note shall not be a Business Day at any
place of payment, then payment of principal of, premium, if any, or interest on
such Note, as the case may be, need not be made on such date, but may be made
on the next succeeding Business Day at such place of payment with the same
force and effect as if made on the Interest Payment Date, Payment Date for an
Offer to Purchase, or Redemption Date, or at the Stated Maturity or date of
maturity of such Note; provided that no interest shall accrue for the period
from and after such Interest Payment Date, Payment Date for an Offer to
Purchase, Redemption Date, Stated Maturity or date of maturity, as the case may
be.
SECTION 11.08. Governing Law. This Indenture and the Notes shall be
governed by the laws of the State of New York. The Trustee, the Company and
the Holders agree to submit to the jurisdiction of the courts of the County of
New York in any action or proceeding arising out of or relating to this
Indenture, the Note Guarantees or the Notes.
SECTION 11.09. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any Subsidiary of the Company, except the Escrow
and Security Agreement and the Registration Rights Agreement. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. No Recourse Against Others. No recourse for the payment
of the principal of, premium, if any, or interest on any of the Notes, or for
any claim based thereon or otherwise in respect thereof, and no recourse under
or upon any obligation, covenant or agreement of the Company or any Guarantor
contained in this Indenture or in any of the Notes, or because of the creation
of any Indebtedness represented thereby, shall be had against any incorporator
or against any past, present or future partner, shareholder, other
equityholder, officer, director, employee or controlling person, as such, of
the Company or any Guarantor or of any successor Person, either directly or
through the Company or any successor Person, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that all such liability
is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes
and the Note Guarantees.
SECTION 11.11. Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successor.
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SECTION 11.12. Duplicate Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
SECTION 11.13. Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.14. Table of Contents, Headings, Etc. The Table of
Contents, Cross-Reference Table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms and provisions hereof.
ARTICLE TWELVE
MEETINGS OF HOLDERS
SECTION 12.01. Purposes for Which Meetings May Be Called. A meeting of
Holders may be called at any time and from time to time pursuant to the
provisions of this Article Twelve for any of the following purposes:
(a) to give any notice to the Company or to the Trustee, or to
give any directions to the Trustee, or to waive or to consent to the
waiving of any Default, Event of Default or Collateral Access Event
hereunder and its consequences, or to take any other action authorized
to be taken by Holders pursuant to any of the provisions of Article Six;
(b) to remove the Trustee or appoint a successor Trustee
pursuant to the provisions of Article Seven;
(c) to consent to an amendment, supplement or waiver pursuant
to the provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount of the
Notes under any other provision of this Indenture, or authorized or
permitted by law.
SECTION 12.02. Manner of Calling Meetings. The Trustee may at any time
call a meeting of Holders to take any action specified in Section 12.01, to be
held at such time and at such place in The City of New York, New York or
elsewhere as the Trustee will determine. Notice of every meeting of Holders,
setting forth the time and place of such meeting and in general terms the
action proposed to be taken at such meeting, will be mailed by the Trustee,
first-class postage prepaid, to the Company and to the Holders at their last
addresses as they will appear on the registration books of the Registrar not
less than 10 nor more than 60 days prior to the date fixed for a meeting.
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Any meeting of Holders will be valid without notice if the Holders of
all outstanding Notes are present in Person or by proxy, or if notice is waived
before or after the meeting by the Holders of all outstanding Notes, and if the
Company and the Trustee are either present by duly authorized representatives
or have, before or after the meeting, waived notice.
SECTION 12.03. Call of Meetings by the Company or Holders. In case at
any time the Company, pursuant to a Board Resolution, or the Holders of not
less than 10% in aggregate principal amount of the outstanding Notes will have
requested the Trustee to call a meeting of Holders to take any action specified
in Section 12.01, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee will not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or the Holders of Notes in the amount above specified may
determine the time and place in The City of New York, New York or elsewhere for
such meeting and may call such meeting for the purpose of taking such action,
by mailing or causing to be mailed notice thereof as provided in Section 12.02,
or by causing notice thereof to be published at least once in each of two
successive calendar weeks (on any Business Day during such week) in a newspaper
or newspapers printed in the English language, customarily published at least
five days a week of a general circulation in The City of New York, State of New
York, the first such publication to be not less than 10 nor more than 60 days
prior to the date fixed for the meeting.
SECTION 12.04. Who May Attend and Vote at Meetings. To be entitled to
vote at any meeting of Holders, a Person will (i) be a registered Holder of one
or more Notes, or (ii) be a Person appointed by an instrument in writing as
proxy for the registered Holder or Holders of Notes. The only Persons who will
be entitled to be present or to speak at any meeting of Holders will be the
Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and their counsel.
SECTION 12.05. Quorum; Action. The Persons entitled to vote a majority
in principal amount of the outstanding Notes shall constitute a quorum. In the
absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of Notes, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 12.02, except that such
notice need be given only once and not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of
an adjourned meeting shall state expressly the percentage of the principal
amount of the outstanding Notes which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned
for a lack of a quorum, the Persons entitled to vote 25% in principal amount of
the outstanding Notes
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at the time shall constitute a quorum for the taking of any action set forth in
the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid, any action or matter, except as otherwise
specified herein, shall be effectively passed and decided if passed or decided
by the Persons entitled to vote not less than a majority in principal amount of
outstanding Notes represented and voting at such meeting.
Any action or matter passed or decision taken at any meeting of Holders
of Notes duly held in accordance with this Section 12.05 shall be binding on
all the Holders of Notes, whether or not present or represented at the meeting.
SECTION 12.06. Regulations May Be Made by Trustee; Conduct of the
Meeting; Voting Rights; Adjournment. Notwithstanding any other provision of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any action by or any meeting of Holders, in regard to proof of
the holding of Notes and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, and submission and examination
of proxies, certificates and other evidence of the right to vote, and such
other matters concerning the conduct of the meeting as it will think
appropriate. Such regulations may fix a record date and time for determining
the Holders of record of Notes entitled to vote at such meeting, in which case
those and only those Persons who are Holders of Notes at the record date and
time so fixed, or their proxies, will be entitled to vote at such meeting
whether or not they will be such Holders at the time of the meeting.
The Trustee will, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting will have been called by the
Company or by Holders as provided in Section 12.03, in which case the Company
or the Holders calling the meeting, as the case may be, will in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary
of the meeting will be elected by vote of the Holders of a majority in
principal amount of the Notes represented at the meeting and entitled to vote.
At any meeting each Holder or proxy will, subject to the provisions of
Section 12.04 hereof, be entitled to one vote for each $1,000 principal amount
of Notes held or represented by him or her; provided, however, that no vote
will be cast or counted at any meeting in respect of any Notes challenged as
not outstanding and ruled by the chairman of the meeting to be not outstanding.
The chairman may adjourn any such meeting if he is unable to determine whether
any Holder or proxy will be entitled to vote at such meeting. The chairman of
the meeting will have no right to vote other than by virtue of Notes held by
him or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Holders. Any meeting of Holders duly called pursuant
to the provisions of Section 12.02 or Section 12.03 may be adjourned from time
to time by vote of the Holders of a majority in aggregate principal amount of
the Notes represented at the meeting and entitled to vote, and the meeting may
be held as so adjourned without further notice.
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SECTION 12.07. Voting at the Meeting and Record to Be Kept. The vote
upon any resolution submitted to any meeting of Holders will be by written
ballots on which will be subscribed the signatures of the Holders of Notes
or/of their representatives by proxy and the principal amount of the Notes
voted by the ballot. The permanent chairman of the meeting will appoint two
inspectors of votes, who will count all votes cast at the meeting for or
against any resolution and will make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting.
