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EXHIBIT 4.49
________________________________________________________________________________
TRUST AGREEMENT
dated as of August 1, 1995
between
BOT FINANCIAL & LEASING CORPORATION B-4,
Owner Participant
and
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION,
Owner Trustee
__________________________
One Boeing Model ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ TRUST N605SW
________________________________________________________________________________
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND TERMS . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
AUTHORITY TO EXECUTE CERTAIN OPERATIVE AGREEMENTS;
DECLARATION OF TRUST . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.01 Authority to Execute Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.02 Declaration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
PURCHASE OF CERTAIN RIGHTS IN THE AIRCRAFT;
ISSUANCE OF CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3.01 Purchase of Certain Rights in the Aircraft . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3.02 Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE TRUST ESTATE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 4.01 Distribution of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 4.02 Method of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V
DUTIES OF THE OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . 5
SECTION 5.01 Notice of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 5.02 Action Upon Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5.03 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5.04 No Duties Except as Specified in Trust Agreement or Instructions . . . . . . . . . . . . . . . 7
3
SECTION 5.05 No Action Except Under Specified Documents or Instructions . . . . . . . . . . . . . . . . . . 7
SECTION 5.06 No Power to Reinvest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE VI
THE OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6.01 Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 6.02 Absence of Certain Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 6.03 No Representations or Warranties as to Certain Matters . . . . . . . . . . . . . . . . . . . . 8
SECTION 6.04 No Segregation of Monies; Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 6.05 Reliance Upon Certificates, Counsel and Agents . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 6.06 Not Acting in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 6.07 Fees and Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 6.08 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VII
INDEMNIFICATION OF SBC
BY OWNER PARTICIPANT . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 7.01 Owner Participant to Indemnify SBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VIII
TRANSFER OF THE OWNER PARTICIPANT'S INTEREST . . . . . . . . . . . . . . . . . 12
SECTION 8.01 Transfer of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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ARTICLE IX
SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES . . . . . . . . . . . . . . . . . . 12
SECTION 9.01 Resignation of Owner Trustee: Appointment of Successor . . . . . . . . . . . . . . . . . . . . 12
SECTION 9.02 Co-Trustees and Separate Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE X
SUPPLEMENTS AND AMENDMENTS
TO TRUST AGREEMENT AND OTHER AGREEMENTS . . . . . . . . . . . . . . . . . . 14
SECTION 10.01 Supplements and Amendments and Delivery Thereof . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 10.02 Discretion as to Execution of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 10.03 Distribution of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 10.04 Absence of Requirement as to Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE XI
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 11.01 Termination of Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 11.02 Owner Participant Has No Legal Title in Trust Estate . . . . . . . . . . . . . . . . . . . . . 16
SECTION 11.03 Assignment, Sale, Etc. of Aircraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 11.04 Trust Agreement for Benefit of Certain Parties Only . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 11.05 [Intentionally reserved for potential future use] . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 11.06 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 11.07 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 11.08 Waivers, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 11.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 11.10 Binding Effect, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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SECTION 11.11 Headings; References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 11.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 11.13 Performance by the Owner Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 11.14 Authorization to Owner Trustee for Trust Indenture . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE XII
CERTAIN LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 12.01 Limitations on Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 12.02 Discretion and Actions of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 12.03 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 12.04 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 12.05 Owner Trustee Acts as Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 12.06 Waiver of Claim Against Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 12.07 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
EXHIBIT 1 Affidavit of Citizenship
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TRUST AGREEMENT
This TRUST AGREEMENT, dated as of August 1, 1995, is between
BOT FINANCIAL & LEASING CORPORATION B-4, a Massachusetts corporation, and
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION, a national banking association
(in its individual capacity, together with its successors and permitted
assigns, "SBC", and otherwise not in its individual capacity but solely as
trustee hereunder with its permitted successors and assigns, the "Owner
Trustee").
W I T N E S S E T H:
ARTICLE I
DEFINITIONS AND TERMS
SECTION 1.01 Certain Definitions. Unless the context
shall otherwise require and except as contained in this Section 1.01, the
capitalized terms used herein and not otherwise defined herein shall have the
respective meanings assigned thereto in the Lease (as hereinafter defined) or,
if not defined in the Lease, in the Trust Indenture (as defined in the Lease),
for all purposes hereof. All definitions contained in this Section 1.01 shall
be equally applicable to both the singular and plural forms of the terms
defined. For all purposes of this Trust Agreement the following terms shall
have the following meanings:
"Commitment" has the meaning ascribed to such term in Section
1 of the Participation Agreement.
"Excluded Payments" has the meaning ascribed to such term in
the Trust Indenture.
"Indenture Event of Default" has the meaning ascribed to such
term in the Trust Indenture.
"Lease" means that certain Sale and Lease Agreement, dated as
of the date hereof, relating to that certain Boeing 737-3H4 aircraft bearing
U.S. Registration No. N605SW and Manufacturer's serial number 27956, to be
entered into by the Owner Trustee and Lessee concurrently with the execution
and delivery of this Trust Agreement, as said Sale and Lease Agreement may from
time to time be supplemented or amended, or the terms thereof waived or
modified, to the extent permitted by, and in accordance with, the terms of this
Trust Agreement. The term "Lease" shall also include said Sale and Lease
Agreement as supplemented by each Lease Supplement from time to time entered
into pursuant to the terms of the Lease.
"Lease Event of Default" has the meaning ascribed to such term
in the Lease.
"Lessee" means Southwest Airlines Co., a Texas corporation,
and its permitted successors and assigns under the Lease and the Participation
Agreement.
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"Owner Participant" means and includes (i) BOT Financial &
Leasing Corporation B-4, a Massachusetts corporation, as the original Owner
Participant, and (ii) the successors and permitted assigns of BOT Financial &
Leasing Corporation B-4.
"Trust Estate" means all estate, right, title and interest of
the Owner Trustee in and to the Aircraft, the Participation Agreement, the
Lease, any Lease Supplement, the Purchase Agreement, the Purchase Agreement
Assignment, the Bills of Sale and the other Operative Agreements including,
without limitation, all amounts of Basic Rent and Supplemental Rent including,
without limitation, insurance proceeds (other than insurance proceeds payable
to or for the benefit of the Owner Trustee, for its own account or in its
individual capacity, the Owner Participant, the Holders or the Indenture
Trustee), all payments and proceeds as a result of the sale, lease or other
disposition of the Aircraft, the Airframe, any Engine or any Part thereof, and
requisition, indemnity or other payments of any kind for or with respect to the
Aircraft (except amounts owing to the Owner Participant, to the Indenture
Trustee, to the Owner Trustee, in its individual capacity, or to a Holder, or
to any of their respective directors, officers, employees, servants and agents,
pursuant to Section 7 of the Participation Agreement) including, without
limitation, any and all payments and proceeds received by the Owner Trustee
after the termination of the Lease with respect to the Aircraft resulting from
the sale, lease or other disposition thereof, subject, however to the
provisions of and the Lien created by the Trust Indenture. Notwithstanding the
foregoing, "Trust Estate" shall (i) not include any Excluded Payment and (ii)
include all property and rights purported to be included in the Trust Indenture
Estate.
