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Exhibit 10.2
EXECUTION COPY
SECURITY TRUST AGREEMENT
Dated as of May 5, 1999
between
AIRCRAFT FINANCE TRUST
and
THE ADDITIONAL GRANTORS REFERRED TO HEREIN
as the Grantors
and
BANKERS TRUST COMPANY,
as the Security Trustee and the Operating Bank
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS..........................................................1
Section 1.01 Definitions..............................................1
Section 1.02 Construction and Usage...................................6
ARTICLE II SECURITY............................................................6
Section 2.01 Grant of Security........................................6
Section 2.02 Security for Obligations.................................9
Section 2.03 Representations and Warranties of the Grantors...........9
Section 2.04 Grantors Remain Liable..................................10
Section 2.05 Delivery of Collateral..................................11
Section 2.06 Maintenance of Security Trustee Accounts................11
Section 2.07 The Grantor and the Accounts............................12
Section 2.08 As to the Assigned Documents............................13
Section 2.09 As to Security Collateral, Beneficial Interest
Collateral and Investment Collateral....................15
Section 2.10 Further Assurances......................................16
Section 2.11 Place of Perfection; Records............................17
Section 2.12 Voting Rights; Dividends; Etc...........................17
Section 2.13 Transfers and Other Encumbrances; Additional
Shares or Interests.....................................18
Section 2.14 Security Trustee Appointed Attorney-in-Fact.............18
Section 2.15 Security Trustee May Perform............................19
Section 2.16 Covenant to Pay.........................................19
Section 2.17 Delivery of Collateral Supplements......................19
Section 2.18 Annual Opinion..........................................19
ARTICLE III REMEDIES..........................................................20
Section 3.01 Remedies................................................20
ARTICLE IV SECURITY INTEREST ABSOLUTE.........................................21
Section 4.01 Security Interest Absolute..............................21
ARTICLE V THE SECURITY TRUSTEE AND THE OPERATING BANK.........................22
Section 5.01 Authorization and Action................................22
Section 5.02 Absence of Duties.......................................22
Section 5.03 Representations or Warranties...........................22
Section 5.04 Reliance; Agents; Advice of Counsel.....................23
Section 5.05 No Individual Liability.................................24
Section 5.06 The Operating Bank......................................25
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ARTICLE VI SUCCESSOR TRUSTEES AND OPERATING BANK..............................25
Section 6.01 Resignation and Removal of Security Trustee.............25
Section 6.02 Appointment of Successor................................25
Section 6.03 The Operating Bank......................................25
ARTICLE VII AGREEMENT AMONG SECURED PARTIES...................................26
Section 7.01 Subordination and Priority..............................26
Section 7.02 Exercise of Remedies....................................27
Section 7.03 Further Agreements of Subordination.....................27
Section 7.04 Rights of Subrogation...................................29
Section 7.05 Further Assurances of Subordinated Representatives......29
Section 7.06 No Change in Rights in Collateral.......................29
Section 7.07 Waiver of Marshalling and Similar Rights................29
Section 7.08 Enforcement.............................................30
Section 7.09 Obligations Not Affected................................30
Section 7.10 Waiver..................................................30
Section 7.11 Senior Obligations and Subordinated Obligations
Unimpaired..............................................31
Section 7.12 Upon Discharge of Obligations...........................31
ARTICLE VIII INDEMNITY AND EXPENSES...........................................31
Section 8.01 Indemnity...............................................31
Section 8.02 Holders' Indemnity......................................32
Section 8.03 No Compensation from Secured Parties....................32
Section 8.04 Security Trustee Fees...................................32
ARTICLE IX MISCELLANEOUS......................................................33
Section 9.01 Amendments; Waivers; Etc................................33
Section 9.02 Addresses for Notices...................................33
Section 9.03 No Waiver; Remedies.....................................34
Section 9.04 Severability............................................34
Section 9.05 Continuing Security Interest; Assignments...............35
Section 9.06 Release and Termination.................................35
Section 9.07 Currency Conversion.....................................35
Section 9.08 Governing Law...........................................36
Section 9.09 Jurisdiction............................................36
Section 9.10 Counterparts............................................36
Section 9.11 Table of Contents, Headings, Etc........................37
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SCHEDULES
Schedule I Pledged Stock, Pledged Beneficial Interest and Pledged Debt
Schedule II Non-Trustee Account Information
Schedule III Trade Names
Schedule IV Chief Place of Business and Chief Executive or Registered Office
EXHIBITS
Exhibit A Form of Secured Party Supplement
Exhibit B-1 Form of Collateral Supplement
Exhibit B-2 Form of Grantor Supplement
Exhibit C Form of Non-Trustee Account Letter
Exhibit D Form of Consent and Agreement
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SECURITY TRUST AGREEMENT
This SECURITY TRUST AGREEMENT (this "Agreement"), dated as of May 5,
1999, is made between AIRCRAFT FINANCE TRUST, a Delaware statutory business
trust (the "Issuer"), the ISSUER SUBSIDIARIES listed on the signature pages of,
or who otherwise become grantors under, this Agreement (together with the
Issuer, the "Grantors") and BANKERS TRUST COMPANY, a New York banking
corporation ("Bankers Trust").
PRELIMINARY STATEMENTS:
(1) The Issuer and Bankers Trust have entered into the Indenture
pursuant to which the Issuer is issuing the Notes and Bankers Trust has been
appointed the Trustee.
(2) The Issuer is the owner of (i) all of the beneficial interest
(the "Pledged Beneficial Interest") in certain Issuer Subsidiaries and all of
the outstanding shares of capital stock of the other Issuer Subsidiaries (the
"Pledged Stock"), all as described in the attached Schedule I and (ii) the
indebtedness of certain Issuer Subsidiaries (the "Pledged Debt"), all as
described in the attached Schedule I.
(3) The Issuer Subsidiaries are or may from time to time be parties
to lease and sub-lease contracts and servicing agreements with respect to the
Initial Aircraft, and they may enter into lease and sub-lease contracts and
servicing agreements with respect to Additional Aircraft.
(4) The Issuer and the Issuer Subsidiaries may from time to time
grant additional security for the benefit of the Secured Parties.
(5) It is a condition precedent to the issuance of the Notes by the
Issuer that each Grantor grant the security interests required by this
Agreement.
(6) Each Grantor will derive substantial direct and indirect benefit
from the issuance of the Notes and from the Related Documents.
(7) Bankers Trust is willing to act as the Security Trustee and the
Operating Bank under this Agreement.
NOW, THEREFORE, in consideration of the premises, each Grantor
hereby agrees with the Security Trustee for its benefit and the benefit of the
other Secured Parties as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. (a) Certain Defined Terms. For the purposes of
this Agreement, the following terms have the meanings indicated below:
"Account Collateral" has the meaning specified in Section 2.01.
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"Account Letters" has the meaning specified in Section 2.07(a).
"Additional Grantor" has the meaning specified in Section 9.01.
"Agreed Currency" has the meaning specified in Section 9.07.
"Agreement" has the meaning specified in the recital of parties to
this Agreement.
"Agreement Collateral" means, collectively, the Assigned Agreement
Collateral, the Lease Collateral and the Servicing Collateral.
"Assigned Agreements" has the meaning specified in Section 2.01
"Assigned Agreement Collateral" has the meaning specified in Section
2.01.
"Assigned Documents" means, collectively, the Assigned Agreements,
the Assigned Leases and the Service Provider Documents included in the Servicing
Collateral.
"Assigned Leases" has the meaning specified in Section 2.01.
"Bankers Trust" has the meaning specified in the recital of parties
to this Agreement.
"Bankers Trust Fee Letter" means the fee agreement dated as of May
5, 1999 between the Issuer and Bankers Trust.
"Beneficial Interest Collateral" has the meaning specified in
Section 2.01.
"Certificated Security" means a certificated security (as defined in
Section 8-102(a)(4) of the UCC) other than a Government Security.
"Collateral" has the meaning specified in Section 2.01.
"Collateral Supplement" means a supplement to this Agreement in
substantially the form attached as Exhibit B-1 executed and delivered by a
Grantor.
"Government Security" means any security issued or guaranteed by the
United States of America or an agency or instrumentality thereof that is
maintained in book-entry on the records of the Federal Reserve Bank of New York
and is subject to Revised Book-Entry Rules.
"Grantors" has the meaning specified in the recital of parties to
this Agreement.
"Grantor Supplement" means a supplement to this Agreement in
substantially the form attached as Exhibit B-2 executed and delivered by an
Issuer Group Member.
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"Indenture" means the Trust Indenture dated as of May 5, 1999
between the Issuer, the Administrative Agent and the Trustee.
"Indenture Obligations" means, in respect of any class of Notes, all
obligations of the Issuer under and in respect of such class of Notes including
all obligations of the Issuer to make payments of principal of, interest on
(including Registration Step-Up Interest, Maturity Step-Up Interest, Additional
Interest and interest following the filing of a petition initiating any
proceeding referred to in Section 7.03(a)) and premium (including Sale Premium),
if any, on such class of Notes, all obligations to pay any fees, expenses or
other amounts under or in respect of such class of Notes, the Indenture or any
Related Document in respect of such class of Notes, and all obligations in
respect of any amendment, modification, extension, renewal or refinancing of
such class of Notes.
"Instrument" means any "instrument" as defined in Section
9-105(1)(i) of the UCC.
"Investment Collateral" has the meaning specified in Section 2.01.
"Issuer" has the meaning specified in the recital of parties to this
Agreement.
"Lease Assignment Documents" means, in respect of any Assigned
Lease, (a) any agreement providing for the novation thereof to substitute, or
the assignment thereof to, an Issuer Group Member as the lessor, (b) any
agreement or instrument supplemental to this Agreement for the purpose of
effecting and/or perfecting the assignment of, and the grant of a lien upon,
such Assigned Lease in favor the Security Trustee under any Applicable Law
(other than the law of the State of New York), (c) any notice provided to the
lessee thereof of the assignment thereof pursuant to this Agreement and/or such
supplement, (d) any acknowledgment of such assignment by such lessee and (e) any
undertaking of quiet enjoyment given by the Security Trustee in respect thereof.
"Lease Collateral" has the meaning specified in Section 2.01.
"Non-Trustee Account Banks" has the meaning specified in Section
2.07.
"Non-Trustee Account Collateral" has the meaning specified in
Section 2.01.
"Obligor" has the meaning specified in Section 2.07.
"Operating Bank" means the Person acting, at the time of
determination, as the operating bank under this Agreement. The initial Operating
Bank is Bankers Trust.
"Owner Trustee Fee Agreement" means the fee agreement dated as of
May 5, 1999 between the Owner Trustee and the Issuer.
"Pledged Beneficial Interest" has the meaning specified in the
preliminary statements to this Agreement.
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"Pledged Debt" has the meaning specified in the preliminary
statements to this Agreement.
"Pledged Stock" has the meaning specified in the preliminary
statements to this Agreement.
"Received Currency" has the meaning specified in Section 9.07.
"Relevant Collateral" has the meaning specified in Section 2.09(a).
"Revised Book-Entry Rules" means 31 C.F.R. ss. 357 (Treasury bills,
notes and bonds); 12 C.F.R. ss. 615 (book-entry securities of the Farm Credit
Administration); 12 C.F.R. ▇▇.▇▇. 910 and 912 (book-entry securities of the
Federal Home Loan Banks); 24 C.F.R. ss. 81 (book-entry securities of the Federal
National Mortgage Association and the Federal Home Loan Mortgage Corporation);
12 C.F.R. ss. 1511 (book-entry securities of the Resolution Funding
Corporation); 31 C.F.R. ss. 354 (book-entry securities of the Student Loan
Marketing Association); and any substantially comparable book-entry rules of any
other Federal agency or instrumentality.
"Secured Collateral Provider" means any of or, in its plural form,
all of the Secured Service Providers, Secured Swap Providers and Secured Credit
Facility Providers.
"Secured Collateral Provider Document" means any of or, in its
plural form, all of the Service Provider Documents, Swap Agreements and Credit
Facilities.
"Secured Credit Facility" means any Eligible Credit Facility in
respect of which the provider has delivered to the Security Trustee a Secured
Party Supplement.
"Secured Credit Facility Obligations" means the obligations of the
Issuer now or hereafter existing under any Secured Credit Facilities to Secured
Credit Facility Providers.
"Secured Credit Facility Provider" means the provider of any Secured
Credit Facility.
"Secured Obligations" means, collectively, the Indenture Obligations
with respect to all classes of Notes, the Secured Service Provider Obligations,
the Additional Servicer Amounts, the Secured Credit Facility Obligations and the
Secured Swap Provider Obligations.
"Secured Party" means any of or, in the plural form, all of the
Security Trustee, each other Secured Service Provider, each Holder, each Secured
Credit Facility Provider and each Secured Swap Provider.
"Secured Party Supplement" means a supplement to this Agreement in
substantially the form attached as Exhibit A executed and delivered to the
Security Trustee by a Service Provider, a Swap Provider or a Secured Credit
Facility Provider.
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"Secured Service Provider" means any of the Security Trustee, the
Trustee, the Operating Bank, the Servicer, the Administrative Agent, the
Reference Agent, the Financial Advisor, the Capital Markets Advisor and each
other provider (including any Authorized Agent) of a Secured Service Provider
Document.
"Secured Service Provider Document" means any of any Service
Provider Document listed under clause (a) of the definition of that term and any
other service agreement entered into by an Issuer Group Member in accordance
with the Indenture in respect of which the counterparty has executed and
delivered to the Security Trustee a Secured Party Supplement.
"Secured Service Provider Obligations" means, collectively, the
obligations now or hereafter existing of any Issuer Group Member to a Service
Provider under a Secured Service Provider Document other than the Additional
Servicer Amounts.
"Secured Swap Agreement" means a Swap Agreement in respect of which
the Swap Provider has executed and delivered to the Security Trustee a Secured
Party Supplement.
"Secured Swap Provider" means the Swap Provider of a Secured Swap
Agreement.
"Secured Swap Provider Obligations" means the obligations of the
Issuer now or hereafter existing under the Secured Swap Agreements.