A record in duplicate of the proceedings of each meeting of Holders will be
prepared by the secretary of the meeting and there will be attached to such
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more Persons having knowledge of the
facts, setting forth a copy of the notice of the meeting and showing that such
notice was mailed as provided in Section 12.02. The record will be signed and
verified by the affidavits of the permanent chairman and the secretary of the
meeting and one of the duplicates will be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting.
Any record so signed and verified will be conclusive evidence of the
matters therein stated.
SECTION 12.08. Exercise of Rights of Trustee or Holders May Not Be
Hindered or Delayed by Call of Meeting. Nothing contained in this Article
Twelve will be deemed or construed to authorize or permit, by reason of any
call of a meeting of Holders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any
right or rights conferred upon or reserved to the Trustee or to the Holders
under any of the provisions of this Indenture or of the Notes.
SECTION 12.09. Procedures Not Exclusive. The procedures set forth in
this Article Twelve are not exclusive and the rights and obligations of the
Company, the Trustee and the Holders under other Articles of this Indenture
(including, without limitation, Articles Six, Seven, Eight and Nine) will in no
way be limited by the provisions of this Article Twelve.
ARTICLE THIRTEEN
GUARANTEES
SECTION 13.01. Guarantees.
Each Guarantor hereby jointly and severally, absolutely, unconditionally
and irrevocably guarantees the Notes and obligations of the Company hereunder
and thereunder, and guarantees to each Holder of a Note authenticated and
delivered by the Trustee, and to the Trustee on behalf of such Holder, that:
(a) the principal of (and premium, if any) and interest on the Notes will be
paid in full when due, whether at Stated Maturity, by acceleration or otherwise
(including, without limitation, the amount that would become due but for the
operation of the automatic stay under Section 362(a) of
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the Bankruptcy Law), together with interest on the overdue principal, if any,
and interest on any overdue interest, to the extent lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be paid in full or performed, all in accordance with the terms
hereof and thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or of any such other obligations, the same will be paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration or otherwise, subject,
however, in the case of clauses (a) and (b) above, to the limitations set forth
in Section 13.04 hereof.
Each Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a guarantor.
Each Guarantor hereby waives (to the extent permitted by law) the
benefits of diligence, presentment, demand for payment, filing of claims with a
court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company or any other Person, protest,
notice and all demands whatsoever and covenants that the Note Guarantee of such
Guarantor will not be discharged as to any Note except by complete performance
of the obligations contained in such Note. Each of the Guarantors hereby
agrees that, in the event of a default in payment of principal (or premium, if
any) or interest on such Note, whether at its Stated Maturity, by acceleration,
purchase or otherwise, legal proceedings may be instituted by the Trustee on
behalf of, or by, the Holder of such Note, subject to the terms and conditions
set forth in this Indenture, directly against each of the Guarantors to enforce
such Guarantor's Note Guarantee without first proceeding against the Company or
any other Guarantor. Each Guarantor agrees that if, after the occurrence and
during the continuance of an Event of Default or Collateral Access Event, the
Trustee or any of the Holders are prevented by applicable law from exercising
their respective rights to accelerate the maturity of the Notes, to collect
interest on the Notes, or to enforce or exercise any other right or remedy with
respect to the Notes, such Guarantor will pay to the Trustee for the account of
the Holders, upon demand therefor, the amount that would otherwise have been
due and payable had such rights and remedies been permitted to be exercised by
the Trustee or any of the Holders.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company or any Guarantor, or any custodian, trustee, liquidator
or other similar official acting in relation to either the Company or any
Guarantor, any amount paid by any of them to the Trustee or such Holder, the
Note Guarantee of each of the Guarantors, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor further agrees
that, as between each Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article Six hereof for the purposes of
the Note Guarantee of such Guarantor, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any
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acceleration of such obligations as provided in Article Six hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of the Note Guarantee of such
Guarantor.
SECTION 13.02. Severability.
In case any provision of any Note Guarantee shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 13.03. Limitation of Guarantors' Liability.
Each Guarantor and, by its acceptance of a Note, each Holder confirms
that it is the intention of all such parties that the guarantee by each such
Guarantor pursuant to its Note Guarantee not constitute a fraudulent transfer
or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law or the provisions of its local law relating to fraudulent transfer or
conveyance. To effectuate the foregoing intention, the Holders and each such
Guarantor hereby irrevocably agree that the maximum liability of each Guarantor
will be $1.00 less than the lesser of (a) the amount which would render the
Note Guarantee voidable under either Section 548 or 544(b) of the Bankruptcy
Code, (b) the amount permitting avoidance of the Note Guarantee as a fraudulent
transfer under any applicable Fraudulent Transfer Act or similar law and (c)
the amount permitting the Note Guarantee to be set aside as a fraudulent
conveyance under any applicable Fraudulent Conveyance Act or similar law. In
addition, if the execution and delivery and/or incurrence evidenced by the Note
Guarantee constitutes a "distribution" under the Michigan Business Corporation
Act (the "MCBA"), the maximum liability under the Note Guarantee with respect
to such Guarantor shall be limited to $1.00 less than the maximum liability
which such Guarantor is permitted to incur under Section 345 of the MCBA.
SECTION 13.04. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under a Note
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets (as
defined below) of each Guarantor (including the Funding Guarantor) for all
payments, damages and expenses incurred by that Funding Guarantor in
discharging the Company's obligations with respect to the Notes or any other
Guarantor's obligations with respect to the Guarantee of such Guarantor.
"Adjusted Net Assets" of such Guarantor at any date shall mean the lesser of
(x) the amount by which the fair value of the property of such Guarantor
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date), but excluding liabilities under
the Guarantee of such Guarantor at such date and (y) the amount by which the
present fair salable value of the assets of such Guarantor at such date exceeds
the
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amount that will be required to pay the probable liability of such Guarantor on
its debts (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), excluding debt in respect of the Guarantee
of such Guarantor, as they become absolute and matured.
SECTION 13.05. Subrogation.
Each Guarantor shall be subrogated to all rights of Holders against the
Company in respect of any amounts paid by any Guarantor pursuant to the
provisions of Section 13.01; provided, however, that, if an Event of Default or
Collateral Access Event has occurred and is continuing, the rights of any
Guarantor to enforce or receive any payments arising out of, or based upon,
such right of subrogation shall be subordinated to the rights of the Trustee
and any Holder until all amounts then due and payable by the Company under this
Indenture or the Notes shall have been paid in full.
SECTION 13.06. Reinstatement.
Each Guarantor hereby agrees (and each Person who becomes a Guarantor
shall be deemed to agree) that the Guarantee provided for in Section 13.01
shall continue to be effective or be reinstated, as the case may be, if at any
time, payment, or any part thereof, of any obligations or interest thereon is
rescinded or must otherwise be restored by a Holder to the Company upon the
bankruptcy or insolvency of the Company or any Guarantor.
SECTION 13.07. Release of a Guarantor.
(a) The Note Guarantee issued by any Guarantor under this Indenture
shall be automatically and unconditionally released and discharged (i) upon any
sale, exchange or transfer to any Person not an Affiliate of the Company or a
Restricted Subsidiary of all of the Company's and its Subsidiaries' Capital
Stock in, or all or substantially all the assets of, such Guarantor (which
sale, exchange or transfer is not prohibited by this Indenture).
(b) Concurrently with the defeasance and discharge of the Notes under
Section 8.02, the Guarantors shall be released from all their obligations under
their Note Guarantees under this Article Thirteen.