"Trust Indenture Estate" has the meaning ascribed to the term
"Indenture Estate" in the Trust Indenture.
"Trust Office" has the meaning ascribed to such term in the
Trust Indenture.
"Trust Supplement" means a supplement to this Trust Agreement
and to the Trust Indenture in substantially the form of Exhibit C to the Trust
Indenture.
ARTICLE II
AUTHORITY TO EXECUTE CERTAIN OPERATIVE AGREEMENTS;
DECLARATION OF TRUST
SECTION 2.01 Authority to Execute Documents. The Owner
Participant hereby authorizes and directs the Owner Trustee to, and the Owner
Trustee agrees for the benefit of the Owner Participant that it will, on or
before the Delivery Date, execute and deliver the Operative Agreements to which
it is a party and any other agreements, instruments or documents to which the
Owner Trustee is a party in the respective forms thereof which are delivered
from time to time by the Owner Participant to the Owner Trustee for execution
and delivery and, subject to the terms hereof, to exercise its rights (upon
instructions received from the Owner Participant) and perform its duties under
said Operative Agreements in accordance with the terms thereof.
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SECTION 2.02 Declaration of Trust. SBC hereby declares
that it will hold as the Owner Trustee the Trust Estate upon the trusts
hereinafter set forth for the use and benefit of the Owner Participant,
subject, however, to the Lien created by the Trust Indenture.
ARTICLE III
PURCHASE OF CERTAIN RIGHTS IN THE AIRCRAFT;
ISSUANCE OF CERTIFICATES
SECTION 3.01 Purchase of Certain Rights in the Aircraft.
The Owner Participant hereby authorizes and directs the Owner Trustee to, and
the Owner Trustee agrees for the benefit of the Owner Participant that it will,
on the Delivery Date, subject to due compliance with the terms of Section 3.02
hereof:
(a) purchase the Aircraft pursuant to the Lease;
(b) accept from Lessee the Lessee Warranty ▇▇▇▇ of Sale
and the Lessee FAA ▇▇▇▇ of Sale and the invoice furnished pursuant to
the Participation Agreement;
(c) execute and deliver a Lease Supplement covering the
Aircraft;
(d) execute and deliver each of the other Operative
Agreements to which the Owner Trustee is to be a party including,
without limitation, a Trust Supplement covering the Aircraft;
(e) execute, issue and deliver to the Original Loan
Participant one or more authenticated Certificates in the amounts and
otherwise as provided in Section 1 of the Participation Agreement;
(f) execute and deliver the financing statements referred
to in Section 4(a)(vi) of the Participation Agreement, together with
all other agreements, documents and instruments referred to in Section
4 of the Participation Agreement to which the Owner Trustee is to be a
party;
(g) effect the registration of the Aircraft in the name
of the Owner Trustee by filing or causing to be filed with the FAA:
(i) the Lessee FAA ▇▇▇▇ of Sale; (ii) an application for registration
of the Aircraft in the name of the Owner Trustee (including, without
limitation, an affidavit from the Owner Trustee in the form of Exhibit
1 hereto in compliance with the provisions of 14 C.F.R. Section
47.7(c)(2)(iii)); and (iii) this Trust Agreement;
(h) authorize a representative or representatives of the
Owner Trustee (who shall be an employee or employees of Lessee) to
accept delivery of the Aircraft pursuant to the Participation
Agreement; and
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(i) execute and deliver all such other instruments,
documents or certificates and take all such other actions in
accordance with the directions of the Owner Participant, as the Owner
Participant may deem necessary or advisable in connection with the
transactions contemplated hereby.
SECTION 3.02 Conditions Precedent. The rights and
obligations of the Owner Trustee to take the actions required by Section 3.01
hereof with respect to the Aircraft shall be subject to the following
conditions precedent: (a) the Owner Participant shall have made the full
amount of its Commitment with respect to the Aircraft available to the Owner
Trustee, in immediately available funds, in accordance with Sections 1 and 2 of
the Participation Agreement; and (b) the Owner Participant shall have notified
the Owner Trustee that the terms and conditions of Section 4 of the
Participation Agreement, insofar as they relate to conditions precedent to
performance by the Owner Participant of its obligations thereunder, shall have
been either fulfilled to the satisfaction of or waived by the Owner
Participant. The Owner Participant shall, by instructing the Owner Trustee to
release the funds then held by the Owner Trustee as provided in Section 2 of
the Participation Agreement, be deemed to have found satisfactory to it, or
waived, all such conditions precedent.
ARTICLE IV
RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE TRUST ESTATE
SECTION 4.01 Distribution of Payments.
(a) Payments to the Indenture Trustee. Until the Trust
Indenture shall have been discharged pursuant to Section 10.01 thereof or
defeased pursuant to Section 10.05 thereof, all Rent, insurance proceeds and
requisition or other payments of any kind included in the Trust Estate (other
than Excluded Payments and other than payments received from the Indenture
Trustee under the Trust Indenture) payable to the Owner Trustee shall be
payable directly to the Indenture Trustee (and any of the same which are
received by the Owner Trustee shall upon receipt be paid over to the Indenture
Trustee without deduction, set-off or adjustment of any kind) for distribution
in accordance with the provisions of Article III of the Trust Indenture;
provided, however, that any payments received by the Owner Trustee from (i) the
Lessee with respect to the Owner Trustee's fees and disbursements, or (ii) the
Owner Participant pursuant to Article VII hereof shall not be paid over to the
Indenture Trustee but shall be retained by the Owner Trustee and applied toward
the purpose for which such payments were made.
(b) Payments to the Owner Trustee; Other Parties. After
the Trust Indenture shall have been discharged pursuant to Section 10.01
thereof or defeased pursuant to Section 10.05 thereof, any payment of the type
referred to in Section 4.01(a) hereof (other than Excluded Payments) received
by the Owner Trustee, any payments received from the Indenture Trustee other
than as specified in Section 4.01(c) or (d) hereof and any other amount
received as part of the Trust Estate and for the application or distribution of
which no provision is made herein, shall be distributed forthwith upon receipt
by the Owner Trustee in the following order of priority: first, so
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much of such payment as shall be required to reimburse the Owner Trustee for
any expenses not otherwise reimbursed as to which the Owner Trustee is entitled
to be so reimbursed by the Owner Participant pursuant to the provisions hereof
shall be retained by the Owner Trustee; second, so much of the remainder for
which provision as to the application thereof is contained in the Lease or any
of the other Operative Agreements shall be applied and distributed in
accordance with the terms of the Lease or such other Operative Agreement; and
third, the balance, if any, shall be paid to the Owner Participant.
(c) Certain Distributions to the Owner Participant. All
amounts from time to time distributable by the Indenture Trustee to the Owner
Participant pursuant to the Trust Indenture shall, if paid to the Owner
Trustee, be distributed by the Owner Trustee to the Owner Participant in
accordance with the provisions of Article III of the Trust Indenture.
(d) Excluded Payments. Any Excluded Payments received by
the Owner Trustee shall be paid by the Owner Trustee to the Person to whom such
Excluded Payments are payable under the provisions of the Participation
Agreement, the Tax Indemnity Agreement or the Lease.
(e) Legal Title. The Owner Participant shall have no
legal title to the Aircraft or any other portion of the Trust Estate.
