EXHIBIT 99(i)
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TRUST INDENTURE AND SECURITY AGREEMENT
[NW ____ _]
Dated as of [______________]
Between
NORTHWEST AIRLINES, INC.,
Owner
and
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity,
except as expressly stated herein,
but solely as Indenture Trustee,
Indenture Trustee
SECURED CERTIFICATES COVERING
ONE [AIRBUS A319-113/114] [BOEING 757-351] [BOEING 747-451] AIRCRAFT
BEARING U.S. REGISTRATION ▇▇▇▇ N[______]
OWNED BY NORTHWEST AIRLINES, INC.
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
ARTICLE II
THE SECURED CERTIFICATES
SECTION 2.01. Form of Secured Certificates................................................................4
SECTION 2.02. Issuance and Terms of Secured Certificates..................................................9
SECTION 2.03. [Intentionally Omitted]....................................................................11
SECTION 2.04. Method of Payment..........................................................................11
SECTION 2.05. Application of Payments....................................................................13
SECTION 2.06. Termination of Interest in Collateral......................................................14
SECTION 2.07. Registration, Transfer and Exchange of Secured Certificates................................14
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Secured Certificates..................................15
SECTION 2.09. Payment of Expenses on Transfer; Cancellation..............................................16
SECTION 2.10. Mandatory Redemptions of Secured Certificates..............................................16
SECTION 2.11. Voluntary Redemptions of Secured Certificates..............................................16
SECTION 2.12. Redemptions; Notice of Redemption..........................................................16
SECTION 2.13. Assumption of Secured Certificates.........................................................17
SECTION 2.14. [Intentionally Omitted]....................................................................17
SECTION 2.15. Subordination..............................................................................17
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS
SECTION 3.01. Basic Distributions........................................................................18
SECTION 3.02. Event of Loss; Replacement; Optional Redemption............................................19
SECTION 3.03. Payments After Event of Default............................................................20
SECTION 3.04. Certain Payments...........................................................................23
SECTION 3.05. Other Payments.............................................................................23
SECTION 3.06. Payments to the Owner......................................................................23
SECTION 3.07. Application of Payments Under Guarantee....................................................23
ARTICLE IV
EVENTS OF DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. Event of Default...........................................................................24
SECTION 4.02. Remedies...................................................................................25
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SECTION 4.03. Return of Aircraft, Etc....................................................................27
SECTION 4.04. Remedies Cumulative........................................................................28
SECTION 4.05. Discontinuance of Proceedings..............................................................28
SECTION 4.06. Waiver of Past Defaults....................................................................29
SECTION 4.07. Appointment of Receiver....................................................................29
SECTION 4.08. Indenture Trustee Authorized to Execute Bills of Sale, Etc.................................29
SECTION 4.09. Rights of Certificate Holders to Receive Payment...........................................29
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. Notice of Event of Default.................................................................30
SECTION 5.02. Action upon Instructions; Certain Rights and Limitations...................................30
SECTION 5.03. Indemnification............................................................................31
SECTION 5.04. No Duties Except as Specified in Trust Indenture or Instructions...........................31
SECTION 5.05. No Action Except Under Trust Indenture or Instructions.....................................31
SECTION 5.06. Investment of Amounts Held by Indenture Trustee............................................31
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Acceptance of Trusts and Duties............................................................32
SECTION 6.02. Absence of Duties..........................................................................32
SECTION 6.03. No Representations or Warranties as to Aircraft or Documents...............................33
SECTION 6.04. No Segregation of Monies; No Interest......................................................33
SECTION 6.05. Reliance; Agreements; Advice of Counsel....................................................33
SECTION 6.06. Compensation...............................................................................34
SECTION 6.07. Instructions from Certificate Holders......................................................34
ARTICLE VII
COVENANTS OF THE OWNER
SECTION 7.01. Liens......................................................................................34
SECTION 7.02. Registration, Maintenance and Operation; Possession and Leases; Insignia...................35
SECTION 7.03. Replacement and Pooling of Parts; Alterations, Modifications and Additions.................40
SECTION 7.04. Insurance..................................................................................42
SECTION 7.05. Inspection.................................................................................47
SECTION 7.06. Loss, Destruction, Requisition, etc........................................................48
SECTION 7.07. Interests in the Purchase Agreement........................................................53
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Scope of Indemnification...................................................................57
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 9.01. Resignation of Indenture Trustee; Appointment of Successor.................................58
SECTION 9.02. Appointment of Additional and Separate Trustees............................................59
ARTICLE X
SUPPLEMENT AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 10.01. Instructions of Majority; Limitations......................................................61
SECTION 10.02. Indenture Trustee Protected................................................................62
SECTION 10.03. Documents Mailed to Certificate Holders....................................................62
SECTION 10.04. No Request Necessary for Trust Indenture Supplement........................................62
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Termination of Trust Indenture.............................................................62
SECTION 11.02. No Legal Title to Collateral in Certificate Holders........................................63
SECTION 11.03. Sale of Aircraft by Indenture Trustee Is Binding...........................................63
SECTION 11.04. Trust Indenture for Benefit of the Owner, Indenture Trustee, and Certificate Holders.......63
SECTION 11.05. Notices....................................................................................63
SECTION 11.06. Severability...............................................................................64
SECTION 11.07. No Oral Modification or Continuing Waivers.................................................64
SECTION 11.08. Successors and Assigns.....................................................................64
SECTION 11.09. Headings...................................................................................64
SECTION 11.10. Normal Commercial Relations................................................................64
SECTION 11.11. Governing Law; Counterpart Form............................................................65
SECTION 11.12. Voting By Certificate Holders..............................................................65
SECTION 11.13. Bankruptcy.................................................................................65
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ANNEX A Definitions
EXHIBIT A Form of Trust Indenture Supplement
SCHEDULE I Secured Certificates Amortization
SCHEDULE II Pass Through Trust Agreements
SCHEDULE III Schedule of Domiciles of Permitted Lessees
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TRUST INDENTURE AND SECURITY AGREEMENT
[NW ____ _]
TRUST INDENTURE AND SECURITY AGREEMENT [NW ____ _], dated as
of [_______________] ("TRUST INDENTURE") between NORTHWEST AIRLINES, INC., a
Minnesota corporation (the "OWNER") and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, not in its individual capacity, except as expressly
stated herein, but solely as Indenture Trustee hereunder (together with its
successors hereunder, the "INDENTURE TRUSTEE").
W I T N E S S E T H:
WHEREAS, all capitalized terms used herein shall have the
respective meanings referred to in Article I hereof;
WHEREAS, the parties desire by this Trust Indenture, among
other things, (i) to provide for the issuance by the Owner to the Pass Through
Trustees (or their designee) of the Secured Certificates specified on Schedule I
hereto (it being understood that not all Series may be issued, in which case,
reference in this Trust Indenture to Series not issued shall be disregarded) and
(ii) to provide for the assignment, mortgage and pledge by the Owner to the
Indenture Trustee, as part of the Collateral hereunder, among other things, of
all of the Owner's right, title and interest in and to the Aircraft and, except
as hereinafter expressly provided, all payments and other amounts received
hereunder in accordance with the terms hereof, as security for, among other
things, the Owner's obligations to the Indenture Trustee, for the ratable
benefit and security of the Certificate Holders, subject to Section 2.15 and
Article III hereof;
WHEREAS, all things have been done to make the Secured
Certificates, when executed by the Owner and authenticated and delivered by the
Indenture Trustee hereunder, the valid, binding and enforceable obligations of
the Owner; and
WHEREAS, all things necessary to make this Trust Indenture the
valid, binding and legal obligation of the Owner for the uses and purposes
herein set forth, in accordance with its terms, have been done and performed and
have happened:
GRANTING CLAUSE
NOW, THEREFORE, THIS
TRUST INDENTURE AND SECURITY AGREEMENT
WITNESSETH, that, to secure the prompt payment of the Principal Amount of,
interest on, Make-Whole Amount, if any, and all other amounts due with respect
to, all Secured Certificates from time to time outstanding hereunder and the
performance and observance by the Owner of all the agreements, covenants and
provisions herein and in the Participation Agreement and the Secured
Certificates contained, for the benefit of the Certificate Holders and the
Indenture Indemnitees and the prompt payment of all amounts from time to time
owing hereunder and under the Participation Agreement to the Certificate Holders
and the Indenture Indemnitees by the Owner and for the uses and purposes and
subject to the terms and provisions hereof, and in consideration of the premises
and of the covenants herein contained, and of the acceptance of the Secured
Certificates by the holders thereof, and for other good and valuable
consideration the receipt and adequacy whereof are hereby acknowledged, the
Owner has granted, bargained, sold, assigned, transferred, conveyed, mortgaged,
pledged and confirmed, and does hereby grant, bargain, sell, assign, transfer,
convey, mortgage, pledge and confirm, unto the Indenture Trustee, its successors
in trust and assigns, for the security and benefit of the Certificate Holders, a
first priority security interest in and mortgage lien on all right, title and
interest of the Owner in, to and under the following described property, rights
and privileges, (including all property hereafter specifically subjected to the
Lien of this Trust Indenture by the Trust Indenture Supplement or any mortgage
supplemental hereto), to wit:
(a) the Aircraft (including the Airframe and the Engines and
all replacements thereof and substitutions therefor as provided herein), all as
more particularly described in the Trust Indenture Supplement executed and
delivered with respect to the Aircraft or any such replacements or substitutions
therefor, as provided in this Trust Indenture and all logs, manuals maintained
on the Aircraft and modification and maintenance records at any time required to
be maintained with respect to the Aircraft, in accordance with the rules and
regulations of the FAA if the Aircraft is registered under the laws of the
United States or the rules and regulations of the government of the country of
registry of the Aircraft if the Aircraft is registered under the laws of a
jurisdiction other than the United States;
(b) the Contract Rights, but subject always to the provisions
of Section 7.07 hereof;
(c) all insurance and requisition proceeds with respect to the
Aircraft, including but not limited to the insurance required under Section 7.04
hereof, but excluding any insurance maintained by the Owner and not required
under Section 7.04 hereof;
(d) all monies and securities from time to time deposited or
required to be deposited with the Indenture Trustee pursuant to any terms of
this Indenture or required hereby to be held by the Indenture Trustee hereunder;
and
(e) all proceeds of the foregoing.
SUBJECT TO all of the terms and conditions of this Trust
Indenture and the rights of the Owner hereunder.
Concurrently with the delivery hereof, the Owner is delivering
to the Indenture Trustee executed copies of the Participation Agreement and the
Consent and Agreement.
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, and its successors and assigns, in trust for the
benefit and security of the Certificate Holders, except as provided in Section
2.15 and Article III hereof without any preference, distinction or priority of
any one Secured Certificate over any other by reason of priority of time of
issue, sale, negotiation, date of maturity thereof or otherwise for any reason
whatsoever, and for the uses and purposes and in all cases and as to all
property specified in paragraphs (a) through (e) inclusive above, subject to the
terms and provisions set forth in this Trust Indenture.
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It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Owner shall remain liable under each of the
Indenture Agreements to which it is a party to perform all of the obligations
assumed by it thereunder, except to the extent prohibited or excluded from doing
so pursuant to the terms and provisions thereof, and the Indenture Trustee and
the Certificate Holders shall have no obligation or liability under the
Indenture Agreements, by reason of or arising out of the assignment hereunder,
nor shall the Indenture Trustee or the Certificate Holders be required or
obligated in any manner to perform or fulfill any obligations of the Owner under
or pursuant to any of the Indenture Agreements to which it is a party, or,
except as herein expressly provided, to make any payment, or to make any inquiry
as to the nature or sufficiency of any payment received by it, or present or
file any claim, or take any action to collect or enforce the payment of any
amounts which may have been assigned to it or to which it may be entitled at any
time or times.
The Owner does hereby constitute the Indenture Trustee the
true and lawful attorney of the Owner, irrevocably, granted for good and
valuable consideration and coupled with an interest and with full power of
substitution, and with full power (in the name of the Owner or otherwise) to ask
for, require, demand, receive, compound and give acquittance for any and all
monies and claims for monies (in each case including insurance and requisition
proceeds) due and to become due under or arising out of the Indenture
Agreements, and all other property which now or hereafter constitutes part of
the Collateral, to endorse any checks or other instruments or orders in
connection therewith and to file any claims or to take any action or to
institute any proceedings which the Indenture Trustee may deem to be necessary
or advisable in the premises. Without limiting the generality of the foregoing,
but subject to the rights of the Owner hereunder, during the continuance of any
Event of Default under this Trust Indenture, the Indenture Trustee shall have
the right under such power of attorney to accept any offer in connection with
the exercise of remedies as set forth herein of any purchaser to purchase the
Airframe and Engines and upon such purchase to execute and deliver in the name
of and on behalf of the Owner an appropriate ▇▇▇▇ of sale and other instruments
of transfer relating to the Airframe and Engines, when purchased by such
purchaser, and to perform all other necessary or appropriate acts with respect
to any such purchase, and in its discretion to file any claim or take any other
action or proceedings, either in its own name or in the name of the Owner or
otherwise, which the Indenture Trustee may deem necessary or appropriate to
protect and preserve the right, title and interest of the Indenture Trustee in
and to such other sums and the security intended to be afforded hereby;
PROVIDED, HOWEVER, that no action of the Indenture Trustee pursuant to this
paragraph shall increase the obligations or liabilities of the Owner to any
Person beyond those obligations and liabilities specifically set forth in this
Trust Indenture and in the other Operative Documents.
The Owner agrees that at any time and from time to time, upon
the written request of the Indenture Trustee, the Owner will promptly and duly
execute and deliver or cause to be duly executed and delivered any and all such
further instruments and documents as the Indenture Trustee may reasonably deem
necessary or desirable to perfect, preserve or protect the mortgage, security
interests and assignments created or intended to be created hereby or to obtain
for the Indenture Trustee the full benefits of the assignment hereunder and of
the rights and powers herein granted.
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The Owner does hereby warrant and represent that it has not
assigned or pledged, and hereby covenants and agrees that it will not assign or
pledge, so long as the assignment hereunder shall remain in effect, and the Lien
hereof shall not have been released pursuant to Section 11.01 hereof, any of its
right, title or interest hereby assigned, to anyone other than the Indenture
Trustee and its predecessor(s) in this transaction.
IT IS HEREBY COVENANTED AND AGREED by and between the parties
hereto as follows:
ARTICLE I
DEFINITIONS
Unless otherwise defined herein or the context requires
otherwise, capitalized terms utilized but not defined herein shall have the
respective meanings set forth or incorporated by reference in Annex A hereto for
all purposes of the Trust Indenture.
ARTICLE II
THE SECURED CERTIFICATES
SECTION 2.01. FORM OF SECURED CERTIFICATES.
The Secured Certificates shall be substantially in the form
set forth below:
THIS SECURED CERTIFICATE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES LAWS OF ANY
STATE. ACCORDINGLY, THIS SECURED CERTIFICATE MAY NOT BE SOLD UNLESS EITHER
REGISTERED UNDER THE ACT AND SUCH APPLICABLE STATE LAWS OR AN EXEMPTION FROM
SUCH REGISTRATIONS IS AVAILABLE.
NORTHWEST AIRLINES, INC. SERIES [___] SECURED CERTIFICATE DUE [_____] ISSUED IN
CONNECTION WITH THE [AIRBUS A319-113/114] [BOEING 757-351] [BOEING 747-451]
AIRCRAFT BEARING UNITED STATES REGISTRATION NUMBER N[_____].
No.____ Date: [________]
$__________________
INTEREST RATE MATURITY DATE
[________] [________,_______]
NORTHWEST AIRLINES, INC. (the "OWNER"), hereby promises to pay
to ___________, or the registered assignee thereof, the principal sum of
$_________ (the "PRINCIPAL AMOUNT"), together with interest on the amount of the
Principal Amount remaining unpaid from time to time (calculated on the basis of
a year of 360 days comprised of twelve 30-
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day months) from the date hereof until paid in full at a rate per annum equal to
the interest rate indicated above. The Principal Amount of this Secured
Certificate shall be payable [on April 1, 2011](1) [in installments on the dates
set forth in Schedule I hereto equal to the corresponding percentage of the
Principal Amount of this Secured Certificate set forth in Schedule I hereto](2).
Accrued but unpaid interest shall be due and payable in semi-annual installments
commencing [April/October 1, ____], and thereafter on [October 1] and [April 1]
of each year, to and including [____________]. [Notwithstanding the foregoing,
the final payment made on this Secured Certificate shall be in an amount
sufficient to discharge in full the unpaid Principal Amount and all accrued and
unpaid interest on, and any other amounts due under, this Secured
Certificate.](3) Notwithstanding anything to the contrary contained herein, if
any date on which a payment under this Secured Certificate becomes due and
payable is not a Business Day then such payment shall not be made on such
scheduled date but shall be made on the next succeeding Business Day and if such
payment is made on such next succeeding Business Day, no interest shall accrue
on the amount of such payment during such extension.
For purposes hereof, the term "TRUST INDENTURE" means the
Trust Indenture and Security Agreement [NW ____ _], dated as of
[_______________], between the Owner and State Street Bank and Trust Company
(the "INDENTURE TRUSTEE"), as the same may be amended or supplemented from time
to time. All other capitalized terms used in this Secured Certificate and not
defined herein shall have the respective meanings assigned in the Trust
Indenture.
This Secured Certificate shall bear interest, payable on
demand, at the Past Due Rate (calculated on the basis of a year of 360 days
comprised of twelve 30-day months) on any overdue Principal Amount, any overdue
Make-Whole Amount, if any, and (to the extent permitted by applicable law) any
overdue interest and any other amounts payable hereunder which are overdue, in
each case for the period the same is overdue. Amounts shall be overdue if not
paid when due (whether at stated maturity, by acceleration or otherwise).
There shall be maintained a Secured Certificate Register for
the purpose of registering transfers and exchanges of Secured Certificates at
the Corporate Trust Office of the Indenture Trustee or at the office of any
successor in the manner provided in Section 2.07 of the Trust Indenture.
The Principal Amount and interest and other amounts due
hereunder shall be payable in Dollars in immediately available funds at the
Corporate Trust Office of the Indenture Trustee, or as otherwise provided in the
Trust Indenture. Each such payment shall be made on the date such payment is due
and without any presentment or surrender of this Secured Certificate, except
that in the case of any final payment with respect to this Secured Certificate,
the Secured Certificate shall be surrendered promptly thereafter to the
Indenture Trustee for cancellation.
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(1) To be inserted in non-installment Secured Certificates (the Series A-2
Secured Certificates).
(2) To be inserted in installment Secured Certificates.
(3) To be inserted in installment Secured Certificates.
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The holder hereof, by its acceptance of this Secured
Certificate, agrees that, except as provided in the Trust Indenture, each
payment received by it hereunder shall be applied, first, to the payment of
accrued interest on this Secured Certificate (as well as any interest on any
overdue Principal Amount, any overdue Make-Whole Amount, if any, or, to the
extent permitted by Law, any overdue interest and other amounts hereunder) to
the date of such payment, second, to the payment of the Principal Amount of this
Secured Certificate then due, third, to the payment of Make-Whole Amount, if
any, and any other amount due hereunder or under the Trust Indenture, and
fourth, the balance, if any, remaining thereafter, to the payment of Principal
Amount of this Secured Certificate remaining unpaid in the inverse order of
their normal maturity.
This Secured Certificate is one of the Secured Certificates
referred to in the Trust Indenture which have been or are to be issued by the
Owner pursuant to the terms of the Trust Indenture. The Collateral is held by
the Indenture Trustee as security, in part, for the Secured Certificates. The
provisions of this Secured Certificate are subject to the Trust Indenture.
Reference is hereby made to the Trust Indenture and the Participation Agreement
for a complete statement of the rights and obligations of the holder of, and the
nature and extent of the security for, this Secured Certificate and the rights
and obligations of the holders of, and the nature and extent of the security
for, any other Secured Certificates executed and delivered under the Trust
Indenture, as well as for a statement of the terms and conditions of the trust
created by the Trust Indenture, to all of which terms and conditions in the
Trust Indenture and the Participation Agreement each holder hereof agrees by its
acceptance of this Secured Certificate.
As provided in the Trust Indenture and subject to certain
limitations therein set forth, this Secured Certificate is exchangeable for a
like aggregate Principal Amount of Secured Certificates of different authorized
denominations, as requested by the holder surrendering the same.
Prior to due presentment for registration of transfer of this
Secured Certificate, the Owner and the Indenture Trustee shall treat the person
in whose name this Secured Certificate is registered as the owner hereof for all
purposes whether or not this Secured Certificate be overdue, and neither of the
Owner nor the Indenture Trustee shall be affected by notice to the contrary.
This Secured Certificate is subject to redemption as provided
in Sections 2.10, 2.11 and 2.12 of the Trust Indenture but not otherwise. This
Secured Certificate is also subject to assumption by an owner trustee as
provided in Section 2.13 of the Trust Indenture.
The indebtedness evidenced by this Secured Certificate [shall
rank in right of payment equally with all Series A-2 Secured Certificates and
all other Series A-1 Secured Certificates but shall rank senior in right of
payment to all the other Secured Certificates.](4) [shall rank in right of
payment equally with all Series A-1 Secured Certificates and all other Series
A-2 Secured Certificates but shall rank senior in right of payment to all the
other Secured
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(4) To be inserted in the case of a Series A-1 Secured Certificate.
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Certificates.](5) [is, to the extent and in the manner provided in the Trust
Indenture, subordinate and subject in right of payment to the prior payment in
full of the Secured Obligations (as defined in the Trust Indenture) in respect
of [Series A-1 Secured Certificates and Series A-2 Secured Certificates](6)
[Series A-1 Secured Certificates, Series A-2 Secured Certificates and Series B
Secured Certificates](7) [Series A-1 Secured Certificates, Series A-2 Secured
Certificates, Series B Secured Certificates and Series C Secured Certificates --
A319's and 757's](8), and this Secured Certificate is issued subject to such
provisions.](9) The Certificate Holder of this Secured Certificate, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Indenture Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the
Trust Indenture and (c) appoints the Indenture Trustee his attorney-in-fact for
such purpose.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Indenture Trustee by manual signature, this
Secured Certificate shall not be entitled to any benefit under the Trust
Indenture or be valid or obligatory for any purpose.
THIS SECURED CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
* * *
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(5) To be inserted in the case of a Series A-2 Secured Certificate.
(6) To be inserted in the case of a Series B Secured Certificate.
(7) To be inserted in the case of a Series C Secured Certificate.
(8) [To be inserted in the case of a Series D Secured Certificate. - A319's
and 757's]
(9) To be inserted in the case of any Secured Certificate other than a
Series A-1 Secured Certificate or a Series A-2 Secured Certificate.
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IN WITNESS WHEREOF, the Owner has caused this Secured
Certificate to be executed in its corporate name by its officer thereunto duly
authorized on the date hereof.
NORTHWEST AIRLINES, INC.,
By _____________________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Secured Certificates referred to in the
within-mentioned Trust Indenture.
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity
but solely as Indenture Trustee
By _____________________________
Name:
Title:
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SCHEDULE I
SECURED CERTIFICATES AMORTIZATION
Percentage of
Principal Amount
Payment Date to be Paid
----------------------------------- ------------------------------------
[SEE SCHEDULE I TO TRUST INDENTURE
WHICH IS INSERTED UPON ISSUANCE]
* * *
SECTION 2.02. ISSUANCE AND TERMS OF SECURED CERTIFICATES.
The Secured Certificates shall be dated the date of issuance
thereof, shall be issued in [four -- 747's] [five -- A319's and 757's] separate
series consisting of Series ▇-▇, ▇▇▇▇▇▇ ▇-▇, Series B [and] Series C [and Series
D -- A319's and 757's] and in the maturities and principal amounts and shall
bear interest as specified in Schedule I hereto. On the Closing Date, each
Secured Certificate shall be issued to the Pass Through Trustees (or their
designee) under the Pass Through Trust Agreements as set forth on Schedule II
hereto. The Secured Certificates shall be issued in registered form only. The
Secured Certificates shall be issued in denominations of $1,000 and integral
multiples thereof, except that one Secured Certificate of each Series may be in
an amount that is not an integral multiple of $1,000.
Each Secured Certificate shall bear interest at the Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) on the unpaid Principal Amount thereof from time to time outstanding,
payable in arrears on [April/October 1, ______], and on each [October 1] and
[April 1] thereafter until maturity. The Principal Amount of each Series A-1,
Series B [and] Series C [and Series D -- A319's and 757's] Secured Certificate
shall be payable on the dates and in the installments equal to the corresponding
percentage of the Principal Amount as set forth in Schedule I hereto applicable
to such Series which shall be attached as Schedule I to the Series A-1, Series B
[and] Series C [and Series D -- A319's and 757's] Secured Certificates. The
Principal Amount of each Series A-2 Secured Certificate shall be due in a single
payment on April 1, 2011. Notwithstanding the foregoing, the final payment made
under each Series A-1, Series B [and] Series C [and Series D -- A319's and
757's] Secured Certificate shall be in an amount sufficient to discharge in full
the unpaid Principal Amount and all accrued and unpaid interest on, and any
other amounts due under, such Secured Certificate. Each Secured Certificate
shall bear interest at the Past Due Rate (calculated on the basis of a year of
360 days comprised of twelve 30-day months) on any part of the Principal Amount,
Make-Whole Amount, if any, and to the extent permitted by applicable law,
interest and any other amounts payable thereunder not paid when due for any
period during which the same shall be overdue, in each case for the period the
same is overdue. Amounts shall be
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overdue if not paid when due (whether at stated maturity, by acceleration or
otherwise). Notwithstanding anything to the contrary contained herein, if any
date on which a payment under any Secured Certificate becomes due and payable is
not a Business Day then such payment shall not be made on such scheduled date
but shall be made on the next succeeding Business Day and if such payment is
made on such next succeeding Business Day, no interest shall accrue on the
amount of such payment during such extension.