SECTION 13.08. Benefits Acknowledged.
Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and
that its Note Guarantee and waivers pursuant to its Note Guarantee are
knowingly made in contemplation of such benefits.
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ARTICLE FOURTEEN
COVENANTS RELATING TO THE AIRCRAFT
SECTION 14.01. Registration of Aircraft.
(a) The Company shall keep the Aircraft registered under the
provisions of the Aviation Act, and record this Indenture at the FAA registry
and, if applicable, the aircraft registry of other aeronautics authorities.
(b) The operation of the Aircraft by the Company (or by any lessee of
the Company) shall be geographically limited to Permitted Countries.
SECTION 14.02. Insurance.
(a) The Company will, at its expense, maintain or cause to be
maintained all-risk aircraft hull insurance covering the Aircraft, and, to the
extent available at reasonable cost, all-risk property damage insurance
covering the Engines and parts, including while temporarily removed from an
Aircraft pending replacement, at all times in an amount not less than the sum
of (i) the aggregate outstanding principal amount of the Notes and (ii) the
scheduled amount of interest payable on the Notes on the next interest payment
date. During any period when an Aircraft is on the ground and not in operation,
the Company may carry or cause to be carried, in lieu of the insurance required
by the previous sentence, insurance otherwise conforming with the provisions of
said sentence except that the scope of the risks covered and the type of
insurance shall be the same as are from time to time applicable to aircraft
owned or leased by the Company of the same type as such Aircraft similarly on
the ground and not in operation, provided that in all cases full amounts shall
not be less than that described in the immediately preceding sentence.
(b) All policies covering loss of or damage to an Aircraft shall be
made payable to the Trustee for any loss in excess of $5 million. With respect
to the Collateral, the Company may maintain customary deductibles. With respect
to all other aircraft owned by the Company or any Restricted Subsidiary, the
Company shall insure such aircraft in a manner consistent with past practice.
(c) The Company shall, at its expense, maintain or cause to be
maintained comprehensive airline liability (including, without limitation,
passenger, contractual, bodily injury and property damage liability) insurance
(exclusive of manufacturer's product liability insurance) and cargo liability
insurance with respect to each Aircraft (i) in amounts that are not less than
the comprehensive airline liability insurance as is from time to time normally
applicable to aircraft owned and operated by the Company of the same type as
such Aircraft and (ii) of the types and covering the same risks as are from
time to time applicable to aircraft owned or operated by the Company of the
same type as such Aircraft and which is maintained in effect with insurers of
recognized responsibility. During any period when an Aircraft is on the ground
and not in operation, the Company may carry or cause to be carried, in lieu of
the insurance required by the previous sentence, insurance otherwise conforming
with the provisions of said sentence except that
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the amounts of coverage shall not be required to exceed the amounts of
comprehensive airline liability insurance, and the scope of risks covered and
type of insurance shall be the same, as are from time to time in effect with
respect to aircraft owned or leased by the Company of the same type as such
Aircraft similarly on the ground and not in operation.
(d) The Company may self-insure a portion of the risks described in
subsections (a) through (c) above by means of deductible or premium adjustment
provisions subject to the same limitations described above for insurance for
risks of loss or damage to such Aircraft. The Company shall be permitted a
deductible per occurrence not in excess of the prevailing standard market
deductible for similar aircraft.
(e) The Trustee shall be named as additional insured parties under
all liability insurance policies required with respect to the Aircraft. The
insurance policies will provide that, in respect of the interest of the
Trustee, the insurance shall not be invalidated by any action or inaction of
the Company and shall insure the interest of the Trustee as they appear,
regardless of any breach or violation of any warranty, declaration or condition
contained in such policies by the Company.
(f) If and to the extent that the Company or a lessee operates an
Aircraft (A) on routes where it maintains war risk insurance in effect with
respect to other similar equipment, or (B) on routes other than routes within
or between the United States, Canada, Mexico, Bermuda and islands other than
Cuba in the Caribbean Basin where the custom in the industry is to carry war
risk insurance, the Company or such lessee shall maintain such insurance with
respect to the Aircraft in an amount not less than the lesser of the aggregate
unpaid principal of, together with accrued interest on, a ratable portion of
the Notes (based on the initial appraised value of such Aircraft) and the
amount of such insurance customarily carried by corporations engaged in the
same or similar business similarly situated with the Company and with respect
to similar equipment on similar routes; provided that, if the requirement to
maintain war risk insurance arises solely by reason of clause (A) of this
sentence, such insurance shall be maintained in an amount not less than that
maintained by the Company or such lessee on other similar aircraft in its
fleet. Unless an Aircraft is operated or used under a contract with the United
States government pursuant to which the United States government assumes
liability for damage to or loss of such Aircraft and to other property or
persons, the Company may not operate or locate any Aircraft outside the United
States and Canada (i) in any war zone or recognized or, in the Company's
reasonable judgment, threatened area of hostilities, unless such Aircraft is
fully covered by war risk insurance, or (ii) in any area excluded from the
insurance coverage required under this Section 14.02.
(g) Insurance proceeds, if any, held from time to time by the Trustee
with respect to any Aircraft, prior to the distribution thereof, shall be
invested and reinvested by the Trustee at the direction of the Company (except
after the occurrence and during the continuance of a Collateral Access Event)
in Cash Equivalents or Temporary Cash Investments. The net amount of any loss
resulting from any such investments will be paid by the Company.
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SECTION 14.03. Maintenance, Lease and Possession.
(a) The Company shall or shall cause each Aircraft to be, at its
expense or at the expense of the Owner), maintained, serviced, and repaired so
as to keep each Aircraft in as good operating condition as on the Closing Date,
ordinary wear and tear excepted, and shall cause the airworthiness
certification thereof to be maintained in good standing at all times (other
than during temporary periods of repair, maintenance, modification, storage or
grounding) under the Aviation Act, including compliance with all then
applicable and effective Noise Regulations and FAA Directives; provided that in
the event the Company or any Owner leases any of its Aircraft in accordance
with the terms of this Indenture to a Permitted Air Carrier organized and
operating under the laws of a Permitted Country, such lease shall provide that
the lessee shall (i) throughout the terms of such lease, inspect, service,
repair, overhaul, and test the Aircraft in compliance with such lessee's
maintenance program as approved by the applicable governmental authority and
maintain the airworthiness certification of such Aircraft in such Permitted
Country in good standing throughout the term of the lease; and (ii) return the
Aircraft at the end of the term of the lease in an operating condition
sufficient to qualify for a United States standard FAA certificate of
airworthiness, including compliance with all then applicable and effective
Noise Regulation and FAA Service Bulletins and Directives.
Notwithstanding the foregoing, if a FAA Service Bulletin, Directive or
the Noise Regulations requires the Owner to maintain a specified portion of its
fleet in a given condition, the Owner must maintain such portion of the
Aircraft in such condition. The Company shall be obligated, at its expense, to
replace, or cause to be replaced, all parts (other than severable parts added
at the option of the Company or any Restricted Subsidiary and obsolete or
unsuitable parts that the Company is permitted to remove to the extent
described below) that may from time to time be incorporated or installed in or
attached to any aircraft and that may become worn out, lost, stolen, destroyed,
seized, confiscated, damaged beyond repair or rendered permanently unfit for
use. The Company or any Owner shall have the right to make (or cause to be
made) such alterations and modifications in and additions to (including removal
of parts from) each Aircraft as the Company or any Owner deems desirable;
provided that no such alteration, modification, addition, or removal shall
materially diminish the value, utility, or condition of such Aircraft in the
service in which it is operated by the Company or any Restricted Subsidiary or
impair the airworthiness thereof.