SECTION 4.02 Method of Payments. The Owner Trustee shall
make distributions or cause distributions to be made to (i) the Owner
Participant pursuant to this Article IV by transferring by wire transfer in
immediately available funds on the day received (or on the next succeeding
Business Day if the funds to be so distributed shall not have been received by
the Owner Trustee by 3:00 p.m., New York City time), the amount to be
distributed as provided in Schedule I to the Participation Agreement or to such
account or accounts of the Owner Participant as the Owner Participant may
designate from time to time in writing to the Owner Trustee and (ii) the
Indenture Trustee pursuant to this Article IV by transferring the amount to be
distributed to the Indenture Trustee in the manner specified in the Trust
Indenture.
ARTICLE V
DUTIES OF THE OWNER TRUSTEE
SECTION 5.01 Notice of Event of Default. If the Owner
Trustee shall have knowledge of a Lease Event of Default or Indenture Event of
Default (or an event which with the passage of time or the giving of notice or
both would constitute a Lease Event of Default or an Indenture Event of
Default), the Owner Trustee shall give to the Owner Participant and Lessee
prompt telephonic or facsimile notice thereof followed by prompt written
confirmation thereof by certified mail, postage prepaid, provided, that (i) in
the case of an event which with the passage of time would constitute an
Indenture Event of Default referred to in paragraph (b) of Section 8.01 of the
Trust Indenture, such notice shall in no event be furnished later than ten (10)
days after the Owner Trustee shall first have knowledge of such event and (ii)
in the case of a misrepresentation by the Owner Trustee which with the passage
of time would constitute an Indenture Event of Default referred to in paragraph
(c) of Section 8.01 of the Trust Indenture, such notice shall in no event be
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furnished later than ten (10) days after the Owner Trustee shall first have
knowledge of such event. The notice shall set forth in reasonable detail the
facts or circumstances known to it with respect to such Lease Event of Default
or Indenture Event of Default. Subject to the terms of Section 5.03 hereof,
the Owner Trustee shall take such action or shall refrain from taking such
action, not inconsistent with the provisions of the Trust Indenture or the
other Operative Agreements, with respect to such Lease Event of Default,
Indenture Event of Default or other event as the Owner Trustee shall be
directed in writing by the Owner Participant. For all purposes of this Trust
Agreement, the Lease and the other Operative Agreements, in the absence of
actual knowledge by a responsible officer of the Trust Office of the Owner
Trustee in his or her capacity as such, the Owner Trustee shall not be deemed
to have knowledge of a Lease Event of Default, Indenture Event of Default or
other event referred to in this Section 5.01 unless notified in writing thereof
by the Indenture Trustee, the Owner Participant or Lessee.
SECTION 5.02 Action Upon Instructions. Subject to the
terms of Sections 5.01 and 5.03 hereof and to the terms of the other Operative
Agreements, upon the written instructions at any time and from time to time of
the Owner Participant, the Owner Trustee will take such of the following
actions, not inconsistent with the provisions of the Lease and the Trust
Indenture, as may be specified in such instructions: (i) give such notice or
direction or exercise such right, remedy or power hereunder or take such other
actions under any of the Operative Agreements to which the Owner Trustee is a
party or in respect of all or any part of the Trust Estate as shall be
specified in such instructions; (ii) take such action to preserve or protect
the Trust Estate (including the discharge of Liens) as may be specified in such
instructions; (iii) approve as satisfactory to it all matters required by the
terms of the Lease or the other Operative Agreements to be satisfactory to the
Owner Trustee, it being understood that without written instructions of the
Owner Participant, the Owner Trustee shall not approve any such matter as
satisfactory to it; (iv) subject to the rights of Lessee under the Operative
Agreements, after the expiration or earlier termination of the Lease, convey
all of the Owner Trustee's right, title and interest in and to the Aircraft for
such amount, on such terms and to such purchaser or purchasers as shall be
designated in such instructions, or net lease the Aircraft to such lessee or
lessees and on such terms as shall be designated in such instructions or
deliver the Aircraft to the Owner Participant in accordance with such
instructions; and (v) take such other action as is requested by the Owner
Participant, which action is not inconsistent with the terms of the Operative
Agreements.
SECTION 5.03 Indemnification. The Owner Trustee shall not
be required to take any action under Section 5.01 (other than the giving of the
notices referred to therein) or 5.02 hereof unless the Owner Trustee shall have
been indemnified by the Owner Participant, in manner and form satisfactory to
the Owner Trustee, against any liability, cost or expense (including reasonable
counsel fees and disbursements) which may be incurred in connection therewith
other than that which results from the willful misconduct or gross negligence
of the Owner Trustee; and, if the Owner Participant shall have directed the
Owner Trustee to take any such action or refrain from taking any action, the
Owner Participant agrees to furnish such indemnity as shall be required and, in
addition to the extent not otherwise paid pursuant to the provisions of the
Lease or of the Participation Agreement, to pay the reasonable fees and charges
of the Owner Trustee for the services performed or to be performed by it
pursuant to such direction. The Owner Trustee shall not be required to take
any action under Section 5.01 (other than the giving of the notices referred
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to therein) or 5.02 hereof if the Owner Trustee shall reasonably determine, or
shall have been advised by counsel, that such action is contrary to the terms
of any of the Operative Agreements to which the Owner Trustee is a party, or is
otherwise contrary to law and the Owner Trustee shall have delivered to the
Owner Participant written notice of the basis of its refusal to act.
SECTION 5.04 No Duties Except as Specified in Trust
Agreement or Instructions. The Owner Trustee shall not have any duty or
obligation to manage, control, use, sell, dispose of or otherwise deal with the
Aircraft or any other part of the Trust Estate, or to otherwise take or refrain
from taking any action under, or in connection with any of the Operative
Agreements to which the Owner Trustee is a party, except (i) as expressly
required by the terms of any of the Operative Agreements to which the Owner
Trustee is a party, or (ii) (to the extent not inconsistent with the provisions
of the Trust Indenture, as expressly provided by the terms hereof) as expressly
provided in a written instruction from the Owner Participant received pursuant
to the terms of Section 5.01 or 5.02 hereof, and no implied duties or
obligations shall be read into this Trust Agreement against the Owner Trustee.
SBC agrees that it will, in its individual capacity and at its own cost or
expense (but without any right of indemnity in respect of any such cost or
expense under Section 5.03 or 7.01 hereof), promptly take such action as may be
necessary to duly discharge and satisfy in full all Lessor Liens attributable
to it in its individual capacity which it is required to discharge pursuant to
Section 8(g) of the Participation Agreement and otherwise comply with the terms
of said Section binding upon it.
SECTION 5.05 No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall have no power, right or authority to,
and the Owner Trustee agrees that it will not, manage, control, use, sell,
dispose of or otherwise deal with the Aircraft or any other part of the Trust
Estate except (i) as expressly required by the terms of any of the Operative
Agreements to which the Owner Trustee is a party, (ii) as expressly provided by
the terms hereof, or (iii) as expressly provided in written instructions from
the Owner Participant pursuant to Section 5.01 or 5.02 hereof, but subject
always to the provisions of and Lien created by the Trust Indenture.