"Securities Account" means a securities account as defined in
Section 8-501(a) of the UCC maintained in the name of the Security Trustee as
"entitlement holder" (as defined in Section 8-102(a)(7) of the UCC) on the books
and records of the Operating Bank or another Securities Intermediary in the
State of New York.
"Securities Intermediary" means any "securities intermediary" of the
Security Trustee as defined in 31 C.F.R. Section 357.2 or Section 8-102(a)(14)
of the UCC.
"Security Collateral" has the meaning specified in Section 2.01(a).
"Security Trustee" means the Person appointed, at the time of
determination, as the security trustee under this Agreement. The initial
Security Trustee is Bankers Trust.
"Security Trustee Account" means any Account other than a
Non-Trustee Account.
"Senior Creditors" means the Secured Parties to whom the Senior
Obligations are owed.
"Senior Obligations" means, with respect to any Secured Obligation
(other than Secured Service Provider Obligations and all Secured Credit Facility
Obligations that constitute Expenses), all other Obligations the payment of
which constitute a Prior Ranking Amount.
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"Senior Representative" means the Controlling Party.
"Service Provider Documents" means (a) the Administrative Agency
Agreement, the Trust Agreement (with respect to the obligations of the Issuer to
the Owner Trustee), the Indenture (with respect to the obligations of the Issuer
to the Trustee), the Reference Agency Agreement, the Servicing Agreement, the
Financial Advisory Agreement, the Capital Markets Advisory Agreement, any
Additional Servicing Agreement, the Bankers Trust Fee Agreement, the Owner
Trustee Fee Agreement and this Agreement (with respect to the obligations of the
Grantors to the Security Trustee and the Operating Bank) and (b) any other
service agreement entered into by any Issuer Group Member pursuant to the
Indenture.
"Subordinated Creditors" means, at any time, the holders and owners
of Subordinated Obligations.
"Subordinated Obligations" means (a)with respect to the Secured
Service Provider Obligations and Secured Credit Facility Obligations that
constitute Expenses, all other Obligations and (b) with respect to any other
Secured Obligations, all Obligations as to which the payment of such Secured
Obligation constitutes a Prior Ranking Amount.
"Subordinated Representative" means, at any time, any trustee or
representative of any holders or owners (or, in the absence of any such person,
such holders and owners) of any Secured Obligations other than the Senior
Representative at such time.
"UCC" means the Uniform Commercial Code as in effect on the date of
determination in the State of New York; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
of the security interest in any Collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than New York, "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions of this Agreement relating to such perfection or effect of perfection
or non-perfection.
"Uncertificated Security" means an uncertificated security (as
defined in Section 8-102(a)(18) of the UCC) other than a Government Security.
(b) Terms Defined in the Indenture. For all purposes of this
Agreement, all capitalized terms used, but not defined in, this Agreement shall
have the respective meanings assigned to such terms in the Indenture.
Section 1.02 Construction and Usage. The conventions of construction and
usage set forth in Section 1.02 of the Indenture are hereby incorporated by
reference in this Agreement.
ARTICLE II
SECURITY
Section 2.01 Grant of Security. To secure the Secured Obligations, each
Grantor hereby assigns and pledges to the Security Trustee for its benefit and
the benefit of the Secured
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Parties (except, with respect to any Secured Collateral Provider Documents under
clause (h) or clause (i) below, the related Secured Collateral Provider), and
hereby grants to the Security Trustee for its benefit and the benefit of the
Secured Parties (except, with respect to any Secured Collateral Provider
Documents under clause (h) or clause (i) below, the related Secured Collateral
Provider) a security interest in, all of such Grantor's right, title and
interest in and to the following (collectively, the "Collateral"):
(a) with respect to each Grantor, all of the following (the
"Security Collateral"):
(i) the Pledged Stock and the certificates representing such Pledged
Stock, and all dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Stock;
(ii) the Pledged Debt and the instruments evidencing the Pledged
Debt, and all interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Debt;
(iii) all additional shares of the capital stock of any Issuer Group
Member from time to time acquired by such Grantor in any manner, including the
capital stock of any Issuer Group Member that may be formed from time to time,
and the certificates representing such additional shares of the capital stock
and all dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all such additional shares; and
(iv) all additional indebtedness from time to time owed to such
Grantor by any Issuer Group Member and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness;
(b) with respect to each Grantor, all of the following (the
"Beneficial Interest Collateral"):
(i) the Pledged Beneficial Interests, all certificates, if any, from
time to time representing all of such Grantor's right, title and interest in the
Pledged Beneficial Interest, any contracts and instruments pursuant to which any
such Pledged Beneficial Interests are created or issued and all distributions,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Pledged
Beneficial Interest; and
(ii) all of such Grantor's right, title and interest in all
additional beneficial interests from time to time acquired by such Grantor in
any manner, all certificates, if any, from time to time representing such
additional beneficial interests and all distributions, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all such additional beneficial
interests;
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(c) with respect to each Grantor, all of the following
(collectively, the "Non-Trustee Account Collateral"):
(i) all of the Non-Trustee Accounts in such Grantor's name, all
funds or any other interest held or required by the terms of the Indenture to be
held in, and all certificates and instruments, if any, from time to time
representing or evidencing, such Non-Trustee Accounts;
(ii) all notes, certificates of deposit, deposit accounts, checks
and other instruments from time to time hereafter delivered to or otherwise
possessed by the Security Trustee for or on behalf of such Grantor in
substitution for or in addition to any or all of the then existing Non-Trustee
Account Collateral; and
(iii) all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the then existing Non-Trustee Account Collateral;
(d) with respect to each Grantor, all right of such Grantor in and
to each Security Trustee Account at any time or from time to time established
and all cash, investment property, Permitted Account Investment, other
Investments, securities, instruments or other property (including all "financial
assets" within the meaning of Section 8-102(a)(9) of the UCC) at any time or
from time to time credited to any such Security Trustee Account (collectively,
the "Account Collateral");
(e) all other investment property (as defined in Section 9-115(1)(f)
of the UCC) of each Grantor including written notification of the following (the
"Investment Collateral"):
(i) all Permitted Account Investments made or acquired from or with
the proceeds of any Non-Trustee Account Collateral of such Grantor from time to
time and all certificates and instruments, if any, from time to time
representing or evidencing such Permitted Account Investments; and
(ii) all interest, dividends, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Investment Collateral;
(f) with respect to the Issuer, all of the following (the "Assigned
Agreement Collateral"):
(i) all of such Grantor's right, title and interest in and to all
security assignments, cash deposit agreements and other security agreements
executed in its favor by any Issuer Subsidiary, in each case as such agreements
may be amended or otherwise modified from time to time (collectively, the
"Assigned Agreements"); and
(ii) all of such Grantor's right, title and interest in and to all
deposit accounts, all funds or other property held in such deposit accounts, all
certificates and instruments, if any, from time to time representing or
evidencing such deposit accounts and all other property of
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whatever nature, in each case pledged, assigned or transferred to it or
mortgaged or charged in its favor pursuant to any Assigned Agreement;
(g) with respect to each Grantor, all of such Grantor's right, title
and interest in and to all Leases to which such Grantor is or may from time to
time be party and any leasing arrangements among Issuer Group Members with
respect to such Leases (all such Leases, the "Assigned Leases"), including (i)
all rights of such Grantor to receive moneys due and to become due under or
pursuant to such Assigned Leases, (ii) all rights of such Grantor to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect to such
Assigned Leases, (iii) claims of such Grantor for damages arising out of or for
breach or default under such Assigned Leases, (iv) all rights under any such
Assigned Lease with respect to any subleases of the Aircraft subject to such
Assigned Lease and (v) the right of such Grantor to terminate such Assigned
Leases and to compel performance of, and otherwise to exercise all remedies
under, any Assigned Lease, whether arising under such Assigned Leases or by
statute or at law or in equity (the "Lease Collateral");
(h) with respect to each Grantor, all of such Grantor's right, title
and interest in and to all Service Provider Documents (the "Servicing
Collateral");
(i) with respect to each Grantor, all of such Grantor's right, title
and interest in and to all Credit Facilities not consisting of a Cash Collateral
Account and Swap Agreements and all rights to administer, draw upon and
otherwise deal with each such Credit Facility and to administer and otherwise
deal with each such Swap Agreement;
(j) with respect each Grantor, all of such Grantor's right, title
and interest in and to the personal property identified in a Grantor Supplement
or a Collateral Supplement executed and delivered by such Grantor to the
Security Trustee; and
(k) all proceeds of any and all of the foregoing Collateral
(including proceeds that constitute property of the types described in
subsections (a), (b), (c), (d), (e), (f), (g), (h), (i) and (j) of this Section
2.01);
provided that the Collateral shall not include Excluded Payments.
Section 2.02 Security for Obligations. This Agreement secures the payment
and performance of all Secured Obligations of the Grantor to each Secured Party
(subject to the subordination provision of this Agreement and the Indenture) and
shall be held by the Security Trustee in trust for the Secured Parties. Without
limiting the generality of the foregoing, this Agreement secures the payment of
all amounts that constitute part of the Secured Obligations and would be owed by
any Grantor to any Secured Parties but for the fact that they are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such Grantor.
Section 2.03 Representations and Warranties of the Grantors. Each Grantor
represents and warrants as of the date of this Agreement, and as of each
subsequent Closing Date and each Delivery Date on which such Grantor accepts an
Aircraft, as follows:
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(a) The Grantors are the legal and beneficial owner of the
Collateral free and clear of any Encumbrance (other than Permitted
Encumbrances), other than that of this Agreement. No effective financing
statement or other instrument similar in effect covering all or any part of the
Collateral is on file in any recording office, except such as may have been
filed in favor of the Security Trustee relating to Collateral.
(b) This Agreement creates a valid and (upon the taking of the
actions required hereby) perfected security interest in the Collateral as
security for the Secured Obligations, subject in priority to no other
Encumbrances (other than Permitted Encumbrances), and all filings and other
actions necessary or desirable to perfect and protect such security interest
have been (or in the case of future Collateral will be) duly taken.
(c) No Grantor has any trade names except as set forth on Schedule
III hereto.
(d) No consent of any other Person and no authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body or other third party is required either (i) for the grant by
such Grantor of the assignment and security interest granted hereby, (ii) for
the execution, delivery or performance of this Agreement by such Grantor or
(iii) for the perfection or maintenance of the pledge, assignment and security
interest created hereby, except for the filing of financing and continuation
statements under the Uniform Commercial Code.
(e) The chief place of business and chief executive or registered
office of such Grantor and the office where such Grantor keeps records of the
Collateral are located at the address specified opposite the name of such
Grantor on the attached Schedule IV.
(f) The Pledged Stock constitutes the percentage of the issued and
outstanding shares of capital stock of the issuers thereof indicated on the
attached Schedule I. The Pledged Beneficial Interest constitutes the percentage
of the beneficial interest of the issuer thereof indicated on Schedule I hereto.
(g) The Pledged Stock and the Pledged Beneficial Interest have been
duly authorized and validly issued and are fully paid up and nonassessable. The
Pledged Debt has been duly authorized, authenticated or issued and delivered, is
the legal, valid and binding obligation of each obligor thereunder and is not in
default.
(h) A true and complete copy of each Assigned Agreement in effect on
the Initial Closing Date has been delivered to the Security Trustee. Each
Assigned Document upon its inclusion in the Collateral will have been duly
authorized, executed and delivered by the relevant Grantors, will be in full
force and effect and will be binding upon and enforceable against all parties
thereto in accordance with their terms.
Section 2.04 Grantors Remain Liable. Anything contained herein to the
contrary notwithstanding, (a) each Grantor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations
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thereunder to the same extent as if this Agreement had not been executed, (b)
the exercise by the Security Trustee of any of its rights hereunder shall not
release any Grantor from any of its duties or obligations under the contracts
and agreements included in the Collateral and (c) no Secured Party shall have
any obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement, nor shall any Secured Party be obligated
to perform any of the obligations or duties of any Grantor under the contracts
and agreements included in the Collateral or to take any action to collect or
enforce any claim for payment assigned under this Agreement.
Section 2.05 Delivery of Collateral. All certificates or instruments
representing or evidencing any Collateral (other than Account Collateral) shall
be delivered to and held by or on behalf of the Security Trustee in New York and
shall be in suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to evidence the security interests granted thereby. The
Security Trustee shall have the right, at any time in its discretion and without
notice to any Grantor, to transfer to or to register in the name of the Security
Trustee or any of its nominees any or all of the Pledged Stock and Pledged
Beneficial Interest, subject only to the revocable rights specified in Section
2.12(a). In addition, the Security Trustee shall have the right at any time to
exchange certificates or instruments representing or evidencing any Collateral
(other than Account Collateral) for certificates or instruments of smaller or
larger denominations. To the extent that any Assigned Lease constitutes chattel
paper (as defined in Section 9-105 of the UCC), the Grantors shall cause the
original of such Assigned Lease to be delivered to the Security Trustee promptly
(and in any case no later than ten days) after the execution and delivery of
such Assigned Lease by all its parties.
Section 2.06 Maintenance of Security Trustee Accounts.
(a) Bankers Trust hereby agrees to act as the Operating Bank under
this Agreement. Upon the execution of this Agreement and from time to time
thereafter as called for by Section 3.01 of the Indenture, the Operating Bank
shall establish and maintain on the books and records of its office specified in
Section 9.02 and maintain in the name of the Security Trustee each respective
Security Trustee Account (as an Eligible Account) to be established on the
Initial Closing Date or on such other time. If, at any time, any Security
Trustee Account ceases to be an Eligible Account, the Operating Bank shall,
within 10 Business Days thereafter, establish a new Security Trustee Account
having the same characteristics or such other Account and transfer all property
related to such old Account to such new Account. The Operating Bank also agrees
to cooperate with any replacement Operating Bank as to the transfer of any
property in, or records relating to, any Security Trust Account maintained by
it. Except as a Secured Party in accordance with the provisions of this
Agreement, Bankers Trust waives any claim or lien against any Account it may
have, by operation of law or otherwise, for any amount owed to it by any
Grantor.