(b) The Company or any Owner may: (i) sell, lease or transfer any
Aircraft or Engine to any Restricted Subsidiary (other than any Excluded
Restricted Subsidiary), or to the Company, and (ii) lease any Aircraft or
Engine to a Permitted Air Carrier; provided that the Trustee shall have
received one or more Opinion of Counsel to the effect that, among other things,
the Lien pursuant to this Indenture continues to be perfected and in full force
and effect, this Indenture continues to be enforceable against the parties
thereto, and the Trustee maintains its right to repossession thereunder, in
each case pursuant to applicable law.
(c) Subject to certain limitations, the Company or any Restricted
Subsidiary (and any permitted lessee) may (i) transfer possession of any
Aircraft pursuant to "wet
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lease" or similar arrangements, in each case whereby the Company or any
Restricted Subsidiary (or such permitted lessee) maintains operational control
of the Aircraft, (ii) transfer possession of any Aircraft or Engine, other than
by lease, to the United States Government and transfers of possession in
connection with maintenance or modifications, (iii) transfer possession of any
Engine and any parts from time to time installed on any Aircraft or Engine,
other than by lease, through transfers in connection with interchange and
pooling arrangements with certified "air carriers" within the meaning of the
Aviation Act, and transfers of possession to FAA licensed repair stations, or
(iv) install one or more of the Engines on airframes owned, mortgaged, leased,
or subject to conditional purchase by, the Company or any Restricted Subsidiary
(or any such permitted lessee); provided that such Engines shall not become
subject to any Lien other than the Lien securing the Notes under this Indenture
notwithstanding the installation thereof on such airframe, and (iv) enter into
any ACMI Agreement. If any Aircraft is leased or the possession is otherwise
transferred, such Aircraft will remain subject to the Lien under this
Indenture.
Other than pursuant to a "wet lease" or similar arrangement, no lease of
any Aircraft shall be for a term in excess of five years beyond the maturity of
the Notes. If the lease is for a period in excess of six months, the Owner
shall grant to the Trustee, for the equal and ratable benefit of the Holders of
the Notes, a security interest in such lease and if the lease if for a period
in excess of two years, shall deliver an Opinion of Counsel to the Trustee
stating (subject to customary qualifications) that such security interest has
been created and perfected under the law of the United States or a state of the
United States; provided that at all times, other than when an Event of Default
has occurred and is continuing, the Company or any Affiliate (x) shall be
entitled to receive and retain all payments made pursuant to the lease; and (y)
shall be entitled to exercise (to the exclusion of the Trustee) all rights and
remedies of the "lessor" under the lease and grant such consents, waivers and
enter into such amendments to the lease as are consistent with the provisions
of this Indenture as the Company may determine appropriate in its sole
discretion. Nothing permitted herein shall be deemed an "Asset Sale."
SECTION 14.04. Liens.
The Aircraft shall be maintained by the Company free of any Liens, other
than the rights of the Trustee under this Indenture and Permitted Liens.
SECTION 14.05. Certain Further Limitations on Leasing or Other
Relinquishment of Possession.
Notwithstanding anything to the contrary in Section 1103:
(a) The rights of any person that receives possession of the
Aircraft in accordance with Section 14.03 shall be subject and
subordinate to all the terms of this Indenture, and to the Trustee's
rights, powers and remedies hereunder; and
(b) The Company shall ensure that no sublease, delivery,
transfer or relinquishment permitted under Section 14.03 shall affect
the United States
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registration of the Aircraft, unless made in accordance with the
provisions of Section 14.06.
SECTION 14.06. Trustee's Acknowledgment of Company's Right to Foreign
Registration.
The Trustee hereby agrees:
(a) that the Company, or any subsequent lessee of the Aircraft,
shall be entitled, at its own expense, to register any Aircraft or cause any
Aircraft to be registered, in the Permitted Countries subject to the following
conditions:
(i) no Event of Default or Collateral Access Event
shall have occurred and be continuing at the time of such
registration;
(ii) such proposed change of registration is made in
connection with a Permitted Aircraft Lease to a Permitted Air
Carrier;
(iii) such country is a Permitted Country with which the
United States maintains normal diplomatic relations at the time
of such registration; and
(iv) prior to any such change in the jurisdiction of
registry, the Trustee shall have received an Opinion of Counsel
(subject to customary exceptions) reasonably satisfactory to the
Trustee addressed to each such party to the effect that:
(A) after giving effect to such change in registration,
such Permitted Country would recognize the
Company's right of ownership and repossession;
(B) after giving effect to such change in registration,
the right of repossession by the Trustee upon the
exercise of remedies is valid under the laws of
such Permitted Country;
(C) the obligations of the Company, and the rights and
remedies of the Trustee, under this Indenture in
connection with such change in registration are
valid, binding and enforceable under the laws of
such Permitted Country (or the laws of the country
to which the laws of such Permitted Country would
refer as the applicable governing law);
(D) after giving effect to such change in registration,
the Lien of the Indenture on the Trustee's right,
title and interest in and to the Aircraft shall be
a valid and duly perfected first priority security
interest and all filing, recording or other action
necessary to protect the same shall have been
accomplished
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or, if such opinion cannot be given at the time of
such proposed change in registration because such
change in registration is not yet effective, (1)
the opinion shall detail what filing, recording or
other action is necessary and (2) the Trustee shall
have received a certificate from the Company that
all possible preparations to accomplish such
filing, recording and other action shall have been
done, and such filing, recording and other action
shall be accomplished and a supplemental opinion to
that effect shall be delivered to the Trustee on or
prior to the effective date of such change in
registration;
(E) it is not necessary, solely as a consequence of
such change in registration and without giving
effect to any other activity of the Trustee, as the
case may be, for the Trustee to qualify to do
business in such Permitted Country as a result of
such reregistration in order to exercise any rights
or remedies with respect to the Aircraft pursuant
to the lease; and
(F) unless the Company or the lessee shall have agreed
to provide insurance covering the risk of
requisition of use of the Aircraft by the
government of such Permitted Country (so long as
the Aircraft is registered under the laws of such
Permitted Country), the laws of such Permitted
Country require fair compensation by the government
of such Permitted Country payable in currency
freely convertible into United States dollars and
freely removable from such Permitted Country
(without license or permit, unless the Company,
prior to such proposed reregistration, has obtained
such license or permit) for the taking or
requisition by such government of such use.
(b) In addition, as a condition precedent to any change
in registration, the Company shall have given to the Trustee assurances
reasonably satisfactory to it:
(i) to the effect that the provisions of Sections 14.01
and 14.03 shall be complied with after giving effect to such
change of registration; and
(ii) of the payment by the Company of all reasonable
out-of-pocket expenses of the Trustee in connection with such
change of registry, including, without limitation (A) the
reasonable fees and disbursements of counsel to the Company and
the Trustee, (B) any filing or recording fees, taxes or similar
payments incurred in connection with the change of registration
of the Aircraft and the creation and perfection of the security
interest therein in favor of Trustee for the benefit of Holders,
and (C) all costs and expenses incurred in connection with any
filings necessary to
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continue in the United States the perfection of the security
interest in the Aircraft in favor of the Trustee for the benefit
of Holders.
(c) The Trustee shall cooperate in, and shall execute and
deliver such documents as may be reasonably required to effectuate a
lease of an Aircraft or Engine in accordance with the foregoing.
ARTICLE FIFTEEN
SECURITY
SECTION 15.01. Registration; Replacement and Pooling of Parts;
Alterations, Modifications and Additions.