The Owner agrees to pay to the Indenture Trustee for
distribution in accordance with Section 3.04 hereof the Owner's pro rata share
of all amounts owed to the Liquidity Provider by the Subordination Agent under
each Liquidity Facility other than amounts due as (i) repayments of the
principal of advances thereunder, (ii) interest on Interest Drawings, Final
Drawings, and Applied Downgrade Advances and Applied Non-Extension Advances (as
defined in the Liquidity Facilities) under any Liquidity Facility except to the
extent included in Net Interest and Related Charges, and (iii) fees payable to
the Liquidity Provider payable (whether or not in fact paid) under Section 7(a)
of the Note Purchase Agreement (as originally in effect or amended. As used in
this Section, "Owner's pro rata share" means as of any time:
(A) with respect to all amounts other than Net Interest and
Related Charges, a fraction the numerator of which is the aggregate
principal balance then outstanding of the Secured Certificates and the
denominator of which is the aggregate principal balance then
outstanding of all Equipment Notes, plus
(B) with respect to all Net Interest and Related Charges (x)
if there exists a Payment Default under any Secured Certificate a
fraction, the numerator of which is the aggregate principal balance
then outstanding of the Secured Certificates [(other than the Series D
Secured Certificates) -- A319's and 757's] and the denominator of which
is the aggregate principal balance then outstanding of all Equipment
Notes (other than the Series D Equipment Notes) issued under Indentures
under which there exists a Payment Default or (y) at all other times,
zero.
As used in this Section, "Net Interest and Related Charges"
means the sum of (i) the amount, if any, by which interest payable to the
Liquidity Provider on any Interest Drawing, Final Drawing, Applied Downgrade
Advance and/or Applied Non-Extension Advance (as defined in the Liquidity
Facilities) exceeds the amount which would be payable if such drawings bore
interest at the Designated Interest Rate plus (ii) any amounts payable under
Section 3.01, Section 3.02, Section 3.03 or Section 7.07 of each Liquidity
Facility (or similar provisions of any succeeding Liquidity Facility) which
result from any Interest Drawing, Final Drawing, Applied Downgrade Advance or
Applied Non-Extension Advance (as defined in the Liquidity Facilities). As used
in this Section "DESIGNATED INTEREST RATE" means the weighted average Past Due
Rate (as defined in the applicable Indentures) except that [(i) the Debt Rate
for the Series D Secured Certificates shall not be taken into account for the
calculation of such weighted average rate and (ii) -- A319's and 757's] with
respect to that portion of any Final Drawing (or Applied Downgrade Advance or
Applied Non-Extension Advance which becomes a Final Drawing) which remains in a
Cash Collateral Account, Designated Interest Rate means the weighted average
Investment Earnings of funds in the Cash Collateral Accounts. As used in this
Section, a Payment Default when used in connection with a Secured Certificate or
Equipment Note means a default in the payment of principal thereof or interest
thereon which has not been cured other
-10-
than solely because of acceleration. The following terms are used in this
Section as defined in the Intercreditor Agreement without regard to any
amendment, modification or supplement thereto after the Closing Date: Cash
Collateral Accounts, Equipment Notes, Final Drawing, Indentures, Interest
Drawing, Investment Earnings and Series D Equipment Notes.
The Secured Certificates shall be executed on behalf of the
Owner by its President or one of its Vice Presidents, its Treasurer or Assistant
Secretaries or other authorized officer. Secured Certificates bearing the
signatures of individuals who were at any time the proper officers of the Owner
shall bind the Owner, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Secured Certificates or did not hold such offices at the respective dates of
such Secured Certificates. The Owner may from time to time execute and deliver
Secured Certificates with respect to the Aircraft to the Indenture Trustee for
authentication upon original issue and such Secured Certificates shall thereupon
be authenticated and delivered by the Indenture Trustee upon the written request
of the Owner signed by a Vice President, its Treasurer or other authorized
officer of the Owner; PROVIDED, HOWEVER, that each such request shall specify
the aggregate Principal Amount of all Secured Certificates to be authenticated
hereunder on original issue with respect to the Aircraft. No Secured Certificate
shall be secured by or entitled to any benefit under this Trust Indenture or be
valid or obligatory for any purposes, unless there appears on such Secured
Certificate a certificate of authentication in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized officers and such certificate upon any Secured Certificates shall be
conclusive evidence, and the only evidence, that such Secured Certificate has
been duly authenticated and delivered hereunder.
SECTION 2.03. [INTENTIONALLY OMITTED].
SECTION 2.04. METHOD OF PAYMENT.
(a) The Principal Amount of, interest on, Make-Whole Amount,
if any, and other amounts due under each Secured Certificate or hereunder will
be payable in Dollars by wire transfer of immediately available funds not later
than 12:00 noon, New York City time, on the due date of payment to the Indenture
Trustee at the Corporate Trust Office for distribution among the Certificate
Holders in the manner provided herein. The Owner shall not have any
responsibility for the distribution of such payment to any Certificate Holder.
Notwithstanding the foregoing or any provision in any Secured Certificate to the
contrary, the Indenture Trustee will use reasonable efforts to pay or cause to
be paid, if so directed in writing by any Certificate Holder (with a copy to the
Owner), all amounts paid by the Owner hereunder and under such holder's Secured
Certificate or Secured Certificates to such holder or a nominee therefor
(including all amounts distributed pursuant to Article III of this Trust
Indenture) by transferring, or causing to be transferred, by wire transfer of
immediately available funds in Dollars, prior to 2:00 p.m., New York City time,
on the due date of payment, to an account maintained by such holder with a bank
located in the continental United States the amount to be distributed to such
holder, for credit to the account of such holder maintained at such bank. If the
Indenture Trustee shall fail to make any such payment as provided in the
immediately preceding sentence after its receipt of funds at the place and prior
to the time specified above, the Indenture Trustee, in its individual capacity
and not as trustee, agrees to compensate such holders for loss of use of funds
at the Federal Funds Rate until such payment is made and the Indenture Trustee
shall be entitled
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to any interest earned on such funds until such payment is made. Any payment
made hereunder shall be made without any presentment or surrender of any Secured
Certificate, except that, in the case of the final payment in respect of any
Secured Certificate, such Secured Certificate shall be surrendered to the
Indenture Trustee for cancellation promptly after such payment. Notwithstanding
any other provision of this Trust Indenture to the contrary, the Indenture
Trustee shall not be required to make, or cause to be made, wire transfers as
aforesaid prior to the first Business Day on which it is practicable for the
Indenture Trustee to do so in view of the time of day when the funds to be so
transferred were received by it if such funds were received after 12:00 noon,
New York City time, at the place of payment. Prior to the due presentment for
registration of transfer of any Secured Certificate, the Owner and the Indenture
Trustee shall deem and treat the Person in whose name any Secured Certificate is
registered on the Secured Certificate Register as the absolute owner and holder
of such Secured Certificate for the purpose of receiving payment of all amounts
payable with respect to such Secured Certificate and for all other purposes, and
none of the Owner or the Indenture Trustee shall be affected by any notice to
the contrary. So long as any signatory to the Participation Agreement or nominee
thereof shall be a registered Certificate Holder, all payments to it shall be
made to the account of such Certificate Holder specified in Schedule I thereto
and otherwise in the manner provided in or pursuant to the Participation
Agreement unless it shall have specified some other account or manner of payment
by notice to the Indenture Trustee consistent with this Section 2.04.
(b) The Indenture Trustee, as agent for the Owner, shall
exclude and withhold at the appropriate rate from each payment of Principal
Amount of, interest on, Make-Whole Amount, if any, and other amounts due
hereunder or under each Secured Certificate (and such exclusion and withholding
shall constitute payment in respect of such Secured Certificate) any and all
withholding taxes applicable thereto as required by Law. The Indenture Trustee
agrees to act as such withholding agent and, in connection therewith, whenever
any present or future United States taxes or similar charges are required to be
withheld with respect to any amounts payable hereunder or in respect of the
Secured Certificates, to withhold such amounts (and such withholding shall
constitute payment in respect of such Secured Certificate) and timely pay the
same to the appropriate authority in the name of and on behalf of the
Certificate Holders, that it will file any necessary United States withholding
tax returns or statements when due, and that as promptly as possible after the
payment thereof it will deliver to each Certificate Holder (with a copy to the
Owner) appropriate receipts showing the payment thereof, together with such
additional documentary evidence as any such Certificate Holder may reasonably
request from time to time.
If a Certificate Holder which is not a U.S. Person within the
meaning of Section 7701(a)(30) of the Code has furnished to the Indenture
Trustee a properly completed (including the U.S. Taxpayer Identification Number
of the Certificate Holder) and currently effective U.S. Internal Revenue Service
Form W-8IMY (with appropriate attachments), W-8BEN or W-8ECI (or such successor
form or forms as may be required by the United States Treasury Department or
Internal Revenue Service) during the calendar year in which the payment
hereunder or under the Secured Certificate(s) held by such holder is made (but
prior to the making of such payment), or in either of the two preceding calendar
years, and has not notified the Indenture Trustee of the withdrawal or
inaccuracy of such form prior to the date of such payment (and the Indenture
Trustee has no reason to know that any information set forth in such form is
inaccurate), the Indenture Trustee shall withhold only the amount, if any,
required by Law (after taking into
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account any applicable exemptions claimed by the Certificate Holder) to be
withheld from payments hereunder or under the Secured Certificates held by such
holder in respect of United States federal income tax (and such withholding
shall constitute payment in respect of such Secured Certificate). If a
Certificate Holder which is a U.S. Person within the meaning of Section
7701(a)(30) of the Code has furnished to the Indenture Trustee a properly
completed and currently effective U.S. Internal Revenue Service Form W-9 prior
to a payment hereunder or under the Secured Certificates held by such holder (or
if such U.S. Person is exempt from backup withholding), no amount shall be
withheld from payments in respect of United States federal income tax. If any
Certificate Holder has notified the Indenture Trustee that any of the foregoing
forms or certificates is withdrawn or inaccurate, or if such holder has not
filed a form claiming an exemption from United States withholding tax or if the
Code or the regulations thereunder or the administrative interpretation thereof
are at any time after the date hereof amended to require such withholding of
United States federal income taxes from payments under the Secured Certificates
held by such holder, the Indenture Trustee agrees to withhold from each payment
due to the relevant Certificate Holder withholding taxes at the appropriate rate
under Law and will, on a timely basis as more fully provided above, deposit such
amounts with an authorized depository and make such returns, statements,
receipts and other documentary evidence in connection therewith as required by
applicable law.
The Owner shall not have any liability for the failure of the
Indenture Trustee to withhold taxes in the manner provided for herein or if any
Certificate Holder provides false or inaccurate information on any form required
to be delivered under this Section 2.04.
SECTION 2.05. APPLICATION OF PAYMENTS.
In the case of each Secured Certificate, each payment of
Principal Amount, Make-Whole Amount, if any, and interest or other amounts due
thereon shall be applied:
FIRST: to the payment of accrued interest on such Secured
Certificate (as well as any interest on any overdue Principal Amount,
any overdue Make-Whole Amount, if any, and to the extent permitted by
Law, any overdue interest and any other overdue amounts thereunder) to
the date of such payment;
SECOND: to the payment of the Principal Amount of such Secured
Certificate (or a portion thereof) then due thereunder;
THIRD: to the payment of Make-Whole Amount, if any, and any
other amount due hereunder or under such Secured Certificate; and
FOURTH: the balance, if any, remaining thereafter, to the
payment of the Principal Amount of such Secured Certificate remaining
unpaid (provided that such Secured Certificate shall not be subject to
redemption except as provided in Sections 2.10, 2.11 and 2.12 hereof).
The amounts paid pursuant to clause "Fourth" above shall be applied to the
installments of Principal Amount of such Secured Certificate in the inverse
order of their normal maturity.
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SECTION 2.06. TERMINATION OF INTEREST IN COLLATERAL.
A Certificate Holder shall not, as such, have any further
interest in, or other right with respect to, the Collateral when and if the
Principal Amount of, Make-Whole Amount, if any, and interest on and other
amounts due under all Secured Certificates held by such Certificate Holder and
all other sums then payable to such Certificate Holder hereunder and under the
other Operative Documents by the Owner (collectively, the "Secured Obligations")
shall have been paid in full.
SECTION 2.07. REGISTRATION, TRANSFER AND EXCHANGE OF SECURED
CERTIFICATES.
The Indenture Trustee shall keep a register (the "Secured
Certificate Register") in which the Indenture Trustee shall provide for the
registration of Secured Certificates and the registration of transfers of
Secured Certificates. No such transfer shall be given effect unless and until
registration hereunder shall have occurred. The Secured Certificate Register
shall be kept at the Corporate Trust Office of the Indenture Trustee. The
Indenture Trustee is hereby appointed "Secured Certificate Registrar" for the
purpose of registering Secured Certificates and transfers of Secured
Certificates as herein provided. A holder of any Secured Certificate intending
to exchange such Secured Certificate shall surrender such Secured Certificate to
the Indenture Trustee at the Corporate Trust Office, together with a written
request from the registered holder thereof for the issuance of a new Secured
Certificate, specifying, in the case of a surrender for transfer, the name and
address of the new holder or holders. Upon surrender for registration of
transfer of any Secured Certificate, the Owner shall execute, and the Indenture
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Secured Certificates of a like aggregate
Principal Amount and of the same series. At the option of the Certificate
Holder, Secured Certificates may be exchanged for other Secured Certificates of
any authorized denominations of a like aggregate Principal Amount, upon
surrender of the Secured Certificates to be exchanged to the Indenture Trustee
at the Corporate Trust Office. Whenever any Secured Certificates are so
surrendered for exchange, the Owner shall execute, and the Indenture Trustee
shall authenticate and deliver, the Secured Certificates which the Certificate
Holder making the exchange is entitled to receive. All Secured Certificates
issued upon any registration of transfer or exchange of Secured Certificates
(whether under this Section 2.07 or under Section 2.08 hereof or otherwise under
this Trust Indenture) shall be the valid obligations of the Owner evidencing the
same respective obligations, and entitled to the same security and benefits
under this Trust Indenture, as the Secured Certificates surrendered upon such
registration of transfer or exchange. Every Secured Certificate presented or
surrendered for registration of transfer, shall (if so required by the Indenture
Trustee) be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Indenture Trustee duly executed by the Certificate
Holder or such holder's attorney duly authorized in writing, and the Indenture
Trustee shall require evidence satisfactory to it as to the compliance of any
such transfer with the Securities Act, and the securities Laws of any applicable
state. The Indenture Trustee shall make a notation on each new Secured
Certificate of the amount of all payments of Principal Amount previously made on
the old Secured Certificate or Secured Certificates with respect to which such
new Secured Certificate is issued and the date to which interest on such old
Secured Certificate or Secured Certificates has been paid. Interest shall be
deemed to have been paid on such new Secured Certificate to the date on which
interest
-14-
shall have been paid on such old Secured Certificate, and all payments of the
Principal Amount marked on such new Secured Certificate, as provided above,
shall be deemed to have been made thereon. The Owner shall not be required to
exchange any surrendered Secured Certificates as provided above during the
ten-day period preceding the due date of any payment on such Secured
Certificate. The Owner shall in all cases deem the Person in whose name any
Secured Certificate shall have been issued and registered as the absolute owner
and holder of such Secured Certificate for the purpose of receiving payment of
all amounts payable by the Owner with respect to such Secured Certificate and
for all purposes until a notice stating otherwise is received from the Indenture
Trustee and such change is reflected on the Secured Certificate Register. The
Indenture Trustee will promptly notify the Owner of each registration of a
transfer of a Secured Certificate. Any such transferee of a Secured Certificate,
by its acceptance of a Secured Certificate, agrees to the provisions of the
Participation Agreement applicable to Certificate Holders, including Sections 6,
8(e), 8(k), 8(l), 8(q), 8(r), 8(t), 8(cc), 10, 13(b), 13(c), 15(b), 15(c) and
16, and shall be deemed to have represented and warranted (except as provided
above), and covenanted, to the parties to the Participation Agreement as to the
matters represented, warranted and covenanted by the Purchasers in the
Participation Agreement. Subject to compliance by the Certificate Holder and its
transferee (if any) of the requirements set forth in this Section 2.07, the
Indenture Trustee and the Owner shall use all reasonable efforts to issue new
Secured Certificates upon transfer or exchange within 10 Business Days of the
date a Secured Certificate is surrendered for transfer or exchange.
SECTION 2.08. MUTILATED, DESTROYED, LOST OR STOLEN SECURED
CERTIFICATES.
If any Secured Certificate shall become mutilated, destroyed,
lost or stolen, the Owner shall, upon the written request of the holder of such
Secured Certificate, execute and the Indenture Trustee shall authenticate and
deliver in replacement thereof a new Secured Certificate, payable in the same
Principal Amount dated the same date and captioned as issued in connection with
the Aircraft. If the Secured Certificate being replaced has become mutilated,
such Secured Certificate shall be surrendered to the Indenture Trustee and a
photocopy thereof shall be furnished to the Owner. If the Secured Certificate
being replaced has been destroyed, lost or stolen, the holder of such Secured
Certificate shall furnish to the Owner and the Indenture Trustee such security
or indemnity as may be required by them to save the Owner and the Indenture
Trustee harmless and evidence satisfactory to the Owner and the Indenture
Trustee of the destruction, loss or theft of such Secured Certificate and of the
ownership thereof. If a "qualified institutional buyer" of the type referred to
in paragraph (a)(l)(i)(A), (B), (D) or (E) of Rule 144A under the Securities Act
(a "QIB") is the holder of any such destroyed, lost or stolen Secured
Certificate, then the written indemnity of such QIB, signed by an authorized
officer thereof, in favor of, delivered to and in form reasonably satisfactory
to the Owner and the Indenture Trustee shall be accepted as satisfactory
indemnity and security and no further indemnity or security shall be required as
a condition to the execution and delivery of such new Secured Certificate.
Subject to compliance by the Certificate Holder of the requirements set forth in
this Section 2.08, the Indenture Trustee and the Owner shall use all reasonable
efforts to issue new Secured Certificates within 10 Business Days of the date of
the written request therefor from the Certificate Holder.
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SECTION 2.09. PAYMENT OF EXPENSES ON TRANSFER; CANCELLATION.
(a) No service charge shall be made to a Certificate Holder
for any registration of transfer or exchange of Secured Certificates, but the
Indenture Trustee, as Secured Certificate Registrar, may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Secured
Certificates.
(b) The Indenture Trustee shall cancel all Secured
Certificates surrendered for replacement, redemption, transfer, exchange,
payment or cancellation and shall destroy the canceled Secured Certificates.
SECTION 2.10. MANDATORY REDEMPTIONS OF SECURED CERTIFICATES.
On the date on which the Owner is required pursuant to Section
7.06(a)(i) hereof to make payment for an Event of Loss with respect to the
Aircraft, all of the Secured Certificates shall be redeemed in whole at a
redemption price equal to 100% of the unpaid Principal Amount thereof, together
with all accrued interest thereon to the date of redemption and all other
amounts payable hereunder or under the Participation Agreement to the
Certificate Holders but without Make-Whole Amount.
SECTION 2.11. VOLUNTARY REDEMPTIONS OF SECURED CERTIFICATES.
Any or all of the Secured Certificates may be redeemed by the
Owner upon at least 30 days' revocable prior written notice to the Indenture
Trustee and the Certificate Holders, and the Secured Certificates shall be
redeemed in whole at a redemption price equal to 100% of the unpaid Principal
Amount thereof, together with accrued interest thereon to the date of redemption
and all other amounts payable hereunder or under the Participation Agreement to
the Certificate Holders plus Make-Whole Amount, if any.
SECTION 2.12. REDEMPTIONS; NOTICE OF REDEMPTION.
(a) No redemption of any Secured Certificate may be made
except to the extent and in the manner expressly permitted by this Trust
Indenture. No purchase of any Secured Certificate may be made by the Indenture
Trustee.
(b) Notice of redemption with respect to the Secured
Certificates shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed not less than 15 nor more than 60 days prior to the
applicable redemption date, to each Certificate Holder of such Secured
Certificates to be redeemed, at such Certificate Holder's address appearing in
the Secured Certificate Register; PROVIDED that, in the case of a redemption to
be made pursuant to Section 2.11, such notice shall be revocable and shall be
deemed revoked if the Indenture Trustee receives written notice of such
revocation from the Owner not later than three days prior to the redemption
date. All notices of redemption shall state: (1) the redemption date, (2) the
applicable basis for determining the redemption price, (3) that on the
redemption date, the redemption price will become due and payable upon each such
Secured Certificate, and that, if any such Secured Certificates are then
outstanding, interest on such Secured Certificates shall
-16-
cease to accrue on and after such redemption date, and (4) the place or places
where such Secured Certificates are to be surrendered for payment of the
redemption price.
(c) On or before the redemption date, the Owner (or any person
on behalf of the Owner) shall, to the extent an amount equal to the redemption
price for the Secured Certificates to be redeemed on the redemption date shall
not then be held in the Collateral, deposit or cause to be deposited with the
Indenture Trustee by 12:00 noon on the redemption date in immediately available
funds the redemption price of the Secured Certificates to be redeemed.
(d) Notice of redemption having been given as aforesaid (and
not deemed revoked as contemplated in the proviso to Section 2.12(b)), the
Secured Certificates to be redeemed shall, on the redemption date, become due
and payable at the Corporate Trust Office of the Indenture Trustee or at any
office or agency maintained for such purposes pursuant to Section 2.07, and from
and after such redemption date (unless there shall be a default in the payment
of the redemption price) any such Secured Certificates then outstanding shall
cease to bear interest. Upon surrender of any such Secured Certificate for
redemption in accordance with said notice, such Secured Certificate shall be
redeemed at the redemption price. If any Secured Certificate called for
redemption shall not be so paid upon surrender thereof for redemption, the
Principal Amount thereof shall, until paid, continue to bear interest from the
applicable redemption date at the interest rate in effect for such Secured
Certificate as of such redemption date.
SECTION 2.13. ASSUMPTION OF SECURED CERTIFICATES.
Pursuant to the provisions of Section 16 of the Participation
Agreement, an owner trustee shall be entitled to assume on a non-recourse basis
all of the obligations of the Owner hereunder and under the Secured Certificates
by an amended and restated trust indenture, an amended and restated
participation agreement, and the issuance of new secured certificates having
substantially the same tenor as the Secured Certificates. If an owner trustee
shall assume such obligations of the Owner, the Owner shall be released and
discharged from any further obligations hereunder and under the Secured
Certificates (except with respect to any such obligations that accrued prior
thereto) and the Secured Certificates shall be delivered to the Indenture
Trustee for cancellation.
SECTION 2.14. [INTENTIONALLY OMITTED]
SECTION 2.15. SUBORDINATION.
(a) The Owner and, by acceptance of its Secured Certificates
of any Series, each Certificate Holder of such Series, hereby agree that no
payment or distribution shall be made on or in respect of the Secured
Obligations owed to such Certificate Holder of such Series, including any
payment or distribution of cash, property or securities after the commencement
of a proceeding of the type referred to in Section 4.01(e) or (f) hereof, except
as expressly provided in Article III hereof.
(b) By the acceptance of its Secured Certificates of any
Series, each Certificate Holder of such Series agrees that in the event that
such Certificate Holder, in its
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capacity as a Certificate Holder, shall receive any payment or distribution on
any Secured Obligations in respect of such Series which it is not entitled to
receive under this Section 2.15 or Article III hereof, it will hold any amount
so received in trust for, and will forthwith turn over such payment to, the
Indenture Trustee in the form received to be applied as provided in Article III
hereof.
(c) The indebtedness evidenced by the Series A-1 Secured
Certificates and Series A-2 Secured Certificates shall rank in right of payment
equally with all other Series A-1 Secured Certificates and Series A-2 Secured
Certificates. The indebtedness evidenced by the Series B Secured Certificates
is, to the extent and in the manner provided in this Trust Indenture,
subordinate and subject in right of payment to the prior payment in full of the
Secured Obligations in respect of the Series A-1 Secured Certificates and Series
A-2 Secured Certificates, and the Series B Secured Certificates are issued
subject to such provisions. The indebtedness evidenced by the Series C Secured
Certificates is, to the extent and in the manner provided in this Trust
Indenture, subordinate and subject in right of payment to the prior payment in
full of the Secured Obligations in respect of the Series A-1 Secured
Certificates, the Series A-2 Secured Certificates and the Series B Secured
Certificates, and the Series C Secured Certificates are issued subject to such
provisions. [The indebtedness evidenced by the Series D Secured Certificates is,
to the extent and in the manner provided in this Trust Indenture, subordinate
and subject in right of payment to the prior payment in full of the Secured
Obligations in respect of the Series A-1 Secured Certificates, the Series A-2
Secured Certificates, the Series B Secured Certificates and the Secured C
Secured Certificates, and the Series D Secured Certificates are issued subject
to such provisions -- A319's and 757's]. By acceptance of its Secured
Certificates of any Series, each Certificate Holder of such Series (a) agrees to
and shall be bound by such provisions, (b) authorizes and directs the Indenture
Trustee on such Certificate Holder's behalf to take any action necessary or
appropriate to effectuate the subordination as provided in this Trust Indenture
and (c) appoints the Indenture Trustee as such Certificate Holder's
attorney-in-fact for such purpose.
ARTICLE III
RECEIPT, DISTRIBUTION AND APPLICATION OF PAYMENTS
SECTION 3.01. BASIC DISTRIBUTIONS.
Except as otherwise provided in Section 3.03 hereof, each
periodic payment of principal or interest on the Secured Certificates received
by the Indenture Trustee shall be promptly distributed in the following order of
priority:
(i) so much of such payment as shall be required to pay
in full the aggregate amount of the payment or
payments of Principal Amount and interest and other
amounts (as well as any interest on any overdue
Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other
overdue amounts) then due under all Series A-1
Secured Certificates and Series A-2 Secured
Certificates shall be distributed to the Certificate
Holders of Series A-1 and A-2 ratably, without
priority of one over the other, in the proportion
that the amount of such payment or
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payments then due under all Series A-1 Secured
Certificates and Series A-2 Secured Certificates held
by each Certificate Holder bears to the aggregate
amount of the payments then due under all Series A-1
Secured Certificates and Series A-2 Secured
Certificates;
(ii) after giving effect to paragraph (i) above, so much
of such payment remaining as shall be required to pay
in full the aggregate amount of the payment or
payments of Principal Amount and interest and other
amounts (as well as any interest on any overdue
Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other
overdue amounts) then due under all Series B Secured
Certificates shall be distributed to the Certificate
Holders of Series B ratably, without priority of one
over the other, in the proportion that the amount of
such payment or payments then due under all Series B
Secured Certificates held by each Certificate Holder
bears to the aggregate amount of the payments then
due under all Series B Secured Certificates; [and]
(iii) after giving effect to paragraph (ii) above, so much
of such payment remaining as shall be required to pay
in full the aggregate amount of the payment or
payments of Principal Amount and interest and other
amounts (as well as any interest on any overdue
Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other
overdue amounts) then due under all Series C Secured
Certificates shall be distributed to the Certificate
Holders of Series C ratably, without priority of one
over the other, in the proportion that the amount of
such payment or payments then due under all Series C
Secured Certificates held by each Certificate Holder
bears to the aggregate amount of the payments then
due under all Series C Secured Certificates[.] [;
and]
[(iv) after giving effect to paragraph (iii) above, so much
of such payment remaining as shall be required to pay
in full the aggregate amount of the payment or
payments of Principal Amount and interest and other
amounts (as well as any interest on any overdue
Principal Amount and, to the extent permitted by
applicable law, on any overdue interest and any other
overdue amounts) then due under all Series D Secured
Certificates shall be distributed to the Certificate
Holders of Series D ratably, without priority of one
over the other, in the proportion that the amount of
such payment or payments then due under all Series D
Secured Certificates held by each Certificate Holder
bears to the aggregate amount of the payments then
due under all Series D Secured Certificates. --
A319's and 757's]
SECTION 3.02. EVENT OF LOSS; REPLACEMENT; OPTIONAL REDEMPTION.