(b) The Operating Bank hereby agrees that (i) each Security Trustee
Account will be and will be maintained as a Securities Account of which it is
the Securities Intermediary and in respect of which the Security Trustee is the
"entitlement holder" (as defined in Section 8-102(a)(7) of the UCC) of the
"securities entitlement" (as defined in Section 8-102(a)(17) of the
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UCC) with respect to each "financial asset" (as defined in Section 8-102(a)(9)
of the UCC) credited to such Account, (ii) all Collections and other cash
required to be deposited in any such Account and Permitted Account Investments
and all other property acquired with cash credited to any such Account will be
credited to such Account, (iii) all items of property (whether cash, investment
property, Permitted Account Investments, other investments, securities,
instruments or other property credited to each Security Trustee Account will be
treated as a "financial asset" (as defined in Section 8-102(a)(9) of the UCC)
under Article 8 of the UCC, (iv) its "securities intermediary's jurisdiction"
(as defined in Section 8-110(e) of the UCC) with respect to each Account is the
State of New York and (v) all securities, instruments and other property in
order or registered from and credited to any Security Trustee Account shall be
payable to or to the order of, or registered in the name of, the Operating Bank
or shall be indorsed to the Operating Bank or in blank, and in no case
whatsoever shall any financial asset credited to any Security Trustee Account be
registered in the name of any Grantor, payable to or to the order of any Grantor
or specially indorsed to any Grantor except to the extent the foregoing have
been specially endorsed by a Grantor to the Operating Bank or in blank. The
Operating Bank acknowledges that the Security Trustee has appointed the
Administrative Agent pursuant to the Administrative Agency Agreement, as its
agent for, among other things, dealings with respect to the Security Trustee
Accounts; the Operating Bank agrees that, until otherwise notified in writing by
the Security Trustee, the Operating Bank will follow the written directions and
instructions of the Administrative Agent, as the agent for the Security Trustee,
to the extent it is required to follow those of the Security Trustee except
that, with respect to withdrawals from any Note Account, the Operating Bank
agrees that it will follow the directions and instructions of the Trustee, as
the agent for the Security Trustee (the Security Trustee hereby appointing the
Trustee as its agent for such purpose).
(c) The Security Trustee agrees that it will hold (and will indicate
clearly in the books and records that it holds) its "security entitlement" to
the "financial asset" credited to each Security Trustee Account in trust (i) to
the extent of any Segregated Funds in the Lessee Funded Account, for the benefit
of the relevant Lessees, (ii) to the extent of any Cash Collateral Account for
any class or subclass of Notes, for the benefit of the Holders of such Notes and
(to the extent so provided, if at all, in the Controlling Trustees' Resolution
establishing such Credit Facility) each provider of a Credit Facility the
proceeds of which funded such Cash Collateral Account, (iii) to the extent of
any Varig Reserve Account, for the Secured Parties and, to the extent set forth
in Section 3.01(m)(iii) of the Indenture, GE Capital and (iv) in the case of any
other Security Trustee Account, for the benefit of the Secured Parties (but
subject to the subordination provisions hereof).
Section 2.07 The Grantor and the Accounts. So long as any Secured
Obligations remain unpaid:
(a) No Grantor shall establish any Account except to the extent that
it is entitled, pursuant to the Indenture and in compliance with this Section
2.07, to establish one or more Non-Trustee Accounts. Except to the extent that
such payment is required by the payee thereof (and is permitted by the
Indenture) to be deposited in a Non-Trustee Account, each Grantor shall
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instruct each Person obligated at any time to make any payment to such Grantor
for any reason (an "Obligor") to make such payment to the appropriate Rental
Account.
(b) With respect to each Non-Trustee Account to be established or
established by any Grantor:
(i) Each Grantor shall maintain each Non-Trustee Account (as an
Eligible Account) in its name only with Eligible Institutions ("Non-Trustee
Account Banks") that have entered into letter agreements in substantially the
form of Exhibit C hereto (or made such other arrangements as are acceptable to
the Security Trustee) with such Grantor and the Security Trustee (the "Account
Letters").
(ii) Each Grantor shall immediately instruct each Obligor to make
any payment not required, as provided in Section 2.07(a), to be made to a
Security Trustee Account to a Non-Trustee Account meeting the requirements of
Section 2.07(b)(i).
(iii) Upon any termination of any Account Letter or other agreement
with respect to the maintenance of a Non-Trustee Account by any Grantor or any
Non-Trustee Account Bank, such Grantor shall immediately notify all Obligors
that were making payments to such Non-Trustee Account to make all future
payments to another Non-Trustee Account meeting the requirements of Section
2.07(b)(i). Subject to the terms of any Lease, upon request by the Security
Trustee, each Grantor shall, and if prohibited from so doing by the terms of any
Lease, shall use its best efforts to seek the consent of the relevant Lessee to,
terminate any or all of its Non-Trustee Accounts, in which case Section 2.07(a)
shall apply.
Section 2.08 As to the Assigned Documents. (a) Upon the inclusion of any
Assigned Document (other than an Assigned Lease) in the Collateral, the relevant
Grantor will deliver to the Security Trustee a consent, in substantially the
form of Exhibit D and executed by each party to such Assigned Document (other
than any Grantor) or (where the terms of such Assigned Document expressly
provide for a consent to its assignment for security purposes to substantially
the same effect as Exhibit D) will give due notice to each such other party to
such Assigned Document of its assignment pursuant to this Agreement. Upon the
inclusion of any Assigned Lease in the Collateral, the relevant Grantor will
deliver to the Security Trustee (i) in the case of any Assigned Lease that is an
Initial Lease such consents, acknowledgments and/or notices as are provided for
in the related Lease Assignment Documents and (ii) in the case of any other
Assigned Lease such consents, acknowledgments and/or notices as are necessary or
customary under the terms of such Assigned Lease and under the Applicable Law of
the jurisdiction governing such Assigned Lease and the jurisdiction in which the
relevant lessee is principally located in order to effect and perfect the
assignment of, and grant of a lien upon, such Assigned Lease pursuant to this
Agreement and/or to assure the payment of all Rental Payments under such
Assigned Lease to the appropriate Account in accordance with the terms of the
Indenture. Upon the request of any Grantor, the Security Trustee (solely in its
capacity as such) will execute such undertakings of quiet enjoyment in favor of
the lessee under any Assigned Lease as are (in the case of any Assigned Lease
that is an Initial Lease) provided for in the Lease Assignment Documents or as
are (in the case of any other Assigned Lease) substantially to the same effect
as such undertakings.
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(b) Upon (i) the inclusion of any Assigned Document in the
Collateral or (ii) the amendment or replacement of any Assigned Document or the
entering into of any new Assigned Document, the relevant Grantor will deliver a
copy thereof to the Security Trustee and will take such other action as may be
necessary or desirable to perfect the lien of this Agreement as to such Assigned
Document.
(c) Each Grantor shall, at its expense but subject to Section
2.08(e), Section 3.01(c), the Indenture and (in the case of any Assigned Lease)
the Servicing Agreement:
(i) perform and observe all the terms and provisions of the Assigned
Documents to be performed or observed by it, enforce the Assigned Documents in
accordance with their terms and take all such action to such end as may be from
time to time requested by the Security Trustee; and
(ii) furnish to the Security Trustee promptly upon receipt copies of
all notices, requests and other documents received by such Grantor under or
pursuant to the Assigned Documents, and from time to time, (A) furnish to the
Security Trustee such information and reports regarding the Collateral as the
Security Trustee may reasonably request and (B) upon request of the Security
Trustee make to each other party to any Assigned Document such demands and
requests for information and reports or for action as such Grantor is entitled
to make thereunder.
(d) Each Grantor will, at its expense and upon the request of any
Secured Service Provider, pursue for the benefit of such Secured Service
Provider any claim that such Secured Service Provider has under any Assigned
Document for indemnity or otherwise.
(e) So long as no Default Notice shall have been delivered to the
Issuer and no Acceleration Default shall have occurred and be continuing, and
notwithstanding any provision to the contrary in this Agreement, each Grantor
shall be entitled, to the exclusion of the Security Trustee but subject always
to the terms of the Indenture (x) to exercise and receive, directly or
indirectly through one or more agents, including the Servicer, any of the
claims, rights, powers, privileges, remedies and other benefits under, pursuant
to, with respect to or arising out of the Assigned Documents and (y) to take any
action or to not take any action, directly or indirectly through one or more
agents, including the Servicer, related to the Assigned Documents and the
lessees or counterparties thereunder, including entering into, amending,
supplementing, terminating, performing, enforcing, compelling performance of,
exercising all remedies (whether arising under any Assigned Document or by
statute or at law or in equity or otherwise) under, exercising rights, elections
or options or taking any other action under or in respect of, granting or
withholding notices, waivers, approvals and consents in respect of, receiving
all payments under, dealing with any credit support or collateral security in
respect of, or taking any other action in respect of, the Assigned Documents and
contacting or otherwise having any dealings with any lessee or counterparty
thereunder; provided, however, (i) whether or not a Default Notice has been
delivered or an Acceleration Default has occurred, all amounts payable under
each Assigned Document (including all Rental Payments under each Assigned Lease)
shall be paid directly to the appropriate Account in accordance with the terms
of the Indenture, (ii) so
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long as any Assigned Lease remains in effect (and without limiting the authority
of the Servicer or the Additional Servicer under the express terms of the
Servicing Agreement or the Additional Servicing Agreement, as applicable), no
Grantor will abrogate any right, power or privilege granted expressly in favor
of the Security Trustee or the Trustee under any Lease Assignment Document and
(ii) upon the delivery of a Default Notice to the Issuer or during the
continuance of an Acceleration Default, all such rights of each Grantor shall
cease, and, subject to Section 3.01(c), all such rights shall become vested in
the Security Trustee, which shall thereupon have the sole right, subject to
Section 3.01(c), to exercise or refrain from exercising such rights.
Section 2.09 As to Security Collateral, Beneficial Interest Collateral and
Investment Collateral. (a) All Security Collateral, Beneficial Interest
Collateral and Investment Collateral (the "Relevant Collateral") shall be
delivered to the Security Trustee as follows:
(i) in the case of each Certificated Security or Instrument, by (A)
causing the delivery of such Certificated Security or Instrument to the Security
Trustee in the State of New York, registered in the name of the Security Trustee
or duly endorsed by an appropriate person to the Security Trustee or in blank
and, in each case, held by the Security Trustee in the State of New York, or (B)
if such Certificated Security or Instrument is registered in the name of any
Securities Intermediary on the books of the issuer thereof or on the books of
any securities intermediary of any Securities Intermediary, by causing such
Securities Intermediary to continuously credit by book entry such Certificated
Security or Instrument to a Securities Account maintained by such Securities
Intermediary in the name of the Security Trustee and confirming to the Security
Trustee that it has been so credited;
(ii) in the case of each Uncertificated Security, by (A) causing
such Uncertificated Security to be continuously registered on the books of the
issuer thereof in the name of the Security Trustee or (B) if such Uncertificated
Security is registered in the name of a Securities Intermediary on the books of
the issuer thereof or on the books of any securities intermediary of a
Securities Intermediary, by causing such Securities Intermediary to continuously
credit by book entry such Uncertificated Security to a Securities Account
maintained by such Securities Intermediary in the name of the Security Trustee
and confirming to the Security Trustee that it has been so credited; and
(iii) in the case of each Government Security registered in the name
of any Securities Intermediary on the books of the Federal Reserve Bank of New
York or on the books of any securities intermediary of such Securities
Intermediary, by causing such Securities Intermediary to continuously credit by
book entry such security to the Securities Account maintained by such Securities
Intermediary in the name of the Security Trustee and confirming to the Security
Trustee that it has been so credited.
(b) Each of the Issuer and the Security Trustee hereby represents,
with respect to the Relevant Collateral, that it has not entered into, and
hereby agrees that it will not enter into, any agreement (i) with any of the
other parties hereto or any Securities Intermediary specifying any jurisdiction
other than the State of New York as any Securities Intermediary's jurisdiction
in connection with any Securities Account with any Securities Intermediary
referred to in Section 2.09(a) for purposes of 31 C.F.R. Section 357.11(b),
Section 8-110(e) of the UCC or any similar
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state or Federal law, or (ii) with any other person relating to such account
pursuant to which it has agreed that any Securities Intermediary may comply with
entitlement orders made by such person. The Security Trustee represents that it
will, by express agreement with each Securities Intermediary, provide for each
item of property constituting Relevant Collateral held in and credited to the
Securities Account, including cash, to be treated as a "financial asset" within
the meaning of Section 8-102(a)(9) of the UCC for the purposes of Article 8 of
the UCC.
(c) Without limiting the foregoing, the Issuer and the Security
Trustee agree, and the Security Trustee shall cause each Securities
Intermediary, to take such different or additional action as may be required
based upon any Opinion of Counsel received pursuant to Section 2.18 in order to
maintain the perfection and priority of the security interest of the Security
Trustee in the Relevant Collateral in the event of any change in applicable law
or regulation, including Articles 8 and 9 of the UCC and regulations of the U.S.
Department of the Treasury governing transfers of interests in Government
Securities.
Section 2.10 Further Assurances. (a) Each Grantor agrees that from time to
time, at the expense of such Grantor, such Grantor shall promptly execute and
deliver all further instruments and documents, and take all further action
(including under the laws of any foreign jurisdiction), that may be necessary or
desirable, or that the Security Trustee may request, in order to perfect and
protect any pledge, assignment or security interest granted or purported to be
granted hereby or to enable the Security Trustee to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, each Grantor shall: (i) ▇▇▇▇ conspicuously each
of its records pertaining to the Collateral with a legend, indicating that such
Collateral is subject to the security interest granted hereby; (ii) if any
Collateral shall be evidenced by a promissory note or other instrument or
chattel paper, deliver and pledge to the Security Trustee hereunder such note or
instrument or chattel paper duly indorsed and accompanied by duly executed
instruments of transfer or assignment; (iii) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Security Trustee may
request, in order to perfect and preserve the pledge, assignment and security
interest granted or purported to be granted hereby and (iv) execute, file,
record, or register such additional documents and supplements to this Agreement,
including any further assignments, security agreements pledges, grants and
transfers, as may be required by or desirable under the laws of any foreign
jurisdiction, or as the Security Trustee may request, to create, attach,
perfect, validate, render enforceable, protect or establish the priority of the
security interest and lien of this Agreement.