(a) The Company will be required, except under certain circumstances,
to record, or maintain the recordation of, this Indenture, among other
documents, with respect to the Collateral under the Aviation Act or the Uniform
Commercial Code, as applicable. Such recordation of this Indenture with
respect to such Collateral will give the Trustee a first priority perfected
security interest in the related Collateral, no matter where located.
(b) Except as otherwise provided in Section 4.16 and the proviso to
the third sentence of paragraph (e) of this Section 15.01, the Company (and its
permitted lessee), at its own cost and expense, will, so long as such Airframe
or Engine is subject to the Lien of this Indenture promptly replace (or cause
to be replaced) all Parts that may from time to time become worn out, obsolete,
lost, stolen, destroyed, seized, confiscated, damaged beyond repair or
permanently rendered unfit for use for any reason whatsoever. In the ordinary
course of maintenance, service, repair, overhaul or testing, the Company (or
its permitted lessee), at its own cost and expense, may remove any Parts,
whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged
beyond repair or permanently rendered unfit for use; provided, however, that
the Company, at its own cost and expense, shall, except as otherwise provided
in Section 4.16 or the proviso to the third sentence of paragraph (e) of this
Section 15.01, replace such Parts as promptly as practicable with replacement
Parts or temporary replacement parts as provided in paragraph (d) of this
Section 15.01. All replacement Parts shall be free and clear of all Liens
except for Permitted Liens 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.
(c) Except as otherwise provided in the proviso to the third sentence
of paragraph (e) of this Section 15.01, any Part at any time removed from an
Airframe or Engine shall remain subject to the Lien of this Indenture, no
matter where located, until such time as such Part shall be replaced by a Part
that has been incorporated or installed in or attached to such Airframe or
Engine and that meets the requirements for replacement Parts specified in
paragraph (b) of this Section. Immediately upon any replacement Part becoming
incorporated or installed in or attached to such Airframe or Engine as provided
in paragraph (b) of this Section, without further act, (i) the replaced
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Part shall thereupon be free and clear of all rights of the Trustee and shall
no longer be deemed a Part hereunder, and (ii) such replacement Part shall
become subject to this Indenture and be deemed part of such Airframe or Engine,
as the case may be, for all purposes hereof to the same extent as the Parts
originally incorporated or installed in or attached to such Airframe or Engine.
(d) Any Part removed from an Airframe or Engine as provided in
paragraph (b) of this Section may be subjected by the Company (or any permitted
lessee) to a pooling or parts leasing agreement or arrangement of a type
customary in the airline industry entered into in the ordinary course of the
Company's (or any permitted lessee's) business with any air carrier; provided
that the part replacing such removed Part shall be incorporated or installed in
or attached to such Airframe or Engine in accordance with paragraphs (b) and
(c) of this Section as promptly as practicable after the removal of such
removed Part. In addition, any temporary replacement part when incorporated or
installed in or attached to an Airframe or any Engine in accordance with
paragraph (b) of this Section may be owned by another airline or vendor as
customary in the U.S. airline industry, subject to a pooling or parts leasing
arrangement; provided, however, that the Company (or any permitted lessee), at
its expense within a commercially reasonable time, either (i) causes such
temporary replacement part to become subject to the Lien of this Indenture,
free and clear of all Liens except Permitted Liens, at which time such
temporary replacement part shall become a Part or (ii) replaces such temporary
replacement part by incorporating or installing in or attaching to such
Airframe or Engine a further replacement Part owned by the Company (or any
permitted lessee) free and clear of all Liens except Permitted Liens and which
shall become subject to the Lien of this Indenture in accordance with paragraph
(c) of this Section.
(e) The Company (and any permitted lessee), at its own expense, shall
make alterations and modifications in and additions to each Airframe and Engine
as may be required to be made from time to time by applicable law regardless of
upon whom such requirements are, by their terms, nominally imposed; provided,
however, that the Company (and any permitted lessee) may, in good faith,
contest the validity or application of any such standard in any reasonable
manner which does not materially adversely affect the Lien of this Indenture.
In addition, the Company, at its own expense, may from time to time make or
cause to be made such alterations and modifications in and additions to any
Airframe or Engine as the Company (or any permitted lessee) may deem desirable
in the proper conduct of its business (including, without limitation, removal
of Parts); provided, however, that no such alteration, modification or addition
diminishes, in the Company's reasonable judgment, the value, utility,
condition, airworthiness or remaining useful life of such Airframe or Engine
below the value, utility, condition, airworthiness or remaining useful life
thereof immediately prior to such alteration, modification or addition,
assuming such Airframe or Engine was then in the condition required to be
maintained by the terms of this Indenture, except that the value (but not the
utility, condition, airworthiness or remaining useful life) of any Aircraft may
be reduced by the value of Parts which the Company (or any permitted lessee)
deems obsolete or no longer suitable or appropriate for use in such Aircraft
which shall have been removed and not replaced, if the aggregate value of all
such obsolete or unsuitable Parts removed from such Aircraft and not replaced
shall not exceed $500,000. All Parts incorporated or
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installed in or attached or added to any Airframe or Engine as the result of
any alteration, modification or addition effected by the Company (or any
permitted lessee) shall be free and clear of any Liens except Permitted Liens
and become subject to the Lien of this Indenture; provided, however, that the
Company (or any permitted lessee) may, at any time so long as an Airframe or
Engine is subject to the Lien of this Indenture, remove any such Part from such
Airframe or Engine if (i) such Part is in addition to, and not in replacement
of or in substitution for, any Part originally incorporated or installed in or
attached to such Airframe or Engine at the time of delivery thereof hereunder
or any Part in replacement of, or in substitution for, any such original Part,
(ii) such Part is not required to be incorporated or installed in or attached
or added to such Airframe or Engine pursuant to the terms of Section 14.03 or
the first sentence of this paragraph (e) and (iii) such Part can be removed
from such Airframe or Engine without diminishing or impairing the value,
condition, utility, airworthiness or remaining useful life which such Airframe
or Engine would have had at the time of removal had such alteration,
modification or addition not been effected by the Company (or any permitted
lessee), assuming the Aircraft was otherwise maintained in the condition
required by this Indenture. Upon the removal by the Company (or any permitted
lessee) of any such Part as above provided, title thereto shall, without
further act, be free and clear of all rights of the Trustee and such Part shall
no longer be deemed a Part hereunder.
SECTION 15.02. [Left Blank]
SECTION 15.03. Inspection.
At all reasonable times so long as an Aircraft is subject to the Lien of
this Indenture, upon at least 15 days' prior notice to the Company and at a
time and place reasonably acceptable to the Company, the Trustee or its
authorized representative may at its own expense and risk conduct a visual
walk-around inspection of such Aircraft and any Engine and may inspect the
books, logs and records of the Company relating to the operation and
maintenance thereof; provided, however, that (a) any such inspection shall be
subject to the safety, security and workplace rules applicable at the location
where such inspection is conducted and any applicable governmental rules or
regulations, (b) in the case of an inspection during a maintenance visit, such
inspection shall not in any respect interfere with the normal conduct of such
maintenance visit or extend the time required for such maintenance visit or, in
any event, at any time interfere with the use or operation of any Airframe or
Engine or with the normal conduct of the Company's or a permitted lessee's
business, and (c) the Company shall not be required to undertake or incur any
additional liabilities in connection with any such inspection. All information
obtained in connection with any such inspection shall be held confidential by
the Trustee and shall not be furnished or disclosed by it to anyone other than
its bank examiners, regulators, auditors, accountants, agents and legal
counsel, and except as may be required by an order of any court or
administrative agency or by any statute, rule, regulation or order of any
governmental authority or as may be necessary to enforce the terms of this
Indenture. The Trustee shall have no duty to make any such inspection and
shall not incur any liability or obligation by reason of not making any such
inspection. No
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inspection under this Section shall relieve the Company of any of its
obligations under this Indenture.