Except as otherwise provided in Section 3.03 hereof, any
payments received by the Indenture Trustee (i) with respect to the Aircraft as
the result of an Event of Loss or (ii) pursuant to the optional redemption of
the Secured Certificates pursuant to Section 2.11 hereof shall be applied to
redemption of the Secured Certificates and to all other amounts payable
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hereunder or to the Indenture Trustee or any Certificate Holder under the
Participation Agreement by applying such funds in the following order of
priority:
FIRST, (a) to reimburse the Indenture Trustee and the Certificate
Holders for any reasonable costs or expenses incurred in
connection with such redemption for which they are entitled to
reimbursement, or indemnity by the Owner, under the Operative
Documents and then (b) to pay any other amounts then due to
the Indenture Trustee and the Certificate Holders under this
Trust Indenture, the Participation Agreement or the Secured
Certificates (other than amounts specified in clause Second
below);
SECOND, (i) to pay the amounts specified in paragraph (i) of
clause "Third" of Section 3.03 hereof plus Make-Whole
Amount, if any, then due and payable in respect of
the Series A-1 Secured Certificates and the Series
A-2 Secured Certificates;
(ii) after giving effect to paragraph (i) above, to pay
the amounts specified in paragraph (ii) of clause
"Third" of Section 3.03 hereof plus Make-Whole
Amount, if any, then due and payable in respect of
the Series B Secured Certificates; [and]
(iii) after giving effect to paragraph (ii) above, to pay
the amounts specified in paragraph (iii) of clause
"Third" of Section 3.03 hereof plus Make-Whole
Amount, if any, then due and payable in respect of
the Series C Secured Certificates[.] [;and]
[(iv) after giving effect to paragraph (iii) above, to pay
the amounts specified in paragraph (iv) of clause
"Third" of Section 3.03 hereof plus Make-Whole
Amount, if any, then due and payable in respect of
the Series D Secured Certificates. -- A319's and
757's]
THIRD, as provided in clause "Fourth" of Section 3.03 hereof;
PROVIDED, HOWEVER, that if a Replacement Airframe or Replacement Engine shall be
substituted for the Airframe or Engine subject to such Event of Loss as provided
in accordance with Section 7.06 hereof, any insurance, condemnation or similar
proceeds which result from such Event of Loss and are paid over to the Indenture
Trustee shall be held by the Indenture Trustee as permitted by Section 6.04
hereof (provided that such moneys shall be invested as provided in Section 5.06
hereof) as additional security for the obligations of the Owner under the
Operative Documents and such proceeds (and such investment earnings), to the
extent not theretofore applied as provided herein, shall be released to the
Owner at the Owner's written request upon the release of such damaged Airframe
or Engine and the replacement thereof as provided herein.
SECTION 3.03. PAYMENTS AFTER EVENT OF DEFAULT.
Except as otherwise provided in Section 3.04 hereof, all
payments received and amounts held or realized by the Indenture Trustee
(including any amounts realized by the Indenture Trustee from the exercise of
any remedies pursuant to Article IV hereof) after both an
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Event of Default shall have occurred and be continuing and the Secured
Certificates shall have become due and payable pursuant to Section 4.02(b)
hereof, as well as all payments or amounts then held by the Indenture Trustee as
part of the Collateral, shall be promptly distributed by the Indenture Trustee
in the following order of priority:
FIRST, so much of such payments or amounts as shall be required to
reimburse the Indenture Trustee for any tax, expense or other
loss (including, without limitation, all amounts to be
expended at the expense of, or charged upon the tolls, rents,
revenues, issues, products and profits of, the property
included in the Collateral (all such property being herein
called the "MORTGAGED Property") pursuant to Section 4.03(b)
hereof) incurred by the Indenture Trustee (to the extent not
previously reimbursed), the expenses of any sale, taking or
other proceeding, reasonable attorneys' fees and expenses,
court costs, and any other expenditures incurred or
expenditures or advances made by the Indenture Trustee or the
Certificate Holders in the protection, exercise or enforcement
of any right, power or remedy or any damages sustained by the
Indenture Trustee or any Certificate Holder, liquidated or
otherwise, upon such Event of Default shall be applied by the
Indenture Trustee as between itself and the Certificate
Holders in reimbursement of such expenses and any other
expenses for which the Indenture Trustee or the Certificate
Holders are entitled to reimbursement under any Operative
Document and in the case the aggregate amount to be so
distributed is insufficient to pay as aforesaid, then ratably,
without priority of one over the other, in proportion to the
amounts owed each hereunder;
SECOND, so much of such payments or amounts remaining as shall be
required to reimburse the then existing or prior Certificate
Holders for payments made pursuant to Section 5.03 hereof (to
the extent not previously reimbursed) shall be distributed to
such then existing or prior Certificate Holders ratably,
without priority of one over the other, in accordance with the
amount of the payment or payments made by each such then
existing or prior Certificate Holder pursuant to said Section
5.03 hereof;
THIRD, (i) so much of such payments or amounts remaining as
shall be required to pay in full the aggregate unpaid
Principal Amount of all Series A-1 Secured
Certificates and Series A-2 Secured Certificates, and
the accrued but unpaid interest and other amounts due
thereon and all other Secured Obligations in respect
of the Series A-1 Secured Certificates and the Series
A-2 Secured Certificates to the date of distribution,
shall be distributed to the Certificate Holders of
Series A-1 and Series A-2, and in case the aggregate
amount so to be distributed shall be insufficient to
pay in full as aforesaid, then ratably, without
priority of one over the other, in the proportion
that the aggregate unpaid Principal Amount of all
Series A-1 Secured Certificates and all Series A-2
Secured Certificates held by each Certificate Holder
plus the accrued but unpaid interest and other
amounts due hereunder or thereunder to the date of
distribution, bears to the aggregate unpaid Principal
Amount of all Series A-1 Secured
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Certificates and Series A-2 Secured Certificates plus
the accrued but unpaid interest and other amounts due
thereon to the date of distribution;
(ii) after giving effect to paragraph (i) above, so much
of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid
Principal Amount of all Series B Secured
Certificates, and the accrued but unpaid interest and
other amounts due thereon and all other Secured
Obligations in respect of the Series B Secured
Certificates to the date of distribution, shall be
distributed to the Certificate Holders of Series B,
and in case the aggregate amount so to be distributed
shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other,
in the proportion that the aggregate unpaid Principal
Amount of all Series B Secured Certificates held by
each Certificate Holder plus the accrued but unpaid
interest and other amounts due hereunder or
thereunder to the date of distribution, bears to the
aggregate unpaid Principal Amount of all Series B
Secured Certificates plus the accrued but unpaid
interest and other amounts due thereon to the date of
distribution;
(iii) after giving effect to paragraph (ii) above, so much
of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid
Principal Amount of all Series C Secured
Certificates, and the accrued but unpaid interest and
other amounts due thereon and all other Secured
Obligations in respect of the Series C Secured
Certificates to the date of distribution, shall be
distributed to the Certificate Holders of Series C,
and in case the aggregate amount so to be distributed
shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other,
in the proportion that the aggregate unpaid Principal
Amount of all Series C Secured Certificates held by
each Certificate Holder plus the accrued but unpaid
interest and other amounts due hereunder or
thereunder to the date of distribution, bears to the
aggregate unpaid Principal Amount of all Series C
Secured Certificates plus the accrued but unpaid
interest and other amounts due thereon to the date of
distribution; [and]
[(iv) after giving effect to paragraph (iii) above, so much
of such payments or amounts remaining as shall be
required to pay in full the aggregate unpaid
Principal Amount of all Series D Secured
Certificates, and the accrued but unpaid interest and
other amounts due thereon and all other Secured
Obligations in respect of the Series D Secured
Certificates to the date of distribution, shall be
distributed to the Certificate Holders of Series D,
and in case the aggregate amount so to be distributed
shall be insufficient to pay in full as aforesaid,
then ratably, without priority of one over the other,
in the proportion that the aggregate unpaid Principal
Amount of all Series D Secured Certificates held by
each Certificate Holder plus the accrued but unpaid
interest and other amounts due hereunder or
thereunder to the date of distribution, bears to the
aggregate unpaid Principal Amount of all Series D
Secured Certificates plus the accrued but unpaid
interest and
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other amounts due thereon to the date of
distribution; -- A319's and 757's]
FOURTH, the balance, if any, of such payments or amounts remaining
thereafter shall be distributed to the Owner.
No Make-Whole Amount shall be due and payable on the Secured
Certificates as a consequence of the acceleration of the Secured Certificates.
SECTION 3.04. CERTAIN PAYMENTS.
(a) Any payments received by the Indenture Trustee for which
no provision as to the application thereof is made in this Trust Indenture and
for which such provision is made in the Participation Agreement or any other
Operative Document shall be applied forthwith to the purpose for which such
payment was made in accordance with the terms of the Participation Agreement or
such other Operative Document, as the case may be.
(b) The Indenture Trustee will distribute promptly upon
receipt any indemnity payment received by it from the Owner in respect of the
Indenture Trustee in its individual capacity, any Certificate Holder or any
other Indenture Indemnitee, in each case pursuant to Section 7 of the
Participation Agreement, directly to the Person entitled thereto. Any payment
received by the Indenture Trustee under the third paragraph of Section 2.02
shall be distributed to the Subordination Agent to be distributed in accordance
with the terms of the Intercreditor Agreement.
SECTION 3.05. OTHER PAYMENTS.
Any payments received by the Indenture Trustee for which no
provision as to the application thereof is made in the Participation Agreement,
elsewhere in this Trust Indenture or in any other Operative Document shall be
distributed by the Indenture Trustee to the extent received or realized at any
time in the order of priority specified in Section 3.01 hereof and after payment
in full of all amounts then due in accordance with Section 3.01 hereof, in the
manner provided in clause "Fourth" of Section 3.03 hereof.
SECTION 3.06. PAYMENTS TO THE OWNER.
Any amounts distributed hereunder by the Indenture Trustee to
the Owner shall be paid to the Owner (within the time limits contemplated by
Section 2.04(a)) by wire transfer of funds of the type received by the Indenture
Trustee at such office and to such account or accounts of such entity or
entities as shall be designated by notice from the Owner to the Indenture
Trustee from time to time.
SECTION 3.07. APPLICATION OF PAYMENTS UNDER GUARANTEE.
All payments received by the Indenture Trustee pursuant to the
Guarantee shall be distributed forthwith by the Indenture Trustee in the same
order of priority, and in the same manner, as it would have distributed the
payment in respect of which such payment under the Guarantee was received.
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ARTICLE IV
EVENTS OF DEFAULT; REMEDIES OF INDENTURE TRUSTEE
SECTION 4.01. EVENT OF DEFAULT.
"EVENT OF DEFAULT" means any of the following events (whatever
the reason for such Event of Default and whether such event shall be voluntary
or involuntary or come about or be effected by operation of Law or pursuant to
or in compliance with any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(a) the failure of the Owner to pay (i) Principal
Amount of, interest on, or Make-Whole Amount, under any
Secured Certificate when due, and such failure shall have
continued unremedied for a period of ten (10) Business Days,
or (ii) any other amount payable by it to the Certificate
Holders under this Trust Indenture (other than any such
failure arising by virtue of a tax withheld pursuant to
Section 2.04(b) hereof) or under the Participation Agreement,
and such failure shall have continued unremedied for ten (10)
Business Days after receipt by the Owner of written demand
therefor from the Indenture Trustee or any Certificate Holder;
or
(b) the Owner shall fail to carry and maintain, or
cause to be carried and maintained, insurance on and in
respect of the Aircraft in accordance with the provisions of
Section 7.04; or
(c) the Owner shall fail to observe or perform (or
caused to be observed or performed), in any material respect,
any covenant or agreement to be performed or observed by it
under any Operative Document, and such failure shall continue
unremedied for a period of thirty (30) days after receipt by
the Owner of written notice thereof from the Indenture Trustee
PROVIDED, HOWEVER, that if the Owner shall have undertaken to
cure any such failure which arises under clause (ii) or clause
(iii) of the first sentence of Section 7.02(a), or under the
second sentence of Section 7.02(a) as it relates to
maintenance, service, repair or overhaul or under Section 7.03
and, notwithstanding the diligence of the Owner in attempting
to cure such failure, such failure is not cured within said
thirty day period but is curable with future due diligence,
there shall exist no Event of Default under this Section 4.01
so long as the Owner is proceeding with due diligence to cure
such failure and such failure is remedied not later than three
hundred sixty-five (365) days after receipt by the Owner of
such written notice; or
(d) any representation or warranty made by the Owner
herein or in the Participation Agreement or any document or
certificate furnished by the Owner in connection herewith or
therewith or pursuant hereto or thereto (except the
representations and warranties set forth in the Pass Through
Trust Agreement, the Underwriting Agreement or the Note
Purchase Agreement or any document or instrument furnished
pursuant to any thereof) shall prove to have been incorrect in
any material respect at the time made and such incorrectness
shall not have been
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cured (to the extent of the adverse impact of such
incorrectness on the interests of the Indenture Trustee or the
Certificate Holders) within thirty (30) days after the receipt
by the Owner of a written notice from the Indenture Trustee
advising the Owner of the existence of such incorrectness; or
(e) the commencement of an involuntary case or other
proceeding in respect of the Owner in an involuntary case
under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law in the United
States or seeking the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar
official) of the Owner or for all or substantially all of its
property, or seeking the winding-up or liquidation of its
affairs and the continuation of any such case or other
proceeding undismissed and unstayed for a period of ninety
(90) consecutive days or an order, judgment or decree shall be
entered in any proceeding by any court of competent
jurisdiction appointing, without the consent of the Owner, a
receiver, trustee or liquidator of the Owner, or of any
substantial part of its property, or sequestering any
substantial part of the property of the Owner and any such
order, judgment or decree or appointment or sequestration
shall be final or shall remain in force undismissed, unstayed
or unvacated for a period of ninety (90) days after the date
of entry thereof; or
(f) the commencement by the Owner of a voluntary case
under the federal bankruptcy laws, as now constituted or
hereafter amended, or any other applicable federal or state
bankruptcy, insolvency or other similar law in the United
States, or the consent by the Owner to the appointment of or
taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official)
of the Owner or for all or substantially all of its property,
or the making by the Owner of any assignment for the benefit
of creditors, or the Owner shall take any corporate action to
authorize any of the foregoing.
PROVIDED, HOWEVER, that, notwithstanding anything to the contrary contained in
this Section 4.01, any failure of the Owner to perform or observe any covenant,
condition, agreement or any error in a representation or warranty shall not
constitute an Event of Default if such failure or error is caused solely by
reason of an event that constitutes an Event of Loss so long as the Owner is
continuing to comply with all of the terms of Section 7.06 hereof.
SECTION 4.02. REMEDIES.
(a) If an Event of Default shall have occurred and be
continuing and so long as the same shall continue unremedied, then in every such
case, the Indenture Trustee may do one or more of the following, to the extent
permitted by, and subject to compliance with any mandatory requirements of,
applicable law then in effect; PROVIDED, HOWEVER, that during any period the
Aircraft is subject to the Civil Reserve Air Fleet Program in accordance with
the provisions of Section 7.02(b) hereof and in possession of the United States
Government or an agency or instrumentality of the United States, the Indenture
Trustee shall not, on account of any Event of Default, be entitled to do any of
the following in such manner as to limit the Owner's control under this Trust
Indenture (or any Lessee's control under any Lease) of any Airframe or
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any Engines installed thereon, unless at least sixty (60) days' (or such lesser
period as may then be applicable under the Air Mobility Command program of the
United States Government) written notice of default hereunder shall have been
given by the Indenture Trustee by registered or certified mail to the Owner (and
any Lessee) with a copy addressed to the Contracting Office Representative for
the Air Mobility Command of the United States Air Force under any contract with
the Owner (or any Lessee) relating to the Aircraft; PROVIDED FURTHER, that the
Indenture Trustee shall give the Owner twenty (20) days' prior written notice of
its intention to sell the Aircraft:
subject to the provisions of the Granting Clause hereof:
(i) cause the Owner upon the written demand of the
Indenture Trustee and at the Owner's expense, to deliver
promptly, and the Owner shall deliver promptly, the Airframe
or any Engine as the Indenture Trustee may so demand to the
Indenture Trustee;
(ii) sell the Airframe and/or any Engine at public or
private sale, whether or not the Indenture Trustee shall at
the time have possession thereof, as the Indenture Trustee may
determine, or lease or otherwise dispose of, all or any part
of the Airframe or any Engine as the Indenture Trustee, in its
sole discretion, may determine, all free and clear of any
rights of the Owner, except as hereinafter set forth in this
Section 4.02; or
(iii) exercise any or all of the rights and powers
and pursue any and all remedies of a secured party under the
Uniform Commercial Code of the State of New York. (b) If an
Event of Default shall have occurred and be continuing, then
and in every such case the Indenture Trustee may (and shall,
upon receipt of a written demand therefor from a Majority in
Interest of Certificate Holders) at any time, by delivery of
written notice or notices to the Owner, declare all the
Secured Certificates to be due and payable, whereupon the
unpaid Principal Amount of all Secured Certificates then
outstanding, together with accrued but unpaid interest thereon
(without Make-Whole Amount) and other amounts due thereunder,
shall immediately become due and payable without presentment,
demand, protest or notice, all of which are hereby waived.
This Section 4.02(b), however, is subject to the condition
that, if at any time after the Principal Amount of the Secured Certificates
shall have become so due and payable, and before any judgment or decree for the
payment of the money so due, or any thereof, shall be entered, all overdue
payments of interest upon the Secured Certificates and all other amounts payable
under the Secured Certificates (except the Principal Amount of the Secured
Certificates which by such declaration shall have become payable) shall have
been duly paid, and every other Default and Event of Default with respect to any
covenant or provision of this Trust Indenture shall have been cured, then and in
every such case a Majority in Interest of Certificate Holders may (but shall not
be obligated to), by written instrument filed with the Indenture Trustee,
rescind and annul the Indenture Trustee's declaration and its consequences; but
no such
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rescission or annulment shall extend to or affect any subsequent Default or
Event of Default or impair any right consequent thereon.
(c) Any Certificate Holder shall be entitled, at any sale
pursuant to this Section 4.02, to credit against any purchase price bid at such
sale by such holder all or any part of the unpaid obligations owing to such
Certificate Holder and secured by the Lien of this Trust Indenture (but only to
the extent that such purchase price would have been paid to such Certificate
Holder pursuant to Article III hereof if such purchase price were paid in cash
and the foregoing provisions of this subsection (c) were not given effect).
(d) In the event of any sale of the Collateral, or any part
thereof, pursuant to any judgment or decree of any court or otherwise in
connection with the enforcement of any of the terms of this Trust Indenture, the
unpaid Principal Amount of all Secured Certificates then outstanding, together
with accrued interest thereon, and other amounts due thereunder, shall
immediately become due and payable without presentment, demand, protest or
notice, all of which are hereby waived.
(e) Notwithstanding anything contained herein, so long as the
Pass Through Trustee under any Pass Through Trust Agreement or the Subordination
Agent on its behalf is a Certificate Holder, the Indenture Trustee will not be
authorized or empowered to acquire title to any Mortgaged Property or take any
action with respect to any Mortgaged Property so acquired by it if such
acquisition or action would cause any Pass Through Trust to fail to qualify as a
"grantor trust" for federal income tax purposes.
SECTION 4.03. RETURN OF AIRCRAFT, ETC.
(a) If an Event of Default shall have occurred and be
continuing and the Secured Certificates have been accelerated, subject to
Section 4.02 hereof, at the request of the Indenture Trustee, the Owner shall
promptly execute and deliver to the Indenture Trustee such instruments of title
and other documents as the Indenture Trustee may deem necessary or advisable to
enable the Indenture Trustee or an agent or representative designated by the
Indenture Trustee, at such time or times and place or places as the Indenture
Trustee may specify, to obtain possession of all or any part of the Mortgaged
Property included in the Collateral to which the Indenture Trustee shall at the
time be entitled hereunder. If the Owner shall for any reason fail to execute
and deliver such instruments and documents after such request by the Indenture
Trustee, the Indenture Trustee may (i) obtain a judgment conferring on the
Indenture Trustee the right to immediate possession and requiring the Owner to
execute and deliver such instruments and documents to the Indenture Trustee, to
the entry of which judgment the Owner hereby specifically consents to the
fullest extent permitted by applicable law, and (ii) pursue all or part of such
Mortgaged Property wherever it may be found and may enter any of the premises of
the Owner wherever such Mortgaged Property may be or be supposed to be and
search for such Mortgaged Property and take possession of and remove such
Mortgaged Property. All expenses of obtaining such judgment or of pursuing,
searching for and taking such property shall, until paid, be secured by the Lien
of this Trust Indenture.
(b) Upon every such taking of possession, the Indenture
Trustee may, from time to time, at the expense of the Mortgaged Property, make
all such expenditures for
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maintenance, use, operation, storage, insurance, leasing, control, management,
disposition, modifications or alterations to and of the Mortgaged Property, as
it may deem proper. In each such case, the Indenture Trustee shall have the
right to maintain, use, operate, store, insure, lease, control, manage, dispose
of, modify or alter the Mortgaged Property and to carry on the business and to
exercise all rights and powers of the Owner relating to the Mortgaged Property,
as the Indenture Trustee shall deem best, including the right to enter into any
and all such agreements with respect to the maintenance, use, operation,
storage, insurance, leasing, control, management, disposition, modification or
alteration of the Mortgaged Property or any part thereof as the Indenture
Trustee may determine, and the Indenture Trustee shall be entitled to collect
and receive directly all tolls, rents, revenues, issues, income, products and
profits of the Mortgaged Property and every part thereof, without prejudice,
however, to the right of the Indenture Trustee under any provision of this Trust
Indenture to collect and receive all cash held by, or required to be deposited
with, the Indenture Trustee hereunder. Such tolls, rents, revenues, issues,
income, products and profits shall be applied to pay the expenses of the
maintenance, use, operation, storage, insurance, leasing, control, management,
disposition, improvement, modification or alteration of the Mortgaged Property
and of conducting the business thereof, and to make all payments which the
Indenture Trustee may be required or may elect to make, if any, for taxes,
assessments, insurance or other proper charges upon the Mortgaged Property or
any part thereof (including the employment of engineers and accountants to
examine, inspect and make reports upon the properties and books and records of
the Owner), and all other payments which the Indenture Trustee may be required
or authorized to make under any provision of this Trust Indenture, as well as
just and reasonable compensation for the services of the Indenture Trustee, and
of all persons properly engaged and employed by the Indenture Trustee with
respect hereto.
SECTION 4.04. REMEDIES CUMULATIVE.
Each and every right, power and remedy given to the Indenture
Trustee specifically or otherwise in this Trust Indenture shall be cumulative
and shall be in addition to every other right, power and remedy herein
specifically given or now or hereafter existing at law, in equity or by statute,
and each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time and as often and in such
order as may be deemed expedient by the Indenture Trustee, and the exercise or
the beginning of the exercise of any power or remedy shall not be construed to
be a waiver of the right to exercise at the same time or thereafter any other
right, power or remedy. No delay or omission by the Indenture Trustee in the
exercise of any right, remedy or power or in the pursuance of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default on the part of the Owner or to be an acquiescence therein.
SECTION 4.05. DISCONTINUANCE OF PROCEEDINGS.
In case the Indenture Trustee shall have instituted any
proceeding to enforce any right, power or remedy under this Trust Indenture by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Indenture Trustee, then and in every such case the Owner and the
Indenture Trustee shall, subject to any determination in such proceedings, be
restored to their former positions and rights hereunder with respect to the
Mortgaged Property, and all rights,
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remedies and powers of the Owner or the Indenture Trustee shall continue as if
no such proceedings had been instituted.
SECTION 4.06. WAIVER OF PAST DEFAULTS.
Upon written instruction from a Majority in Interest of
Certificate Holders, the Indenture Trustee shall waive any past Default
hereunder and its consequences and upon any such waiver such Default shall cease
to exist and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Trust Indenture, but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon;
PROVIDED, that in the absence of written instructions from all the Certificate
Holders, the Indenture Trustee shall not waive any Default (i) in the payment of
the Principal Amount, Make-Whole Amount, if any, and interest and other amounts
due under any Secured Certificate then outstanding, or (ii) in respect of a
covenant or provision hereof which, under Article X hereof, cannot be modified
or amended without the consent of each Certificate Holder.
SECTION 4.07. APPOINTMENT OF RECEIVER.
The Indenture Trustee shall, as a matter of right, be entitled
to the appointment of a receiver (who may be the Indenture Trustee or any
successor or nominee thereof) for all or any part of the Mortgaged Property,
whether such receivership be incidental to a proposed sale of the Mortgaged
Property or the taking of possession thereof or otherwise, and the Owner hereby
consents to the appointment of such a receiver and will not oppose any such
appointment. Any receiver appointed for all or any part of the Mortgaged
Property shall be entitled to exercise all the rights and powers of the
Indenture Trustee with respect to the Mortgaged Property.