(b) Each Grantor hereby authorizes the Security Trustee to file one
or more financing or continuation statements, and amendments thereto, relating
to all or any part of the Collateral without the signature of such Grantor where
permitted by law. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
(c) Each Grantor shall furnish or cause to be furnished to the
Security Trustee from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as the Security Trustee may reasonably request, all in reasonable
detail; provided that, to the extent that (in the case of any Assigned
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Lease) such statements, schedules or reports (or the data needed to prepare
them) can be obtained only from the Servicer or the Additional Servicer (as
applicable), no Grantor shall be required to obtain any such statements,
schedules, reports or data beyond those to which it is entitled under the
Servicing Agreement or the Additional Servicing Agreement, respectively.
(d) Each Grantor shall, immediately upon the organization or
acquisition by such Grantor of any Issuer Subsidiary, cause such Issuer
Subsidiary to enter into a Grantor Supplement.
Section 2.11 Place of Perfection; Records. Each Grantor shall keep its
chief place of business and chief executive office and the office where it keeps
its records concerning the Collateral at the location therefor specified in
Schedule IV or, upon 30 days' prior written notice to the Security Trustee, at
such other locations in a jurisdiction where all actions required by Section
2.03(e) shall have been taken with respect to the Collateral. Each Grantor shall
hold and preserve such records and shall permit representatives of the Security
Trustee at any time during normal business hours to inspect and make abstracts
from such records, all at the sole cost and expense of such Grantor.
Section 2.12 Voting Rights; Dividends; Etc. (a) So long as no Default
Notice shall have been delivered to the Issuer and no Acceleration Default shall
have occurred and be continuing:
(i) Each of the Grantors shall be entitled to exercise any and all
voting and other consensual rights pertaining to all or any part of the Security
Collateral and Beneficial Interest Collateral pledged by such Grantor for any
purpose not inconsistent with the terms of this Agreement, the charter documents
of such Grantor or the Indenture; provided, however, that such Grantor shall not
exercise or shall refrain from exercising any such right if in its judgment such
action would have a material adverse effect on the value of all or any part of
the Security Collateral or the Beneficial Interest Collateral; and
(ii) The Security Trustee shall execute and deliver (or cause to be
executed and delivered) to such Grantor all such proxies and other instruments
as such Grantor may reasonably request in writing and provide for the purpose of
enabling such Grantor to exercise the voting and other rights that it is
entitled to exercise pursuant to Section 2.12(a)(i).
(b) Whether or not any Default or Event of Default shall have
occurred, any and all distributions, dividends and interest paid in respect of
the Security Collateral and Beneficial Interest Collateral pledged by such
Grantor, including any and all (i) distributions, dividends and interest paid or
payable other than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or in exchange for,
such Security Collateral or Beneficial Interest Collateral; (ii) distributions,
dividends and other distributions paid or payable in cash in respect of such
Security Collateral or Beneficial Interest Collateral in connection with a
partial or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in surplus; and (iii) cash paid, payable or
otherwise distributed in respect of principal of, or in redemption of, or in
exchange for, such Security Collateral or Beneficial Interest Collateral shall
be paid into the Collections Account or shall be forthwith
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delivered to the Security Trustee, as applicable and, if received by such
Grantor, shall be received in trust for the benefit of the Security Trustee, be
segregated from the other property or funds of such Grantor and be forthwith
paid to the Collections Account or delivered to the Security Trustee in the same
form as so received (with any necessary indorsement).
(c) Upon the delivery of a Default Notice to any Issuer Group Member
or during the continuance of an Acceleration Default, all rights of each Grantor
to exercise or refrain from exercising the voting and other consensual rights
that it would otherwise be entitled to exercise pursuant to Section 2.12(a)(i)
and 2.12(a)(ii) shall cease, and all such rights shall thereupon become vested
in the Security Trustee, which shall thereupon have the sole right to exercise
or refrain from exercising such voting and other consensual rights.
Section 2.13 Transfers and Other Encumbrances; Additional Shares or
Interests. (a) No Grantor shall (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to, any of
the Collateral or (ii) create or suffer to exist any Encumbrance upon or with
respect to any of the Collateral of such Grantor, in the case of clause (i) or
(ii) other than the pledge, assignment and security interest created by this
Agreement and as otherwise provided herein, in the Indenture or in the Servicing
Agreement.
(b) Except as otherwise provided pursuant to Section 5.02(l) of the
Indenture, the Issuer Subsidiaries shall not, and the Issuer shall not permit
the Issuer Subsidiaries to, issue, deliver or sell any shares, interests,
participations or other equivalents. Any beneficial interest or capital stock or
other securities or interests issued in respect of or in substitution for the
Pledged Stock or the Pledged Beneficial Interest shall be issued or delivered
(with any necessary endorsement) to the Security Trustee.
Section 2.14 Security Trustee Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Security Trustee such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time in the Security
Trustee's discretion, to take any action and to execute any instrument that the
Security Trustee may deem necessary or advisable to accomplish the purposes of
this Agreement, including:
(a) to ask for, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(b) to receive, indorse and collect any drafts or other instruments
and documents in connection included in the Collateral;
(c) to file any claims or take any action or institute any
proceedings that the Security Trustee may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Security Trustee with respect to any of the Collateral; and
(d) to execute and file any financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, in order to
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perfect (except in the case of the Security Collateral provided pursuant to
Section 2.01(i)) and preserve the pledge, assignment and security interest
granted hereby;
provided that the Security Trustee's exercise of any such power shall be subject
to Section 2.08(e) and Section 3.01(c).
Section 2.15 Security Trustee May Perform. If any Grantor fails to perform
any agreement contained in this Agreement, the Security Trustee may (but shall
not be obligated to) itself perform, or cause performance of, such agreement,
and the expenses of the Security Trustee incurred in connection with doing so
shall be payable by the Grantors.
Section 2.16 Covenant to Pay. Each Grantor covenants with the Security
Trustee (for the benefit of the Security Trustee and the Secured Parties) that
it will pay or discharge any monies and liabilities whatsoever that are now, or
at any time hereafter may be, due, owing or payable by such Grantor in any
currency, actually or contingently, solely and/or jointly, and/or severally with
another or others, as principal or surety on any account whatsoever pursuant to
the Service Provider Documents, the Indenture, the Notes, the Secured Credit
Facilities and the Secured Swap Agreements in accordance with their terms. If no
Default Notice has been delivered and no Acceleration Default is continuing, all
such payments shall be made in accordance with Section 3.08(a) of the Indenture;
if a Default Notice has been declared or an Acceleration Default is continuing,
all such payments shall be made in accordance with Section 3.08(b) of the
Indenture.
Section 2.17 Delivery of Collateral Supplements. Upon (a) the acquisition
by any Grantor of any Relevant Collateral or (b) the establishment of any
Non-Trustee Account, each relevant Grantor shall concurrently execute and
deliver to the Security Trustee a Collateral Supplement duly completed with
respect to such Collateral and shall take such steps with respect to the
perfection of such Collateral as are called for by this Agreement for Collateral
of the same type; provided that the foregoing shall not be construed to impair
or otherwise derogate from any restriction on any such action in any Related
Document and provided, further that the failure of any Grantor to deliver any
Collateral Supplement as to any such Collateral shall not impair the lien of
this Agreement as to such Collateral.
Section 2.18 Annual Opinion. Upon each anniversary of the Initial Closing
Date, the Issuer shall cause to be delivered to the Security Trustee an Opinion
of Counsel to the effect that there has not been adopted during the preceding
year any change of New York law that would require the taking of any action in
order to maintain the perfection or priority of the lien of this Agreement on
the Collateral or, if there has been such a change, setting forth the actions so
to be taken. The Issuer agrees to take all such actions as may be indicated in
any such opinion, except that, as provided in Section 2.09(c), the Security
Trustee shall take any such actions as may be required with respect to any
Securities Intermediary.
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ARTICLE III
REMEDIES
Section 3.01 Remedies. Upon delivery of a Default Notice pursuant to
Section 4.02 of the Indenture or if any Acceleration Default under the Indenture
shall have occurred and be continuing:
(a) The Security Trustee may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein, all the rights and
remedies of a secured party upon default under the UCC (whether or not the UCC
applies to the affected Collateral) and also may (i) require any Grantor to, and
such Grantor hereby agrees that it shall at its expense and upon request of the
Security Trustee forthwith, assemble all or part of the Collateral as directed
by the Security Trustee and make it available to the Security Trustee at a place
to be designated by the Security Trustee that is reasonably convenient to both
parties and (ii) without notice except as specified below, sell or cause the
sale of the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Security Trustee's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Security
Trustee may deem commercially reasonable. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten days' notice to
such Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. The
Security Trustee shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Security Trustee may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.
(b) All cash proceeds received by the Security Trustee in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Security Trustee, be held by the
Security Trustee as collateral for, and/or then or at any time thereafter
applied in whole or in part by the Security Trustee for the benefit of the
Secured Parties against, all or any part of the Secured Obligations in
accordance with Article VII of this Agreement and Articles III and X of the
Indenture. Any surplus of such cash or cash proceeds held by the Security
Trustee and remaining after payment in full of all the Secured Obligations shall
be paid over to the relevant Grantors or whomsoever may be lawfully entitled to
receive such surplus. Any amount received for any sale or sales conducted in
accordance with the terms of this Section 3.01 shall be deemed conclusive and
binding on the Issuer, each Grantor and the Secured Parties.
(c) Notwithstanding any provision in this Agreement to the contrary,
so long as the Servicer or the Additional Servicer (as applicable) is acting in
such capacity with respect to any Lease pursuant to the provisions of the
Servicing Agreement or the Additional Servicing Agreement (as applicable), the
Security Trustee as assignee of the Issuer agrees not to take any action
constituting Services (as defined in the Servicing Agreement or the Additional
Servicing Agreement, as applicable) and is otherwise subject to the terms of the
Servicing Agreement or the Additional Servicing Agreement when acting thereunder
in place of any Grantor, except (subject to Section 2.08(e)) to the extent the
Issuer would then be entitled to take such action
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under the express terms of the Servicing Agreement or the Additional Servicing
Agreement (as applicable).
ARTICLE IV
SECURITY INTEREST ABSOLUTE
Section 4.01 Security Interest Absolute. A separate action or actions may
be brought and prosecuted against each Grantor to enforce this Agreement,
irrespective of whether any action is brought against any other Grantor or
whether any other Grantor is joined in any such action or actions. All rights of
the Security Trustee and the security interest and lien granted under, and all
obligations of each Grantor under, this Agreement shall be absolute and
unconditional, irrespective of:
(a) any lack of validity or enforceability of any Related Document,
Assigned Document, Credit Facility or Swap Agreement or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, the
security for, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from any
Related Document, Assigned Document, Credit Facility or Swap Agreement or any
other agreement or instrument relating thereto;
(c) any taking, exchange, release or non-perfection of the
Collateral or any other collateral or taking, release or amendment or waiver of
or consent to departure from any guaranty, for all or any of the Secured
Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or any
other assets of the Grantors;
(e) any change, restructuring or termination of the corporate
structure or existence of any Grantor; or
(f) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Grantor or a third-party grantor of a
security interest or a Person deemed to be a surety.
ARTICLE V
THE SECURITY TRUSTEE
AND THE OPERATING BANK
Section 5.01 Authorization and Action. (a) Each Secured Party by its
acceptance of the benefits of this Agreement hereby appoints and authorizes
Bankers Trust as the initial Security Trustee to take such action as trustee on
behalf of the Secured Parties and to exercise such powers and discretion under
this Agreement and the other Related Documents as are
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specifically delegated to the Security Trustee by the terms of this Agreement
and of the Related Documents, and no implied duties and covenants shall be
deemed to arise against the Security Trustee.
(b) The Security Trustee accepts such appointment and agrees to
perform the same but only upon the terms of this Agreement and agrees to receive
and disburse all moneys received by it in accordance with the terms of this
Agreement. The Security Trustee in its individual capacity shall not be
answerable or accountable under any circumstances, except for its own willful
misconduct or gross negligence (or simple negligence in the handling of funds or
breach of any of its representations or warranties set forth in this Agreement)
and the Security Trustee shall not be liable for any action or inaction of any
Grantor or any other parties to any of the Related Documents.
Section 5.02 Absence of Duties. The powers conferred on the Security
Trustee under this Agreement with respect to the Collateral are solely to
protect its interest in this Agreement and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it under this
Agreement, the Security Trustee shall have no duty as to any Collateral, as to
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
any Secured Party has or is deemed to have knowledge of such matters, or as to
the taking of any necessary steps to preserve or perfect rights against any
parties or any other rights pertaining to any Collateral. The Security Trustee
shall have no duty to ascertain or inquire as to the performance or observance
of any covenants, conditions or agreements on the part of any Grantor or Lessee.
Section 5.03 Representations or Warranties. The Security Trustee does not
make and shall not be deemed to have made any representation or warranty as to
the validity, legality or enforceability of this Agreement, any other Related
Document or any other document or instrument or as to the correctness of any
statement contained in any thereof, or as to the validity or sufficiency of any
of the pledge and security interests granted hereby, except that the Security
Trustee in its individual capacity hereby represents and warrants (i) that each
such specified document to which it is a party has been or will be duly executed
and delivered by one of its officers who is and will be duly authorized to
execute and deliver such document on its behalf, and (ii) this Agreement is the
legal, valid and binding obligation of Bankers Trust, enforceable against
Bankers Trust in accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors' rights generally.