SECTION 5.06 No Power to Reinvest. Notwithstanding
anything contained in Section 5.01, 5.02, 5.04 or 5.05 to the contrary, the
Owner Trustee shall not be authorized and shall have no power to reinvest the
proceeds of the Trust Estate or to otherwise "vary the investment" of the Owner
Participant within the meaning of Treasury Regulations Section
301.7701-4(c)(1); provided, however, that nothing contained in this Section
5.06 shall limit the indemnity provided in Section 5.03 hereof or any
requirement pertaining to the investment of funds in the Operative Agreements.
ARTICLE VI
THE OWNER TRUSTEE
SECTION 6.01 Acceptance of Trusts and Duties. SBC accepts
the trusts hereby created and agrees to perform the same but only upon the
terms hereof applicable to it. The Owner Trustee also agrees to receive and
disburse all monies received by it constituting part of the Trust
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Estate upon the terms hereof. SBC shall not be answerable or accountable under
any circumstances, except for (a) its or the Owner Trustee's own willful
misconduct or gross negligence, (b) its failure to perform its obligations
under the last sentence of Section 5.04 hereof and the first sentence of
Section 5.01 hereof, (c) its or the Owner Trustee's failure to use ordinary
care in handling and disbursing funds, (d) any Tax based on or measured by any
fees, commissions or compensation received by it for acting as trustee in
connection with any of the transactions contemplated by the Operative
Agreements, and (e) liabilities that may result from the inaccuracy of any
representation or warranty of it (or from the failure by it to perform any
covenant) in Section 6.03 hereof or in any of the other Operative Agreements
(including, without limitation, covenants of SBC contained in the Participation
Agreement and the Trust Indenture).
SECTION 6.02 Absence of Certain Duties. Except in
accordance with written instructions furnished pursuant to Section 5.01 or 5.02
hereof and except as provided in, and without limiting the generality of,
Sections 3.01, 5.04 and 5.05 hereof and the last sentence of Section 9.01(b)
hereof, neither the Owner Trustee nor SBC shall have any duty (i) to see to any
recording or filing of any Operative Agreement or of any supplement to any
thereof or to see to the maintenance of any such recording or filing or any
other filing of reports with the Federal Aviation Administration or other
governmental agencies, except that SBC in its individual capacity agrees to
comply with the Federal Aviation Administration reporting requirements set
forth in 14 C.F.R. Section 47.45 and 14 C.F.R. Section 47.51, and the Owner
Trustee shall, to the extent that information for that purpose is timely
supplied by Lessee and approved by the Owner Participant pursuant to any of the
Operative Agreements, complete and timely submit (and furnish the Owner
Participant with a copy of) any and all reports relating to the Aircraft which
may from time to time be required by the Federal Aviation Administration or any
government or governmental authority having jurisdiction, (ii) to see to any
insurance on the Aircraft or to effect or maintain any such insurance, whether
or not Lessee shall be in default with respect thereto, other than to forward
to the Owner Participant copies of all reports and other written information
which the Owner Trustee receives from Lessee pursuant to Section 11 of the
Lease, (iii) to see to the payment or discharge of any tax, assessment or other
governmental charge or any lien or encumbrance of any kind owing with respect
to, assessed or levied against any part of the Trust Indenture Estate or the
Trust Estate, except as provided in Section 5.04 hereof, Section 4.01(ii) or
4.02 of the Trust Indenture or Section 8(g) of the Participation Agreement, or
(iv) to inspect Lessee's books and records with respect to the Aircraft at any
time permitted pursuant to the Lease. Notwithstanding the foregoing, the Owner
Trustee will furnish to the Indenture Trustee and the Owner Participant,
promptly upon receipt thereof, duplicates or copies of all reports, notices,
requests, demands, certificates, financial statements and other instruments
furnished to the Owner Trustee under the Lease or any other Operative Agreement
to the extent that any of the same shall not state on its face or otherwise
that it has been so distributed.
SECTION 6.03 No Representations or Warranties as to
Certain Matters. NEITHER THE OWNER TRUSTEE NOR SBC MAKES OR SHALL BE DEEMED TO
HAVE MADE (a) ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE
TITLE, AIRWORTHINESS, VALUE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR
FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF,
AS TO THE ABSENCE OF LATENT OR OTHER
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DEFECTS, WHETHER OR NOT DISCOVERABLE, OR ANY OTHER REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF
WHATSOEVER, except that SBC in its individual capacity warrants that (i) on the
Delivery Date, the Owner Trustee shall have received whatever title was
conveyed to it by Lessee, (ii) on the Delivery Date, the Owner Trustee shall be
in compliance with the last sentence of Section 5.04 hereof, and (iii) the
Aircraft shall during the Term of the Lease be free of Lessor Liens
attributable to SBC, or (b) any representation or warranty as to the validity,
legality or enforceability of this Trust Agreement or any other Operative
Agreement to which the Owner Trustee is a party, or any other document or
instrument, or as to the correctness of any statement contained in any thereof
except to the extent that any such statement is expressly made herein or
therein by such party as a representation by SBC or by the Owner Trustee, as
the case may be, and except that SBC hereby represents and warrants that this
Trust Agreement has been, and (assuming due authorization, execution and
delivery by the Owner Participant of this Trust Agreement) the other Operative
Agreements to which it or the Owner Trustee is a party have been (or at the
time of execution and delivery of any such instrument by it or the Owner
Trustee hereunder or pursuant to the terms of the Participation Agreement that
such an instrument will be) duly executed and delivered by one of its officers
who is or will be, as the case may be, duly authorized to execute and deliver
such instruments on behalf of SBC or the Owner Trustee, as the case may be, and
that this Trust Agreement constitutes the legal, valid and binding obligation
of SBC or the Owner Trustee, as the case may be, enforceable against SBC or the
Owner Trustee, as the case may be, in accordance with its terms.
SECTION 6.04 No Segregation of Monies; Interest. Monies
received by the Owner Trustee hereunder need not be segregated in any manner
except to the extent required by law and the Owner Trustee shall not be liable
for any interest thereon.
SECTION 6.05 Reliance Upon Certificates, Counsel and
Agents. The Owner Trustee shall incur no liability to anyone in acting in
reliance upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper reasonably
believed by it in good faith to be genuine and reasonably believed by it in
good faith to be signed by the proper party or parties. Unless other evidence
in respect thereof is specifically prescribed herein, any request, direction,
order or demand of the Owner Participant or Lessee mentioned herein or in any
of the other Operative Agreements to which the Owner Trustee is a party shall
be sufficiently evidenced by written instruments signed by the Chairman of the
Board, the President, any Vice President, the Treasurer or any other duly
authorized officer or representative and in the name of any such Owner
Participant or Lessee, as the case may be. The Owner Trustee may accept a copy
of a resolution of the Board of Directors or Executive Committee of Lessee or
the Owner Participant, as the case may be, certified by the Secretary or an
Assistant Secretary of Lessee or the Owner Participant, as the case may be, as
duly adopted and in full force and effect, as conclusive evidence that such
resolution has been duly adopted by said Board or Committee 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 herein, the Owner Trustee
may for all purposes hereof rely on a certificate signed by the Chairman of the
Board, the President, any Vice President, the Treasurer or any other duly
authorized officer or representative of Lessee or the Owner Participant, as the
case may be, as to such fact or matter, and such certificate shall constitute
full protection to the Owner
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Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon. In the administration of trusts hereunder, the Owner Trustee
may execute any of the trusts or powers hereof and perform its powers and
duties hereunder directly or through agents or attorneys and may, at the
expense of the Trust Estate, consult with counsel, accountants and other
skilled persons to be selected and employed by it. The Owner Trustee shall not
be liable for anything done, suffered or omitted in good faith by it in
accordance with the advice or opinion, within the scope of such person's
competence, of any such counsel, accountants or other skilled persons and the
Owner Trustee shall not be liable for the negligence of any such counsel,
accountant or other skilled person appointed by it with due care hereunder.