SECTION 4.08. INDENTURE TRUSTEE AUTHORIZED TO EXECUTE BILLS OF
SALE, ETC.
The Owner irrevocably appoints the Indenture Trustee the true
and lawful attorney-in-fact of the Owner in its name and stead and on its
behalf, for the purpose, if an Event of Default shall have occurred and be
continuing, of effectuating any sale, assignment, transfer or delivery for the
enforcement of the Lien of this Trust Indenture, whether pursuant to foreclosure
or power of sale, assignments and other instruments as may be necessary or
appropriate, with full power of substitution, the Owner hereby ratifying and
confirming all that such attorney or any substitute shall do by virtue hereof in
accordance with applicable law. Nevertheless, if so requested by the Indenture
Trustee or any purchaser, the Owner shall ratify and confirm any such sale,
assignment, transfer or delivery, by executing and delivering to the Indenture
Trustee or such purchaser all bills of sale, assignments, releases and other
proper instruments to effect such ratification and confirmation as may be
designated in any such request.
SECTION 4.09. RIGHTS OF CERTIFICATE HOLDERS TO RECEIVE
PAYMENT.
Notwithstanding any other provision of this Trust Indenture,
the right of any Certificate Holder to receive payment of principal of, and
premium, if any, and interest on a Secured Certificate on or after the
respective due dates expressed in such Secured Certificate, or to bring suit for
the enforcement of any such payment on or after such respective dates in
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accordance with the terms hereof, shall not be impaired or affected without the
consent of such Certificate Holder.
ARTICLE V
DUTIES OF THE INDENTURE TRUSTEE
SECTION 5.01. NOTICE OF EVENT OF DEFAULT.
If the Indenture Trustee shall have Actual Knowledge of an
Event of Default or of a Default arising from a failure to pay any payment of
Principal Amount of, interest on, Make-Whole Amount, if any, due and payable
under any Secured Certificates, the Indenture Trustee shall give prompt written
notice thereof to the Owner and each Certificate Holder. Subject to the terms of
Sections 4.02, 4.06, 5.02 and 5.03 hereof, the Indenture Trustee shall take such
action, or refrain from taking such action, with respect to such Event of
Default or Default (including with respect to the exercise of any rights or
remedies hereunder) as the Indenture Trustee shall be instructed in writing by a
Majority in Interest of Certificate Holders. Subject to the provisions of
Section 5.03, if the Indenture Trustee shall not have received instructions as
above provided within twenty (20) days after mailing notice of such Event of
Default to the Certificate Holders the Indenture Trustee may, subject to
instructions thereafter received pursuant to the preceding provisions of this
Section 5.01, take such action, or refrain from taking such action, but shall be
under no duty to take or refrain from taking any action, with respect to such
Event of Default or Default as it shall determine advisable in the best
interests of the Certificate Holders; PROVIDED, HOWEVER, that the Indenture
Trustee may not sell the Aircraft or any Engine without the consent of a
Majority in Interest of Certificate Holders. For all purposes of this Trust
Indenture, in the absence of Actual Knowledge on the part of the Indenture
Trustee, the Indenture Trustee shall not be deemed to have knowledge of a
Default or an Event of Default (except the failure of the Owner to pay any
payment of Principal Amount or interest within one (1) Business Day after the
same shall become due, which failure shall constitute knowledge of a Default)
unless notified in writing by the Owner or one or more Certificate Holders.
SECTION 5.02. ACTION UPON INSTRUCTIONS; CERTAIN RIGHTS AND
LIMITATIONS.
Subject to the terms of Sections 4.02(a), 4.06, 5.01 and 5.03
hereof, upon the written instructions at any time and from time to time of a
Majority in Interest of Certificate Holders, the Indenture Trustee shall,
subject to the terms of this Section 5.02, take such of the following actions as
may be specified in such instructions: (i) give such notice or direction or
exercise such right, remedy or power hereunder as shall be specified in such
instructions; and (ii) give such notice or direction or exercise such right,
remedy or power hereunder with respect to any part of the Collateral as shall be
specified in such instructions.
The Indenture Trustee will execute and the Owner will file or
cause to be filed such continuation statements with respect to financing
statements relating to the security interest created hereunder in the Collateral
as specified from time to time in written instructions of a Majority in Interest
of Certificate Holders (which instructions may, by their terms, be operative
only at a future date and which shall be accompanied by the form of such
continuation statement so to be filed). The Indenture Trustee will furnish to
each Certificate Holder promptly upon
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receipt thereof, duplicates or copies of all reports, notices, requests,
demands, certificates and other instruments furnished to the Indenture Trustee
hereunder.
SECTION 5.03. INDEMNIFICATION.
The Indenture Trustee shall not be under any obligation to
take any action under this Trust Indenture and nothing herein or therein shall
require the Indenture Trustee to expend or risk its own funds or otherwise incur
the risk of any financial liability in the performance of any of its rights or
powers if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it (the written indemnity of any Certificate Holder who is a QIB,
signed by an authorized officer thereof, in favor of, delivered to and in form
reasonably satisfactory to Indenture Trustee shall be accepted as reasonable
assurance of adequate indemnity). The Indenture Trustee shall not be required to
take any action under Section 5.01 (other than the first sentence thereof) or
5.02 or Article IV hereof, nor shall any other provision of this Trust Indenture
or any other Operative Document be deemed to impose a duty on the Indenture
Trustee to take any action, if the Indenture Trustee shall have been advised by
counsel that such action is contrary to the terms hereof or is otherwise
contrary to Law.
SECTION 5.04. NO DUTIES EXCEPT AS SPECIFIED IN TRUST INDENTURE
OR INSTRUCTIONS.
The Indenture Trustee shall not have any duty or obligation to
use, operate, store, lease, control, manage, sell, dispose of or otherwise deal
with the Aircraft or any other part of the Collateral, or to otherwise take or
refrain from taking any action under, or in connection with, this Trust
Indenture or any part of the Collateral, except as expressly provided by the
terms of this Trust Indenture or as expressly provided in written instructions
from Certificate Holders as provided in this Trust Indenture; and no implied
duties or obligations shall be read into this Trust Indenture against the
Indenture Trustee. The Indenture Trustee agrees that it will in its individual
capacity and at its own cost and expense (but without any right of indemnity in
respect of any such cost or expense under Section 8.01 hereof), promptly take
such action as may be necessary duly to discharge all liens and encumbrances on
any part of the Collateral which result from claims against it in its individual
capacity not related to the ownership of the Aircraft or the administration of
the Collateral or any other transaction pursuant to this Trust Indenture or any
document included in the Collateral.
SECTION 5.05. NO ACTION EXCEPT UNDER TRUST INDENTURE OR
INSTRUCTIONS.
The Indenture Trustee agrees that it will not use, operate,
store, lease, control, manage, sell, dispose of or otherwise deal with the
Aircraft or any other part of the Collateral except in accordance with the
powers granted to, or the authority conferred upon, the Indenture Trustee
pursuant to this Trust Indenture and in accordance with the express terms
hereof.
SECTION 5.06. INVESTMENT OF AMOUNTS HELD BY INDENTURE TRUSTEE.
Any amounts held by the Indenture Trustee pursuant to Section
3.02, or pursuant to any provision of any other Operative Document providing for
amounts to be held by the Indenture Trustee which are not distributed pursuant
to the other provisions of Article III hereof
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shall be invested by the Indenture Trustee from time to time in Cash Equivalents
as directed by the Owner so long as the Indenture Trustee may acquire the same
using its best efforts. Unless otherwise expressly provided in this Trust
Indenture, any income realized as a result of any such investment, net of the
Indenture Trustee's reasonable fees and expenses in making such investment,
shall be held and applied by the Indenture Trustee in the same manner as the
principal amount of such investment is to be applied and any losses, net of
earnings and such reasonable fees and expenses, shall be charged against the
principal amount invested. The Indenture Trustee shall not be liable for any
loss resulting from any investment required to be made by it under this Trust
Indenture other than by reason of its willful misconduct or gross negligence,
and any such investment may be sold (without regard to its maturity) by the
Indenture Trustee without instructions whenever such sale is necessary to make a
distribution required by this Trust Indenture. Any of the investments permitted
hereunder may be made with or through, as applicable, the entity acting as
Indenture Trustee or its Affiliates.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. ACCEPTANCE OF TRUSTS AND DUTIES.
The Indenture Trustee accepts the duties hereby created and
applicable to it and agrees to perform the same but only upon the terms of this
Trust Indenture and agrees to receive and disburse all monies constituting part
of the Collateral in accordance with the terms hereof. The Indenture Trustee, in
its individual capacity, shall not be answerable or accountable under any
circumstances, except (i) for its own willful misconduct or gross negligence
(other than for the handling of funds, for which the standard of accountability
shall be willful misconduct or negligence), and (ii) as provided in the fourth
sentence of Section 2.04(a) hereof and the last sentence of Section 5.04 hereof.
SECTION 6.02. ABSENCE OF DUTIES.
In the case of the Indenture Trustee, except in accordance
with written instructions furnished pursuant to Section 5.01 or 5.02 hereof, and
except as provided in, and without limiting the generality of, Sections 5.03 and
5.04 hereof, the Indenture Trustee shall have no duty (i) to see to any
registration of the Aircraft or any recording or filing of this Trust Indenture
or any other document, or to see to the maintenance of any such registration,
recording or filing, (ii) to see to any insurance on the Aircraft or to effect
or maintain any such insurance, whether or not the Owner shall be in default
with respect thereto, (iii) to see to the payment or discharge of any lien or
encumbrance of any kind against any part of the Collateral, (iv) to confirm,
verify or inquire into the failure to receive any financial statements from the
Owner, or (v) to inspect the Aircraft at any time or ascertain or inquire as to
the performance or observance of any of the Owner's covenants herein with
respect to the Aircraft.
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SECTION 6.03. NO REPRESENTATIONS OR WARRANTIES AS TO AIRCRAFT
OR DOCUMENTS.
THE INDENTURE TRUSTEE IN ITS INDIVIDUAL OR TRUST CAPACITY DOES
NOT MAKE AND SHALL NOT BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY DISCLAIMS ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS,
VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN, QUALITY, DURABILITY,
OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE
AIRCRAFT OR ANY ENGINE, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR
NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK
OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT
OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER. The Indenture Trustee, in
its individual or trust capacities, does not make, nor shall it be deemed to
have made, any representation or warranty as to the validity, legality or
enforceability of this Trust Indenture, the Participation Agreement, the Secured
Certificates, the Purchase Agreement, the Consent and Agreement or the
Guarantee, or as to the correctness of any statement contained in any thereof,
except for the representations and warranties of the Indenture Trustee, in each
case expressly made in this Trust Indenture or in the Participation Agreement.
The Loan Participants and the Certificate Holders make no representation or
warranty hereunder whatsoever.
SECTION 6.04. NO SEGREGATION OF MONIES; NO INTEREST.
Any monies paid to or retained by the Indenture Trustee
pursuant to any provision hereof and not then required to be distributed to the
Certificate Holders, or the Owner as provided in Article III hereof need not be
segregated in any manner except to the extent required by Law or Section 5.06,
7.04(g), 7.06(f) or 7.07(c) hereof, and may be deposited under such general
conditions as may be prescribed by Law, and the Indenture Trustee shall not be
liable for any interest thereon (except that the Indenture Trustee shall invest
all monies held as directed by the Owner so long as no Default or Event of
Default has occurred and is continuing (or in the absence of such direction, by
the Majority In Interest of Certificate Holders) in Cash Equivalents; PROVIDED,
HOWEVER, that any payments received, or applied hereunder, by the Indenture
Trustee shall be accounted for by the Indenture Trustee so that any portion
thereof paid or applied pursuant hereto shall be identifiable as to the source
thereof.
SECTION 6.05. RELIANCE; AGREEMENTS; ADVICE OF COUNSEL.
The Indenture Trustee shall not incur any liability to anyone
in acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper believed by
it to be genuine and believed by it to be signed by the proper party or parties.
The Indenture Trustee may accept a copy of a resolution of the Board of
Directors (or Executive Committee thereof) of any party to the Participation
Agreement, certified by the Secretary or an Assistant Secretary thereof as duly
adopted and in full force and effect, as conclusive evidence that such
resolution has been duly adopted and that the same is in full force and effect.
As to the aggregate unpaid Principal Amount of Secured Certificates outstanding
as of any date, the Owner may for all purposes hereof rely on a certificate
signed by any Vice
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President or other authorized corporate trust officer of the Indenture Trustee.
As to any fact or matter relating to the Owner the manner of ascertainment of
which is not specifically described herein, the Indenture Trustee may for all
purposes hereof rely on a certificate, signed by a duly authorized officer of
the Owner, as to such fact or matter, and such certificate shall constitute full
protection to the Indenture Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon. In the administration of the trusts
hereunder, the Indenture Trustee may execute any of the trusts or powers hereof
and perform its powers and duties hereunder directly or through agents or
attorneys and may at the expense of the Collateral, consult with counsel,
accountants and other skilled persons to be selected and retained by it, and the
Indenture Trustee shall not be liable for anything done, suffered or omitted in
good faith by them in accordance with the written advice or written opinion of
any such counsel, accountants or other skilled persons.
SECTION 6.06. COMPENSATION.
The Indenture Trustee shall be entitled to reasonable
compensation, including expenses and disbursements (including the reasonable
fees and expenses of counsel), for all services rendered hereunder and shall, on
and subsequent to an Event of Default hereunder, have a priority claim on the
Collateral for the payment of such compensation, to the extent that such
compensation shall not be paid by the Owner, and shall have the right, on and
subsequent to an Event of Default hereunder, to use or apply any monies held by
it hereunder in the Collateral toward such payments. The Indenture Trustee
agrees that it shall have no right against the Loan Participants or the
Certificate Holders for any fee as compensation for its services as trustee
under this Trust Indenture.
SECTION 6.07. INSTRUCTIONS FROM CERTIFICATE HOLDERS.
In the administration of the trusts created hereunder, the
Indenture Trustee shall have the right to seek instructions from a Majority in
Interest of Certificate Holders should any provision of this Trust Indenture
appear to conflict with any other provision herein or should the Indenture
Trustee's duties or obligations hereunder be unclear, and the Indenture Trustee
shall incur no liability in refraining from acting until it receives such
instructions. The Indenture Trustee shall be fully protected for acting in
accordance with any instructions received under this Section 6.07.
ARTICLE VII
COVENANTS OF THE OWNER
SECTION 7.01. LIENS.
The Owner will not directly or indirectly create, incur,
assume or suffer to exist any Lien on or with respect to the Aircraft, title
thereto or any interest therein, except (i) the Lien of this Trust Indenture,
and any other rights existing pursuant to the Operative Documents, (ii) the
rights of others under agreements or arrangements to the extent permitted by the
terms of Sections 7.02(b) and 7.03(b) hereof, (iii) Loan Participant Liens and
Indenture Trustee's Liens, (iv) Liens for taxes of the Owner (or any Lessee)
either not yet due or being contested in good
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faith by appropriate proceedings so long as such proceedings do not involve any
material risk of the sale, forfeiture or loss of the Airframe or any Engine or
any interest therein, or, so long as any Secured Certificates shall be
outstanding, adversely affect the Lien of this Trust Indenture, (v)
materialmen's, mechanics', workmen's, repairmen's, employees' or other like
Liens arising in the ordinary course of the Owner's (or, if a Lease is then in
effect, Lessee's business (including those arising under maintenance agreements
entered into in the ordinary course of business) securing obligations that are
not overdue for a period of more than sixty (60) days or are being contested in
good faith by appropriate proceedings so long as such proceedings do not involve
any material danger of the sale, forfeiture or loss of the Airframe or any
Engine or any interest therein or, so long as any Secured Certificates shall be
outstanding, adversely affect the Lien of this Trust Indenture, (vi) Liens
arising out of any judgment or award against the Owner (or any Lessee), unless
the judgment secured shall not, within sixty (60) days after the entry thereof,
have been discharged, vacated, reversed or execution thereof stayed pending
appeal or shall not have been discharged, vacated or reversed within sixty (60)
days after the expiration of such stay, (vii) any other Lien with respect to
which the Owner (or any Lessee) shall have provided a bond, cash collateral or
other security adequate in the reasonable opinion of the Indenture Trustee, and
(viii) Liens approved in writing by the Indenture Trustee. The Owner will
promptly, at its own expense, take (or cause to be taken) such actions as may be
necessary duly to discharge any such Lien not excepted above if the same shall
arise at any time.
SECTION 7.02. REGISTRATION, MAINTENANCE AND OPERATION;
POSSESSION AND LEASES; INSIGNIA.
(a) (I) REGISTRATION AND MAINTENANCE. The Owner, at its own
cost and expense, shall (or shall cause any Lessee to): (i) cause the Aircraft
to be duly registered in its name, and, subject to the second paragraph of this
Section 7.02(a) and Section 8(f) of the Participation Agreement, to remain duly
registered in the name of the Owner under the Federal Aviation Act, PROVIDED
that the Owner shall not register the Aircraft or permit the Aircraft to be
registered under any laws other than the Federal Aviation Act at any time except
as provided in Section 8(f) of the Participation Agreement and shall cause this
Trust Indenture to be duly recorded and maintained of record as a first mortgage
on the Aircraft; (ii) maintain, service, repair and overhaul (or cause to be
maintained, serviced, repaired and overhauled) the Aircraft so as to keep the
Aircraft in as good an operating condition as when initially subjected to the
Lien hereof, ordinary wear and tear excepted, and as may be necessary to enable
the applicable airworthiness certification for the Aircraft to be maintained in
good standing at all times (other than during temporary periods of storage in
accordance with applicable regulations or during maintenance or modification
permitted hereunder) under the Federal Aviation Act, except when all [Airbus
Model A319-100] [Boeing Model 757-300] [Boeing Model 747-400] aircraft powered
by engines of the same type as those with which the Airframe shall be equipped
at the time of such grounding and registered in the United States have been
grounded by the FAA (although such certification need actually be maintained
only during such periods as the Aircraft is registered in the United States), or
the applicable laws of any other jurisdiction in which the Aircraft may then be
registered from time to time in accordance with Section 8(f) of the
Participation Agreement, and utilizing, except during any period that a Lease is
in effect, the same manner and standard of maintenance, service, repair
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or overhaul used by the Owner with respect to similar aircraft operated by the
Owner in similar circumstances and utilizing, during any period that a Lease is
in effect, the same manner and standard of maintenance, service, repair or
overhaul used by the Lessee with respect to similar aircraft operated by the
Lessee in similar circumstances; PROVIDED, HOWEVER, that in all circumstances
the Aircraft shall be maintained by the Owner (or any Lessee) in accordance with
maintenance standards required by, or substantially equivalent to those required
by, the FAA or the central civil aviation authority of Canada, France, Germany,
Japan, the Netherlands or the United Kingdom; and (iii) maintain or cause to be
maintained all records, logs and other materials required to be maintained in
respect of the Aircraft by the FAA or the applicable regulatory agency or body
of any other jurisdiction in which the Aircraft may then be registered. (II)
OPERATION. The Owner will not maintain, use, service, repair, overhaul or
operate the Aircraft (or permit any Lessee to maintain, use, service, repair,
overhaul or operate the Aircraft) in violation of any law or any rule,
regulation, order or certificate of any government or governmental authority
(domestic or foreign) having jurisdiction, or in violation of any airworthiness
certificate, license or registration relating to the Aircraft issued by any such
authority, except to the extent the Owner (or, if a Lease is then in effect, any
Lessee) is contesting in good faith the validity or application of any such law,
rule, regulation or order in any reasonable manner which does not materially
adversely affect the first priority Lien of this Trust Indenture and does not
involve any material risk of sale, forfeiture or loss of the Aircraft. The Owner
will not operate the Aircraft, or permit any Lessee to operate the Aircraft, in
any area excluded from coverage by any insurance required by the terms of
Section 7.04; PROVIDED, HOWEVER, that the failure of the Owner to comply with
the provisions of this sentence shall not give rise to an Event of Default
hereunder where such failure is attributable to causes beyond the reasonable
control of the Owner (or any Lessee) or to extraordinary circumstances involving
an isolated occurrence or series of incidents not in the ordinary course of the
regular operations of the Owner (or any Lessee) and in each such case the Owner
(or such Lessee, as the case may be) is taking all reasonable steps to remedy
such failure as soon as is reasonably practicable.
The Indenture Trustee, upon compliance with all of the terms
of Section 8(f) of the Participation Agreement, shall, at the request and sole
expense of the Owner, cooperate with the Owner to take all actions required to
change the registration of the Aircraft to another country.
(b) POSSESSION AND LEASES. The Owner will not, without the
prior written consent of the Indenture Trustee, lease or otherwise in any manner
deliver, transfer or relinquish possession of the Airframe or any Engine or
install or permit any Engine to be installed on any airframe other than the
Airframe or enter into any Wet Lease; PROVIDED that, so long as no Default of
the type referred to in Section 4.01(a) or 4.01(e) or Event of Default shall
have occurred and be continuing at the time of such lease, delivery, transfer or
relinquishment of possession or installation or such Wet Lease, and so long as
the action to be taken shall not deprive the Indenture Trustee of the perfected
first priority Lien of this Trust Indenture on the Airframe or (subject to the
further proviso (B) to clause (i) of this Section 7.02(b)) any Engine, and so
long as the Owner (or any Lessee) shall comply with the provisions of Sections
7.02(a) and 7.04 hereof, the Owner (or, except with respect to clause (x) below,
any Lessee) may, without the prior written consent of the Indenture Trustee:
(i) subject the Airframe and the Engines or engines
then installed thereon to normal interchange agreements or any
Engine to normal pooling or similar arrangements, in each case
customary in the airline industry and entered
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into by the Owner (or, if a Lease is then in effect, by
Lessee) in the ordinary course of its business; PROVIDED that
(A) no such agreement or arrangement contemplates or requires
the transfer of title to the Airframe, (B) if the Owner's
title to any Engine shall be divested under any such agreement
or arrangement, such divestiture shall be deemed to be an
Event of Loss with respect to such Engine and the Owner shall
(or shall cause Lessee to) comply with Section 7.06(b) hereof
in respect thereof, and (C) any interchange agreement to which
the Airframe may be subject shall be with a U.S. Air Carrier
or a Foreign Air Carrier;
(ii) deliver possession of the Airframe or any Engine
to the manufacturer thereof (or for delivery thereto) or to
any organization (or for delivery thereto) for testing,
service, repair, maintenance or overhaul work on the Airframe
or Engine or any part of any thereof or for alterations or
modifications in or additions to such Airframe or Engine to
the extent required or permitted by the terms of Section
7.03(c) hereof;
(iii) install an Engine on an airframe which is owned
by the Owner (or any Lessee) free and clear of all Liens,
except: (A) Permitted Liens and those which apply only to the
engines (other than Engines), appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment
(other than Parts) installed on such airframe (but not to the
airframe as an entirety), (B) the rights of third parties
under interchange agreements which would be permitted under
clause (i) above, PROVIDED that the Owner's title to such
Engine and the first priority Lien of this Trust Indenture
shall not be divested or impaired as a result thereof and (C)
mortgage liens or other security interests, PROVIDED that (as
regards this clause (C)) such mortgage liens or other security
interests effectively provide that such Engine shall not
become subject to the lien of such mortgage or security
interest, notwithstanding the installation thereof on such
airframe;
(iv) install an Engine on an airframe leased to the
Owner (or any Lessee) or purchased by the Owner (or any
Lessee) subject to a conditional sale or other security
agreement, PROVIDED that (x) such airframe is free and clear
of all Liens, except: (A) the rights of the parties to the
lease or conditional sale or other security agreement covering
such airframe, or their assignees, and (B) Liens of the type
permitted by subparagraph (iii) of this paragraph (b) and (y)
such lease, conditional sale or other security agreement
effectively provides that such Engine shall not become subject
to the lien of such lease, conditional sale or other security
agreement, notwithstanding the installation thereof on such
airframe;
(v) install an Engine on an airframe owned by the
Owner (or any Lessee), leased to the Owner (or any Lessee) or
purchased by the Owner (or any Lessee) subject to a
conditional sale or other security agreement under
circumstances where neither subparagraph (iii) nor
subparagraph (iv) of this paragraph (b) is applicable,
PROVIDED that such installation shall be deemed an Event of
Loss with respect to such Engine and the Owner shall (or shall
cause any Lessee to) comply with Section 7.06(b) hereof in
respect thereof, the Indenture Trustee not intending hereby to
waive any right or interest it may have to or in
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such Engine under applicable law until compliance by the Owner
with such Section 7.06(b);
(vi) to the extent permitted by Section 7.03(b)
hereof, subject any appliances, Parts or other equipment owned
by the Owner and removed from the Airframe or any Engine to
any pooling arrangement referred to in Section 7.03(b) hereof;
(vii) subject (or permit any Lessee to subject) the
Airframe or any Engine to the Civil Reserve Air Fleet Program
and transfer (or permit any Lessee to transfer) possession of
the Airframe or any Engine to the United States of America or
any instrumentality or agency thereof pursuant to the Civil
Reserve Air Fleet Program, so long as the Owner (or any
Lessee) shall (A) promptly notify the Indenture Trustee upon
subjecting the Airframe or any Engine to the Civil Reserve Air
Fleet Program in any contract year and provide the Indenture
Trustee with the name and address of the Contracting Office
Representative for the Air Mobility Command of the United
States Air Force to whom notice must be given pursuant to
Section 4.02 hereof, and (B) promptly notify the Indenture
Trustee upon transferring possession of the Airframe or any
Engine to the United States of America or any agency or
instrumentality thereof pursuant to such program;
(viii) enter into a Wet Lease for the Airframe and
Engines or engines then installed thereon with any third party
provided that if the Owner (or any Lessee) shall enter into
any Wet Lease for a period of more than one year (including
renewal options) the Owner shall provide the Indenture Trustee
written notice of such Wet Lease (such notice to be given
prior to entering into such Wet Lease, if practicable, but in
any event promptly after entering into such Wet Lease);
(ix) transfer possession of the Airframe or any
Engine to the United States of America or any instrumentality
or agency thereof pursuant to a contract, a copy of which
shall be provided to the Indenture Trustee; or
(x) the Owner may, at any time, enter into any lease
with (1) a U.S. Air Carrier, (2) any Person approved in
writing by the Indenture Trustee, which approval shall not be
unreasonably withheld or (3) any Permitted Lessee if (A) in
any such case, the Lessee under such lease is not subject to a
proceeding or final order under applicable bankruptcy,
insolvency or reorganization laws on the date such lease is
entered into, (B) in the event that the Lessee under such
lease is a foreign air carrier (other than a foreign air
carrier principally based in Taiwan), the United States
maintains diplomatic relations with the country in which such
proposed Lessee is principally based at the time such lease is
entered into (or, in the case of a lease to a proposed Lessee
principally based in Taiwan, maintains diplomatic relations at
least as good as those in effect on the Closing Date) and (C)
in the event that the Lessee under such lease is a foreign air
carrier, the Indenture Trustee shall have received an opinion
of counsel to the Owner to the effect that (I) the terms of
the proposed lease will be legal, valid, binding and
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(subject to customary exceptions in foreign opinions
generally) enforceable against the proposed Lessee in the
country in which the proposed Lessee is principally based,
(II) there exist no possessory rights in favor of the Lessee
under such lease under the laws of such Lessee's country of
domicile that would, upon bankruptcy or insolvency of or other
default by the Owner and assuming at such time such Lessee is
not insolvent or bankrupt, prevent the return or repossession
of the Aircraft in accordance with the terms of this Trust
Indenture, (III) the laws of such Lessee's country of domicile
require fair compensation by the government of such
jurisdiction payable in currency freely convertible into
Dollars for the loss of use of the Aircraft in the event of
the requisition by such government of such use, and (IV) the
laws of such Lessee's country of domicile would give
recognition to the Owner's title to the Aircraft, to the
registry of the Aircraft in the name of the Owner (or the
proposed Lessee, as "lessee", as appropriate) and to the Lien
of this Trust Indenture.