Section 5.04 Reliance; Agents; Advice of Counsel. (a) The Security Trustee
shall incur no liability to anyone as a result of acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. The Security Trustee
may accept a copy of a resolution of the board or other governing body of any
party to this Agreement or any Related Document, certified by the Secretary or
an Assistant Secretary thereof or other duly authorized Person of such party as
duly adopted and in full force and effect, as conclusive evidence that such
resolution has been duly adopted by said board or
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other governing body and that the same is in full force and effect. As to any
fact or matter the manner of ascertainment of which is not specifically
described in this Agreement, the Security Trustee shall be entitled to receive
and may for all purposes hereof conclusively rely on a certificate, signed by an
officer of any duly authorized Person, as to such fact or matter, and such
certificate shall constitute full protection to the Security Trustee for any
action taken or omitted to be taken by it in good faith in reliance thereon. The
Security Trustee shall furnish to each Service Provider upon request such
information and copies of such documents as the Security Trustee may have and as
are necessary for such Service Provider to perform its duties under the
applicable Related Documents. The Security Trustee shall assume, and shall be
fully protected in assuming, that each other party to this Agreement is
authorized by its constitutional documents to enter into this Agreement and to
take all action permitted to be taken by it pursuant to the provisions of this
Agreement, and shall not inquire into the authorization of such party with
respect thereto.
(b) The Security Trustee may execute any of the powers hereunder or
perform any duties under this Agreement either directly or by or through agents,
including financial advisors, or attorneys or a custodian or nominee, and the
Security Trustee shall not be responsible for any misconduct or negligence on
the part of, or for the supervision of, any such agent, attorney, custodian or
nominee appointed with due care by it hereunder.
(c) The Security Trustee may consult with counsel and any opinion of
counsel or any advice of such counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it under
this Agreement in good faith and in accordance with such advice or opinion of
counsel.
(d) The Security Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or in relation hereto, at
the request, order or direction of any of the Secured Parties, pursuant to the
provisions of this Agreement, unless such Secured Party shall have offered to
the Security Trustee reasonable security or indemnity satisfactory to it against
the costs, expenses and liabilities which may be incurred therein or thereby.
(e) The Security Trustee shall not be required 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
there is reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it, and none of the provisions contained in this Agreement shall in any event
require the Security Trustee to perform, or be responsible or liable for the
manner of performance of, any obligations of the Issuer or the Administrative
Agent under any of the Related Documents.
(f) The Security Trustee shall not be liable for any Costs, Taxes or
the selection of Permitted Account Investments or for any investment losses
resulting from Permitted Account Investments.
(g) When the Security Trustee incurs expenses or renders services in
connection with an exercise of remedies specified in Section 3.01 or during a
proceeding described in
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Section 7.03(a), such expenses (including the fees and expenses of its counsel)
and the compensation for such services are intended to constitute expenses of
administration under any bankruptcy law or law relating to creditors' rights
generally.
(h) The Security Trustee shall not be charged with knowledge of an
Event of Default unless a Responsible Officer of the Security Trustee obtains
actual knowledge of such event or the Security Trustee receives written notice
of such event from any of the Secured Parties or the Administrative Agent.
(i) The Security Trustee shall have no duty to monitor the
performance of the Issuer, the Administrative Agent or any other party to the
Related Documents, nor shall it have any liability in connection with the
appointment of the Administrative Agent, or the malfeasance or nonfeasance by
such parties. The Security Trustee shall have no liability in connection with
compliance by the Issuer, the Administrative Agent or any lessee under a Lease
with statutory or regulatory requirements related to the Collateral, any
Aircraft or any Lease. The Security Trustee shall not make or be deemed to have
made any representations or warranties with respect to the Collateral, any
Aircraft or any Lease or the validity or sufficiency of any assignment or other
disposition of the Collateral, any Aircraft or any Lease.
Section 5.05 No Individual Liability. The Security Trustee shall have no
individual liability in respect of all or any part of the Secured Obligations,
and all shall look, subject to the lien and priorities of payment provided
herein and in the Indenture, only to the property of the Grantors for payment or
satisfaction of the Secured Obligations.
Section 5.06 The Operating Bank. The Operating Bank shall be entitled to
the immunities and privileges of the Security Trustee under Sections 5.03 and
5.04(a), (e) and (g). The Operating Bank agrees to perform its duties hereunder
in accordance with the requirements of, and subject to the limitations of the
duties of, a Securities Intermediary under the UCC.
ARTICLE VI
SUCCESSOR TRUSTEES
AND OPERATING BANK
Section 6.01 Resignation and Removal of Security Trustee. The Security
Trustee may resign at any time without cause by giving at least 30 days' prior
written notice to the Issuer and the Senior Representative. The Senior
Representative may at any time remove the Security Trustee without cause by an
instrument in writing delivered to the Secured Parties and the Security Trustee.
No termination of this Agreement by the Security Trustee or the Senior
Representative pursuant to this Section 6.01 shall become effective prior to the
date of appointment by the Senior Representative of a successor Security Trustee
and the acceptance of such appointment by such successor Security Trustee.
Section 6.02 Appointment of Successor. (a) In the case of the resignation
or removal of the Security Trustee, the Senior Representative, on behalf of the
Secured Parties, shall promptly appoint a successor Security Trustee. If a
successor Security Trustee shall not have been appointed and accepted its
appointment hereunder within 60 days after the Security Trustee
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gives notice of resignation as to such class or subclass, the retiring Security
Trustee or the Secured Parties may petition any court of competent jurisdiction
for the appointment of a successor Security Trustee. Any successor Security
Trustee so appointed by such court shall immediately and without further act be
superseded by any successor Security Trustee appointed as provided in the first
sentence of this paragraph within one year from the date of the appointment by
such court.
(b) Any successor Security Trustee shall execute and deliver to the
Secured Parties an instrument accepting such appointment. Upon the acceptance of
any appointment as Security Trustee hereunder, a successor Security Trustee,
upon the execution and filing or recording of such financing statements, or
amendments thereto, and such amendments or supplements to this Agreement, and
such other instruments or notices, as may be necessary or desirable, or as the
Senior Trustee may request, in order to continue the perfection (if any) of the
liens granted or purported to be granted hereby, shall succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Security Trustee, and the retiring Security Trustee shall be discharged
from its duties and obligations under this Agreement and the other Related
Documents. The retiring Security Trustee shall take all steps necessary to
transfer all Collateral in its possession and all its control over the
Collateral to the successor Security Trustee. After any retiring Security
Trustee's resignation or removal hereunder as to any actions taken or omitted to
be taken by it while it was Security Trustee, the provisions of all of Article
VII shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Security Trustee under this Agreement.
(c) Each Security Trustee shall be an Eligible Institution, if there
be such an institution willing, able and legally qualified to perform the duties
of a Security Trustee hereunder.
(d) Any corporation into which the Security Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Security Trustee shall
be a party, or any corporation to which substantially all the business of the
Security Trustee may be transferred, shall be the Security Trustee under this
Agreement without further act.
Section 6.03 The Operating Bank. If at any time the Person acting as the
Operating Bank is no longer the Security Trustee, the Security Trustee shall so
notify the Administrative Agent and the Issuer, and the Security Trustee shall
cause the Administrative Agent to establish and maintain the Security Trustee
Accounts with the Person then acting as the Security Trustee as provided in the
Administrative Agency Agreement and the Person then acting as the Security
Trustee shall assume the obligations of the Operating Bank under this Agreement.
ARTICLE VII
AGREEMENT AMONG SECURED PARTIES
Section 7.01 Subordination and Priority. (a) Notwithstanding the date,
manner or order of attachment or perfection (if any) or the description of any
collateral or security interests, liens, claims or encumbrances covered or
granted by Section 2.01, each Subordinated
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Representative agrees that the respective rights and interest of the
Subordinated Creditors in the Collateral are and shall be subordinate, to the
extent and in the manner hereinafter and in Articles III and X of the Indenture
set forth, to all rights and interest of the Senior Creditors in the Collateral,
and that the Senior Creditors shall have at all times interests prior and senior
to that of the Subordinated Creditors in all Collateral until the payment in
full of all Senior Obligations owed to such Senior Creditors.
(b) For the purposes of this Agreement, no Senior Obligations shall
be deemed to have been paid in full until and unless the Senior Representative
in respect of such Senior Obligations shall have received payment in full in
cash of such Senior Obligations.
(c) Notwithstanding anything contained herein to the contrary,
payments from any property (or the proceeds thereof) deposited in the
Defeasance/Redemption Account or the Refinancing Account pursuant to Section
3.10(a) or Article XI of the Indenture and payments covered by Section 3.12 and
3.13 of the Indenture shall not be subordinated to the prior payment of any
Senior Creditors in respect of any Senior Obligations or subject to any other
restrictions set forth in this Article VII and Article X of the Indenture, and
none of the Holders shall be obligated to pay over any payments from any such
property to the Security Trustee or any other creditor of any of the Grantors.
Section 7.02 Exercise of Remedies. (a) Until the date on which all the
Senior Obligations shall have been paid in full, the Senior Representative, in
its sole discretion and to the exclusion of the Subordinated Representatives,
shall have, whether or not any default under the Indenture shall have occurred
and be continuing and both before and after the commencement of any proceeding
referred to in Section 7.03(a), the sole and exclusive right (as between the
Senior Representative, on the one hand, and the Subordinated Representatives, on
the other) to direct the Security Trustee to take all action with respect to the
Collateral, including the right to exercise or direct voting or other consensual
rights, to foreclose or forebear from foreclosure in respect of the Collateral
and to accept the Collateral in full or partial satisfaction of any Senior
Obligation, all in accordance with the terms of this Agreement. The Subordinated
Representatives agree that, until the Senior Obligations have been paid in full,
the only right of the Subordinated Creditors under this Agreement is for the
Subordinated Obligations to be secured by the Collateral for the period and to
the extent provided for herein and to receive a share of the proceeds of the
Collateral, if any.
(b) The Subordinated Representatives agree that, so long as any of
the Senior Obligations shall remain unpaid, they and the Subordinated Creditors
will not commence, or join with any creditor other than the Security Trustee and
the Senior Creditors in commencing, any enforcement, collection, execution, levy
or foreclosure proceeding with respect to the Collateral or proceeds of
Collateral. Upon request by the Senior Representative, the Subordinated
Representatives and the Subordinated Creditors will, at the expense of the
Issuer, join in enforcement, collection, execution, levy or foreclosure
proceedings and otherwise cooperate fully in the maintenance of such proceedings
by the Security Trustee, including by executing and delivering all such
consents, pleadings, releases and other documents and instruments as the
Security Trustee may reasonably request in connection therewith, it being
understood that the
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conduct of such proceedings shall at all times be under the exclusive control of
the Security Trustee.
(c) The Subordinated Representatives agree, upon written request by
the Senior Representative, to release the liens and security interests in favor
of the Subordinated Creditors in any Collateral and to execute and deliver all
such directions, consents, pleadings, releases and other documents and
instruments as the Senior Representative may reasonably request in connection
therewith, upon any sale, lease, transfer or other disposition of such
Collateral or part thereof in accordance with, or for application of proceeds
pursuant to, Section 7.01(a).
(d) The Subordinated Representatives agree that neither they nor any
Subordinated Creditors will contest, or bring (or join in) any action or
proceeding for the purpose of contesting, the validity, perfection or priority
of, or seeking to avoid, the rights of the Senior Representative or the Senior
Creditors in or with respect to the Collateral.
Section 7.03 Further Agreements of Subordination. The Subordinated
Representatives agree as follows:
(a) Upon any distribution of all or any of the Collateral or
proceeds of Collateral to creditors of any Grantor upon the dissolution,
winding-up, liquidation, arrangement, reorganization, adjustment, protection,
relief, or composition of such Grantor or its debts, whether in any bankruptcy,
insolvency, arrangement, reorganization, receivership, relief or similar
proceedings or upon an assignment for the benefit of creditors or any other
marshalling of the assets and liabilities of such Grantor, or otherwise, any
distribution of any kind of Collateral or proceeds of Collateral that otherwise
would be deliverable upon or with respect to the Subordinated Obligations shall
be delivered directly to the Security Trustee for application (in the case of
cash) to or as collateral (in the case of non-cash property or securities) for
the payment or prepayment of the Senior Obligations until the Senior Obligations
shall have been paid in full.
(b) If any proceeding referred to in Section 7.03(a) is commenced by
or against any Grantor,
(i) the Security Trustee is hereby irrevocably authorized and
empowered (in its own name or in the name of the Secured Parties or otherwise),
but shall have no obligation, to demand, ▇▇▇ for, collect and receive every
distribution referred to in subsection (a) above and give acquittance therefor
and to file claims and proofs of claim and take such other action (including
enforcing this Agreement) as it may deem necessary or advisable, or as the
Senior Representative may direct, for the exercise or enforcement of any of the
rights or interests of the Senior Creditors hereunder; and
(ii) the Subordinated Representatives shall duly and promptly take
such action, at the expense of the Issuer, as the Senior Representative may
request (A) to collect Collateral and proceeds of Collateral for the account of
the Senior Creditors and to file appropriate claims or proofs of claim in
respect of Collateral and proceeds of Collateral, (B) to execute and deliver to
the Security Trustee such powers of attorney, assignments, or other instruments
as the Senior
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Representative may request in order to enable it to enforce any and all claims
with respect to the Collateral and proceeds of Collateral and (C) to collect and
receive any and all payments or distributions that may be payable or deliverable
upon or with respect to the Collateral or proceeds of Collateral. Without
limiting the generality of any of the foregoing, if any proceeding referred to
in Section 7.03(a) is commenced by or against any Grantor, the Subordinated
Creditors shall, upon written demand from the Senior Representative or the
Security Trustee, file such claims in such proceeding as the Senior
Representative or the Security Trustee, as applicable, shall request in such
written demand or any subsequent written demand provided in connection
therewith; provided however, that should one or more Subordinated Creditors fail
to comply fully with any such demand within thirty (30) days of receipt by such
Subordinated Creditor of the relevant demand, such Subordinated Creditor (by
holding its respective Notes) shall be deemed to have irrevocably appointed the
Security Trustee its attorney-in-fact to file and prosecute any such claim and
to dispose of any proceeds of such filing or prosecution in accordance with the
terms hereof and of the other Related Documents.