SECTION 6.06 Not Acting in Individual Capacity. In
executing the trusts accepted by SBC hereunder, the Owner Trustee acts solely
as trustee and not in its individual capacity except as otherwise expressly
provided herein; and, except as may be otherwise expressly provided in this
Trust Agreement, the Lease, the Participation Agreement and the Trust
Indenture, all persons, other than the Owner Participant, as provided herein,
having any claim against the Owner Trustee by reason of the transactions
contemplated hereby shall look only to the Trust Estate for payment or
satisfaction thereof except to the extent the Owner Trustee shall expressly
agree otherwise in writing.
SECTION 6.07 Fees and Compensation. The Owner Trustee
shall be entitled to receive compensation, reasonable as regards its
responsibilities hereunder, together with reimbursement within three (3) months
of its request for all reasonable expenses incurred or made by it in accordance
with any of the provisions of this Trust Agreement or any other Operative
Agreement (including the reasonable compensation of the expenses of its
counsel, accountants or other skilled persons and of all other persons not
regularly in its employ). If a Lease Event of Default or Indenture Event of
Default shall occur and be continuing, the Owner Trustee shall be entitled to
receive compensation, reasonable as regards its additional responsibilities
hereunder, and payment or reimbursement for its expenses as provided above.
Pursuant to Section 7(c) of the Participation Agreement and subject to Section
16 thereof, Lessee shall be required to pay the reasonable fees and expenses of
the Owner Trustee comprising the compensation and reimbursement of expenses to
which the Owner Trustee is entitled under this Section 6.07. Except as
otherwise expressly provided in Section 5.03 or Section 7.01 of this Trust
Agreement, neither the Owner Participant nor the Trust Estate shall have any
liability for any such fees and expenses; provided, however, the Owner
Participant shall be liable for such additional compensation of the Owner
Trustee if the same is attributable to an Indenture Event of Default which is
caused solely by the actions or inactions of the Owner Participant.
SECTION 6.08 Tax Returns. The Owner Participant shall be
responsible for causing to be prepared and filed all income tax returns to be
filed by the Owner Participant. The Owner Trustee will, upon request, furnish
the Owner Participant with all such information as may be reasonably required
or necessary from the Owner Trustee in connection with the preparation of such
tax returns and in connection with any other filing or audit and related
litigation obligations. The Owner Trustee shall be responsible for causing to
be prepared at the request of the Owner Participant all income tax returns
required to be filed with respect to the trust created hereby and shall execute
and, with the approval of the Owner Participant, file such returns; provided,
however,
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that the Owner Trustee shall send a completed copy of each such return to the
Owner Participant not more than 60 nor less than 30 days prior to the due date
of such return; provided that the Owner Trustee shall have timely received all
necessary information to complete and deliver to the Owner Participant such
return. The Owner Participant, upon request, will furnish the Owner Trustee
with all such information as may be required from the Owner Participant in
connection with the preparation of such tax returns. The Owner Trustee will
give to the Owner Participant, upon request, such periodic information
concerning receipts and disbursements by it with respect to the Trust Estate as
would be helpful to the Owner Participant in preparing its tax returns.
ARTICLE VII
INDEMNIFICATION OF SBC
BY OWNER PARTICIPANT
SECTION 7.01 Owner Participant to Indemnify SBC. The
Owner Participant hereby agrees, whether or not any of the transactions
contemplated hereby shall be consummated, to assume liability for, and hereby
indemnifies, protects, saves and keeps harmless SBC in its individual capacity
and its successors, assigns, legal representatives and agents, from and against
any and all Losses indemnified against by Lessee pursuant to Section 7(b) or
7(c) of the Participation Agreement, disregarding those exclusions contained in
clause (3) of Section 7(b)(ii) and in clauses (A) and (B) of Section 7(c)(ii),
and, to the extent that SBC acts in its capacity as the Owner Trustee and in
accordance with instructions received from the Owner Participant, clause (E) of
Section 7(c)(ii), and except (a) in the case of willful misconduct or gross
negligence on the part of the Owner Trustee or SBC in the performance or
nonperformance of its duties hereunder or under any of the other Operative
Agreements to which the Owner Trustee is a party, (b) those claims resulting
from the inaccuracy of any representation or warranty of SBC (or from the
failure of SBC to perform any of its covenants) in Section 6.03 hereof or in
any of the other Operative Agreements, (c) as may result from a breach by SBC
of its covenant in the last sentence of Section 5.04 hereof or a breach by SBC
of any other of its covenants contained herein or (d) in the case of the
failure to use ordinary care on the part of the Owner Trustee or SBC in the
receipt or disbursement of funds; provided, however, that the exception set
forth in clause (a) of this Section 7.01 shall not apply to any action taken or
omission made by the Owner Trustee pursuant to and in accordance with written
directions given to the Owner Trustee by the Owner Participant. The
indemnities contained in this Section 7.01 extend to SBC only in its individual
capacity and shall not be construed as indemnities of the Trust Indenture
Estate or the Trust Estate (except to the extent, if any, that SBC has been
reimbursed by the Trust Indenture Estate or the Trust Estate for amounts
covered by the indemnities contained in this Section 7.01). The indemnities
contained in this Section 7.01 shall survive the termination of this Trust
Agreement. In addition, if necessary, SBC shall be entitled to indemnification
from the Trust Estate, subject to the provisions of Section 4.01 hereof and the
Lien of the Trust Indenture, for any liability, obligation, loss, damage,
penalty, tax, claim, action, suit, cost, expense or disbursement indemnified
against pursuant to this Section 7.01 to the extent not reimbursed by Lessee,
the Owner Participant or others, but without releasing any of them from their
respective agreements of reimbursement; and, to secure the same, SBC shall have
a lien on the Trust Estate, subject to the provisions of Section 4.01 hereof
and the Lien of the Trust Indenture, which shall be prior to any interest
therein of the Owner Participant. The payor of any indemnity under
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this Article VII shall be subrogated to any right of the person indemnified in
respect of the matter as to which such indemnity was paid. Notwithstanding the
foregoing, SBC shall not make any claim under this Section 7.01 for any claim,
loss, tax or other liability indemnified against by the Lessee under the
Participation Agreement without first making demand on the Lessee for payment
of such claim, loss, tax or other liability, and pursuing such demand on a
reasonable basis for a reasonable length of time.