The rights of any Lessee or other transferee who receives
possession by reason of a transfer permitted by this paragraph (b) (other than
the transfer of an Engine which is deemed an Event of Loss) shall be effectively
subject and subordinate to, and any Lease permitted by this paragraph (b) shall
be expressly subject and subordinate to, all the terms of this Trust Indenture
and to the Lien of this Trust Indenture, including, without limitation, the
covenants contained in Section 7.02(a) hereof and the Indenture Trustee's rights
to foreclosure and repossession pursuant to Section 4.02 hereof and to avoid
such Lease upon such repossession, and the Owner shall remain primarily liable
hereunder for the performance of all of the terms of this Trust Indenture to the
same extent as if such Lease or transfer had not occurred, and, except as
otherwise provided herein, the terms of any such Lease shall not permit any
Lessee to take any action not permitted to be taken by the Owner in this Trust
Indenture with respect to the Aircraft. No pooling agreement, lease or other
relinquishment of possession of the Airframe or any Engine or Wet Lease shall in
any way discharge or diminish any of the Owner's obligations to the Indenture
Trustee hereunder or constitute a waiver of the Indenture Trustee's rights or
remedies hereunder. Any lease permitted under this Section 7.02(b) shall
expressly prohibit any further sublease by the Lessee. The Indenture Trustee
agrees, for the benefit of the Owner (and any Lessee) and for the benefit of any
mortgagee or other holder of a security interest in any engine (other than an
Engine) owned by the Owner (or any Lessee), any lessor of any engine (other than
an Engine) leased to the Owner (or any Lessee) and any conditional vendor of any
engine (other than an Engine) purchased by the Owner (or any Lessee) subject to
a conditional sale agreement or any other security agreement, that no interest
shall be created hereunder in any engine so owned, leased or purchased and that
neither the Indenture Trustee nor its successors or assigns will acquire or
claim, as against the Owner (or any Lessee) or any such mortgagee, lessor or
conditional vendor or other holder of a security interest or any successor or
assignee of any thereof, any right, title or interest in such engine as the
result of such engine being installed on the Airframe; PROVIDED, HOWEVER, that
such agreement of the Indenture Trustee shall not be for the benefit of any
lessor or secured party of any airframe (other than the Airframe) leased to the
Owner (or any Lessee) or purchased by the Owner (or any Lessee) subject to a
conditional sale or other security agreement or for the benefit of any mortgagee
of or any other holder of a security interest in an airframe owned by the Owner
(or any Lessee), unless such lessor, conditional vendor, other secured party or
mortgagee has expressly agreed (which agreement may be contained in such lease,
conditional sale or other security agreement or mortgage) that
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neither it nor its successors or assigns will acquire, as against the Indenture
Trustee, any right, title or interest in an Engine as a result of such Engine
being installed on such airframe. The Owner shall provide to the Indenture
Trustee (i) written notice of any Lease hereunder (such notice to be given not
later than five days prior to entering into such Lease, if practicable, but in
any event promptly after entering into any such Lease) and (ii) a copy of each
Lease which has a term of more than three months.
(c) INSIGNIA. On or prior to the Closing Date, or as soon as
practicable thereafter, the Owner agrees to affix and maintain (or cause to be
affixed and maintained), at its expense, in the cockpit of the Airframe adjacent
to the airworthiness certificate therein and on each Engine, a nameplate bearing
the inscription:
Mortgaged To
State Street Bank and Trust Company,
AS INDENTURE TRUSTEE
(such nameplate to be replaced, if necessary, with a nameplate reflecting the
name of any successor Indenture Trustee as permitted herein). Except as above
provided, the Owner will not allow the name of any Person (other than the Owner)
to be placed on the Airframe or on any Engine as a designation that might be
interpreted as a claim of ownership; PROVIDED that nothing herein contained
shall prohibit the Owner (or any Lessee) from placing its customary colors and
insignia on the Airframe or any Engine.
SECTION 7.03. REPLACEMENT AND POOLING OF PARTS; ALTERATIONS,
MODIFICATIONS AND ADDITIONS.
(a) REPLACEMENT OF PARTS. The Owner, at its own cost and
expense, will so long as the Airframe or an Engine is subject to the Lien of
this Trust Indenture promptly replace or cause to be replaced all Parts which
may from time to time be incorporated or installed in or attached to the
Airframe or any Engine and which may from time to time become worn out, lost,
stolen, destroyed, seized, confiscated, damaged beyond repair or permanently
rendered unfit for use for any reason whatsoever, except as otherwise provided
in paragraph (c) of this Section 7.03 or if the Airframe or an Engine to which a
Part relates has suffered an Event of Loss. In addition, the Owner (or any
Lessee) may, at its own cost and expense, remove in the ordinary course of
maintenance, service, repair, overhaul or testing, any Parts, whether or not
worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or
permanently rendered unfit for use, PROVIDED that the Owner (or any Lessee),
except as otherwise provided in paragraph (c) of this Section 7.03, will, at its
own cost and expense, replace such Parts as promptly as practicable. All
replacement Parts shall be free and clear of all Liens (except for Permitted
Liens and pooling arrangements to the extent permitted by paragraph (b) of this
Section 7.03 and except in the case of replacement property temporarily
installed on an emergency basis) and shall be in as good operating condition as,
and shall have a value and utility at least equal to, the Parts replaced
assuming such replaced Parts were in the condition and repair required to be
maintained by the terms hereof. Except as otherwise provided in paragraph (c) of
this Section 7.03, all Parts at any time removed from the Airframe or any Engine
shall remain subject to the Lien of this Trust Indenture, no matter where
located, until such time as such Parts shall be replaced by Parts
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which have been incorporated or installed in or attached to the Airframe or such
Engine and which meet the requirements for replacement Parts specified above.
Immediately upon any replacement part becoming incorporated or installed in or
attached to the Airframe or any Engine as above provided, without further act
(subject only to Permitted Liens and any pooling arrangement to the extent
permitted by paragraph (b) of this Section 7.03 and except in the case of
replacement property temporarily installed on an emergency basis), (i) title to
such replacement Part shall be owned by the Owner, (ii) such replacement Part
shall become subject to the Lien of this Trust Indenture and be deemed part of
the Airframe or such Engine for all purposes hereof to the same extent as the
Parts originally incorporated or installed in or attached to the Airframe or
such Engine, and (iii) the replaced Part shall thereupon be free and clear of
all rights of the Indenture Trustee, and shall no longer be subject to the Lien
of this Trust Indenture or be deemed a Part hereunder.
(b) POOLING OF PARTS. Any Part removed from the Airframe or
any Engine as provided in paragraph (a) of this Section 7.03 may be subjected by
the Owner (or any Lessee) to a normal pooling arrangement customary in the
airline industry of which the Owner (or, if a Lease is then in effect, any
Lessee) is a party entered into in the ordinary course of the Owner's (or any
Lessee's) business; PROVIDED that the Part replacing such removed Part shall be
incorporated or installed in or attached to such Airframe or Engine in
accordance with such paragraph (a) as promptly as practicable after the removal
of such removed Part. In addition, any replacement Part when incorporated or
installed in or attached to the Airframe or any Engine in accordance with such
paragraph (a) may be owned by any third party subject to such a normal pooling
arrangement, PROVIDED that the Owner (or any Lessee), at its expense, as
promptly thereafter as practicable, either (i) causes such replacement Part to
become subject to the Lien of this Trust Indenture free and clear of all Liens
except Permitted Liens (other than pooling arrangements), at which time such
temporary replacement Part shall become a Part or (ii) replaces such replacement
Part by incorporating or installing in or attaching to the Airframe or Engine a
further replacement Part which is subject to the Lien of this Trust Indenture,
free and clear of all Liens except Permitted Liens (other than pooling
arrangements).
(c) ALTERATIONS, MODIFICATIONS AND ADDITIONS. The Owner, at
its own expense, will make (or cause to be made) such alterations and
modifications in and additions to the Airframe and Engines as may be required
from time to time to meet the applicable standards of the FAA or any other
governmental authority having jurisdiction; PROVIDED, HOWEVER, that the Owner
(or, if a Lease is then in effect, any Lessee) may, in good faith, contest the
validity or application of any such law, rule, regulation or order in any
reasonable manner which does not adversely affect the Indenture Trustee. In
addition, the Owner (or any Lessee), at its own expense, may from time to time
add further parts or accessories and make such alterations and modifications in
and additions to the Airframe or any Engine as the Owner (or any Lessee) may
deem desirable in the proper conduct of its business, including, without
limitation, removal of Parts which the Owner (or any Lessee) has determined in
its reasonable judgment to be obsolete or no longer suitable or appropriate for
use on the Airframe or such Engine (such parts, "OBSOLETE PARTS"); PROVIDED that
no such alteration, modification or addition shall materially diminish the
value, utility or remaining useful life of the Airframe or such Engine below the
value, utility or remaining useful life thereof immediately prior to such
alteration, modification or addition, assuming the Airframe or such Engine was
then in the condition required to be maintained by the terms of this Trust
Indenture, except that the value (but not the utility or
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remaining useful life) of the Airframe or any Engine may be reduced by the value
of Obsolete Parts which shall have been removed so long as the aggregate value
of all Obsolete Parts which shall have been removed and not replaced shall not
exceed [$400,000 for A319's] [$500,000 for 757's] [$800,000 for 747's]. All
Parts incorporated or installed in or attached or added to the Airframe or an
Engine as the result of such alteration, modification or addition (the
"ADDITIONAL PARTS") shall, without further act, become subject to the Lien of
this Trust Indenture. Notwithstanding the foregoing sentence, the Owner (or any
Lessee) may remove or suffer to be removed any Additional Part, PROVIDED that
such Additional Part (i) is in addition to, and not in replacement of or
substitution for, any Part originally incorporated or installed in or attached
to the Airframe or any Engine on the Closing Date or any Part in replacement of,
or substitution for, any such Part, (ii) is not required to be incorporated or
installed in or attached or added to the Airframe or any Engine pursuant to the
terms of Section 7.02 hereof or the first sentence of this paragraph (c) and
(iii) can be removed from the Airframe or such Engine without diminishing or
impairing the value, utility or remaining useful life which the Airframe or such
Engine would have had at the time of removal had such alteration, modification
or addition not occurred, assuming that such Airframe or Engine was in the
condition and repair required to be maintained by the terms hereof. Upon the
removal by the Owner (or any Lessee) of any Part as provided above, such Part
shall, without further act, be free and clear of all rights of the Indenture
Trustee, such Part shall not be subject to the Lien of this Trust Indenture and
such Part shall no longer be deemed part of the Airframe or Engine from which it
was removed.
SECTION 7.04. INSURANCE.
(a) PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE. (I) Except
as provided in clause (II) of this Section 7.04(a), the Owner will carry or
cause to be carried at its or any Lessee's expense (i) aircraft public liability
(including, without limitation, passenger legal liability) (and including
aircraft war risk and hijacking insurance, if and to the extent the same is
maintained by the Owner (or, if a Lease is then in effect, if and to the extent
maintained by Lessee) with respect to other aircraft owned or leased, and
operated by the Owner (or such Lessee) on the same routes) insurance and
property damage insurance (exclusive of manufacturer's product liability
insurance) with respect to the Aircraft, in an amount not less than the greater
of (x) the amount of public liability and property damage insurance from time to
time applicable to aircraft owned or operated by the Owner (or, if a Lease is
then in effect, by Lessee) of the same type as the Aircraft and (y)
$[250,000,000 for A319's, $300,000,000 for 757's and $400,000,000 for 747's] per
occurrence and (ii) cargo liability insurance, in the case of both clause (i)
and clause (ii), (A) of the type and covering the same risks as from time to
time applicable to aircraft operated by the Owner (or, if a Lease is then in
effect, by Lessee) of the same type as the Aircraft and (B) which is maintained
in effect with insurers of recognized responsibility. Any policies of insurance
carried in accordance with this paragraph (a) and any policies taken out in
substitution or replacement for any of such policies (A) shall be amended to
name the Indenture Trustee (but without imposing on any such parties liability
to pay the premiums for such insurance) (and, if any Lease shall be in effect,
the Owner in its capacity as lessor under the Lease) as additional insureds as
their respective interests may appear, (B) shall provide that in respect of the
interest of the Indenture Trustee (and, if any Lease shall be in
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effect, the Owner in its capacity as lessor under the Lease) in such policies
the insurance shall not be invalidated by any action or inaction of the Owner
(or, if any Lease is then in effect, any Lessee) or any other Person and shall
insure the Indenture Trustee (and, if any Lease shall be in effect, the Owner in
its capacity as lessor under the Lease) regardless of any breach or violation of
any warranty, declaration or condition contained in such policies by the Owner
(or, if any Lease is then in effect, any Lessee), (C) may provide for
self-insurance to the extent permitted by Section 7.04(d) and (D) shall provide
that if the insurers cancel such insurance for any reason whatever or if any
material change is made in such insurance which adversely affects the interest
of the Indenture Trustee (or, if any Lease shall be in effect, the Owner in its
capacity as lessor under the Lease), or such insurance shall lapse for
non-payment of premium, such cancellation, lapse or change shall not be
effective as to the Indenture Trustee (or, if any Lease shall be in effect, the
Owner in its capacity as lessor under the Lease) for thirty (30) days (seven (7)
days in the case of war risk and allied perils coverage) after issuance to the
Indenture Trustee (or, if any Lease shall be in effect, the Owner in its
capacity as lessor under the Lease), respectively, of written notice by such
insurers of such cancellation, lapse or change; provided, however, that if any
notice period specified above is not reasonably obtainable, such policies shall
provide for as long a period of prior notice as shall then be reasonably
obtainable. Each liability policy (1) shall be primary without right of
contribution from any other insurance which is carried by the Indenture Trustee
(or, if any Lease shall be in effect, the Owner in its capacity as lessor under
the Lease), (2) shall expressly provide that all of the provisions thereof,
except the limits of liability, shall operate in the same manner as if there
were a separate policy covering each insured, and (3) shall waive any right of
the insurers to any set-off or counterclaim or any other deduction, whether by
attachment or otherwise, in respect of any liability of the Indenture Trustee
(or, if any Lease shall be in effect, the Owner in its capacity as lessor under
the Lease) to the extent of any moneys due to the Indenture Trustee (or, if any
Lease shall be in effect, the Owner in its capacity as lessor under the Lease).
(II) During any period that the Aircraft is on the ground and
not in operation, the Owner may carry or cause to be carried, in lieu of the
insurance required by clause (I) above, insurance otherwise conforming with the
provisions of said clause (I) except that (A) the amounts of coverage shall not
be required to exceed the amounts of public liability and property damage
insurance from time to time applicable to aircraft owned or operated by the
Owner (or, if a Lease is then in effect, by Lessee) of the same type as the
Aircraft which are on the ground and not in operation; and (B) the scope of the
risks covered and the type of insurance shall be the same as from time to time
shall be applicable to aircraft owned or operated by the Owner (or, if a Lease
is then in effect, by Lessee) of the same type which are on the ground and not
in operation.
(b) INSURANCE AGAINST LOSS OR DAMAGE TO THE AIRCRAFT. (I)
Except as provided in clause (II) of this Section 7.04(b), the Owner shall
maintain or cause to be maintained in effect, at its or any Lessee's expense,
with insurers of recognized responsibility, all-risk ground and flight aircraft
hull insurance covering the Aircraft and all-risk ground and flight coverage of
Engines and Parts while temporarily removed from the Aircraft and not replaced
by similar components (including, without limitation, war risk and governmental
confiscation and expropriation (other than by the government of registry of the
Aircraft) and hijacking insurance, if and to the extent the same is maintained
by the Owner (or, if a Lease is then in effect, by Lessee) with respect to other
aircraft owned or operated by the Owner (or such Lessee) on the same routes,
except that the Owner (or such Lessee) shall maintain war risk and governmental
confiscation and expropriation (other than by the government of registry of the
Aircraft) and hijacking insurance if the Aircraft is operated on routes where
the custom is for major international air carriers flying comparable routes to
carry such insurance) which is of the type as
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from time to time applicable to aircraft owned or operated by the Owner (or, if
a Lease is then in effect, by Lessee) of the same type as the Aircraft; provided
that such insurance shall at all times while the Aircraft is subject to this
Trust Indenture be for an amount (subject to self-insurance to the extent
permitted by Section 7.04(d)) not less than the 100% of the then aggregate
unpaid Principal Amount of the Secured Certificates (the "Loan Loss Value"). Any
policies carried in accordance with this paragraph (b) covering the Aircraft and
any policies taken out in substitution or replacement for any such policies (i)
shall name the Indenture Trustee (and, if any Lease shall be in effect, the
Owner in its capacity as lessor under the Lease) as an additional insured, as
its interest may appear (but without imposing on such party liability to pay
premiums with respect to such insurance), (ii) may provide for self-insurance to
the extent permitted in Section 7.04(d), (iii) shall provide that (A) in the
event of a loss involving proceeds in excess of [$5,000,000 for A319's and
757's] [$7,000,000 for 747's] (or, if the Aircraft is then under a Lease, in
excess of [$3,000,000 for A319's and 757's] [$4,000,000 for 747's]), the
proceeds in respect of such loss up to an amount equal to the aggregate unpaid
Principal Amount of the Secured Certificates plus all accrued and unpaid
interest thereon (the "Balance Due") shall be payable to the Indenture Trustee
(except in the case of a loss with respect to an Engine installed on an airframe
other than the Airframe, in which case the Owner (or any Lessee) shall arrange
for any payment of insurance proceeds in respect of such loss to be held for the
account of the Indenture Trustee whether such payment is made to the Owner (or
any Lessee) or any third party), it being understood and agreed that in the case
of any payment to the Indenture Trustee otherwise than in respect of an Event of
Loss, the Indenture Trustee shall, upon receipt of evidence satisfactory to it
that the damage giving rise to such payment shall have been repaired or that
such payment shall then be required to pay for repairs then being made, pay the
amount of such payment to the Owner or its order, and (B) the entire amount of
any loss involving proceeds of [$5,000,000 for A319's and 757's] [$7,000,000 for
747's] (or, if the Aircraft is then under a Lease, of [$3,000,000 for A319's and
757's] [$4,000,000 for 747's]) or less or the amount of any proceeds of any loss
in excess of the Balance Due shall be paid to the Owner or its order unless an
Event of Default shall have occurred and be continuing and the insurers have
been notified thereof by the Indenture Trustee, (iv) shall provide that if the
insurers cancel such insurance for any reason whatever, or such insurance lapses
for non-payment of premium or if any material change is made in the insurance
which adversely affects the interest of the Indenture Trustee, such
cancellation, lapse or change shall not be effective as to the Indenture Trustee
(or, if any Lease shall be in effect, the Owner in its capacity as lessor under
the Lease) for thirty (30) days (seven (7) days in the case of hull war risk and
allied perils coverage) after issuance to the Indenture Trustee (or, if any
Lease shall be in effect, the Owner in its capacity as lessor under the Lease),
respectively, of written notice by such insurers of such cancellation, lapse or
change, provided, however, that if any notice period specified above is not
reasonably obtainable, such policies shall provide for as long a period of prior
notice as shall then be reasonably obtainable, (v) shall provide that in respect
of the interest of the Indenture Trustee (and, if any Lease shall be in effect,
the Owner in its capacity as lessor under the Lease) in such policies the
insurance shall not be invalidated by any action or inaction of the Owner (or,
if a Lease is then in effect, any Lessee) or any other Person and shall insure
the Indenture Trustee (and, if any Lease shall be in effect, the Owner in its
capacity as lessor under the Lease) regardless of any breach or violation of any
warranty, declaration or condition contained in such policies by the Owner (or,
if a Lease is then in effect, any Lessee), (vi) shall be primary without any
right of contribution from any other insurance which is carried by the Indenture
Trustee (or, if any Lease shall be in effect, the
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Owner in its capacity as lessor under the Lease), (vii) shall waive any right of
subrogation of the insurers against the Indenture Trustee (and, if any Lease
shall be in effect, the Owner in its capacity as lessor under the Lease), and
(viii) shall waive any right of the insurers to set-off or counterclaim or any
other deduction, whether by attachment or otherwise, in respect of any liability
of the Indenture Trustee or the Owner (or any Lessee) to the extent of any
moneys due to the Indenture Trustee. In the case of a loss with respect to an
engine (other than an Engine) installed on the Airframe, the Indenture Trustee
shall hold any payment to it of any insurance proceeds in respect of such loss
for the account of any third party that is entitled to receive such proceeds.
As between the Indenture Trustee and the Owner, it is agreed
that all insurance payments received as the result of the occurrence of an Event
of Loss will be applied as follows:
(x) if such payments are received as a result of an
Event of Loss with respect to the Airframe (or the Airframe
and the Engines installed thereon) that has been or is being
replaced by the Owner as contemplated by Section 7.06(a)
hereof, such payments shall be paid over to, or retained by,
the Indenture Trustee as security and upon completion of such
replacement shall be paid over to the Owner;
(y) if such payments are received with respect to the
Airframe (or the Airframe and the Engines installed thereon)
that has not been or is not being replaced by the Owner as
contemplated by Section 7.06(a) hereof, so much of such
payments remaining, after reimbursement of the Indenture
Trustee for reasonable costs and expenses, as shall not exceed
the Balance Due shall be applied in reduction of the Owner's
obligation to pay such Balance Due, if not already paid by the
Owner, or, if already paid by the Owner, shall be applied to
reimburse the Owner for its payment of such Balance Due, and
the balance, if any, of such payments remaining thereafter
will be paid over to, or retained by, the Owner (or if
directed by the Owner, any Lessee); and
(z) if such payments are received with respect to an
Engine or Part under the circumstances contemplated by Section
7.06(b) hereof, so much of such payments remaining, after
reimbursement of the Indenture Trustee for reasonable costs
and expenses, shall be paid over to, or retained by, the Owner
(or if directed by the Owner, any Lessee), PROVIDED that the
Owner shall have fully performed, or concurrently therewith
will fully perform, the terms of Section 7.06(b) hereof with
respect to the Event of Loss for which such payments are made.
As between the Indenture Trustee and the Owner, the insurance
payments for any property damage loss to the Airframe or any Engine not
constituting an Event of Loss with respect thereto will be applied in payment
for repairs or for replacement property in accordance with the terms of Sections
7.02 and 7.03, if not already paid for by the Owner (or any Lessee), and any
balance (or if already paid for by the Owner (or any Lessee), all such insurance
proceeds) remaining after compliance with such Sections with respect to such
loss shall be paid to the Owner (or any Lessee if directed by the Owner).
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(II) During any period that the Aircraft is on the ground and
not in operation, the Owner may carry or cause to be carried, in lieu of the
insurance required by clause (I) above, insurance otherwise conforming with the
provisions of said clause (I) except that the scope of the risks and the type of
insurance shall be the same as from time to time applicable to aircraft owned or
operated by the Owner (or, if a Lease is then in effect, by Lessee) of the same
type similarly on the ground and not in operation, PROVIDED that the Owner shall
maintain insurance against risk of loss or damage to the Aircraft in an amount
equal to the Loan Loss Value of the Aircraft during such period that the
Aircraft is on the ground and not in operation.
(c) REPORTS, ETC. The Owner will furnish, or cause to be
furnished, to the Indenture Trustee, on or before the Closing Date and on or
before July 1 in each year thereafter commencing July, _____, a report, signed
by Aon Risk Services, Inc., Aon Risk Services of Minnesota, Inc. or any other
independent firm of insurance brokers reasonably acceptable to the Indenture
Trustee (the "INSURANCE BROKERS"), describing in reasonable detail the insurance
and reinsurance then carried and maintained with respect to the Aircraft and
stating the opinion of such firm that the insurance then carried and maintained
with respect to the Aircraft complies with the terms hereof; PROVIDED, HOWEVER,
that all information contained in the foregoing report shall not be made
available by the Indenture Trustee or the Loan Participants to anyone except (A)
to permitted transferees of the Loan Participants' or the Indenture Trustee who
agree to hold such information confidential, (B) to the Loan Participants' or
the Indenture Trustee's counsel or independent certified public accountants or
independent insurance advisors who agree to hold such information confidential
or (C) as may be required by any statute, court or administrative order or
decree or governmental ruling or regulation. The Owner will cause such Insurance
Brokers to agree to advise the Indenture Trustee in writing of any default in
the payment of any premium and of any other act or omission on the part of the
Owner of which it has knowledge and which might invalidate or render
unenforceable, in whole or in part, any insurance on the Aircraft. To the extent
such agreement is reasonably obtainable, the Owner will also cause such
Insurance Brokers to agree to advise the Indenture Trustee in writing at least
thirty (30) days (seven (7) days in the case of war risk and allied perils
coverage), prior to the expiration or termination date of any insurance carried
and maintained on the Aircraft pursuant to this Section 7.04. In addition, the
Owner will also cause such Insurance Brokers to deliver to the Indenture
Trustee, on or prior to the date of expiration of any insurance policy
referenced in a previously delivered certificate of insurance, a new certificate
of insurance, substantially in the same form as delivered by the Owner to such
party on the Closing Date. In the event that the Owner or any Lessee shall fail
to maintain or cause to be maintained insurance as herein provided, the
Indenture Trustee may at its sole option provide such insurance and, in such
event, the Owner shall, upon demand, reimburse the Indenture Trustee for the
cost thereof to Indenture Trustee, without waiver of any other rights Indenture
Trustee may have.