(c) All payments or distributions upon or with respect to the
Collateral or proceeds of Collateral that are received by the Subordinated
Representatives or the Subordinated Creditors contrary to the provisions of this
Agreement shall be received for the benefit of the Senior Creditors, shall be
segregated from other funds and property held by the Subordinated
Representatives or the Subordinated Creditors and shall be forthwith paid over
to the Security Trustee in the same form as so received (with any necessary
indorsement) to be applied (in the case of cash) to or held as collateral (in
the case of non-cash property or securities) for the payment or prepayment of
the Senior Obligations in accordance with the terms thereof.
(d) The Senior Representative is hereby authorized to demand
specific performance of this Agreement at any time when any of the Subordinated
Representatives or the Subordinated Creditors shall have failed to comply with
any of the provisions of this Agreement applicable to them. The Subordinated
Representatives hereby irrevocably waive, on their own behalf and on behalf of
the Subordinated Creditors, any defense based on the adequacy of a remedy at law
that might be asserted as a bar to such remedy of specific performance.
Section 7.04 Rights of Subrogation. The Subordinated Representatives agree
that no payment or distributions to the Senior Representative or the Senior
Creditors pursuant to the provisions of this Agreement shall entitle any
Subordinated Representative or any Subordinated Creditor to exercise any rights
of subrogation in respect thereof until all Obligations constituting Senior
Obligations with respect to such Person shall have been paid in full.
Section 7.05 Further Assurances of Subordinated Representatives. Each of
the Subordinated Representatives shall, at the expense of the Issuer, at any
time and from time to time promptly execute and deliver all further instruments
and documents, and take all further action, that the Senior Representative or
the Security Trustee may reasonably request, in order to protect any right or
interest granted or purported to be granted hereby or to enable the Senior
Representative and the Security Trustee to exercise and enforce their rights and
remedies hereunder.
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Section 7.06 No Change in Rights in Collateral. The Subordinated
Representatives and the Subordinated Creditors will not sell, assign, pledge,
encumber or otherwise dispose of any of their rights in the Collateral as such
or in proceeds of Collateral as such, without the prior written consent of the
Senior Representative. Nothing in this Section 7.06 shall limit the right of any
Subordinated Creditor to transfer any Subordinated Obligation including any
Note.
Section 7.07 Waiver of Marshalling and Similar Rights. Each of the
Subordinated Representatives waives, on its own behalf and on behalf of the
Subordinated Creditors, to the fullest extent permitted by applicable law, any
requirement regarding, and agrees not to demand, request, plead or otherwise
claim the benefit of, any marshalling, appraisement, valuation or other similar
right with respect to the Collateral that may otherwise be available under
applicable law or any other similar rights a junior creditor or junior secured
creditor may have under applicable law.
Section 7.08 Enforcement. Each of the Subordinated Representatives agrees
that this Agreement shall be enforceable against it and the Subordinated
Creditors under all circumstances, including in any proceeding referred to in
Section 7.03(a).
Section 7.09 Obligations Not Affected. All rights and interests of the
Senior Representative, the Senior Creditors and the Security Trustee hereunder,
and all agreements and obligations of the Subordinated Representatives under
this Agreement, shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of this Agreement, any
Assigned Document, Note, Secured Credit Facility or Secured Swap Agreement or
any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, the
security for, or in any other term of, all or any of the Senior Obligations, or
any other amendment or waiver of or any consent to any departure from this
Agreement, any Service Provider Document, Note, Secured Credit Facility or
Secured Swap Agreement or any other agreement or instrument relating thereto;
(c) any taking, exchange, release or non-perfection of the
Collateral or any other collateral, or any release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the Senior
Obligations; or
(d) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Subordinated Representatives, the
Subordinated Creditors, a subordinated creditor or a secured subordinated
creditor or a Person deemed to be a surety.
This Agreement shall continue to be effective or shall be revived or reinstated,
as the case may be, if at any time any payment of any of the Senior Obligations
is rescinded or must otherwise be returned by any Senior Creditor upon the
insolvency, bankruptcy or reorganization of any Grantor, or otherwise, all as
though such payment had not been made.
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Section 7.10 Waiver. The Subordinated Representatives hereby waive, on
their own behalf and on behalf of the Subordinated Creditors, to the fullest
extent permitted by law, any right under Section 9-504(1)(c) of the N.Y. Uniform
Commercial Code to application of the proceeds of disposition (other than as
contemplated by this Agreement), any right to notice and objection under Section
9-505(2) of the N.Y. Uniform Commercial Code and promptness, diligence, notice
of acceptance and any other notice with respect to any of the Senior Obligations
and this Agreement and any requirement that the Security Trustee protect,
secure, perfect or insure any security interest or lien hereunder or otherwise
or any Collateral or any other property subject thereto or exhaust any right or
take any action against the Grantors or any other person or entity or any
Collateral or any other collateral.
Section 7.11 Senior Obligations and Subordinated Obligations Unimpaired.
Nothing in this Agreement shall impair (a) as between the Issuer and any Secured
Party, the obligations of the Issuer to such Secured Party, including the Senior
Obligations and the Subordinated Obligations or (b) as between the Senior
Creditors and the Subordinated Creditors, the provisions relating to the
priority of payments in the Indenture; provided that it is understood that the
enforcement of rights and remedies against the Collateral shall be subject to
the terms of this Agreement.
Section 7.12 Upon Discharge of Obligations. Upon the payment in full of
the Senior Obligations in respect of which it is acting as Senior
Representative, the Security Trustee shall, without any further action on its
part, be relieved of any obligation under this Agreement with respect to such
discharged Senior Obligations and this Agreement shall continue in effect as an
agreement among the remaining Secured Parties.
ARTICLE VIII
INDEMNITY AND EXPENSES
Section 8.01 Indemnity. (a) The Issuer shall indemnify the Security
Trustee (and its officers, directors, employees and agents) for, and hold it
harmless against, any loss, liability or expense (including reasonable legal
fees and expenses) incurred by it without negligence or bad faith on its part in
connection with the acceptance or administration of this Agreement and its
duties hereunder (including, when the Security Trustee is performing the same in
place of the Administrative Agent, the performance of the Bank Account
Managerial Services), 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 hereunder and hold it harmless against, any loss, liability
or reasonable expense incurred without negligence or bad faith on its part. The
Security Trustee shall notify the Issuer promptly of any claim asserted against
the Security Trustee for which it may seek indemnity; provided, however, that
failure to provide such notice shall not invalidate any right to indemnity
hereunder. The Issuer shall defend the claim and the Security Trustee shall
cooperate in the defense. The Security Trustee may have separate counsel and the
Issuer shall pay reasonable fees and expenses of such counsel. The Issuer need
not pay for any settlements made without its consent; provided that such consent
shall not be unreasonably withheld or delayed. The Issuer need not reimburse any
expense or indemnity against any loss or liability incurred by the Security
Trustee through negligence or bad faith. For the avoidance of doubt, in the
event the Security Trustee is providing any of the Bank Account Managerial
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Services in place of the Administrative Agent, each of its expenses related
thereto shall be deemed to be an "Expense" for purposes of the Related
Documents.
(b) The Issuer shall upon demand pay to the Security Trustee the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that the Security Trustee
may incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from or
other realization upon, any of the Collateral, (iii) the exercise or enforcement
of any of the rights of the Security Trustee or any other Secured Party against
any Grantor hereunder, (iv) the failure by any Grantor to perform or observe any
of the provisions hereof, or (v) without limiting any of the foregoing, the
Security Trustee's performance of the Bank Account Managerial Services in place
of the Administrative Agent.
(c) The Issuer shall indemnify the Operating Bank (and its officers,
directors, employees and agents) for, and hold it harmless against, any loss,
liability or expense (including reasonable legal fees and expenses) incurred by
it without negligence (determined with reference to reasonable commercial
standards applicable to Securities Intermediaries) or bad faith on its part in
connection with its duties hereunder, 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 hereunder and hold it harmless
against, any loss, liability or reasonable expense incurred without negligence
(determined with reference to reasonable commercial standards applicable to
Securities Intermediaries) or bad faith on its part. The Operating Bank shall
notify the Issuer promptly of any claim asserted against the Operating Bank for
which it may seek indemnity; provided, however, that failure to provide such
notice shall not invalidate any right to indemnity hereunder. The Issuer shall
defend the claim and the Operating Bank shall cooperate in the defense. The
Operating Bank may have separate counsel and the Issuer shall pay reasonable
fees and expenses of such counsel. The Issuer need not pay for any settlements
made without its consent; provided that such consent shall not be unreasonably
withheld or delayed. The Issuer need not reimburse any expense or indemnity
against any loss or liability incurred by the Operating Bank through negligence
(as so determined) or bad faith.
Section 8.02 Holders' Indemnity. The Security Trustee shall be entitled to
be indemnified (subject to the limitations and requirements described in Section
8.01 mutatis mutandis) by the Senior Creditors to the sole satisfaction of the
Security Trustee before proceeding to exercise any right or power under this
Agreement at the request or direction of the Senior Representative.
The provisions of Section 8.01 and this Section 8.02 shall survive
the termination of this Agreement or the earlier resignation or removal of the
Security Trustee.
Section 8.03 No Compensation from Secured Parties. Each of the Security
Trustee and the Operating Bank agrees that it shall have no right against the
Secured Parties for any fee as compensation for its services in such capacity.
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Section 8.04 Security Trustee Fees. In consideration of the Security
Trustee's performance of the services provided for under this Agreement, the
Issuer shall pay to the Security Trustee an annual fee set forth under a
separate agreement between the Issuer and the Security Trustee.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Amendments; Waivers; Etc. (a) No amendment or waiver of any
provision of this Agreement, and no consent to any departure by any party from
the provisions of this Agreement, shall in any event be effective unless the
same shall be in writing and signed by each Service Provider, the Senior
Representative and, in the event the Subordinate Creditors are adversely
affected thereby, the Subordinated Representative, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No failure on the part of the Security Trustee to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. In executing and delivering any amendment or modification to this
Agreement, the Security Trustee shall be entitled to (i) an Opinion of Counsel
stating that such amendment is authorized and permitted pursuant to the
Indenture and this Agreement and complies with the terms thereof and hereof and
(ii) an Officer's Certificate stating that all conditions precedent to the
execution, delivery and performance of such amendment have been satisfied in
full. The Security Trustee may, but shall have no obligation to, execute and
deliver any amendment or modification which would affect its duties, powers,
rights, immunities or indemnities hereunder.
(b) Upon the execution and delivery by any Person of a Grantor
Supplement, (i) such Person shall be referred to as an "Additional Grantor" and
shall be and become a Grantor hereunder, and each reference in this Agreement to
"Grantor" shall also mean and be a reference to such Additional Grantor, (ii)
Annexes I, II, III and IV attached to each Grantor Supplement shall be
incorporated into, become a part of and supplement Schedules I, II, III and IV,
respectively, and the Security Trustee may attach such Annexes as supplements to
such Schedules; and each reference to such Schedules shall be a reference to
such Schedules as so supplemented and (iii) such Additional Grantor shall be a
Grantor for all purposes under this Agreement and shall be bound by the
obligations of the Grantors hereunder.
(c) Upon the execution and delivery by a Grantor of a Collateral
Supplement, Annexes I and II to each Collateral Supplement shall be incorporated
into, become a part of and supplement Schedules I and II, respectively, and the
Security Trustee may attach such Annexes as supplements to such Schedules; and
each reference to such Schedules shall be a reference to such Schedules as so
supplemented.
Section 9.02 Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telecopier) and mailed,
telecopied or delivered to the intended recipient at its address specified, as
follows:
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37
For each Grantor:
Aircraft Finance Trust
c/o Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
For the Security Trustee:
Bankers Trust Company
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency Services,
Structured Finance Team
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
For the Operating Bank:
Bankers Trust Company
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency Services,
Structured Finance Team
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this Section 9.02. Each such notice shall be effective (a) upon receipt when
sent through the mails, registered or certified mail, return receipt requested,
postage prepaid, with such receipt to be effective the date of delivery
indicated on the return receipt, or (b) one Business Day after delivery to an
overnight courier, or (c) on the date personally delivered to an authorized
officer of the party to which sent, or (d) on the date transmitted by legible
telecopier transmission with a confirmation of receipt.
Section 9.03 No Waiver; Remedies. No failure on the part of the Security
Trustee to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
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38
Section 9.04 Severability. If any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof shall not in any way be affected or impaired.
Section 9.05 Continuing Security Interest; Assignments. Subject to the
Section 9.06(c), this Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the earlier
of the payment in full in cash of the Secured Obligations and the circumstances
specified in Section 9.06(c), (b) be binding upon each Grantor, its successors
and assigns and (c) inure, together with the rights and remedies of the Security
Trustee hereunder, to the benefit of the Secured Parties and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing subsection (c), any Secured Party may assign or otherwise transfer all
or any portion of its rights and obligations under any Related Document to which
it is a party in accordance with the terms thereof to any other Person or
entity, and such other Person or entity shall thereupon become vested with all
the rights in respect thereof granted to such Secured Party herein or otherwise.
Section 9.06 Release and Termination. (a) Upon any sale, lease, transfer
or other disposition of any item of Collateral in accordance with the terms of
the Indenture, the Security Trustee will, at the Issuer's expense, execute and
deliver to the Grantor of such item of Collateral such documents as such Grantor
shall reasonably request and provide to the Security Trustee to evidence the
release of such item of Collateral from the assignment and security interest
granted hereby.
(b) Except as otherwise provided in Section 9.06(c), upon the
payment in full in cash of the Secured Obligations, the pledge, assignment and
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the Grantors. Upon any such termination, the Security
Trustee will, at the Issuer's expense, execute and deliver to each relevant
Grantor such documents as such Grantor shall prepare and reasonably request to
evidence such termination.