ARTICLE VIII
TRANSFER OF THE OWNER PARTICIPANT'S INTEREST
SECTION 8.01 Transfer of Interest. All provisions of
Section 8(l) of the Participation Agreement shall (with the same force and
effect as if set forth, mutatis mutandis, in full in this Section 8.01) be
applicable to any assignment, conveyance or other transfer by the Owner
Participant of its right, title or interest in and to the Participation
Agreement, the Trust Estate or this Trust Agreement.
ARTICLE IX
SUCCESSOR OWNER TRUSTEES; CO-TRUSTEES
SECTION 9.01 Resignation of Owner Trustee: Appointment of
Successor.
(a) Resignation or Removal. The Owner Trustee or any
successor Owner Trustee (i) shall resign if required to do so pursuant to
Section 8(b) of the Participation Agreement and (ii) may resign at any time
without cause by giving at least 60 days' prior written notice to the Owner
Participant, the Indenture Trustee and Lessee, such resignation to be effective
upon the acceptance of appointment by the successor Owner Trustee under Section
9.01(b) hereof. In addition, the Owner Participant may at any time remove the
Owner Trustee with or without cause by a notice in writing delivered to the
Owner Trustee, the Holders, the Indenture Trustee and Lessee, such removal to
be effective upon the acceptance of appointment by the successor Owner Trustee
under Section 9.01(b) hereof. In the case of the removal or resignation of the
Owner Trustee, the Owner Participant may, after consultation in good faith with
Lessee, appoint a successor Owner Trustee by an instrument signed by the Owner
Participant. If a successor Owner Trustee shall not have been appointed within
30 days after such notice of resignation or removal, the Owner Trustee, the
Owner Participant, Lessee or the Indenture Trustee may apply to any court of
competent jurisdiction to appoint a successor Owner Trustee to act until such
time, if any, as a successor shall have been appointed as above provided. Any
successor Owner Trustee so appointed by such court shall immediately and
without further act be superseded by any successor Owner Trustee appointed as
above provided.
(b) Execution and Delivery of Documents, Etc. Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee an instrument accepting such appointment, and
thereupon such successor Owner Trustee, without further act, shall become
vested with all the estates, properties, rights, powers, duties and trusts of
the predecessor
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Owner Trustee in the trusts hereunder with like effect as if originally named
the Owner Trustee herein; but nevertheless, upon the written request of such
successor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trusts herein expressed, all the estates, properties, rights, powers and trusts
of such predecessor Owner Trustee, and such predecessor Owner Trustee shall
duly assign, transfer, deliver and pay over to such successor Owner Trustee all
monies or other property then held by such predecessor Owner Trustee upon the
trusts herein expressed. Upon the appointment of any successor Owner Trustee
hereunder, the predecessor Owner Trustee will complete, execute and deliver
such documents as are provided to it by such successor Owner Trustee and will
take such further actions as are requested of it by such successor Owner
Trustee as are reasonably required to cause registration of the Aircraft
included in the Trust Estate to be transferred upon the records of the Federal
Aviation Administration, or other governmental authority having jurisdiction,
into the name of the successor Owner Trustee.
(c) Qualifications. Any successor Owner Trustee, however
appointed, shall be a "citizen of the United States" within the meaning of the
Act and shall also be a bank or trust company organized under the laws of the
United States or any state thereof having a combined capital and surplus of at
least $100,000,000, if there be such an institution willing, able and legally
qualified to perform the duties of the Owner Trustee hereunder upon reasonable
or customary terms.
(d) Merger, Etc. Any corporation into which SBC may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which SBC shall be a
party, or any corporation to which substantially all the corporate trust
business of SBC may be transferred, shall, subject to the terms of Section
9.01(c) hereof, be the Owner Trustee hereunder without further act.
SECTION 9.02 Co-Trustees and Separate Trustees. If at any
time it shall be necessary or prudent in order to conform to any law of any
jurisdiction in which all or any part of the Trust Estate is located, or make
any claim or bring any suit with respect to the Trust Estate or the Lease, or
in the event that the Owner Trustee shall have been requested to do so by the
Owner Participant or the Owner Trustee being advised by counsel shall determine
that it is so necessary or prudent in the interest of the Owner Participant or
the Owner Trustee, or the Owner Trustee shall have been directed to do so by
the Owner Participant, the Owner Trustee and Owner Participant shall execute
and deliver an agreement supplemental hereto and all other instruments and
agreements necessary or proper to constitute another bank or trust company or
one or more persons (any and all of which shall be a "citizen of the United
States" as defined in 49 U.S.C. Section 40102(a)(15)(C)) approved by the Owner
Trustee and the Owner Participant, either to act as co-trustee, jointly with
the Owner Trustee, or to act as separate trustee hereunder (any such co-trustee
or separate trustee being herein sometimes referred to as an "additional
trustee").
Every additional trustee hereunder shall, to the extent
permitted by law, be appointed and act, and the Owner Trustee and its
successors shall act, subject to the following provisions and conditions:
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(A) all powers, duties, obligations and rights conferred
upon the Owner Trustee in respect of the custody, control and
management of monies, the Aircraft or documents authorized to be
delivered hereunder or under the Participation Agreement shall be
exercised solely by the Owner Trustee;
(B) all other rights, powers, duties and obligations
conferred or imposed upon the Owner Trustee and any limitations
thereon shall be conferred or imposed upon and exercised or performed
by the Owner Trustee and such additional trustee jointly, except to
the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (including the holding of
title to the Trust Estate) the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations shall be exercised and performed by
such additional trustee;
(C) notwithstanding anything to the contrary contained
herein, no power given to, or which it is provided hereby may be
exercised by, any such additional trustee shall be exercised hereunder
by such additional trustee, except jointly with, or with the consent
in writing of, the Owner Trustee;
(D) no trustee hereunder shall be personally liable by
reason of any action or omission of any other trustee hereunder;
(E) the Owner Participant, at any time, by an instrument
in writing may remove any such additional trustee; and
(F) no appointment of, or action by, any additional
trustee will relieve the Owner Trustee of any of its obligations
under, or otherwise affect any of the terms of, the Trust Indenture or
affect the interests of the Indenture Trustee or the Holders in the
Trust Indenture Estate.
ARTICLE X
SUPPLEMENTS AND AMENDMENTS
TO TRUST AGREEMENT AND OTHER AGREEMENTS
SECTION 10.01 Supplements and Amendments and Delivery Thereof.
(a) Supplements and Amendments. This Trust Agreement may
not be amended, supplemented or otherwise modified except by an instrument in
writing signed by the Owner Trustee and (except in the case of a Trust
Supplement) the Owner Participant. Subject to Section 10.02 hereof, Section 10
of the Participation Agreement and, until the Trust Indenture shall have been
satisfied and discharged pursuant to Section 10.01 thereof, Section 11.06 of
the Trust Indenture, the Owner Trustee will execute any amendment, supplement
or other modification of this Trust Agreement or of any other Operative
Agreement to which the Owner Trustee is a party which it is requested to
execute by the Owner Participant except that the Owner Trustee shall not
execute any such amendment, supplement or other modification which, by the
express provisions of any of the
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above documents, requires the consent of any other party unless such consent
shall have been obtained.
(b) Delivery of Amendments and Supplements to Certain
Parties. A signed copy of each amendment or supplement referred to in Section
10.01(a) hereof shall be delivered promptly by the Owner Trustee to Lessee and,
until the Trust Indenture shall have been satisfied and discharged pursuant to
Section 10.01 thereof, the Indenture Trustee.