SECTION 15.04. Requisition for Use.
In the event of a requisition for use by any government of any Airframe
and the Engines, if any, or engines installed on such Airframe while such
Airframe is subject to the Lien of this Indenture, the Company shall promptly
notify the Trustee of such requisition and all of the Company obligations under
this Indenture shall continue to the same extent as if such requisition had not
occurred except to the extent that the performance or observance of any
obligation by the Company shall have been prevented or delayed by such
requisition; provided, however, that the Company's obligations under this
Section 15.04 with respect to the occurrence of an Event of Loss, for the
payment of money and under Sections 4.12 and 14.02 shall not be reduced or
delayed by such requisition. Any payments received by the Trustee or the
Company from such government with respect to such requisition of use shall be
paid over to, or retained by, the Company. In the event of an Event of Loss of
an Aircraft or Engine resulting from the requisition for use by a government of
such Aircraft or Engine, the Company will replace such Aircraft or Engine
hereunder by complying with the terms of Section 4.16 and any payments received
by the Trustee or the Company from such government with respect to such
requisition shall be paid over to, or retained by, the Company.
SECTION 15.05. Substitution of Collateral.
Upon the request of any Owner of any Aircraft or Engine to release such
Aircraft or Engine from the Lien pursuant to the Indenture, the Trustee shall
be required to immediately release such Aircraft or Engine from such Lien upon
fulfillment of the following conditions: (i) the Owner delivers a written
request to the Trustee, requesting such release and specifically describing the
Aircraft or Engine so to be released and the replacement Aircraft or
replacement Engine therefor; (ii) the replacement Aircraft or replacement
Engine has a value at least equal to, and in as good operating condition and
repair and as airworthy as the Aircraft or Engine subject to the substitution
(determined by the chief financial officer of the Company in good faith); (iii)
the Owner delivers to the Trustee a supplemental indenture subjecting the
replacement Aircraft or replacement Engine to the Lien pursuant to the
Indenture; (iv) the Owner delivers an opinion of counsel that the Trustee has a
valid, perfected, first priority security interest in the replacement Aircraft
or replacement Engine; and (v) the replacement Aircraft or replacement Engine
otherwise complies with the terms and provisions of the Indenture.
Notwithstanding the foregoing, with respect to any substitution of Collateral,
or any series of related substitutions of Collateral, where the initial
appraised value of such Collateral exceeds $25.0 million, the Company shall be
required to obtain one or more appraisals from an aircraft appraisal firm of
national standing. Such appraisal(s) must indicate that the value (or fair
value or similar measure) of the replacement Collateral is at least equal to
the value (or fair value or similar measure) of the Collateral which is being
replaced.
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SECTION 15.06. Release of Collateral.
(a) If at any time, or from time to time, the aggregate principal
amount of the Notes outstanding is less than $340.0 million, and no Event of
Default has occurred and is continuing, the Company shall be entitled to
release a portion of the Collateral, so long as the aggregate value of the
Collateral so released does not exceed the aggregate principal amount of Notes
which are no longer outstanding (in the good faith opinion of the chief
financial officer of the Company as evidenced by a written certificate of such
chief financial officer).
(b) The Company shall be entitled to substitute additional Collateral
in connection with any such release (in accordance with Section 15.05) if the
aggregate value of Collateral released exceeds the aggregate principal amount
of Notes which are no longer outstanding. Upon delivery of a certificate
regarding such good faith opinion the Trustee shall immediately execute and
deliver all releases and certificates necessary or desirable to release such
Collateral from the Lien of the Indenture. Notwithstanding the foregoing, in
the event of any release of Collateral, or any series of related releases of
Collateral, where the initial appraised value of such Collateral exceeds $10.0
million, the Company shall be required to obtain one or more appraisals from an
aircraft appraisal firm of national standing. Such appraisal(s) must indicate
that the aggregate value (or fair value or similar measure) of the Collateral
released.
SECTION 15.07. Discontinuance of Proceedings.
In case the 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 Person instituting such
proceeding, then and in every such case the Company, the Trustee shall, subject
to any determination in such proceedings, be restored to their former positions
and rights hereunder with respect to the Collateral, and all rights, remedies
and powers of the Trustee shall continue as if no such proceedings had been
instituted.
SECTION 15.09. Termination of Interest in Collateral.
A Holder shall not, as such, have any further interest in, or other
right with respect to, the Collateral when and if the principal amount of, and
interest on, and other amounts due under all Securities held by such Holder and
all other sums due to such Holder under this Indenture shall have been paid in
full.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, all as of the date first written above.
KITTY HAWK, INC.,
as Issuer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President-Finance
KITTY HAWK CHARTERS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
AIRCRAFT LEASING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
KITTY HAWK AIRCARGO, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
117
AMERICAN INTERNATIONAL AIRWAYS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
KALITTA FLYING SERVICE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
FLIGHT ONE LOGISTICS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
O.K. TURBINES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
AMERICAN INTERNATIONAL TRAVEL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
118
BANK ONE, NA,
as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Trust Officer
119
EXHIBIT A
[FACE OF NOTE]
KITTY HAWK, INC.
9.95% Senior Secured Notes Due 2004
[CUSIP][__________]
No. $_________
KITTY HAWK, INC., a Delaware corporation (the "Company", which
term includes any successor under the Indenture hereinafter referred to), for
value received, promises to pay to _____________, or its registered assigns,
the principal sum of ____________ ($____) on November 15, 2004.
Interest Payment Dates: May 15 and November 15, commencing May
15, 1998.
Regular Record Dates: May 1 and November 1.
Reference is hereby made to the further provisions of this Note
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
120
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Date: November 19, 1997 KITTY HAWK, INC.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 9.95% Senior Secured Notes due 2004 described in the within
mentioned Indenture.
BANK ONE, NA,
as Trustee
By:
------------------------------------
Trust Officer
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[REVERSE SIDE OF NOTE]
KITTY HAWK, INC.
9.95% Senior Secured Note Due 2004
1. Principal and Interest.
The Company will pay the principal of this Note on November 15,
2004.
The Company promises to pay interest on the principal amount of
this Note on each Interest Payment Date, as set forth below, at the rate per
annum shown above.
Interest will be payable semiannually (to the holders of record
of the Notes at the close of business on the May 1 or November 1 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
May 15, 1998.
If the exchange offer contemplated by the Registration Statement
under the Securities Act is not consummated or, if required, a Shelf
Registration Statement under the Securities Act with respect to resales of the
Notes is not declared effective by the Commission, on or before May 19, 1998 in
accordance with the terms of the Registration Rights Agreement dated as of
November 19, 1997 between the Company, the Guarantors and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, BT Alex. ▇▇▇▇▇ Incorporated and Fieldstone FPCG Services, L.P.,
then the interest rate per annum accruing on the Notes shall, effective May 19,
1998, be increased by 0.5% from 9.95% per annum, payable in cash semiannually,
in arrears, on each May 15 and November 15, commencing November 15, 1998, until
the exchange offer is completed or such Shelf Registration Statement is
declared effective. The Holder of this Note is entitled to the benefits of
such Registration Rights Agreement.
Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from November
19, 1997; provided that, if there is no existing default in the payment of
interest and this Note is authenticated between a Regular Record Date referred
to on the face hereof and the next succeeding Interest Payment Date, interest
shall accrue from such Interest Payment Date. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium,
if any, and interest on overdue installments of interest, to the extent lawful,
at a rate borne by the Notes.