(d) SELF-INSURANCE. The Owner may self-insure by way of
deductible, premium adjustment or franchise provisions or otherwise (including,
with respect to insurance maintained pursuant to Section 7.04(b), insuring for a
maximum amount which is less than the Loan Loss Value of the Aircraft) in the
insurance covering the risks required to be insured against pursuant to this
Section 7.04 under a program applicable to all aircraft in the Owner's fleet,
but in no case shall the aggregate amount of self-insurance in regard to Section
7.04(a) and Section 7.04(b) exceed during any policy year, with respect to all
of the aircraft in the Owner's fleet (including, without limitation, the
Aircraft), the lesser of (a) 50% of the largest replacement
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value of any single aircraft in the Owner's fleet or (b) 1-1/2% of the average
aggregate insurable value (during the preceding policy year) of all aircraft
(including, without limitation, the Aircraft) on which the Owner carries
insurance. In addition, the Owner (and any Lessee) may self-insure to the extent
of any applicable mandatory minimum per aircraft (or, if applicable, per annum
or other period) hull or liability insurance deductible imposed by the aircraft
hull or liability insurers.
(e) ADDITIONAL INSURANCE BY THE OWNER. The Owner (and any
Lessee) may at its own expense carry insurance with respect to its interest in
the Aircraft in amounts in excess of that required to be maintained by this
Section 7.04.
(f) INDEMNIFICATION BY GOVERNMENT IN LIEU OF INSURANCE.
Notwithstanding any provisions of this Section 7.04 requiring insurance, the
Indenture Trustee agrees to accept, in lieu of insurance against any risk with
respect to the Aircraft, indemnification from, or insurance provided by, the
United States Government or any agency or instrumentality thereof or, upon the
written consent of the Indenture Trustee, other government of registry of the
Aircraft or any agency or instrumentality thereof, against such risk in an
amount which, when added to the amount of insurance against such risk maintained
by the Owner (or any Lessee) with respect to the Aircraft (including permitted
self-insurance) shall be at least equal to the amount of insurance against such
risk otherwise required by this Section 7.04.
(g) APPLICATION OF PAYMENTS DURING EXISTENCE OF AN EVENT OF
DEFAULT. Any amount referred to in paragraph (b) of this Section 7.04 which is
payable to or retainable by the Owner (or any Lessee) shall not be paid to or
retained by the Owner (or any Lessee) if at the time of such payment or
retention an Event of Default shall have occurred and be continuing, but shall
be held by or paid over to the Indenture Trustee as security for the obligations
of the Owner (or any Lessee) under this Trust Indenture and applied against the
Owner's obligations hereunder as and when due. Upon the earlier of (a) such time
as there shall not be continuing any such Event of Default or (b) the
termination of this Trust Indenture in accordance with Section 11.01 hereof,
such amount shall be paid to the Owner (or such Lessee) to the extent not
previously applied in accordance with the preceding sentence.
SECTION 7.05. INSPECTION.
At all reasonable times and upon at least 15 days' prior
written notice to the Owner, the Indenture Trustee or its authorized
representative may (not more than once every calendar year (unless an Event of
Default has occurred and is continuing when such inspection right shall not be
so limited)) inspect the Aircraft and inspect and make copies (at the Indenture
Trustee's expense) of the books and records of the Owner relating to the
maintenance of the Aircraft; any such inspection of the Aircraft shall be
limited to a visual, walk-around inspection and shall not include opening any
panels, bays or the like without the express consent of the Owner; PROVIDED that
no exercise of such inspection right shall interfere with the operation or
maintenance of the Aircraft by, or the business of, the Owner (or any Lessee).
The Indenture Trustee shall not have any duty to make any such inspection nor
shall it incur any liability or obligation by reason of not making such
inspection.
-47-
SECTION 7.06. LOSS, DESTRUCTION, REQUISITION, ETC.
(a) EVENT OF LOSS WITH RESPECT TO THE AIRCRAFT. Upon the
occurrence of an Event of Loss with respect to the Airframe or the Airframe and
the Engines and/or engines then installed thereon, the Owner shall forthwith
(and in any event, within fifteen (15) days after such occurrence) give the
Indenture Trustee written notice of such Event of Loss, and within forty-five
(45) days after such Event of Loss the Owner shall give the Indenture Trustee
written notice of its election to perform one of the following options (it being
agreed that if the Owner shall not have given such notice of election within
such period, the Owner shall be deemed to have elected the option set forth in
clause (i) below). The Owner may elect either to:
(i) redeem the Secured Certificates in accordance
with Section 2.10 hereof not later than the earlier of (x) the
Business Day next succeeding the 120th day following the
occurrence of such Event of Loss or (y) an earlier Business
Day irrevocably specified fifteen (15) days in advance by
notice from the Owner to the Indenture Trustee; or
(ii) substitute an aircraft or an airframe or an
airframe and one or more engines, as the case may be;
provided that, if the Owner does not perform its obligation to effect such
substitution in accordance with this Section 7.06(a) during the period of time
provided herein, then the Owner shall pay or cause to be paid to the Indenture
Trustee on the Business Day next succeeding the 120th day following the
occurrence of such Event of Loss the amount specified in clause (i) above.
In the event the Owner shall elect to substitute an aircraft
(or an airframe or an airframe and one or more engines, as the case may be), the
Owner shall at its sole expense, not later than the Business Day next succeeding
the 120th day following the occurrence of such Event of Loss, (x) cause to be
subjected to the Lien of this Trust Indenture, in replacement of the Airframe
with respect to which the Event of Loss occurred, a Replacement Airframe and, if
any Engine shall have been installed on the Airframe when it suffered an Event
of Loss, a Replacement Engine therefor, such Replacement Airframe and
Replacement Engines, if any, to be free and clear of all Liens (other than
Permitted Liens) and having a value, utility and remaining useful life (without
regard to hours or cycles) at least equal to the Airframe or Engine, as the case
may be, subject to such Event of Loss assuming no Event of Loss had occurred and
that the Aircraft had been maintained in accordance with this Trust Indenture;
PROVIDED that the Replacement Airframe and the Replacement Engines, if any,
shall be of the same or improved model as the Airframe or Engine, as the case
may be, that are replaced and (y) prior to or at the time of any such
substitution, the Owner (or any Lessee), at its own expense, will (1) furnish
the Indenture Trustee a copy of the original ▇▇▇▇ of sale respecting such
Replacement Airframe and the Replacement Engines, if any, and appropriate
instruments assigning to the Indenture Trustee the benefits, if any, of all
manufacturer's and vendor's warranties generally available and permitted to be
assigned by the Owner with respect to such Replacement Airframe and Replacement
Engines, if any, (2) cause a Trust Indenture Supplement to be duly executed by
the Owner and filed for recording pursuant to the Federal Aviation Act, or the
applicable laws, rules and regulations of any other jurisdiction in which the
Replacement Airframe and Replacement
-48-
Engines, if any, may then be registered as permitted by Section 8(f) of the
Participation Agreement, (3) cause a financing statement or statements with
respect to such Replacement Airframe and Replacement Engines, if any, to be
filed in such place or places as are deemed necessary or desirable by counsel
for the Indenture Trustee to perfect the Indenture Trustee's interest therein,
(4) furnish the Indenture Trustee with such evidence of compliance with the
insurance provisions of Section 7.04 with respect to such Replacement Airframe
and Replacement Engines, if any, as the Indenture Trustee's counsel may
reasonably request, (5) furnish the Indenture Trustee with (A) an opinion of
in-house counsel to the Owner, or other counsel satisfactory to the Indenture
Trustee, stating that the Replacement Airframe and Replacement Engines, if any,
has or have been validly subjected to the Lien of this Trust Indenture, the
instruments subjecting such Replacement Airframe and Replacement Engines, if
any, to the Lien of this Trust Indenture, have been duly filed for recordation
pursuant to the Federal Aviation Act or any other law then applicable to the
registration of the Replacement Airframe and Replacement Engines, if any, and no
further action, filing or recording of any document is necessary or advisable in
order to establish and perfect the Lien of this Trust Indenture on such
Replacement Airframe and Replacement Engines, if any (B) a certificate signed by
a duly authorized officer of the Owner stating the following: (i) a description
of the replaced Airframe and Engines, if any, which shall be identified by
manufacturer, model, FAA registration number (or other applicable registration
information) and manufacturer's serial number; (ii) a description of the
Replacement Airframe and Replacement Engines, if any, to be received (including
the manufacturer, model, FAA registration number (or other applicable
registration information) and manufacturer's serial number) as consideration for
the replaced Airframe and Engines, if any; (iii) that the Replacement Airframe
and Replacement Engines, if any, is or are of the same or an improved model as
the Airframe and Engines, if any, requested to be released from this Trust
Indenture; (iv) the value, utility and remaining useful life (without regard to
hours or cycles) of the Replacement Airframe and Replacement Engines, if any, as
of the date of such certificate (which in the judgment of the Owner shall be not
less than the value, utility and remaining useful life (without regard to hours
or cycles) of the Airframe and Engines, if any, requested to be released
(assuming no Event of Loss and that such Airframe and Engines, if any, was or
were in the condition and repair required to be maintained under this Trust
Indenture)); and (v) that no Event of Default or Default has occurred which has
not been remedied or waived, and that the Owner will not be in default, by the
making and granting of the request for release and the addition of a Replacement
Airframe and Replacement Engines, if any, in the performance of any of the terms
and covenants of the Owner, and (C) a certificate from either an aircraft
engineer (who may be an employee of the Owner) or a firm of independent aircraft
appraisers selected by the Owner confirming the accuracy of the information set
forth in sub-clause (iv) of the immediately preceding clause (5)(B) of this
Section 7.06(a), and (6) furnish the Indenture Trustee with an opinion of
counsel (which shall be Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ and, if not, other counsel
chosen by the Owner and reasonably acceptable to the Indenture Trustee)
reasonably satisfactory to the Indenture Trustee to the effect that the
Indenture Trustee will be entitled to the benefits of Section 1110 of the U.S.
Bankruptcy Code with respect to the Replacement Airframe, PROVIDED that such
opinion need not be delivered to the extent that immediately prior to such
substitution the benefits of Section 1110 of the U.S. Bankruptcy Code were not,
solely by reason of a change in law or governmental interpretation thereof,
available to the Indenture Trustee. For all purposes hereof, the property so
substituted shall after such
-49-
transfer be deemed part of the property subject to the Lien of this Trust
Indenture and shall be deemed an "Aircraft", "Airframe" and "Engine", as the
case may be, as defined herein.
Upon the Owner having provided a Replacement Airframe and
Replacement Engines, if any, as provided for in this Section 7.06(a), (x) the
Lien of this Trust Indenture shall continue with respect to such Replacement
Airframe and Replacement Engines, if any, as though no Event of Loss had
occurred; the Indenture Trustee shall, at the cost and expense of the Owner,
release from the Lien of this Trust Indenture the replaced Airframe and Engines,
if any, with respect to which such Event of Loss occurred, by executing and
delivering to the Owner such documents and instruments, prepared at the Owner's
expense, as the Owner may reasonably request to evidence such release; and (y)
the Indenture Trustee shall assign to the Owner all claims it may have against
any other Person arising from the Event of Loss and the Owner shall receive all
insurance proceeds and proceeds from any award in respect of condemnation,
confiscation, seizure or requisition, including any investment interest thereon,
to the extent not previously applied to the purchase price of the Replacement
Airframe and Replacement Engines, if any, as provided in Sections 7.04(b) and
7.06(c)(i) hereof.
(b) SUBSTITUTION WITH RESPECT TO AN ENGINE. The Owner shall
(i) so long as no Default or Event of Default has occurred which has not been
remedied or waived, have the right to substitute a Replacement Engine for any
Engine at its option at any time, on at least thirty (30) days' prior written
notice to the Indenture Trustee and (ii) substitute a Replacement Engine for an
Engine if an Event of Loss shall have occurred with respect to such Engine
(under circumstances in which there has not occurred an Event of Loss with
respect to the Airframe) within sixty (60) days after the occurrence of such
Event of Loss (such Replacement Engine to be of the same or another manufacturer
of the same, an equivalent or an improved model and suitable for installation
and use on the Airframe without impairing the value, utility or remaining useful
life of the Aircraft; PROVIDED that [both] [all] Engines shall be of the same
make and model) free and clear of all Liens (other than Permitted Liens) and
having a value, utility and remaining useful life (without regard to hours or
cycles) at least equal to the replaced Engine assuming no Event of Loss had
occurred and that such replaced Engine had been maintained in accordance with
the provisions of this Trust Indenture. Prior to or at the time of any such
substitution, the Owner, at its own expense, will (1) furnish the Indenture
Trustee with (A) a copy of the original ▇▇▇▇ of sale with respect to such
Replacement Engine and (B) appropriate instruments assigning to the Indenture
Trustee the benefits, if any, of all manufacturer's and vendor's warranties
generally available and permitted to be assigned by the Owner with respect to
such Replacement Engine, (2) cause a Trust Indenture Supplement to be duly
executed by the Owner and to be filed for recording pursuant to the Federal
Aviation Act, or the applicable laws, rules and regulations of any other
jurisdiction in which the Aircraft may then be registered as permitted by
Section 8(f) of the Participation Agreement, (3) cause a financing statement or
statements covering the Lien created by this Trust Indenture with respect to the
Replacement Engine to be filed in such place or places as are deemed necessary
or desirable by counsel for the Indenture Trustee to perfect the Indenture
Trustee's interest therein, (4) furnish the Indenture Trustee with such evidence
of compliance with the insurance provisions of Section 7.04 hereof with respect
to such Replacement Engine as the Indenture Trustee may reasonably request, and
(5) furnish the Indenture Trustee with (A) an opinion of in-house counsel to the
Owner, or other counsel satisfactory to the Indenture Trustee, stating that the
Replacement Engine has been validly subjected to the Lien of this Trust
Indenture, the instruments subjecting such
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Replacement Engine to the Lien of this Trust Indenture have been duly filed for
recordation pursuant to the Federal Aviation Act or any other law then
applicable to the registration of the Aircraft, and no further action, filing or
recording of any document is necessary or advisable in order to establish and
perfect the Lien of this Trust Indenture on such Replacement Engine and (B) a
certificate signed by a duly authorized officer of the Owner stating the
following: (i) a description of the replaced Engine which shall be identified by
manufacturer's serial number; (ii) a description of the Replacement Engine
(including the manufacturer's name and serial number) as consideration for the
replaced Engine; (iii) that such Replacement Engine is substantially the same as
the replaced Engine (or an improved model); and (iv) the value, utility and
remaining useful life (without regard to hours or cycles) of the Replacement
Engine as of the date of such certificate (which in the judgment of the Owner
shall not be less than the value, utility and remaining useful life (without
regard to hours or cycles) of the Engine requested to be released (assuming no
Event of Loss and that such Engine was in the condition and repair required to
be maintained under this Trust Indenture).
Upon the Owner having provided a Replacement Engine, as
provided for in this Section 7.06(b), (x) the Lien of this Trust Indenture shall
continue with respect to such Replacement Engine; the Indenture Trustee shall,
at the cost and expense of the Owner, release from the Lien of this Trust
Indenture the replaced Engine by executing and delivering to the Owner such
documents and instruments, prepared at the Owner's expense, as the Owner may
reasonably request to evidence such release; and (y) the Indenture Trustee shall
assign to the Owner all claims it may have against any other Person arising from
an Event of Loss of such replaced Engine giving rise to such substitution and
the Owner shall receive all insurance proceeds and proceeds from any award in
respect of condemnation, confiscation, seizure or requisition, including any
investment interest thereon, to the extent not previously applied to the
purchase price of the Replacement Engine, as provided in Sections 7.04(b) and
7.06(c)(ii) hereof. For all purposes hereof, each such Replacement Engine shall,
after such conveyance, be deemed part of the property subject to the Lien of
this Trust Indenture, and shall be deemed an "ENGINE".
(c) APPLICATION OF PAYMENTS FROM GOVERNMENTAL AUTHORITIES FOR
REQUISITION OF TITLE, ETC. Any payments (other than insurance proceeds the
application of which is provided for in Section 7.04) received at any time by
the Indenture Trustee or by the Owner from any governmental authority or other
Person with respect to an Event of Loss will be applied as follows:
(i) if payments are received with respect to the
Airframe (or the Airframe and any Engine then installed
thereon), that has been or is being replaced by the Owner as
contemplated by Section 7.06(a) hereof, such payments shall be
paid over to, or retained by the Indenture Trustee as security
and upon completion of such replacement and compliance by the
Owner with the provisions of Section 7.06(a) with respect to
the Event of Loss for which such payments are made, be paid
over to the Owner;
(ii) if such payments are received with respect to
the Airframe (or the Airframe and any Engines installed
thereon) or an Engine or Part (not involving an Event of Loss
as to the Airframe) that has been or is being replaced by the
-51-
Owner pursuant to Section 7.06(b) hereof, such payments shall
be paid over to, or retained by, the Owner; and
(iii) if such payments are received with respect to
the Airframe (or the Airframe and any Engines installed
thereon) that has not been replaced by the Owner as
contemplated by Section 7.06(a) hereof, so much of such
payments remaining, after reimbursement of the Indenture
Trustee for reasonable costs and expenses as shall not exceed
the Balance Due, shall be applied in reduction of the Owner's
obligation to pay such Balance Due, if not already paid by the
Owner, or, if already paid by the Owner, shall be applied to
reimburse the Owner for its payment of such Balance Due, and
the balance, if any, of such payments remaining thereafter
will be paid over to, or retained by, the Owner (or if
directed by the Owner, any Lessee).
(d) REQUISITION FOR USE OF THE AIRCRAFT. In the event of the
requisition for use by any government or any instrumentality or agency thereof,
so long as it does not constitute an Event of Loss, of the Airframe and the
Engines or engines installed on the Airframe, so long as the Airframe or an
Engine is subject to the Lien of this Trust Indenture, the Owner shall promptly
notify the Indenture Trustee of such requisition, and all of the Owner's
obligations under this Trust Indenture with respect to the Aircraft shall
continue to the same extent as if such requisition had not occurred. All
payments received by the Indenture Trustee or the Owner from such government or
instrumentality or agency thereof for the use of such Airframe and Engines or
engines shall be paid over to, or retained by, the Owner (or, if directed by the
Owner, any Lessee).
(e) REQUISITION FOR USE OF AN ENGINE. In the event of an Event
of Loss of an Engine resulting from the requisition for use of such Engine (but
not the Airframe) by any government or agency or instrumentality the Owner will
replace such Engine hereunder by complying (or causing any Lessee to comply)
with the terms of Section 7.06(b) hereof and any payments received by the
Indenture Trustee or the Owner from such government with respect to such
requisition shall be paid over to, or retained by, the Owner.
(f) APPLICATION OF PAYMENTS DURING EXISTENCE OF EVENT OF
DEFAULT. Any amount referred to in this Section 7.06 which is payable to or
retainable by the Owner (or any Lessee) shall not be paid to or retained by the
Owner (or such Lessee) if at the time of such payment or retention an Event of
Default shall have occurred and be continuing, but shall be held by or paid over
to the Indenture Trustee as security for the obligations of the Owner (or such
Lessee) under this Trust Indenture and applied against the Owner's obligations
hereunder as and when due. Upon the earlier of (a) such time as there shall not
be continuing any such Event of Default or (b) the termination of this Trust
Indenture in accordance with Section 11.01 hereof, such amount shall be paid to
the Owner (or such Lessee) to the extent not previously applied in accordance
with the preceding sentence.
-52-
SECTION 7.07. INTERESTS IN THE PURCHASE AGREEMENT.
[A319'S -- The grant by the Owner to the Indenture Trustee of
the Owner's interests in and to the Contract Rights as set forth in clause (b)
of the Granting Clause hereof is subject to the following:
(a) With respect to the assignment contained in clause (b) of
the Granting Clause, if and so long as (A) the Aircraft shall be subject to this
Trust Indenture and (B) no Event of Default under this Trust Indenture has
occurred and is continuing, (1) the Indenture Trustee authorizes the Owner, on
behalf of but to the exclusion of the Indenture Trustee, to exercise in the
Owner's own name (i) all rights and powers related to the Assigned Warranties
and the Guaranty as it relates to the Assigned Warranties and (ii) subject to
paragraph 7.07(c) hereof, to retain any recovery or benefit resulting from the
enforcement of any Assigned Warranties in respect of the Aircraft or resulting
from the enforcement of the Guaranty in respect of the same, and (2) the
Indenture Trustee shall, at the Owner's expense, cooperate with the Owner and
take such actions as the Owner reasonably deems necessary to enable the Owner to
enforce such rights and claims.
(b) In the event that an Event of Default under this Trust
Indenture has occurred and is continuing and thereafter until such Event of
Default has been cured or waived: (i) at the Indenture Trustee's option, the
authorization given to the Owner under paragraph 7.07(a) hereof to enforce such
rights and claims shall henceforth cease to be effective and the Indenture
Trustee and its successors and permitted assigns shall, to the exclusion of the
Owner, be entitled to assert and enforce such rights and claims as substitute
party plaintiff or otherwise, and the Owner shall, at the request of the
Indenture Trustee or its successors or permitted assigns and at the Owner's
expense, cooperate with and take such action as reasonably necessary to enable
the Indenture Trustee and its successors and permitted assigns to enforce such
rights and claims, and the Indenture Trustee, if it shall elect to enforce such
rights or claims, shall use its best efforts to assert and enforce such rights
and claims, and (ii) the Owner will be deemed to have irrevocably constituted
the Indenture Trustee and its successors and permitted assigns the Owner's true
and lawful attorney (it being acknowledged that such appointment is coupled with
an interest, namely the Indenture Trustee's rights acquired and to be acquired
hereunder) with full power (in the name of the Owner or otherwise) to ask,
require, demand, receive, settle, compromise, compound and give acquittance for
any and all monies and claims for monies due and to become due under, or arising
out of, the Purchase Agreement in respect of the Aircraft, to the extent that
the same have been assigned pursuant to clause (b) of the Granting Clause
hereof, and for such period as the Indenture Trustee may exercise rights with
respect thereto under this clause (ii), to endorse any checks or other
instruments or orders in connection therewith and to file any claims or take any
action or institute (or, if previously commenced, assume control of) any
proceedings and to obtain any recovery in connection therewith which the
Indenture Trustee may deem to be necessary or advisable in the premises.
(c) Notwithstanding clause (b) of the Granting Clause hereof,
this Section 7.07 and anything in this Trust Indenture to the contrary (but
subject to all the terms of the Purchase Agreement), all amounts that the
Supplier or the Manufacturer is obligated to pay to the Owner under Clauses 12,
13 and, to the extent relating to acts to be performed following the date of
enforcement of this Indenture, 17 of the Purchase Agreement with respect to the
Aircraft or
-53-
the Guaranty as it relates to such Clauses (a "SUPPLIER PAYMENT"), will be
payable and applicable as follows: so long as the Aircraft is subject to this
Trust Indenture, all Supplier Payments shall be paid to the Owner unless and
until an Event of Default under this Trust Indenture has occurred and is
continuing, whereupon the Indenture Trustee shall direct the Supplier to make
all Supplier Payments directly to the Indenture Trustee until all Events of
Default under this Trust Indenture have been cured or waived. Any amounts
received by the Indenture Trustee pursuant to the immediately preceding sentence
shall, to the extent not theretofore applied in satisfaction of the Secured
Obligations, be returned to the Owner promptly after all Events of Default under
this Trust Indenture have been cured or waived.
(d) Anything herein contained to the contrary notwithstanding:
(i) the Owner shall at all times remain liable to the Manufacturer under the
Purchase Agreement in respect of the Aircraft to perform all of the duties and
obligations of "Northwest" thereunder to the same extent as if this Trust
Indenture had not been executed; (ii) the exercise by the Indenture Trustee of
any of the rights assigned hereunder shall not release the Owner from any of its
duties or obligations to the Supplier under the Purchase Agreement in respect of
the Aircraft except to the extent that such exercise by the Indenture Trustee
shall constitute performance of such duties and obligations; and (iii) except as
provided in paragraph (e) of this Section 7.07, the Indenture Trustee shall not
have any obligation or liability under the Purchase Agreement by reason of, or
arising out of, this Trust Indenture or be obligated to perform any of the
obligations or duties of the Owner under the Purchase Agreement or to make any
payment or make any inquiry as to the sufficiency of any payment received by it
or to present or to file any claim or to take any other action to collect or
enforce any claim for any payment assigned hereunder.
(e) Without in any way releasing the Owner from any of its
duties or obligations under the Purchase Agreement, the Indenture Trustee
confirms for the benefit of the Supplier and the Manufacturer that, insofar as
the provisions of the Purchase Agreement relate to the Aircraft, in exercising
any rights under the Purchase Agreement or the Guaranty, or in making any claim
with respect to the Aircraft or other things delivered or to be delivered
pursuant to the Purchase Agreement or the Guaranty, the terms and conditions of
the Purchase Agreement and the Guaranty shall apply to, and be binding upon, the
Indenture Trustee to the same extent as the Owner. The Indenture Trustee hereby
confirms that it shall be deemed for all purposes to have read and be familiar
with the Purchase Agreement and the Guaranty and to understand thoroughly the
terms and conditions thereof.
(f) Nothing contained in this Trust Indenture shall (i)
subject the Supplier or the Manufacturer to any liability to which it would not
otherwise be subject under the Purchase Agreement or the Guaranty or (ii) modify
in any respect the Supplier's or the Manufacturer's contract rights thereunder,
except as provided in the Consent and Agreement.