SECTION 10.02 Discretion as to Execution of Documents.
Prior to executing any document required to be executed by it pursuant to the
terms of Section 10.01 hereof, the Owner Trustee shall be entitled to receive
an opinion of its counsel to the effect that the execution of such document is
authorized hereunder. If in the opinion of the Owner Trustee any document
required to be executed by the Owner Trustee pursuant to the terms of Section
10.01 hereof adversely affects any right, duty, immunity or indemnity in favor
of the Owner Trustee hereunder or under any other Operative Agreement to which
the Owner Trustee is a party, the Owner Trustee may in its discretion decline
to execute such document.
SECTION 10.03 Distribution of Documents. Promptly after
the execution by the Owner Trustee of any document entered into pursuant to
Section 10.01 hereof, the Owner Trustee shall mail, by certified mail, postage
prepaid, a conformed copy thereof to the Owner Participant, but the failure of
the Owner Trustee to mail such conformed copy shall not impair or affect the
validity of such document.
SECTION 10.04 Absence of Requirement as to Form. It shall
not be necessary for any written request furnished pursuant to Section 10.01 to
specify the particular form of the proposed documents to be executed pursuant
to such Section, but it shall be sufficient if such request shall indicate the
substance thereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Termination of Trust Agreement. This Trust
Agreement and the trusts created hereby shall terminate and this Trust
Agreement shall be of no further force or effect upon the earlier of (a) the
later of (x) the final satisfaction and discharge of the Trust Indenture
pursuant to Section 10.01 thereof and the sale or other final disposition by
the Owner Trustee of all property constituting part of the Trust Estate and the
final distribution by the Owner Trustee of all monies or other property or
proceeds constituting part of the Trust Estate in accordance with Article IV
hereof, provided, that at such time Lessee shall have fully complied with all
of the terms of the Lease and the Participation Agreement and (y) the
expiration or termination of the Lease in accordance with its terms, (b)
twenty-one years less one day after the death of the last survivor of all of
the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇, late General in Chief of the Armies of the
Confederate States, living on the date of the earliest execution of this Trust
Agreement by any party hereto, or (c) the date of revocation of such trusts by
the Owner Participant (in which case the Trust Estate, subject to the Trust
Indenture, shall be distributed in accordance with the terms hereof); otherwise
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this Trust Agreement and the trusts created hereby shall continue in full force
and effect in accordance with the term hereof.
SECTION 11.02 Owner Participant Has No Legal Title in Trust
Estate. The Owner Participant shall not have legal title to any part of the
Trust Estate. No transfer, by operation of law or otherwise, of any right,
title and interest of the Owner Participant in and to the Trust Estate
hereunder shall operate to terminate this Trust Agreement or the trusts
hereunder or entitle any successors or transferees of the Owner Participant to
an accounting or to the transfer of legal title to any part of the Trust
Estate.
SECTION 11.03 Assignment, Sale, Etc. of Aircraft. Any
assignment, sale, transfer or other conveyance of the Aircraft, any Engine or
any interest therein by the Owner Trustee made in accordance with the express
terms hereof or of the Lease or the Participation Agreement shall bind the
Owner Participant and shall be effective to transfer or convey all right, title
and interest of the Owner Trustee and the Owner Participant in and to the
Aircraft, such Engine or interest therein. No purchaser or other grantee shall
be required to inquire as to the authorization, necessity, expediency or
regularity of such assignment, sale, transfer or conveyance or as to the
application of any sale or other proceeds with respect thereto by the Owner
Trustee.
SECTION 11.04 Trust Agreement for Benefit of Certain
Parties Only. Except for the terms of Section 8(l) of the Participation
Agreement incorporated in Article VIII hereof and except as otherwise provided
in Articles V and IX and Sections 2.02, 3.01, 4.01, 6.07, 10.01, 10.02 and
11.01 hereof, nothing herein, whether expressed or implied, shall be construed
to give any person other than the Owner Trustee and the Owner Participant any
legal or equitable right, remedy or claim under or in respect of this Trust
Agreement; but this Trust Agreement shall be held to be for the sole and
exclusive benefit of the Owner Trustee and the Owner Participant.
SECTION 11.05 [Intentionally reserved for potential future
use].
SECTION 11.06 Notices. All notices, demands, instructions
and other communications required or permitted to be given to or made upon any
party hereto shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, or by telecopier, or by prepaid
courier service, and shall be deemed to be given for purposes of this Trust
Agreement on the day that such writing is delivered or, if sent by registered
or certified mail, three Business Days after being deposited in the mails
addressed to the intended recipient thereof in accordance with the provisions
of this Section 11.06. Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this Section 11.06,
notices, demands, instructions and other communications in writing shall be
given to or made upon the respective parties hereto at their respective
addresses (or to their respective telecopier numbers) as follows: (A) if to
Lessee, the Owner Trustee, the Indenture Trustee or the Owner Participant, to
the respective addresses set forth on Schedule I to the Participation Agreement
or (B) if to any Holder, addressed to such Holder at its address as set forth
in the Register maintained pursuant to the Trust Indenture.
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SECTION 11.07 Severability. Subject to Section 11.12
hereof, any provision hereof which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 11.08 Waivers, Etc. No term or provision hereof
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing entered into in compliance with the terms of Article X
hereof; and any waiver of the terms hereof shall be effective only in the
specific instance and for the specific purpose given.
SECTION 11.09 Counterparts. This Trust Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.10 Binding Effect, Etc. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the Owner Trustee and its successors and assigns, and the Owner Participant,
its successors and, to the extent permitted by Article VIII hereof, its
assigns. Any request, notice, direction, consent, waiver or other instrument
or action by an Owner Participant shall bind its successors and permitted
assigns.
SECTION 11.11 Headings; References. The headings of the
various Articles and Sections herein are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof. The trust
created hereby, together with the trust created by the Trust Indenture, may for
convenience of reference be referred to, collectively, as "Southwest Airlines
1995 Trust N605SW."
SECTION 11.12 Governing Law. THIS TRUST AGREEMENT SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE. THIS TRUST AGREEMENT HAS BEEN DELIVERED IN THE STATE OF NEW
YORK.
SECTION 11.13 Performance by the Owner Participant. Any
obligation of SBC in its individual capacity or as the Owner Trustee hereunder
or under any other Operative Agreement or other document contemplated herein,
may be performed by the Owner Participant and any such performance shall not be
construed as a revocation of the trust created hereby.
SECTION 11.14 Authorization to Owner Trustee for Trust
Indenture. Notwithstanding any contrary provision in this Trust Agreement, the
Owner Trustee is hereby authorized and instructed to enter into and perform
fully the Trust Indenture. This provision is for the benefit of the Owner
Trustee and the Indenture Trustee and the Holders from time to time of the
Certificates and shall not be changed prior to the termination of the Trust
Indenture pursuant to Section 10.01 thereof.