(c) If at any time all Notes have been defeased pursuant to Article
XI of the Indenture, the pledge, assignment and security interest in the Pledged
Stock shall be released and the certificates or other instruments representing
or evidencing any of the Collateral held by the Security Trustee shall be
returned to the Issuer and the Security Trustee shall, at the expense of the
Issuer, execute and deliver to the Issuer such documents as the Issuer shall
prepare and reasonably request to evidence such termination.
Section 9.07 Currency Conversion. If any amount is received or recovered
by the Security Trustee in a currency (the "Received Currency") other than the
currency in which such amount was expressed to be payable (the "Agreed
Currency"), then the amount in the Received Currency actually received or
recovered by the Security Trustee, to the extent permitted by law, shall only
constitute a discharge of the relevant Grantor to the extent of the amount of
the Agreed Currency which the Security Trustee was or would have been able in
accordance with its or his normal procedures to purchase on the date of actual
receipt or recovery (or, if that is not practicable, on the next date on which
it is so practicable), and, if the amount of the Agreed Currency which the
Security Trustee is or would have been so able to purchase is less than the
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39
amount of the Agreed Currency which was originally payable by the relevant
Grantor, such Grantor shall pay to the Security Trustee such amount as it shall
determine to be necessary to indemnify the Security Trustee against any Loss
sustained by it as a result (including the cost of making any such purchase and
any premiums, commissions or other charges paid or incurred in connection
therewith) and so that, to the extent permitted by law, (i) such indemnity shall
constitute a separate and independent obligation of each Grantor distinct from
its obligation to discharge the amount which was originally payable by such
Grantor and (ii) shall give rise to a separate and independent cause of action
and apply irrespective of any indulgence granted by the Security Trustee and
continue in full force and effect notwithstanding any judgment, order, claim or
proof for a liquidated amount in respect of the amount originally payable by any
Grantor or any judgment or order and no proof or evidence of any actual loss
shall be required.
Section 9.08 Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 9.09 Jurisdiction. (a) Each of the parties hereto irrevocably
agrees that the courts of New York shall have jurisdiction to hear and determine
any suit, action or proceeding, and to settle any disputes, which may arise out
of or in connection with this Agreement and, for such purposes, irrevocably
submits to the jurisdiction of such courts. Each of the parties hereto
irrevocably waives any objection which it might now or hereafter have to the
federal U.S. or New York State courts located in New York, New York being
nominated as the forum to hear and determine any suit, action or proceeding, and
to settle any disputes, which may arise out of or in connection with this
Agreement and agrees not to claim that any such court is not a convenient or
appropriate forum. Each of the parties hereto agrees that the process by which
any suit, action or proceeding is begun may be served on it by being delivered
in connection with any suit, action or proceeding in New York, New York to the
Person named as the process agent of such party in Exhibit F to the Indenture at
the address set out therein or at the principal New York City office of such
process agent, if not the same.
(b) Each of the parties hereto hereby consents generally in respect
of any legal action or proceeding arising out of or in connection with this
Agreement to the giving of any relief or the issue of any process in connection
with such action or proceeding, including the making, enforcement or execution
against any property whatsoever (irrespective of its use or intended use) of any
order or judgment which may be made or given in such action or proceeding.
Section 9.10 Counterparts. This Agreement may be executed in two or more
counterparts by the parties hereto, and each such counterpart shall be
considered an original and all such counterparts shall constitute one and the
same instrument.
Section 9.11 Table of Contents, Headings, Etc. The Table of Contents and
headings of the Articles and Sections of this Agreement 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.
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40
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by its representative or officer thereunto duly
authorized as of the date first above written.
AIRCRAFT FINANCE TRUST
By Wilmington Trust Company, not in its
individual capacity but solely as the
Owner Trustee
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Financial Services Officer
AFT TRUST - SUB I
By Wilmington Trust Company, not in its
individual capacity but solely as the
owner trustee
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Financial Services Officer
Given under the Common Seal
of AIRCRAFT FINANCE TRUST
IRELAND LIMITED in the
presence of:
BANKERS TRUST COMPANY,
as the Operating Bank and the Security
Trustee
By /s/ [ILLEGIBLE]
------------------------------------
Name:
Title:
41
IN WITNESS WHEREOF, this Agreement has been duly executed on the
date first written above.
AIRCRAFT FINANCE TRUST
By Wilmington Trust Company, not in its
individual capacity but solely as the
Owner Trustee
By:
--------------------------------------
Name:
Title:
AFT TRUST - SUB I
By Wilmington Trust Company, not in its
individual capacity but solely as the
owner trustee
By:
--------------------------------------
Name:
Title:
Given under the Common Seal
of AIRCRAFT FINANCE TRUST
IRELAND LIMITED in the
presence of:
/s/ [ILLEGIBLE]
p.p. Goodbody Secretarial Ltd.
Secretary
/s/ [ILLEGIBLE]
DIRECTOR
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as the Security Trustee
By:
--------------------------------------
Name:
Title:
42
EXHIBIT A
SECURITY TRUST AGREEMENT
FORM OF SECURED PARTY SUPPLEMENT
Bankers Trust Company, as Security Trustee
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ [Date]
Attention: Corporate Trust and Agency
Services-Structured Finance Team
Re: Security Trust Agreement, dated as of May 5, 1999
Reference is made to the Security Trust Agreement, dated as of May 5, 1999 (the
"Security Trust Agreement"), between AIRCRAFT FINANCE TRUST, a Delaware
statutory business trust organized (the "Issuer"), the ISSUER SUBSIDIARIES
listed on the signature pages of, or who otherwise become grantors under, the
Security Trust Agreement (together with the Issuer, the "Grantors") and BANKERS
TRUST COMPANY, a New York banking corporation ("Bankers Trust"). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to them in the Security Trust Agreement.
The undersigned hereby:
1. confirms that attached hereto is a true and complete copy of the
_________ Agreement, between the Issuer and the undersigned, dated as of ____
[(the "Credit Facility Agreement"), which Credit Facility Agreement constitutes
a [Primary] [Secondary] [Tertiary] [Subordinated] Credit Facility under the
Indenture] [a "Service Provider Document"][a "Swap Agreement"] [FOR SWAPS
ENTITLED TO SENIOR SWAP PAYMENTS ADD: payments under which constitute Senior
Swap Payments under and as defined in the Indenture, entitled to the priority of
payments specified in Section 3.08(a)(ii) and 3.08(b)(iii) of the Indenture];
2. confirms that it has received a copy of the Security Trust
Agreement and such other documents and information as it deems appropriate to
make a decision to enter into this Secured Party Supplement;
3. confirms that, upon delivery of this Secured Party Supplement,
each reference in the Security Trust Agreement to a "Secured Party" shall also
mean and be a reference to the undersigned and the undersigned accepts the
benefits of the Security Trust Agreement subject to the terms and provisions
thereof (including Article VII thereof);
43
4. in its capacity as a Secured Party, appoints and authorizes the
Security Trustee to take any and all actions in respect of the Collateral as
are delegated to the Security Trustee by the terms of the Security Trust
Agreement, together with any such powers and discretion as are reasonably
incidental thereto;
5. in its capacity as a Secured Party, confirms its agreement to
the limitations and qualifications of the Security Trustee's obligations set
forth in Article V of the Security Trust Agreement; and
6. confirms that this Secured Party Supplement shall in all
respects be governed by, and construed in accordance with, the laws of the
State of New York, including all matters of construction, validity and
performance.
Very truly yours,
[SECURED PARTY]
By:___________________
Name:
Title:
Acknowledged and Agreed to
as of the date first above written:
BANKERS TRUST COMPANY,
not in its individual capacity, but
solely as the Security Trustee
By_____________________________
Name:
Title:
44
4. in its capacity as a Secured Party, appoints and authorizes the
Security Trustee to take any and all actions in respect of the Collateral as are
delegated to the Security Trustee by the terms of the Security Trust Agreement,
together with any such powers and discretion as are reasonably incidental
thereto;
5. in its capacity as a Secured Party, confirms its agreement to the
limitations and qualifications of the Security Trustee's obligations set forth
in Article V of the Security Trust Agreement; and
6. confirms that this Secured Party Supplement shall in all respects
be governed by, and construed in accordance with, the laws of the State of New
York, including all matters of construction, validity and performance.
Very truly yours,
[SECURED PARTY]
By:________________________________
Name:
Title:
Acknowledged and Agreed to
as of the date first above written:
BANKERS TRUST COMPANY,
not in its individual capacity, but
solely as the Security Trustee
By ____________________________________
Name:
Title:
2
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EXHIBIT B-1
SECURITY AGREEMENT SUPPLEMENT
[FORM OF COLLATERAL SUPPLEMENT]
Bankers Trust Company, as Security Trustee
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ [Date]
Attention: Corporate Trust and Agency
Services-Structured Finance Team
Re: Security Trust Agreement, dated as of May 5, 1999
Ladies and Gentlemen:
Reference is made to the Security Trust Agreement, dated as of May 5, 1999 (the
"Security Trust Agreement"), between AIRCRAFT FINANCE TRUST, a Delaware
statutory business trust organized under the laws of the State of Delaware (the
"Issuer"), the ISSUER SUBSIDIARIES listed on the signature pages of, or who
otherwise become grantors under, the Security Trust Agreement (together with the
Issuer, the "Grantors") and BANKERS TRUST COMPANY, a New York banking
corporation ("Bankers Trust"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Security Trust
Agreement.
The undersigned hereby delivers, as of the date first above written,
the attached Annexes I and II pursuant to Section 2.17 of the Security Trust
Agreement.
The undersigned Guarantor hereby confirms that the property included
in the attached Annexes constitutes part of the Collateral and hereby makes each
representation and warranty set forth in Section 2.03 of the Security Trust
Agreement (as supplemented by the attached Annexes).
Attached are (i) an Account Letter in substantially the form of
Exhibit C to the Security Trust Agreement from each Non-Trustee Account Bank at
which each Non-Trustee Account included in the foregoing Collateral is
maintained, (ii) where required with respect to any Assigned Document (other
than an Assigned Lease) included in the foregoing Collateral, a Consent and
Agreement in substantially the form of Exhibit D to the Security Trust Agreement
from the counterparty thereto or, with respect to any Assigned Lease included in
the foregoing Collateral, such consents, acknowledgements and/or notices as are
called for under Section 2.08(a) of the Security Trust Agreement and (iii) duly
completed copies of Annexes I and II hereto.
46
This Collateral Supplement shall in all respects be governed by, and
construed in accordance with, the laws of the State of New York, including all
matters of construction, validity and performance.
Very truly yours,
[NAME OF GRANTOR]
By:_____________________________
Name:
Title:
Acknowledged and agreed to as of the date first above written:
BANKERS TRUST COMPANY,
not in its individual capacity, but
solely as the Security Trustee
By:_____________________________
Name:
Title:
2
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ANNEX I
SECURITY AGREEMENT SUPPLEMENT
PLEDGED STOCK
Percentage of
Stock Issuer Par Value Certificate No(s). Number of Shares Outstanding Shares
------------ --------- ------------------ ---------------- ------------------
PLEDGED BENEFICIAL INTERESTS
Percentage of
Issuer Certificate No. Beneficial Interest
--------------------- --------------------------------- --------------------------
PLEDGED DEBT
Debt Issuer Description of Debt Date
--------------------- --------------------------------- --------------------------
48
ANNEX II
SECURITY AGREEMENT SUPPLEMENT
NON-TRUSTEE ACCOUNT INFORMATION
NAME AND ADDRESS OF
NAME AND ADDRESS NON-TRUSTEE
OF BANK ACCOUNT HOLDER ACCOUNT NUMBER
--------------------- --------------------------------- --------------------------
49
EXHIBIT B-2
SECURITY TRUST AGREEMENT
[FORM OF GRANTOR SUPPLEMENT]
Bankers Trust Company, as Security Trustee
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ [Date]
Attention: Corporate Trust and Agency
Services-Structured Finance Team
Re: Security Trust Agreement, dated as of May 5, 1999
Ladies and Gentlemen:
Reference is made to the Security Trust Agreement, dated as of May 5, 1999 (the
"Security Trust Agreement"), between AIRCRAFT FINANCE TRUST, a Delaware
statutory business trust organized under the laws of the State of Delaware (the
"Issuer"), the ISSUER SUBSIDIARIES listed on the signature pages of, or who
otherwise become grantors under, the Security Trust Agreement (together with the
Issuer, the "Grantors") and BANKERS TRUST COMPANY, a New York banking
corporation ("Bankers Trust"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Security Trust
Agreement.
The undersigned hereby agrees, as of the date first above written,
to become a Grantor under the Security Trust Agreement as if it were an original
party thereto and agrees that each reference in the Security Trust Agreement to
"Grantor" shall also mean and be a reference to the undersigned.