(g) For all purposes of the assignment contained in clause (b)
of the Granting Clause, the Supplier and the Manufacturer shall not be deemed to
have knowledge of and need not recognize any Event of Default, unless and until
the Supplier shall have received written notice thereof from the Indenture
Trustee at the address for the Supplier set forth in Section 11.05 hereof and,
in acting in accordance with the terms of the Purchase Agreement, the Guaranty
and the assignment contained in clause (b) of the Granting Clause, the Supplier
and the Manufacturer may act with acquittance and conclusively rely upon such
notice. -- A319'S]
-54-
[757'S AND 747'S -- The grant by the Owner to the Indenture
Trustee of the Owner's interests in and to the Contract Rights as set forth in
clause (b) of the Granting Clause hereof is subject to the following:
(h) If and so long as (A) the Aircraft shall be subject to
this Trust Indenture and (B) the Manufacturer shall not have received written
notice from the Indenture Trustee (including by mail, courier, telex, or
telecopy thereof from the Indenture Trustee addressed to the Manufacturer's Vice
President - Contracts at ▇.▇. ▇▇▇ ▇▇▇▇, Mail Code 21-34, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ if by
mail; ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇.▇., ▇/▇ ▇▇-▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, if by courier;
▇▇▇-▇▇▇-▇▇▇▇ if by telecopy and 32-9430 (answerback BOEINGREN), if by telex)
that an Event of Default under this Trust Indenture has occurred and is
continuing, (1) the Indenture Trustee authorizes the Owner, on behalf of but to
the exclusion of the Indenture Trustee, to exercise in the Owner's own name (i)
such rights and powers of the "Buyer" under the Purchase Agreement and (ii) such
rights as the Indenture Trustee may have with respect to the Aircraft under any
warranty, covenant, representation, service life policy, aircraft performance
guarantee, indemnity or product support agreement of the Manufacturer or any
subcontractor or vendor with respect thereto and, subject to paragraph 7.07(c)
hereof, to retain any recovery or benefit resulting from the enforcement of any
warranty, covenant, representation, service life policy, aircraft performance
guarantee, indemnity, or product support agreement of the Manufacturer or any
subcontractor or vendor under the Purchase Agreement in respect of the Aircraft,
and (2) the Indenture Trustee shall, at the Owner's expense, cooperate with the
Owner and take such actions as the Owner reasonably deems necessary to enable
the Owner to enforce such rights and claims.
(i) Effective upon the receipt by the Manufacturer of written
notice from the Indenture Trustee that an Event of Default under this Trust
Indenture has occurred and is continuing and thereafter until the Manufacturer
shall have received written notice from the Indenture Trustee that such Event of
Default has been cured or waived: (i) at the Indenture Trustee's option, the
authorization given to the Owner under paragraph 7.07(a) hereof to enforce such
rights and claims shall henceforth cease to be effective and the Indenture
Trustee and its successors and permitted assigns shall, to the exclusion of the
Owner, be entitled to assert and enforce such rights and claims as substitute
party plaintiff or otherwise, and the Owner shall, at the request of the
Indenture Trustee or its successors or permitted assigns and at the Owner's
expense, cooperate with and take such action as reasonably necessary to enable
the Indenture Trustee and its successors and permitted assigns to enforce such
rights and claims, and the Indenture Trustee, if it shall elect to enforce such
rights or claims, shall use its best efforts to assert and enforce such rights
and claims, and (ii) the Owner will be deemed to have irrevocably constituted
the Indenture Trustee and its successors and permitted assigns the Owner's true
and lawful attorney (it being acknowledged that such appointment is coupled with
an interest, namely the Indenture Trustee's rights acquired and to be acquired
hereunder) with full power (in the name of the Owner or otherwise) to ask,
require, demand, receive, settle, compromise, compound and give acquittance for
any and all monies and claims for monies due and to become due under, or arising
out of, the Purchase Agreement in respect of the Aircraft, to the extent that
the same have been assigned pursuant to clause (b) of the Granting Clause
hereof, and for such period as the Indenture Trustee may exercise rights with
respect thereto under this clause (ii), to endorse any checks or other
instruments or orders in connection therewith and to file any claims or take any
action or institute (or, if previously commenced, assume control of) any
proceedings
-55-
and to obtain any recovery in connection therewith which the Indenture Trustee
may deem to be necessary or advisable in the premises.
(j) Notwithstanding clause (b) of the Granting Clause hereof,
this Section 7.07 and anything in this Trust Indenture to the contrary, all
amounts that the Manufacturer is obligated to pay to the Owner under the
Purchase Agreement with respect to the Aircraft, including, without limitation,
in respect of refunds thereunder or resulting from the enforcement of any
warranty, service life policy, aircraft performance guarantee or indemnity or
product support agreement thereunder or the enforcement or exercise of any right
or power under the Purchase Agreement or hereunder (a "MANUFACTURER PAYMENT")
(excluding, however, from the Manufacturer Payments any amounts the Manufacturer
is obligated to pay to the Owner with respect to the rights reserved to the
Owner in clauses (i) through (v) of the definition of Contract Rights, which
shall at all times be paid to the Owner), will be payable and applicable as
follows: all the Manufacturer Payments shall be paid to the Owner unless and
until the Manufacturer shall have received written notice from the Indenture
Trustee that an Event of Default under this Trust Indenture has occurred and is
continuing, whereupon the Manufacturer will, until the Manufacturer shall have
received written notice from the Indenture Trustee that all Events of Default
under this Trust Indenture have been cured or waived, make any and all such
payments directly to the Indenture Trustee. Any amounts received by the
Indenture Trustee pursuant to the immediately preceding sentence shall, to the
extent not theretofore applied in satisfaction of the Secured Obligations, be
returned to the Owner promptly after all Events of Default under this Trust
Indenture have been cured or waived.
(k) For all purposes of this Trust Indenture, the Manufacturer
shall not be deemed to have knowledge of an Event of Default under this Trust
Indenture or of the discontinuance or waiver of an Event of Default unless and
until the Manufacturer shall have received written notice thereof from the
Indenture Trustee (including by mail, courier, telex, or telecopy thereof from
the Indenture Trustee addressed to the Manufacturer's Vice President - Contracts
at ▇.▇. ▇▇▇ ▇▇▇▇, Mail Code 21-34, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ if by mail; ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇. ▇.▇., ▇/▇ ▇▇-▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, if by courier; ▇▇▇-▇▇▇-▇▇▇▇ if by
telecopy and 32-9430 (answerback BOEINGREN), if by telex) and, in acting in
accordance with the terms and conditions of the Purchase Agreement and this
Trust Indenture, the Manufacturer may rely conclusively upon any such notice.
(l) Anything herein contained to the contrary notwithstanding:
(i) the Owner shall at all times remain liable to the Manufacturer under the
Purchase Agreement in respect of the Aircraft to perform all of the duties and
obligations of "Buyer" thereunder to the same extent as if this Trust Indenture
had not been executed; (ii) the exercise by the Indenture Trustee of any of the
rights assigned hereunder shall not release the Owner from any of its duties or
obligations to the Manufacturer under the Purchase Agreement in respect of the
Aircraft except to the extent that such exercise by the Indenture Trustee shall
constitute performance of such duties and obligations; and (iii) except as
provided in paragraph (f) of this Section 7.07, the Indenture Trustee shall not
have any obligation or liability under the Purchase Agreement by reason of, or
arising out of, this Trust Indenture or be obligated to perform any of the
obligations or duties of the Owner under the Purchase Agreement or to make any
payment or make any inquiry as to the sufficiency of any payment received by it
or to present or to file any claim or to take any other action to collect or
enforce any claim for any payment assigned hereunder.
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(m) Without in any way releasing the Owner from any of its
duties or obligations under the Purchase Agreement, the Indenture Trustee
confirms for the benefit of the Manufacturer that, insofar as the provisions of
the Purchase Agreement relate to the Aircraft, in exercising any rights under
the Purchase Agreement, or in making any claim with respect to the Aircraft or
other things delivered or to be delivered pursuant to the Purchase Agreement,
the terms and conditions of the Purchase Agreement (including, without
limitation, the warranty disclaimer and indemnity provisions in the product
assurance and customer support documents, Exhibits B and C, respectively, to the
Purchase Agreement) shall apply to, and be binding upon, the Indenture Trustee
to the same extent as the Owner. The Indenture Trustee hereby confirms that it
shall be deemed for all purposes to have read and be familiar with the Purchase
Agreement (insofar as it relates to the Aircraft) and to understand thoroughly
the terms and conditions thereof.
(n) Nothing contained in this Trust Indenture shall (i)
subject the Manufacturer to any liability to which it would not otherwise be
subject under the Purchase Agreement or (ii) modify in any respect the
Manufacturer's contract rights thereunder, except as provided in the Consent and
Agreement. -- 757'S AND 747'S]
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. SCOPE OF INDEMNIFICATION.
The Owner hereby agrees, except as otherwise provided in
Section 2.03 hereof, to assume liability for, and does hereby indemnify,
protect, save and keep harmless the Indenture Trustee (in its individual and
trust capacities), and its successors, assigns, agents and servants, from and
against any and all liabilities, obligations, losses, damages, penalties, taxes
(excluding any taxes payable by the Indenture Trustee on or measured by any
compensation received by the Indenture Trustee for its services under this Trust
Indenture), claims, actions, suits, costs, expenses or disbursements (including
reasonable legal fees and expenses) of any kind and nature whatsoever, which may
be imposed on, incurred by or asserted against the Indenture Trustee (whether or
not also indemnified against by any other Person under any other document) in
any way relating to or arising out of this Trust Indenture or any other
Operative Document to which it is a party or the enforcement of any of the terms
of any thereof, or in any way relating to or arising out of the manufacture,
purchase, acceptance, non-acceptance, rejection, ownership, delivery, lease,
possession, use, operation, condition, sale, return or other disposition of the
Aircraft or any Engine (including, without limitation, latent or other defects,
whether or not discoverable, and any claim for patent, trademark or copyright
infringement), or in any way relating to or arising out of the administration of
the Collateral or the action or inaction of the Indenture Trustee hereunder.
Without limiting the foregoing, the Indenture Trustee agrees that, prior to
seeking indemnification from the Collateral, it will demand, and take such
action as it may in its discretion determine to be reasonable to pursue,
indemnification available to the Indenture Trustee under the Participation
Agreement. Notwithstanding the foregoing, the Indenture Trustee shall not be
entitled to any indemnification for any Taxes or Expenses to the extent relating
to or arising from the willful misconduct or gross negligence (or negligence in
the case of handling funds) of the Indenture Trustee in the performance of its
duties hereunder or
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resulting from the inaccuracy of any representation or warranty of the Indenture
Trustee (in its individual capacity) referred to in Section 6.03 hereof, or as
provided in Section 6.01 hereof or in the last sentence of Section 5.04 hereof,
or as otherwise excluded by the terms of Sections 7(b) and 7(c) of the
Participation Agreement from the Owner's indemnities under such Sections. In
addition, if necessary, the Indenture Trustee shall be entitled to
indemnification from the Collateral for any liability, obligation, loss, damage,
penalty, claim, action, suit, cost, expense or disbursement indemnified against
pursuant to this Section 8.01 to the extent not reimbursed by others, but
without releasing any of them from their respective agreements of reimbursement;
and to secure the same the Indenture Trustee shall have a prior Lien on the
Collateral.
ARTICLE IX
SUCCESSOR AND SEPARATE TRUSTEES
SECTION 9.01. RESIGNATION OF INDENTURE TRUSTEE; APPOINTMENT OF
SUCCESSOR.
(a) The Indenture Trustee or any successor thereto may resign
at any time without cause by giving at least 30 days' prior written notice to
the Owner and each Certificate Holder, such resignation to be effective upon the
acceptance of the trusteeship by a successor Indenture Trustee. In addition, a
Majority in Interest of Certificate Holders may at any time (but only with the
consent of the Owner, which consent shall not be unreasonably withheld, except
that such consent shall not be necessary if an Event of Default is continuing)
remove the Indenture Trustee without cause by an instrument in writing delivered
to the Owner and the Indenture Trustee, and the Indenture Trustee shall promptly
notify each Certificate Holder thereof in writing, such removal to be effective
upon the acceptance of the trusteeship by a successor Indenture Trustee. In the
case of the resignation or removal of the Indenture Trustee, a Majority in
Interest of Certificate Holders may appoint a successor Indenture Trustee by an
instrument signed by such holders, which successor, so long as no Event of
Default shall have occurred and be continuing, shall be subject to the Owner's
reasonable approval. If a successor Indenture Trustee shall not have been
appointed within 30 days after such notice of resignation or removal, the
Indenture Trustee, the Owner or any Certificate Holder may apply to any court of
competent jurisdiction to appoint a successor Indenture Trustee to act until
such time, if any, as a successor shall have been appointed as above provided.
The successor Indenture Trustee so appointed by such court shall immediately and
without further act be superseded by any successor Indenture Trustee appointed
as above provided.
(b) Any successor Indenture Trustee, however appointed, shall
execute and deliver to the Owner and the predecessor Indenture Trustee an
instrument accepting such appointment and assuming the obligations of the
Indenture Trustee under the Participation Agreement arising from and after the
time of such appointment, and thereupon such successor Indenture Trustee,
without further act, shall become vested with all the estates, properties,
rights, powers and duties of the predecessor Indenture Trustee hereunder in the
trust hereunder applicable to it with like effect as if originally named the
Indenture Trustee herein; but nevertheless upon the written request of such
successor Indenture Trustee, such predecessor Indenture Trustee shall execute
and deliver an instrument transferring to such successor Indenture Trustee, upon
the trusts herein expressed applicable to it, all the estates, properties,
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rights and powers of such predecessor Indenture Trustee, and such predecessor
Indenture Trustee shall duly assign, transfer, deliver and pay over to such
successor Indenture Trustee all monies or other property then held by such
predecessor Indenture Trustee hereunder.
(c) Any successor Indenture Trustee, however appointed, shall
be a bank or trust company having its principal place of business in the Borough
of Manhattan, City and State of New York; Minneapolis, Minnesota; Chicago,
Illinois; Hartford, Connecticut; Wilmington, Delaware; or Boston, Massachusetts
and having (or whose obligations under the Operative Documents are guaranteed by
an affiliated entity having) a combined capital and surplus of at least
$100,000,000, if there be such an institution willing, able and legally
qualified to perform the duties of the Indenture Trustee hereunder upon
reasonable or customary terms.
(d) Any corporation into which the Indenture Trustee may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Indenture
Trustee shall be a party, or any corporation to which substantially all the
corporate trust business of the Indenture Trustee may be transferred, shall,
subject to the terms of paragraph (c) of this Section 9.01, be a successor
Indenture Trustee and the Indenture Trustee under this Trust Indenture without
further act.
SECTION 9.02. APPOINTMENT OF ADDITIONAL AND SEPARATE TRUSTEES.
(a) Whenever (i) the Indenture Trustee shall deem it necessary
or desirable in order to conform to any law of any jurisdiction in which all or
any part of the Collateral shall be situated or to make any claim or bring any
suit with respect to or in connection with the Collateral, this Trust Indenture,
any other Indenture Agreement, the Secured Certificates or any of the
transactions contemplated by the Participation Agreement, (ii) the Indenture
Trustee shall be advised by counsel satisfactory to it that it is so necessary
or prudent in the interests of the Certificate Holders (and the Indenture
Trustee shall so advise the Owner), or (iii) the Indenture Trustee shall have
been requested to do so by a Majority in Interest of Certificate Holders, then
in any such case, the Indenture Trustee and, upon the written request of the
Indenture Trustee, the Owner, shall execute and deliver an indenture
supplemental hereto and such other instruments as may from time to time be
necessary or advisable either (1) to constitute one or more bank or trust
companies or one or more persons approved by the Indenture Trustee, either to
act jointly with the Indenture Trustee as additional trustee or trustees of all
or any part of the Collateral, or to act as separate trustee or trustees of all
or any part of the Collateral, in each case with such rights, powers, duties and
obligations consistent with this Trust Indenture as may be provided in such
supplemental indenture or other instruments as the Indenture Trustee or a
Majority in Interest of Certificate Holders may deem necessary or advisable, or
(2) to clarify, add to or subtract from the rights, powers, duties and
obligations theretofore granted any such additional and separate trustee,
subject in each case to the remaining provisions of this Section 9.02. If the
Owner shall not have taken any action requested of it under this Section 9.02(a)
that is permitted or required by its terms within 15 days after the receipt of a
written request from the Indenture Trustee so to do, or if an Event of Default
shall have occurred and be continuing, the Indenture Trustee may act under the
foregoing provisions of this Section 9.02(a) without the concurrence of the
Owner; and the Owner hereby irrevocably appoints (which appointment is coupled
with an interest) the Indenture Trustee, its agent and attorney-in-fact to act
for it under the foregoing provisions of this Section 9.02(a) in either of such
contingencies. The Indenture
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Trustee may, in such capacity, execute, deliver and perform any such
supplemental indenture, or any such instrument, as may be required for the
appointment of any such additional or separate trustee or for the clarification
of, addition to or subtraction from the rights, powers, duties or obligations
theretofore granted to any such additional or separate trustee. In case any
additional or separate trustee appointed under this Section 9.02(a) shall die,
become incapable of acting, resign or be removed, all the assets, property,
rights, powers, trusts, duties and obligations of such additional or separate
trustee shall revert to the Indenture Trustee until a successor additional or
separate trustee is appointed as provided in this Section 9.02(a).
(b) No additional or separate trustee shall be entitled to
exercise any of the rights, powers, duties and obligations conferred upon the
Indenture Trustee in respect of the custody, investment and payment of monies
and all monies received by any such additional or separate trustee from or
constituting part of the Collateral or otherwise payable under any Operative
Document to the Indenture Trustee shall be promptly paid over by it to the
Indenture Trustee. All other rights, powers, duties and obligations conferred or
imposed upon any additional or separate trustee shall be exercised or performed
by the Indenture Trustee and such additional or separate trustee jointly except
to the extent that applicable Law of any jurisdiction in which any particular
act is to be performed renders the Indenture Trustee incompetent or unqualified
to perform such act, in which event such rights, powers, duties and obligations
(including the holding of title to all or part of the Collateral in any such
jurisdiction) shall be exercised and performed by such additional or separate
trustee. No additional or separate trustee shall take any discretionary action
except on the instructions of the Indenture Trustee or a Majority in Interest of
Certificate Holders. No trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder, except that the Indenture
Trustee shall be liable for the consequences of its lack of reasonable care in
selecting, and Indenture Trustee's own actions in acting with, any additional or
separate trustee. Each additional or separate trustee appointed pursuant to this
Section 9.02 shall be subject to, and shall have the benefit of Articles IV, V,
VI, VIII, IX and XI hereof insofar as they apply to the Indenture Trustee. The
powers of any additional or separate trustee appointed pursuant to this Section
9.02 shall not in any case exceed those of the Indenture Trustee hereunder.
(c) If at any time the Indenture Trustee shall deem it no
longer necessary or desirable in order to conform to any such law or take any
such action or shall be advised by such counsel that it is no longer so
necessary or desirable in the interest of the Certificate Holders, or in the
event that the Indenture Trustee shall have been requested to do so in writing
by a Majority in Interest of Certificate Holders, the Indenture Trustee and,
upon the written request of the Indenture Trustee, the Owner, shall execute and
deliver an indenture supplemental hereto and all other instruments and
agreements necessary or proper to remove any additional or separate trustee. The
Indenture Trustee may act on behalf of the Owner under this Section 9.02(c) when
and to the extent it could so act under Section 9.02(a) hereof.
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ARTICLE X
SUPPLEMENT AND AMENDMENTS TO THIS TRUST INDENTURE
AND OTHER DOCUMENTS
SECTION 10.01. INSTRUCTIONS OF MAJORITY; LIMITATIONS.
(a) The Indenture Trustee agrees with the Certificate Holders
that it shall not enter into any amendment, waiver or modification of,
supplement or consent to the Purchase Agreement, the Consent and Agreement, this
Trust Indenture, the Guarantee or the Participation Agreement, or any other
agreement included in the Collateral, unless such supplement, amendment, waiver,
modification or consent is consented to in writing by a Majority in Interest of
Certificate Holders, or does not adversely affect the Certificate Holders, but
upon the written request of a Majority in Interest of Certificate Holders, the
Indenture Trustee shall from time to time enter into any such supplement or
amendment, or execute and deliver any such waiver, modification or consent, as
may be specified in such request and as may be (in the case of any such
amendment, supplement or modification), to the extent such agreement is
required, agreed to by the Owner or, as may be appropriate, the Manufacturer;
PROVIDED, HOWEVER, that, without the consent of each holder of an affected
Secured Certificate then outstanding, no such amendment of or supplement to this
Trust Indenture, the Purchase Agreement, the Consent and Agreement, the
Guarantee or the Participation Agreement or waiver or modification of the terms
of, or consent under, any thereof, shall (i) modify any of the provisions of
this Section 10.01, or of Sections 2.02, 2.10, 2.11, 2.15, 4.02, 4.02(c),
4.02(d), 5.02, 7.06(a) or 7.06(b) hereof, the definitions of "Event of Default",
"Default", "Majority in Interest of Certificate Holders", "Make-Whole Amount" or
"Certificate Holder", or the percentage of Certificate Holders required to take
or approve any action hereunder, (ii) reduce the amount, or change the time of
payment or method of calculation of any amount, of Principal Amount, Make-Whole
Amount, if any, or interest with respect to any Secured Certificate, or alter or
modify the provisions of Article III hereof with respect to the order of
priorities in which distribution thereunder shall be made as among the
Certificate Holders and the Owner, (iii) reduce, modify or amend any indemnities
in favor of the Certificate Holders or (iv) permit the creation of any Lien on
the Collateral or any part thereof other than Permitted Liens or deprive any
Certificate Holder of the benefit of the Lien of this Trust Indenture on the
Collateral, except as provided in connection with the exercise of remedies under
Article IV hereof.
(b) The Owner and the Indenture Trustee may enter into one or
more agreements supplemental hereto without the consent of any Certificate
Holder for any of the following purposes: (i) (a) to cure any defect or
inconsistency herein or in the Secured Certificates, or to make any change not
inconsistent with the provisions hereof (PROVIDED that such change does not
adversely affect the interests of any Certificate Holder in its capacity solely
as Certificate Holder) or (b) to cure any ambiguity or correct any mistake; (ii)
to evidence the succession of another party as the Owner in accordance with the
terms of the hereof or to evidence the succession of a new trustee hereunder
pursuant hereto, the removal of the trustee hereunder or the appointment of any
co-trustee or co-trustees or any separate or additional trustee or trustees;
(iii) to convey, transfer, assign, mortgage or pledge any property to or with
the Indenture Trustee or to make any other provisions with respect to matters or
questions arising hereunder so long as such action shall not adversely affect
the interests of the Certificate Holders
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in its capacity solely as Certificate Holder; (iv) to correct or amplify the
description of any property at any time subject to the Lien of this Trust
Indenture or better to assure, convey and confirm unto the Indenture Trustee any
property subject or required to be subject to the Lien of this Trust Indenture,
the Airframe or Engines or any Replacement Airframe or Replacement Engine; (v)
to add to the covenants of the Owner for the benefit of the Certificate Holders,
or to surrender any rights or power herein conferred upon the Owner; (vi) to add
to the rights of the Certificate Holders; and (vii) to include on the Secured
Certificates any legend as may be required by law.
SECTION 10.02. INDENTURE TRUSTEE PROTECTED.
If, in the opinion of the institution acting as Indenture
Trustee hereunder, any document required to be executed by it pursuant to the
terms of Section 10.01 hereof adversely affects any right, duty, immunity or
indemnity with respect to such institution under this Trust Indenture, such
institution may in its discretion decline to execute such document.
SECTION 10.03. DOCUMENTS MAILED TO CERTIFICATE HOLDERS.
Promptly after the execution by the Owner or the Indenture
Trustee of any document entered into pursuant to Section 10.01 hereof, the
Indenture Trustee shall mail, by first class mail, postage prepaid, a copy
thereof to the Owner and to each Certificate Holder at its address last set
forth in the Secured Certificate Register, but the failure of the Indenture
Trustee to mail such copies shall not impair or affect the validity of such
document.
SECTION 10.04. NO REQUEST NECESSARY FOR TRUST INDENTURE
SUPPLEMENT.
No written request or consent of the Indenture Trustee or the
Certificate Holders pursuant to Section 10.01 hereof shall be required to enable
the Owner to execute and deliver a Trust Indenture Supplement specifically
required by the terms hereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. TERMINATION OF TRUST INDENTURE.
Upon (or at any time after) payment in full of the Principal
Amount of, Make-Whole Amount, if any, and interest on and all other amounts due
under all Secured Certificates and provided that there shall then be no other
Secured Obligations due to the Certificate Holders and the Indenture Trustee
hereunder or under the Participation Agreement, the Owner shall direct the
Indenture Trustee to execute and deliver to or as directed in writing by the
Owner an appropriate instrument releasing the Aircraft and the Engines from the
Lien of this Trust Indenture and releasing the Guarantee and the Purchase
Agreement from the assignment and pledge thereof hereunder and the Indenture
Trustee shall execute and deliver such instrument as aforesaid and give written
notice thereof to the Owner; PROVIDED, HOWEVER, that this Trust Indenture and
the trusts created hereby shall earlier terminate and this Trust Indenture shall
be of no further force or effect upon any sale or other final disposition by the
Indenture Trustee of all
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property constituting part of the Collateral and the final distribution by the
Indenture Trustee of all monies or other property or proceeds constituting part
of the Collateral in accordance with the terms hereof. Except as aforesaid
otherwise provided, this Trust Indenture and the trusts created hereby shall
continue in full force and effect in accordance with the terms hereof.
SECTION 11.02. NO LEGAL TITLE TO COLLATERAL IN CERTIFICATE
HOLDERS.
No holder of a Secured Certificate shall have legal title to
any part of the Collateral. No transfer, by operation of law or otherwise, of
any Secured Certificate or other right, title and interest of any Certificate
Holder in and to the Collateral or hereunder shall operate to terminate this
Trust Indenture or entitle such holder or any successor or transferee of such
holder to an accounting or to the transfer to it of any legal title to any part
of the Collateral.
SECTION 11.03. SALE OF AIRCRAFT BY INDENTURE TRUSTEE IS
BINDING.