TRUST AGREEMENT [N605SW]
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ARTICLE XII
CERTAIN LIMITATIONS
SECTION 12.01 Limitations on Control. Notwithstanding any
other provision of this Agreement, but subject to the other provisions of this
Article XII, from and after the Delivery Date and until termination of this
Trust Agreement and the trusts created hereby, (i) the Owner Participant shall
not have any voting rights or other rights to direct the Owner Trustee
hereunder in connection with matters involving the ownership and operation of
the Aircraft by the Owner Trustee (collectively "Control Rights") and (ii) the
Owner Trustee shall have absolute and complete discretion in all matters as to
which the Owner Participant otherwise would have had any Control Rights, but
for the provisions of this Article XII. Such discretion (i) is in addition to
the discretion given to the Owner Trustee under the other Articles of this
Trust Agreement and (ii) is expressly limited to the Control Rights that, but
for the provisions of this Article XII, would be held or exercisable by the
Owner Participant, and does not extend to any other rights, powers or
privileges in respect of the beneficial interest of the Owner Participant in
the Trust Estate.
SECTION 12.02 Discretion and Actions of Owner Trustee.
(a) In exercising its discretion under this Article XII,
the Owner Trustee shall exercise its best judgment and shall not be liable for
any action taken or omitted under this Article XII, except for its gross
negligence or willful misconduct, and shall exercise the Control Rights.
(b) In exercise or administration of the power or duties
created under this Article XII, the Owner Trustee may act directly or through
any agents or attorneys and may, at the cost and expense of the Trust Estate,
consult with counsel, accountants and other skilled persons to be selected and
retained by it, and the Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith in accordance with the advice or opinion of
any such counsel, accountants or other skilled persons, and the Owner Trustee
shall not be liable for the negligence of any such counsel, accountants or
other skilled persons.
(c) Notwithstanding any other provision hereof, in
exercising its discretion pursuant to this Article XII, the Owner Trustee shall
be free of any kind of control by the Owner Participant and shall act as it in
its discretion shall deem necessary to protect the interests of the United
States, notwithstanding any countervailing interests of any foreign power
which, or whose citizens, may have a direct or indirect interest in the Owner
Participant and any such action by the Owner Trustee shall not be considered
malfeasance or in breach of any obligation which the Owner Trustee might
otherwise have to the Owner Participant. In connection with any other matters
which may arise not relating to the ownership and operation of the Aircraft,
the Owner Trustee shall act only in accordance with Section 5.05 and the
provisions referred to therein. The Owner Trustee, promptly after any exercise
of discretion hereunder, shall notify the Owner Participant of the exercise
thereof.
TRUST AGREEMENT [N605SW]
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SECTION 12.03 Removal. Notwithstanding any provision of
this Trust Agreement relating to any right or power of the Owner Participant to
remove the Owner Trustee, the Owner Trustee may be removed only (i) for its
gross negligence or willful misconduct or in conjunction with a revocation or
other termination of this Trust Agreement and the trusts created hereby or (ii)
if it shall fail to resign in the event that it is no longer a "Citizen of the
United States," as defined in 49 U.S.C. Section 40102(a)(15)(C).
SECTION 12.04 Payments. Notwithstanding any other
provision of this Article XII, the Owner Participant and not the Owner Trustee
shall be entitled to receive from the Owner Trustee or otherwise all rent,
payments or insurance proceeds, and other payments of whatsoever kind and
nature, payable to the Owner Participant pursuant to this Trust Agreement or
any other Operative Agreement in the same manner as if the Control Rights had
not been transferred to the Owner Trustee and held in trust hereunder.
SECTION 12.05 Owner Trustee Acts as Trustee.
Notwithstanding any other provision of this Trust Agreement, in exercising any
discretion pursuant to this Article XII, the Owner Trustee acts solely as
trustee and not in its individual capacity, and except as may be otherwise
expressly provided in Section 12.02, all persons having any claim against SBC
in its individual capacity or as the Owner Trustee by reason of the
transactions contemplated by this Article XII shall not have any recourse to
SBC in its individual capacity.
SECTION 12.06 Waiver of Claim Against Owner Trustee. To
the extent permitted by law, the Owner Participant agrees to waive and does
waive any and all claims of every kind and nature which hereafter the Owner
Participant may have against SBC in its individual capacity, its successors and
assigns, from any liability whatsoever arising out of or in connection with the
exercise of its powers or the performance of its duties under this Article XII,
except liability for the gross negligence or willful misconduct of the Owner
Trustee.
SECTION 12.07 Amendments. Notwithstanding Section 10.01,
so long as the Aircraft shall be registered under the laws of the United States
and this Trust Agreement and the trusts created hereby shall not have been
revoked or otherwise terminated, this Article XII shall not be amended,
supplemented or modified unless either (i) the Owner Participant shall have
become a "Citizen of the United States," as defined in 49 U.S.C. Section
40102(a)(15)(C), or (ii) the FAA shall have concluded that such amendment,
supplement or modification would not cause the Aircraft to be ineligible for
registration in the United States (without giving consideration to any
provision of the Act (or any superseding statute) which permits United States
registration of an aircraft based on conditions which impose restrictions on
the location and use of such aircraft or otherwise restrict the ability of an
air carrier to operate an aircraft in the ordinary course of its business).
TRUST AGREEMENT [N605SW]
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
BOT FINANCIAL & LEASING CORPORATION B-4
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Senior Vice President
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Corporate Trust Officer
TRUST AGREEMENT [N605SW]
26
EXHIBIT 1
to Trust Agreement
AFFIDAVIT
STATE OF CONNECTICUT Section
Section ss.:
COUNTY OF HARTFORD Section
The undersigned, having been first duly sworn, deposes and says:
1. He is a duly elected and qualified officer of Shawmut Bank
Connecticut, National Association, a national banking association;
2. Shawmut Bank Connecticut, National Association is the Owner
Trustee (the "Owner Trustee") under the Trust Agreement, dated as of August 1,
1995 (the "Trust Agreement"), with BOT Financial & Leasing Corporation B-4, a
Massachusetts corporation (the "Owner Participant");
3. The Owner Trustee is the applicant for registration under
Subtitle VII of Title 49 of the United States Code, of one Boeing Model 737-3H4
aircraft with Manufacturer's serial number 27956 and United States nationality
and registration ▇▇▇▇ N605SW (the "Aircraft");
4. There are no persons whose security interest in the Aircraft
is incorporated in the trust within the meaning of 14 C.F. R. Section 47.7
(1994);
5. The Owner Trustee is a "Citizen of the United States" as
defined in 49 U.S.C. Section 40102(a)(15)(C);
6. Based upon an affidavit of the Owner Participant provided to
the Owner Trustee, the Owner Participant is not currently a "Citizen of the
United States" as defined in 49 U.S.C. Section 40102(a)(15)(C); and
7. The sole beneficiary of the trust created pursuant to the
Trust Agreement is the Owner Participant and the Owner Trustee is not aware of
any reason, situation, or relationship involving the Owner Participant or other
persons who are not "Citizens of the United States" as defined in 49 U.S.C.
Section 40102(a)(15), or resident aliens as a result of which such persons
together would have more than 25 percent of the aggregate power to influence or
limit the exercise of the Owner Trustee's authority under the Trust Agreement.
______________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Vice President,
Corporate Trust Administration
Sworn to before me this _____
day of __________, 1995
_____________________________________
Notary Public