A-3
122
2. Method of Payment.
The Company will pay interest (except defaulted interest) on the
principal amount of the Notes as provided above on each May 15 and November 15
to the persons who are Holders (as reflected in the Security Register at the
close of business on the May 1 and November 1 immediately preceding the
Interest Payment Date), in each case, even if the Note is canceled on
registration of transfer, registration of exchange, redemption or repurchase
after such record date; provided that, with respect to the payment of
principal, the Company will make payment to the Holder that surrenders this
Note to a Paying Agent on or after November 15, 2004.
The Company will pay principal, premium, if any, and as provided
above, interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts. However, the Company, at
its option, may pay principal, premium, if any, and interest by its check
payable in such money. It may mail an interest check to a Holder's registered
address (as reflected in the Security Register). If a payment date is a date
other than a Business Day at a place of payment, payment may be made at that
place on the next succeeding day that is a Business Day and no interest shall
accrue for the intervening period.
3. Paying Agent and Registrar.
Initially, the Trustee will act as authenticating agent, Paying
Agent and Registrar. The Company may change any authenticating agent, Paying
Agent or Registrar without notice. The Company, any Subsidiary or any
Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar.
4. Indenture; Limitations.
The Company issued the Notes under an Indenture dated as of
November 19, 1997 (the "Indenture"), between the Company, the Guarantors and
Bank One, NA, as trustee and collateral trustee (collectively, the "Trustee").
Capitalized terms herein are used as defined in the Indenture unless otherwise
indicated. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act. The
Notes are subject to all such terms, and Holders are referred to the Indenture
and the Trust Indenture Act for a statement of all such terms. To the extent
permitted by applicable law, in the event of any inconsistency between the
terms of this Note and the terms of the Indenture, the terms of the Indenture
shall control.
The Notes are senior secured obligations of the Company.
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5. Redemption.
The Notes will be redeemable, at the Company's option, in whole
or in part, at any time or from time to time, on or after November 15, 2001 and
prior to maturity, upon not less than 30 nor more than 60 days' prior notice
mailed by first class mail to each Holder's last address as it appears in the
Security Register, at the following Redemption Prices (expressed in percentages
of principal amount), plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date that is on or prior to the Redemption Date to receive
interest due on an Interest Payment Date), if redeemed during the 12-month
period commencing November 15, of the years set forth below:
Redemption
Year Price
---- -------------
2001 . . . . . . . . . . . . . . . 104.975%
2002 . . . . . . . . . . . . . . . 102.488%
2003 . . . . . . . . . . . . . . . 100.000%
In addition, at any time prior to November 15, 2000, the Company
may redeem up to 35% of the principal amount of the Notes with the proceeds of
one or more Public Equity Offerings, at any time or from time to time, at a
Redemption Price (expressed as a percentage of principal amount) of 109.95%,
plus accrued and unpaid interest to the Redemption Date (subject to the rights
of Holders of record on the relevant Regular Record Date that is prior to the
Redemption Date to receive interest due on an Interest Payment Date); provided
that at least $150 million aggregate principal amount of Notes remains
outstanding after each such redemption.
Notice of any optional redemption will be mailed at least 30 days
but not more than 60 days before the Redemption Date to each Holder of Notes to
be redeemed at his last address as it appears in the Security Register. Notes
in denominations larger than $1,000 may be redeemed in part. On and after the
Redemption Date, interest ceases to accrue on Notes or portions of Notes called
for redemption, unless the Company defaults in the payment of the Redemption
Price.
6. Repurchase upon Change of Control Triggering Event.
Upon the occurrence of a Change of Control Triggering Event, the
Company must commence, within 30 days of the occurrence of a Change of Control
Triggering Event, and consummate an Offer to Purchase for all Notes then
outstanding, at a purchase price equal to 101% of the principal amount thereof,
plus accrued interest (if any) to the Payment Date.
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A notice of such Change of Control will be mailed within 30 days
after any Change of Control occurs to each Holder at his last address as it
appears in the Security Register. Notes in denominations larger than $1,000
may be sold to the Company in part. On and after the Payment Date, interest
ceases to accrue on Notes or portions of Notes surrendered for purchase by the
Company, unless the Company defaults in the payment of the Change of Control
Payment.
7. Denominations; Transfer; Exchange.
The Notes are in registered form without coupons in denominations
of $1,000 of principal amount and any integral multiple in excess thereof. A
Holder may register the transfer or exchange of Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer or exchange of any Notes selected for redemption. Also, it need
not register the transfer or exchange of any Notes for a period of 15 days
before the day of the mailing of a notice of redemption of Notes selected for
redemption.
8. Persons Deemed Owners.
A Holder shall be treated as the owner of a Note for all
purposes.
9. Unclaimed Money.
If money for the payment of principal, premium, if any, or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company at its written request. After that, Holders
entitled to the money must look to the Company for payment, unless an abandoned
property law designates another Person, and all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
▇-▇
▇▇▇
▇▇. Discharge Prior to Redemption or Maturity.
The Company or the Guarantors generally will be discharged from
the Indenture and the Notes, except in certain circumstances for certain
sections thereof, if, among other things, the Company and the Guarantors (A)
deposit with the Trustee money or U.S. Government Obligations sufficient to pay
the then outstanding principal of, premium, if any, and accrued interest on the
Notes on the Stated Maturity of such payments in accordance with the terms of
the Indenture and the Notes and (B) deliver (i) an Opinion of Counsel or
Internal Revenue Service ruling directed to the Trustee with respect to the tax
effects of such deposits and (ii) an Opinion of Counsel concerning Investment
Company Act of 1940 and United States Bankruptcy Code ramifications of the
deposits, (C) in conjunction with such deposits, ensure there is an absence of
certain Events of Default and (D) provide an Opinion of Counsel concerning the
potential delisting of the Notes from a national securities exchange as a
result of the deposits; provided that if simultaneously with the deposit of the
money and/or U.S. Government Obligations referred to in (A) above, the Company
or any Guarantor has caused an irrevocable, transferable, standby letter of
credit to be issued by a bank with capital and surplus exceeding the principal
amount of the Notes then outstanding, expiring not earlier than 180 days from
its issuance, in favor of the Trustee which permits the Trustee to draw an
amount equal to the principal, premium, if any, and accrued interest on the
Notes through the expiry date of the letter of credit, then the Company and the
Guarantors will be deemed to have paid and discharged any and all obligations
in respect of the Notes on the date of the deposit and issuance of the letter
of credit.
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding, and any existing default or
compliance with any provision may be waived with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding. Without
notice to or the consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency and make any change that, in the opinion of
the Board of Directors of the Company evidenced by a Board resolution, does not
materially and adversely affect the rights of any Holder.
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Restricted Subsidiaries, among other things, to Incur
additional Indebtedness, make Restricted Payments, suffer to exist restrictions
on the ability of Restricted Subsidiaries to make certain payments to the
Company, issue Capital Stock of Restricted Subsidiaries, engage in transactions
with Affiliates, suffer to exist or incur Liens, or merge, consolidate or
transfer substantially all of its assets. On or before a date not more than 90
days after the end of each fiscal year, the Company
A-7
126
shall deliver to the Trustee an Officers' Certificate stating whether or not
the signers know of any Default or Event of Default under such restrictive
covenants or a Collateral Access Event.
13. Successor Persons.
When a successor person or other entity assumes all the
obligations of its predecessor under the Notes and the Indenture, the
predecessor person will be released from those obligations.