To secure the Secured Obligations, the undersigned Grantor hereby
assigns and pledges to the Security Trustee for its benefit and the benefit of
the Secured Parties (except, with respect to any Secured Collateral Provider
Documents under clause (h) or clause (i) below the related Secured Collateral
Provider), and hereby grants to the Security Trustee for its benefit and the
benefit of the Secured Parties (except, with respect to any Secured Collateral
Provider Documents under clause (h) or clause (i) below the related Secured
Collateral Provider) a security interest in, all of its right, title and
interest in and to:
(a) all of the following (the "Security Collateral"):
(i) the Pledged Stock identified on the attached Annex 1 and the
certificates representing such Pledged Stock, and all dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Pledged Stock;
50
(ii) the Pledged Debt identified on the attached Annex 1 and the
instruments evidencing such Pledged Debt, and all interest, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such Pledged Debt;
(iii) all additional shares of capital stock of any Issuer Group
Member from time to time acquired by such Grantor in any manner, including the
capital stock of any Issuer Group Member that may be formed from time to time,
and the certificates representing such additional shares of the capital stock
and all dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all such additional shares; and
(iv) all additional indebtedness from time to time owed to such
Grantor by any Issuer Group Member and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness;
(b) all of the following (the "Beneficial Interest Collateral"):
(i) the Pledged Beneficial Interests identified on the attached
Annex 1, all certificates, if any, from time to time representing all of such
Grantor's right, title and interest in such Pledged Beneficial Interest, any
contracts and instruments pursuant to which any such Pledged Beneficial
Interests are created or issued and all distributions, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such Pledged Beneficial Interest;
and
(ii) all of such Grantor's right, title and interest in all
additional beneficial interests from time to time acquired by such Grantor in
any manner, all certificates, if any, from time to time representing such
additional beneficial interests and all distributions, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all such additional beneficial
interests;
(c) all of the following (collectively, the "Non-Trustee Account
Collateral"):
(i) all of the Non-Trustee Accounts in such Grantor's name, all
funds or any other interest held or required by the terms of the Indenture to be
held in, and all certificates and instruments, if any, from time to time
representing or evidencing, such Non-Trustee Accounts;
(ii) all notes, certificates of deposit, deposit accounts, checks
and other instruments from time to time hereafter delivered to or otherwise
possessed by the Security Trustee for or on behalf of such Grantor in
substitution for or in addition to any or all of the then existing Non-Trustee
Account Collateral; and
(iii) all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the then existing Non-Trustee Account Collateral;
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51
(d) all right of such Grantor in and to each Security Trustee
Account at any time or from time to time established and all cash, investment
property, Permitted Account Investment, other Investments, securities,
instruments or other property (including all "financial assets" within the
meaning of Section 8.102(a)(9) of the UCC) at any time or from time credited to
any such Security Trustee Account (collectively, the "Account Collateral"):
(e) all other "investment property" (as defined in Section
9-115(1)(f) of the UCC) of such Grantor including written notification of the
following (the "Investment Collateral"):
(i) all Permitted Account Investments made or acquired from or with
the proceeds of any Non-Trustee Account Collateral of such Grantor from time to
time and all certificates and instruments, if any, from time to time
representing or evidencing such Permitted Account Investments; and
(ii) all interest, dividends, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Investment Collateral;
(f) all of the following (the "Assigned Agreement Collateral"):
(i) all of such Grantor's right, title and interest in and to all
security assignments, cash deposit agreements and other security agreements
executed in its favor by any Issuer Subsidiary, in each case as such agreements
may be amended or otherwise modified from time to time (collectively, the
"Assigned Agreements"); and
(ii) all of such Grantor's right, title and interest in and to all
deposit accounts, all property in such deposit account, all certificates and
instruments, if any from time to time representing or evidencing such deposit
accounts and all other property of whatever nature, in each case pledged,
assigned or transferred to it or mortgaged or charged in its favor pursuant to
any Assigned Agreement;
(g) all of such Grantor's right, title and interest in and to all
Leases to which such Grantor is or may from time to time be party and any
leasing arrangements among Issuer Group Members with respect to such Leases (all
such Leases, the "Assigned Leases"), including without limitation (i) all rights
of such Grantor to receive moneys due and to become due under or pursuant to
such Assigned Leases, (ii) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to such Assigned Leases,
(iii) claims of such Grantor for damages arising out of or for breach or default
under such Assigned Leases, (iv) all rights under any such Assigned Lease with
respect to any subleases of the Aircraft subject to such Assigned Lease and (v)
the right of such Grantor to terminate such Assigned Leases and to compel
performance of, and otherwise to exercise all remedies under, any Assigned
Lease, whether arising under such Assigned Leases or by statute or at law or in
equity (the "Lease Collateral");
(h) all of such Grantor's right, title and interest in and to all
Service Provider Documents (the "Servicing Collateral");
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(i) all of such Grantor's rights, title and interest in and to all
Credit Facilities not consisting of a Cash Collateral Account and Swap
Agreements all rights to administer, draw upon and otherwise deal with each
Credit Facility and to administer and otherwise deal with each such Swap
Agreement; and
(j) all of such Grantor's right, title and interest in and to the
personal property identified in a Grantor Supplement or a Collateral Supplement
executed and delivered by such Grantor to the Security Trustee; and
(k) all proceeds of any and all of the foregoing Collateral
(including proceeds that constitute property of the types described in
subsections (a), (b), (c), (d), (e), (f), (g), (h), (i) and (j) above);
provided that the Collateral shall not include Excluded Payments.
The undersigned Guarantor hereby makes each representation and
warranty set forth in Section 2.03 of the Security Trust Agreement (as
supplemented by the attached Annexes) and hereby agrees to be bound as a Grantor
by all of the terms and provisions of the Security Trust Agreement. Each
reference in the Security Trust Agreement to the Pledged Stock, the Pledged
Debt, the Pledged Beneficial Interests, the Security Collateral, the Beneficial
Interest Collateral, the Non-Trustee Account Collateral, the Account Collateral,
the Investment Collateral, the Assigned Agreement, the Assigned Agreement
Collateral, the Assigned Leases, the Service Provider Documents, the Servicing
Collateral, the Lease Collateral, the Assigned Documents and the Agreement
Collateral shall be construed to include a reference to the corresponding
Collateral hereunder.
The undersigned hereby agrees, together with the Issuer, jointly and
severally to indemnify the Security Trustee, its officers, directors, employees
and agents in the manner set forth in Section 9.01 of the Security Trust
Agreement.
Attached are (i) an Account Letter in substantially the form of
Exhibit C to the Security Trust Agreement from each Non-Trustee Account Bank at
which each Non-Trustee Account included in the foregoing Collateral is
maintained, (ii) where required with respect to any Assigned Document (other
than an Assigned Lease) included in the foregoing Collateral, a Consent and
Agreement in substantially the form of Exhibit D to the Security Trust Agreement
from the counterparty thereto or, with respect to any Assigned Lease included in
the foregoing Collateral, such consents, acknowledgements and/or notices as are
called for under Section 2.08(a) of the Security Trust Agreement and (iii) duly
completed copies of Annexes I, II, III and IV hereto.
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This Grantor Supplement shall in all respects be governed by, and
construed in accordance with, the laws of the State of New York, including all
matters of construction, validity and performance.
Very truly yours,
[NAME OF GRANTOR]
By:_____________________________
Name:
Title:
Acknowledged and agreed to as of the date first above written:
BANKERS TRUST COMPANY,
not in its individual capacity, but
solely as the Security Trustee
By:_____________________________
Name:
Title:
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ANNEX I
SECURITY AGREEMENT SUPPLEMENT
PLEDGED STOCK
Percentage of
Stock Issuer Par Value Certificate No(s). Number of Shares Outstanding Shares
------------ --------- ------------------ ---------------- ------------------
PLEDGED BENEFICIAL INTERESTS
Percentage of
Issuer Certificate No. Beneficial Interest
--------------------- --------------------------------- --------------------------
PLEDGED DEBT
Debt Issuer Description of Debt Date
--------------------- --------------------------------- --------------------------
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ANNEX II
SECURITY AGREEMENT SUPPLEMENT
NON-TRUSTEE ACCOUNT INFORMATION
NAME AND ADDRESS OF
NAME AND ADDRESS NON-TRUSTEE
OF BANK ACCOUNT HOLDER ACCOUNT NUMBER
--------------------- --------------------------------- --------------------------
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ANNEX III
SECURITY AGREEMENT SUPPLEMENT
TRADE NAMES
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ANNEX IV
SECURITY AGREEMENT SUPPLEMENT
CHIEF PLACE OF
NAME OF GRANTOR CHIEF EXECUTIVE OFFICE BUSINESS REGISTERED OFFICE
-------------------- ---------------------------- -------------- ---------------------
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EXHIBIT C
SECURITY TRUST AGREEMENT
FORM OF NON-TRUSTEE ACCOUNT LETTER
_______________, 1999
[Name and address
of Account Bank]
[Name of the Grantor]
Ladies and Gentlemen:
Reference is made to Account No. __________ into which certain
monies, instruments and other properties are deposited from time to time (the
"Pledged Account") maintained with you by ____________________ (the "Grantor").
Pursuant to the Security Trust Agreement, dated as of May 5, 1999 (the "Security
Trust Agreement"), between the Grantor, various other Grantors and Bankers Trust
Company, as the Operating Bank and the Security Trustee (the "Security
Trustee"). Capitalized terms used herein, unless otherwise defined herein, have
the meanings assigned to them in the Security Trust Agreement.
Pursuant to the Security Trust Agreement, the Grantor has granted to
the Security Trustee a security interest in certain property of the Grantor,
including, among other things, the following (the "Collateral"): the Pledged
Account, all funds held or required by the terms of the Indenture to be held
therein and all certificates and instruments, if any, from time to time
representing or evidencing such Pledged Account, all notes, certificates of
deposit, deposit accounts, checks and other instruments from time to time
hereafter delivered to or otherwise possessed by the Security Trustee for or on
behalf of such Grantor in substitution for or in addition to any or all of the
then existing Collateral, and all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the then existing Collateral, and
all proceeds of any and all of the foregoing Collateral. It is a condition to
the continued maintenance of the Pledged Account with you that you agree to this
letter agreement.
By signing this letter agreement, you acknowledge notice of, and
consent to the terms and provisions of, the Security Trust Agreement and confirm
to the Security Trustee that you have received no notice of any other pledge or
assignment of the Pledged Account. Further, you hereby agree with the Security
Trustees that:
(a) Notwithstanding anything to the contrary in any other agreement
relating to the Pledged Account, the Pledged Account is and will be subject to
the terms and conditions of the Security Trust Agreement, and will henceforth be
subject to written instructions only from an officer of the Security Trustee or
(unless you are otherwise notified by the Security Trustee)
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from an officer of the Administrative Agent as the agent of the Security
Trustee. In the event of any conflicting instructions, those of the Security
Trustee shall prevail.
(b) You will follow your usual operating procedures for the handling
of any remittance received in the Pledged Account, including any remittance that
contains restrictive endorsements, irregularities (such as a variance between
the written and numerical amounts), undated or postdated items, missing
signatures, incorrect payees, etc.
(c) You will transfer, in same day funds, on each of your business
days, an amount equal to the credit balance of the Pledged Account (other than
any amount required to be left on deposit for local tax or other regulatory or
legal purposes) on such day to the following account (the "Collections
Account"):
[Insert address of Operating Bank and
account number of the Collections Account]
Each such transfer of funds shall neither comprise only part of a remittance nor
reflect the rounding off of any funds so transferred.
(d) All service charges and fees with respect to the Pledged Account
shall be payable by the Grantor, and deposited checks returned for any reason
shall not be charged to such account.
(e) The Security Trustee and the Administrative Agent as the agent
of the Security Trustee shall be entitled to exercise any and all rights of the
Grantor in respect of the Pledged Account in accordance with the terms of the
Security Trust Agreement, and the undersigned shall comply in all respects with
such exercise.
This letter agreement shall be binding upon you and your successors and
assigns and shall inure to the benefit of the Security Trustee, the Secured
Parties and their successors, transferees and assigns. You may terminate this
letter agreement only upon 30 days' prior written notice to the Grantor and the
Security Trustee. Upon such termination you shall close the Pledged Account and
transfer all funds in the Pledged Account to the Collections Account. After any
such termination, you shall nonetheless remain obligated promptly to transfer to
the Collections Account all funds and other property received in respect of the
Pledged Account.
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This letter agreement shall in all respects be governed by and construed
in accordance with the laws of the State of New York, including all matters of
construction, validity and performance.
Very truly yours,
[NAME OF GRANTOR]
By:_______________________________
Name:
Title:
BANKERS TRUST COMPANY,
not in its individual capacity,
but solely as the Security Trustee
By:_______________________________
Name:
Title:
Acknowledged and agreed to as of
the date first above written:
[NAME OF PLEDGED ACCOUNT BANK]
By:____________________________
Name:
Title:
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EXHIBIT D
SECURITY TRUST AGREEMENT
FORM OF CONSENT AND AGREEMENT
_______________, 1999
[Name of the Grantor]
Ladies and Gentlemen:
Reference is made to the agreement between you and the Grantor dated
(the "Assigned Document").
Pursuant to the Security Trust Agreement, dated May 5, 1999 (the
"Security Trust Agreement"), between the Grantor, certain other Grantors and
Bankers Trust Company, as the Operating Bank and the Security Trustee (the
"Security Trustee"), the Grantor has granted to the Security Trustee a security
interest in certain property of the Grantor, including, among other things, the
following (the "Collateral"): all of such Grantor's right, title and interest in
and to the Assigned Document, including without limitation all rights of such
Grantor to receive moneys due and to become due under or pursuant to the
Assigned Document, all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned
Document, claims of such Grantor for damages arising out of or for breach or
default under the Assigned Document and the right of such Grantor to terminate
the Assigned Document, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder, whether arising under the Assigned
Document or by statute or at law or in equity. Capitalized terms used herein,
unless otherwise defined herein, have the meanings assigned to them in the
Security Trust Agreement.
By signing this Consent and Agreement, you acknowledge notice of,
and consent to the terms and provisions of, the Security Trust Agreement and
confirm to the Security Trustee that you have received no notice of any other
pledge or assignment of the Assigned Document. Further, you hereby agree with
the Security Trustee that:
(a) You will make all payments to be made by you under or in
connection with the Assigned Document directly to the Collections Account or
otherwise in accordance with the instructions of the Security Trustee.
(b) The Security Trustee shall be entitled to exercise any and all
rights and remedies of the Grantor under the Assigned Document in accordance
with the terms of the Security Trust Agreement, and you will comply in all
respects with such exercise.
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(c) You will not, without the prior written consent of the Security
Trustee, (i) cancel or terminate the Assigned Document or consent to or accept
any cancellation or termination thereof or (ii) amend or otherwise modify the
Assigned Document.
This Consent and Agreement shall be binding upon you and your
successors and assigns and shall inure to the benefit of the Security Trustee,
the Secured Parties and their successors, transferees and assigns.
This Consent and Agreement shall in all respects, be governed by
and construed in accordance with the laws of the State of New York, including
all matters of construction, validity and performance.
Very truly yours,
[NAME OF GRANTOR]
By:_______________________________
Name:
Title:
BANKERS TRUST COMPANY,
not in its individual capacity,
but solely as the Security Trustee
By:_______________________________
Name:
Title:
Acknowledged and agreed to as of
the date first above written:
[NAME OF OBLIGOR]
By:______________________________
Name:
Title:
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