14. Defaults and Remedies.
The following events constitute "Event of Default" with respect
to the Notes under the Indenture: (a) the Company defaults in the payment of
principal of (or premium, if any, on) any Note when the same becomes due and
payable at maturity, upon acceleration, redemption or otherwise; (b) the
Company defaults in the payment of interest on any Note when the same becomes
due and payable, and such default continues for a period of 30 days; (c) the
Company defaults in the performance or breaches the provisions of Article Five
or fails to make or consummate an Offer to Purchase in accordance with Section
4.11 or Section 4.14; (d) the Company or any Guarantor defaults in the
performance of or breaches any other covenant or agreement of the Company in
the Indenture or under the Notes (other than a default specified in clause (a),
(b) or (c) above) and such default or breach continues for a period of 30
consecutive days after written notice by the Trustee or the Holders of 25% or
more in aggregate principal amount of the Notes; (e) there occurs with respect
to any issue or issues of Indebtedness of the Company or any Guarantor or
Significant Subsidiary having an outstanding principal amount of $10 million or
more in the aggregate for all such issues of all such Persons, whether such
Indebtedness now exists or shall hereafter be created, (I) an event of default
that has caused the holder thereof to declare such Indebtedness to be due and
payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration and/or (II) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such defaulted
payment shall not have been made, waived or extended within 30 days of such
payment default; (f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $10 million in the aggregate for all such
final judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any Guarantor or Significant Subsidiary and shall not be paid or
discharged, and there shall be any period of 30 consecutive days following
entry of the final judgment or order that causes the aggregate amount for all
such final judgments or orders outstanding and not paid or discharged against
all such Persons to exceed $10 million during which a stay of enforcement of
such final judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; (g) a court having jurisdiction in the premises enters a
decree or order for (A) relief in respect of the Company, any Guarantor or any
Significant Subsidiary in an involuntary case under any applicable
A-8
127
bankruptcy, insolvency or other similar law now or hereafter in effect, (B)
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary
or for all or substantially all of the property and assets of the Company or
any Significant Subsidiary or (C) the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary and, in each case, such decree or
order shall remain unstayed and in effect for a period of 30 consecutive days;
(h) the Company, any Guarantor or any Significant Subsidiary (A) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consents to the entry of an order for relief in
an involuntary case under any such law, (B) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary
or for all or substantially all of the property and assets of the Company or
any Significant Subsidiary or (C) effects any general assignment for the
benefit of creditors; or (i) any Note Guarantee shall cease to be, or shall be
asserted in writing by the Company or any Guarantor not to be, in full force
and effect or enforceable in accordance with its terms.
If an Event of Default, except for certain ones, or a Collateral
Access Event, as defined in the Indenture, occurs and is continuing under the
Indenture, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes, then outstanding may declare all the Notes to be due and
payable. If a bankruptcy or insolvency default with respect to the Company
occurs and is continuing, the Notes automatically become due and payable.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders
of at least a majority in principal amount of the Notes then outstanding may
direct the Trustee in its exercise of any trust or power.
15. Security.
The Collateral securing the Notes will consist of (i) nine Boeing
747s (including the Optioned Boeing 747s), eight Lockheed L-1011s and thirteen
Boeing 727s, along with the Engines, (ii) all insurance and requisition
proceeds and other similar payments with respect to each of the Aircraft, (iii)
all monies or securities deposited or required to be deposited with the
Trustee, (iv) any purchase agreements and any related documentation to the
extent assignable for each Aircraft, (v) all logs, data and records related to
the Aircraft, (vii) the Pledged Securities on deposit in the Escrow Account,
the Escrow Account and certain related assets, (vii) all rights of any Owner
under any Lease relating to any Aircraft and (viii) all proceeds of the
foregoing. The Pledged Securities shall be sufficient to provide for (i) the
purchase of the two Optioned Boeing 747s or other Eligible Aircraft and (ii)
the conversion of such Aircraft to freighter configuration.
▇-▇
▇▇▇
▇▇. Trustee Dealings with the Company.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
17. No Recourse Against Others.
No incorporator, stockholder, other officer, director, employee
or controlling person as such, of the Company or any Guarantor or of any
successor Person thereof shall have any liability for any obligations of the
Company under the Notes, the Guarantees, the Escrow and Security Agreement or
the Indenture or for any claim based on, or otherwise in respect of or by
reason of, such obligations or their creation. Each Holder by accepting a Note
expressly waives and releases all such liability. The waiver and release are
a condition of, and part of the consideration for the issuance of the Notes and
the related Guarantees.
18. Guarantees.
The Company's obligations under the Notes are irrevocably
guaranteed by the Guarantors.
19. Authentication.
This Note shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this Note.
20. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Kitty Hawk,
Inc., P.O. Box 612787, 1515 West 20th Street, Dallas/Fort Worth International
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer.
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[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
________________________________________________________________________________
Please print or typewrite name and address including zip code of assignee
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ____________________________________________________________________
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date the shelf registration statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act of 1933 provided by
Rule 144A thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
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130
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.
Date:
-------------- ---------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933 and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
--------------------- -----------------------------------------------
NOTICE: To be executed by an executive officer
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131
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant
to an Offer to Purchase in accordance with the terms of the Indenture, check
the Box: [ ]
If you wish to have a portion of this Note purchased by the
Company pursuant to an Offer to Purchase in accordance with the terms of the
Indenture, state the amount: $___________________.
Date:
-----------------
Your Signature:
---------------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Note)
Signature Guarantee: *
------------------------------
-------------------------
* The Holders signature must be guaranteed by a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office
or correspondent in the United States or an eligible guarantor institution as
defined by Rule 17Ad-15 under the Exchange Act.
▇-▇▇
▇▇▇
▇▇▇▇▇▇▇ B
[Intentionally Omitted]
133
EXHIBIT C
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
_______________________, ____
Bank One, NA
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency Group
Re: Kitty Hawk, Inc. (the "Company")
9.95% Senior Secured Notes due 2004 (the "Notes")
Dear Sirs:
In connection with our proposed purchase of $__________________
aggregate principal amount of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture dated
as of November 15, 1997 (the "Indenture"), relating to the Notes, and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and conditions
and the Securities Act of 1933 (the "Securities Act").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes may not be offered
or sold except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Notes, we will do so only (A) to the Company
or any subsidiary thereof, (B) in accordance with Rule 144A under the
Securities Act to a "qualified institutional buyer" (as defined therein), (C)
to an institutional "accredited investor" (as defined below) that, prior to
such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to you and to the Company a signed letter substantially in the
form of this letter, (D) outside the United States in accordance with Rule 904
of Regulation S under the Securities Act, (E) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act, or (F) pursuant to
an effective registration statement under the Securities Act, and we further
agree to provide to any person purchasing any of the Notes from us a notice
advising such purchaser that resales of the Notes are restricted as stated
herein.
134
3. We understand that, on any proposed resale of any Notes, we
will be required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably require to
confirm that the proposed sale complies with the foregoing restrictions. We
further understand that the Notes purchased by us will bear a legend to the
foregoing effect.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes purchased by us for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
----------------------------------
Authorized Signature
C-2
135
EXHIBIT D
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
_____________________, ____
Bank One, NA
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency Group
Re: Kitty Hawk, Inc. (the "Company")
9.95% Senior Secured Notes due 2004 (the "Notes")
Dear Sirs:
In connection with our proposed sale of U.S.$__________________
aggregate principal amount of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the Securities
Act of 1933 and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the
United States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the
United States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any
136
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
------------------------------------------
Authorized Signature
D-2