Any sale or other conveyance of the Collateral, or any part
thereof (including any part thereof or interest therein), by the Indenture
Trustee made pursuant to the terms of this Trust Indenture shall bind the
Certificate Holders and shall be effective to transfer or convey all right,
title and interest of the Indenture Trustee, the Owner and such holders in and
to such Collateral or part thereof. No purchaser or other grantee shall be
required to inquire as to the authorization, necessity, expediency or regularity
of such sale or conveyance or as to the application of any sale or other
proceeds with respect thereto by the Indenture Trustee.
SECTION 11.04. TRUST INDENTURE FOR BENEFIT OF THE OWNER,
INDENTURE TRUSTEE, AND CERTIFICATE HOLDERS.
Nothing in this Trust Indenture, whether express or implied,
shall be construed to give any person other than the Owner, the Indenture
Trustee and the Certificate Holders, any legal or equitable right, remedy or
claim under or in respect of this Trust Indenture.
SECTION 11.05. NOTICES.
Unless otherwise expressly specified or permitted by the terms
hereof, all notices, requests, demands, authorizations, directions, consents,
waivers or documents provided or permitted by this Trust Indenture to be made,
given, furnished or filed shall be in writing, personally delivered or mailed by
certified mail, postage prepaid, or by facsimile or confirmed telex, and (i) if
to the Owner, addressed to it at its office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Treasurer (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), (ii) if to
the Indenture Trustee, addressed to it at its office at, for U.S. MAIL at
Corporate Trust Department, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and
for OVERNIGHT COURIER at Corporate Trust Department, ▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), (iii) if to any
Certificate Holder, addressed to such party at such address as such party shall
have furnished by notice to the Owner and the Indenture Trustee or, until an
address is so furnished, addressed to the address of such party (if any) set
forth on the signature pages to the Participation Agreement or in the Secured
Certificate Register. [Any notice to the Supplier shall be addressed to its
Chief Executive Officer, ▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
(telex 521155F) (fax: 011-33-5-61-93-49-77). -- A319'S ONLY] Whenever any notice
in writing is required to be given by the Owner or the Indenture Trustee or any
Certificate Holder to any of
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the other of them, such notice shall be deemed given and such requirement
satisfied when such notice is received, or if such notice is mailed by certified
mail, postage prepaid, three Business Days after being mailed, addressed as
provided above. Any party hereto may change the address to which notices to such
party will be sent by giving notice of such change to the other parties to this
Trust Indenture.
SECTION 11.06. SEVERABILITY.
Any provision of this Trust Indenture which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any such prohibition or unenforceability in any
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 11.07. NO ORAL MODIFICATION OR CONTINUING WAIVERS.
No term or provision of this Trust Indenture or the Secured
Certificates may be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the Owner and the Indenture Trustee, in
compliance with Section 10.01 hereof. Any waiver of the terms hereof or of any
Secured Certificate shall be effective only in the specific instance and for the
specific purpose given.
SECTION 11.08. SUCCESSORS AND ASSIGNS.
All covenants and agreements contained herein shall be binding
upon, and inure to the benefit of, each of the parties hereto and the permitted
successors and assigns of each, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by any Certificate
Holder shall bind the successors and assigns of such holder. Each Certificate
Holder by its acceptance of a Secured Certificate agrees to be bound by this
Trust Indenture and all provisions of the Participation Agreement applicable to
a Loan Participant or a Certificate Holder.
SECTION 11.09. HEADINGS.
The headings of the various Articles and sections herein and
in the table of contents hereto are for convenience of reference only and shall
not define or limit any of the terms or provisions hereof.
SECTION 11.10. NORMAL COMMERCIAL RELATIONS.
Anything contained in this Trust Indenture to the contrary
notwithstanding, the Owner, the Indenture Trustee, any Certificate Holder or any
bank or other Affiliate of such Certificate Holder may conduct any banking or
other financial transactions, and have banking or other commercial
relationships, with the Owner fully to the same extent as if this Trust
Indenture were not in effect, including without limitation the making of loans
or other extensions of credit to the Owner for any purpose whatsoever, whether
related to any of the transactions contemplated hereby or otherwise.
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SECTION 11.11. GOVERNING LAW; COUNTERPART FORM.
THIS TRUST INDENTURE 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
INDENTURE IS BEING DELIVERED IN THE STATE OF NEW YORK. This Trust Indenture may
be executed by the parties hereto in separate counterparts (or upon separate
signature pages bound together into one or more counterparts), each of which
when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.12. VOTING BY CERTIFICATE HOLDERS.
All votes of the Certificate Holders shall be governed by a
vote of a Majority in Interest of Certificate Holders, except as otherwise
provided herein.
SECTION 11.13. BANKRUPTCY.
It is the intention of the parties that the Indenture Trustee,
shall be entitled to the benefits of Section 1110 with respect to the right to
take possession of the Aircraft, Airframe, Engines and Parts as provided herein
in the event of a case under Chapter 11 of the Bankruptcy Code in which the
Owner is a debtor, and in any instance where more than one construction is
possible of the terms and conditions hereof or any other pertinent Operative
Document, each such party agrees that a construction which would preserve such
benefits shall control over any construction which would not preserve such
benefits.
-65-
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Indenture to be duly executed by their respective officers thereof duly
authorized as of the day and year first above written.
NORTHWEST AIRLINES, INC.,
By: ________________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, not in its individual
capacity, except as expressly
provided herein, but solely as
Indenture Trustee, Indenture Trustee
By: ________________________________
Name:
Title:
-66-
ANNEX A
DEFINITIONS
Unless the context otherwise requires, the following terms
shall have the following meanings for all purposes of the
Trust Indenture and
Security Agreement [NW ____ _] and shall be equally applicable to both the
singular and the plural forms of the terms herein defined:
"ACTUAL KNOWLEDGE" shall mean, as it applies to the
Indenture Trustee, actual knowledge of a Responsible Officer
in the Corporate Trust Office of the Indenture Trustee.
"AFFILIATE" means, with respect to any person, any
other person directly or indirectly controlling, controlled by
or under common control with such person. For the purposes of
this definition, "control" (including "controlled by" and
"under common control with") shall mean the power, directly or
indirectly, to direct or cause the direction of the management
and policies of such person whether through the ownership of
voting securities or by contract or otherwise.
"AIRCRAFT" means the Airframe (or any airframe from
time to time substituted for such Airframe pursuant to Section
7.06 of the Trust Indenture) together with the initial Engines
(or any engine substituted for either of such Engines pursuant
to the terms of the Trust Indenture), whether or not any such
initial or substituted Engines may from time to time be
installed on such initial or substituted Airframe or may be
installed on any other airframe or on any other aircraft.
"AIRFRAME" means: (i) the [Airbus A319-113/114]
[Boeing 757-351] [Boeing 747-451] aircraft (except Engines or
engines from time to time installed thereon) identified by
U.S. registration ▇▇▇▇ and manufacturer's serial number in the
initial Trust Indenture Supplement and any aircraft (except
Engines or engines from time to time installed thereon) which
may from time to time be substituted for such aircraft (except
Engines or engines from time to time installed thereon)
pursuant to clause (ii) of the first paragraph of Section
7.06(a) of the Trust Indenture; and (ii) any and all Parts so
long as the same shall be incorporated or installed in or
attached to such aircraft (except Engines or engines from time
to time installed thereon).
"AMORTIZATION AMOUNT" shall mean, with respect to any
Principal Amount Repayment Date, the amount set forth opposite
such Date on the Amortization Schedule.
"AMORTIZATION SCHEDULE" shall mean the amortization
schedule for the Secured Certificates delivered pursuant to
Section 2.02 of the Trust Indenture.
Annex A-1
"APPLICABLE RATE" means as of any date the weighted
average of the interest rates borne by the Secured
Certificates then outstanding and, if no Secured Certificates
shall be outstanding, the Base Rate.
["ASSIGNED WARRANTIES" has the meaning set forth in
the definition of "Contract Rights".-- A319'S ONLY]
"AVERAGE LIFE DATE" for each Secured Certificate to
be redeemed shall be the date which follows the redemption
date by a period equal to the Remaining Weighted Average Life
at the redemption date of such Secured Certificate. "REMAINING
WEIGHTED AVERAGE LIFE" of such Secured Certificate, at the
redemption date of such Secured Certificate, shall be the
number of days equal to the quotient obtained by dividing (a)
the sum of the products obtained by multiplying (i) the amount
of each then remaining installment of principal, including the
payment due on the maturity date of such Secured Certificate,
by (ii) the number of days from and including the redemption
date to but excluding the scheduled payment date of such
principal installment; by (b) the then unpaid principal amount
of such Secured Certificate.
"BANKRUPTCY CODE" means the Bankruptcy Reform Act of
1978, as amended, or any subsequent legislation that amends,
supplements or supersedes such provisions.
"BASE RATE" means the rate of interest announced
publicly by Citibank, N.A. in New York, New York from time to
time as its base rate.
"BUSINESS DAY" means any day other than a Saturday or
Sunday or a day on which commercial banks are required or
authorized to close in the City of New York, New York; Boston,
Massachusetts; or Minneapolis, Minnesota.
"CASH EQUIVALENTS" shall mean (i) direct obligations
of the United States of America and agencies guaranteed by the
United States government having a final maturity of ninety
(90) days or less from date of purchase thereof; (ii)
certificates of deposit issued by, bankers' acceptances of, or
time deposits with, any bank, trust company or national
banking association incorporated under the laws of the United
States of America or one of the states thereof having combined
capital and surplus and retained earnings as of its last
report of condition of at least $500,000,000 and having a
rating of Aa or better by ▇▇▇▇▇'▇ Investors Service, Inc.
("MOODY'S") or AA or better by Standard & Poor's Ratings
Services, a division of ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. ("S&P")
and having a final maturity of ninety (90) days or less from
date of purchase thereof; and (iii) commercial paper of any
holding company of a bank, trust company or national banking
association described in (ii) and commercial paper of any
corporation or finance company incorporated or doing business
under the laws of the United States of America or any state
thereof having a rating assigned to such commercial paper of
A1 by S&P or P1 by Moody's and having a final maturity of
ninety (90) days or less from the date of purchase thereof;
PROVIDED, HOWEVER, that
Annex A-2
the aggregate amount at any one time so invested in
certificates of deposit issued by any one bank shall not be in
excess of 5% of such bank's capital and surplus.
"CERTIFICATE HOLDER" shall mean any holder from time
to time of one or more Secured Certificates.
"CERTIFICATED AIR CARRIER" means a Citizen of the
United States holding a carrier operating certificate issued
by the Secretary of Transportation pursuant to Chapter 447 of
Title 49, United States Code, for aircraft capable of carrying
ten or more individuals or 6,000 pounds or more of cargo or
that otherwise is certified or registered to the extent
required to fall within the purview of 11 U.S.C. Section 1110
or any analogous successor provision of the Bankruptcy Code.
"CITIZEN OF THE UNITED STATES" has the meaning
specified in Section 40102(a)(15) of Title 49 of the United
States Code or any similar legislation of the United States of
America enacted in substitution or replacement therefor.
"CIVIL RESERVE AIR FLEET PROGRAM" means the Civil
Reserve Air Fleet Program currently administered by the United
States Air Force Air Mobility Command pursuant to Executive
Order No. 11490, as amended, or any substantially similar
program.
["CLASS D PASS THROUGH TRUST" means the Pass Through
Trust Agreement, dated as of June 3, 1999, among
Northwest
Airlines Corporation, Northwest Airlines, Inc., and State
Street Bank and Trust Company of Connecticut, National
Association, as supplemented by Trust Supplement No. 2001-1D,
dated as of [__________, ____] among Northwest Airlines, Inc.,
Northwest Airlines Corporation and State Street Bank and Trust
Company of Connecticut, National Association.-- A319's and
757's]
"CLASS D TRUSTEE" means the Pass Through Trustee
under the Pass Through Trust Agreement, dated as of June 3,
1999, among
Northwest Airlines Corporation, Northwest
Airlines, Inc., and State Street Bank and Trust Company of
Connecticut, National Association, as supplemented by Trust
Supplement No. 2001-1D, dated as of [__________, ____] among
Northwest Airlines, Inc.,
Northwest Airlines Corporation and
State Street Bank and Trust Company of Connecticut, National
Association.-- A319's and 757's]
"CLOSING" means the closing of the transactions
contemplated by the Participation Agreement.
"CLOSING DATE" means the date on which the Closing
occurs.
"CODE" means the Internal Revenue Code of 1986, as
amended.
"COLLATERAL" shall mean all estate, right, title and
interest of the Indenture Trustee in and to the properties
referred to in the Granting Clause of the Trust Indenture.
Annex A-3
"COMMITMENT" means the amount the payment of each
Pass Through Trustee to be made as provided in Section 1 of
the Participation Agreement.
"CONSENT AND AGREEMENT" means[, collectively, the
Manufacturer Consent and Agreement to Assignment of Warranties
and the Supplier Consent and Agreement to Assignment of
Warranties. -- A319'S] [that certain Consent and Agreement [NW
____ _], dated as of the date hereof, executed by the
Manufacturer, as the same may be amended, modified or
supplemented in accordance with the applicable provisions
thereof -- 757'S AND 747'S]
"CONTRACT RIGHTS" means all of the Owner's rights and
interests in and to [(i) Clauses 12, 13 and, to the extent
relating to acts to be performed following the date of
enforcement of the Trust Indenture, 17 of the Purchase
Agreement (but not any other provision of the Purchase
Agreement or any letter agreement referred to therein) as such
Clauses relate to the Aircraft (the "ASSIGNED WARRANTIES"),
and (ii) the Guaranty as it relates to the Assigned
Warranties, RESERVING TO THE OWNER, HOWEVER, all of the
Owner's rights and interests in and to Clauses 12, 13 and, to
the extent relating to acts to be performed following the date
of enforcement of the Trust Indenture, 17 of the Purchase
Agreement and the Guaranty as and to the extent that such
Clauses of the Purchase Agreement and the Guaranty relate to
aircraft other than the Aircraft and to the extent that the
Purchase Agreement and the Guaranty relate to any other
matters not directly pertaining to the Aircraft. -- A319'S]
[the Purchase Agreement, as and to the extent that the same
relate to the Aircraft and the operation thereof, including,
without limitation, (a) all claims for damages in respect of
the Aircraft arising as a result of any default by the
Manufacturer under the Purchase Agreement, including, without
limitation, all warranty, service life policy, aircraft
performance guarantee and indemnity provisions in the Purchase
Agreement in respect of the Aircraft and all claims thereunder
and (b) any and all rights of the Owner to compel performance
of the terms of the Purchase Agreement in respect of the
Aircraft; reserving to the Owner, however, (i) all of the
Owner's rights and interests in and to the Purchase Agreement
as and to the extent that it relates to any matters not in
respect of the Aircraft, (ii) all of the Owner's rights and
interests under the Purchase Agreement (other than under
Exhibit B (Product Assurance Document) thereof), (iii) all of
the Owner's rights and interests in or arising out of any
payments or deposits made or to be made by the Owner or
amounts credited or to be credited or paid or to be paid by
the Manufacturer to the Owner in respect of the Aircraft under
the Purchase Agreement, (iv) all of the Owner's rights and
interests in and to any Spare Parts General Terms Agreement
and (v) with respect to the Aircraft, all rights to demand,
accept and retain all rights in and to property (other than
the Aircraft), data, documents, training and services of any
kind which the Manufacturer is obligated to provide or does
provide pursuant to the Purchase Agreement with respect to the
Aircraft. -- 757'S AND 747'S]
"CORPORATE TRUST OFFICE" shall mean the principal
office of the Indenture Trustee located at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Trust Department, or such other office at which the Indenture
Trustee's
Annex A-4
corporate trust business shall be administered which the
Indenture Trustee shall have specified by notice in writing to
the Owner, the Loan Participants and each Certificate Holder.
"DEBT" shall mean any liability for borrowed money,
or any liability for the payment of money in connection with
any letter of credit transaction, or other liabilities
evidenced or to be evidenced by bonds, debentures, notes or
other similar instruments or for the deferred purchase price
of property, goods or services.
"DEBT RATE" shall mean, with respect to any Series,
the rate per annum specified for such Series under the heading
"Interest Rate" in Schedule I to the Trust Indenture.
"DEFAULT" means any event which with the giving of
notice or the lapse of time or both would become an Event of
Default.
"DOLLARS" and "$" means the lawful currency of the
United States of America.
"ENGINE" means (i) each of the [two] [four] [CFM
International, Inc. Model CFM56-5A4/5A5] [▇▇▇▇▇ & ▇▇▇▇▇▇▇
Model PW2040] [▇▇▇▇▇ & Whitney Model PW4056] engines listed by
manufacturer's serial number in the initial Trust Indenture
Supplement, whether or not from time to time thereafter
installed on the Airframe or installed on any other airframe
or on any other aircraft; and (ii) any engine which may from
time to time be substituted, pursuant to the terms of the
Trust Indenture, for any of such [two] [four] engines,
together in each case with any and all Parts incorporated or
installed in or attached thereto.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder. Section references
to ERISA are to ERISA, as in effect at the date of the
Participation Agreement and any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted
therefor.
"EVENT OF DEFAULT" shall have the meaning specified
in Section 4.01 of the Trust Indenture.
"EVENT OF LOSS" with respect to the Aircraft,
Airframe or any Engine means any of the following events with
respect to such property: (i) the loss of such property or of
the use thereof due to the destruction of or damage to such
property which renders repair uneconomic or which renders such
property permanently unfit for normal use by the Owner (or any
Lessee) for any reason whatsoever; (ii) any damage to such
property which results in an insurance settlement with respect
to such property on the basis of a total loss, or a
constructive or compromised total loss; (iii) the theft or
disappearance of such property, or the confiscation,
condemnation, or seizure of, or requisition of title to, or
use of, such property (other than a requisition for use by the
United States
Annex A-5
Government or any other government of registry of the
Aircraft, or any agency or instrumentality of any thereof)
which in the case of any event referred to in this clause
(iii) (other than a requisition of title) shall have resulted
in the loss of possession of such property by the Owner (or
any Lessee) for a period in excess of 180 consecutive days or,
in the case of a requisition of title, the requisition of
title shall not have been reversed within 90 days from the
date of such requisition of title; (iv) as a result of any
law, rule, regulation, order or other action by the Federal
Aviation Administration or other governmental body of the
government of registry of the Aircraft having jurisdiction,
the use of such property in the normal course of the business
of air transportation shall have been prohibited for a period
of 180 consecutive days, unless the Owner (or any Lessee),
prior to the expiration of such 180 day period, shall have
undertaken and shall be diligently carrying forward all steps
which are necessary or desirable to permit the normal use of
such property by the Owner (or such Lessee), but in any event
if such use shall have been prohibited for a period of two
consecutive years, PROVIDED that no Event of Loss shall be
deemed to have occurred if such prohibition has been
applicable to the entire U.S. registered fleet of [Airbus
Model A319-100] [Boeing Model 757-300] [Boeing Model 747-400]
aircraft of the Owner (or any Lessee) and the Owner (or a
Lessee), prior to the expiration of such two-year period,
shall have conformed at least one such aircraft in its fleet
to the requirements of any such law, rule, regulation, order
or other action and commenced regular commercial use of the
same in such jurisdiction and shall be diligently carrying
forward, in a manner which does not discriminate against the
Aircraft in so conforming the Aircraft, all steps which are
necessary or desirable to permit the normal use of the
Aircraft by the Owner (or such Lessee), PROVIDED, FURTHER
that, notwithstanding any of the foregoing, such prohibition
shall constitute an Event of Loss if such use shall have been
prohibited for a period of three consecutive years; and (v)
any divestiture of title to or interest in an Engine treated
as an Event of Loss pursuant to Section 7.06(b) of the Trust
Indenture. An Event of Loss with respect to the Aircraft shall
be deemed to have occurred if an Event of Loss occurs with
respect to the Airframe.
"EXPENSES" shall have the meaning attributed thereto
in Section 7(c) of the Participation Agreement.
"FEDERAL AVIATION ACT" means that portion of the
United States Code comprising those provisions formerly
referred to as the Federal Aviation Act of 1958, as amended,
or any subsequent legislation that amends, supplements or
supersedes such provisions.
"FEDERAL AVIATION ADMINISTRATION" and "FAA" mean the
United States Federal Aviation Administration and any agency
or instrumentality of the United States government succeeding
to their functions.
"FEDERAL FUNDS RATE" means a fluctuating interest
rate per annum in effect from time to time, which rate per
annum shall at all times be equal to the weighted average of
the rates on overnight Federal funds transactions with
Annex A-6
members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or if such rate is not
published for any day that is a Business Day, the average of
the quotations for such day for such transactions received by
State Street from three Federal funds brokers of recognized
standing selected by it.
"FOREIGN AIR CARRIER" means any air carrier which is
not a U.S. Air Carrier and which performs maintenance,
preventative maintenance and inspections for the Aircraft,
Airframe and/or any Engine or engine to standards which are
approved by, or which are substantially equivalent to those
required by, the Federal Aviation Administration, the Civil
Aviation Authority of the United Kingdom, the Direction
Generale de l'Aviation Civile of the French Republic, the
Luftfahrt Bundesamt of the Federal Republic of Germany, the
Nederlandse Luchtvaart Authoriteit of the Kingdom of the
Netherlands, the Ministry of Transportation of Japan or the
Federal Ministry of Transport of Canada (and any agency or
instrumentality of the applicable government succeeding to the
functions of any of the foregoing entities).
["FRENCH PLEDGE AGREEMENT" means the French Pledge
Agreement, dated as of [_____________], between the Owner and
the Indenture Trustee.-- A319'S ONLY]
"GOVERNMENT ENTITY" mean (a) any federal, state,
provincial or similar government, and any body, board,
department, commission, court, tribunal, authority, agency or
other instrumentality of any such government or otherwise
exercising any executive, legislative, judicial,
administrative or regulatory functions of such government or
(b) any other government entity having jurisdiction over any
matter contemplated by the Operative Agreements or relating to
the observance or performance of the obligations of any of the
parties to the Operative Agreements.
"GUARANTEE" means that certain Guarantee [NW ____ _],
dated as of [________], made by the Guarantor, as such
Guarantee may be amended or supplemented from time to time
pursuant to the applicable provisions thereof.
"GUARANTOR" means
Northwest Airlines Corporation, a
Delaware corporation.
["GUARANTY" means that certain Guaranty of the
Manufacturer attached to the Purchase Agreement.-- A319'S
ONLY]
"INDEMNITEE" means (i) the Indenture Trustee, (ii)
the Loan Participants and each other Certificate Holder, (iii)
the Subordination Agent, (iv) the Liquidity Provider, (v) the
Pass Through Trustees, (vi) each Affiliate of the Person
described in clause (i), (vii) each Affiliate of the Persons
described in clauses (iii), (iv) and (v) inclusive, (viii) the
respective directors, officers, employees, agents
Annex A-7
and servants of each of the Persons described in clauses (i)
through (v), inclusive, (ix) the successors and permitted
assigns of the Person described in clause (i), and (x) the
successors and permitted assigns of the Persons described in
clauses (ii), (iii), (iv) and (v) inclusive.
"INDENTURE AGREEMENTS" means the Participation
Agreement, the Purchase Agreement, [the Guaranty, -- A319'S
ONLY] the Guarantee, and any other contract, agreement or
instrument from time to time assigned or pledged under the
Trust Indenture.
"INDENTURE INDEMNITEE" means (i) the Indenture
Trustee, (ii) the Loan Participants and each Certificate
Holder, (iii) the Subordination Agent, (iv) the Liquidity
Provider, (v) the Pass Through Trustee and (vi) the respective
directors, officers, employees, agents and servants of each of
the Persons described in clauses (i) through (v), inclusive.
"INDENTURE TRUSTEE" means the Indenture Trustee under
the Trust Indenture, and any entity which may from time to
time be acting as Indenture Trustee under the Trust Indenture.
"INDENTURE TRUSTEE DOCUMENTS" means the Participation
Agreement and the Trust Indenture.
"INDENTURE TRUSTEE'S LIENS" means any Lien which
arises as a result of (A) claims against the Indenture Trustee
not related to its interest in the Aircraft, (B) acts of the
Indenture Trustee not permitted by, or failure of the
Indenture Trustee to take any action required by, the
Operative Documents to the extent such acts arise or such
failure arises from or constitutes gross negligence or willful
misconduct, (C) claims against the Indenture Trustee relating
to Taxes or Expenses which are excluded from the
indemnification provided by Section 7 of the Participation
Agreement pursuant to said Section 7, or (D) claims against
the Indenture Trustee arising out of the transfer by the
Indenture Trustee of all or any portion of its interest in the
Aircraft, the Collateral or the Operative Documents other than
a transfer of the Aircraft pursuant to Article IV of the Trust
Indenture while an event of default is continuing and prior to
the time that the Indenture Trustee has received all amounts
due pursuant to the Trust Indenture.
"INTERCREDITOR AGREEMENT" means that certain
Intercreditor Agreement among the Pass Through Trustees
[(originally executed without the Pass Through Trustee for the
Class D Pass Through Trust) -- A319's and 757's], the
Liquidity Provider and the Subordination Agent, as such
Intercreditor Agreement may be amended or supplemented from
time to time pursuant to the applicable provisions thereof.
"ISSUANCE DATE" means June 1, 2001.
"LAW" shall mean (a) any constitution, treaty,
statute, law, regulation, order, rule or directive of any
Government Entity, and (b) any judicial or
Annex A-8
administrative interpretation or application of, or decision
under, any of the foregoing.
"LEASE" means any lease permitted by the terms of
Section 7.02 of the Trust Indenture.
"LESSEE" means any Person for so long, but only so
long, as such Person is in possession of the Airframe and/or
any Engine pursuant to the terms of a Lease which is then in
effect pursuant to Section 7.02(b)(x) of the Trust Indenture.
"LIEN" means any mortgage, pledge, lien, charge,
claim, encumbrance, lease, sublease or security interest.
"LIQUIDITY FACILITIES" means the four Revolving
Credit Agreements between the Subordination Agent, as
borrower, and the Liquidity Provider, including the related
Liquidity Fee Letter referred to therein, and any replacement
thereof, in each case as the same may be amended, modified or
supplemented.
"LIQUIDITY PROVIDER" means Landesbank
Hessen-Thuringen Girozentrale, as Class A-1 Liquidity
Provider, Class A-2 Liquidity Provider, Class B Liquidity
Provider and Class C Liquidity Provider under the Liquidity
Facilities, or any successor thereto.
"LOAN PARTICIPANT" means each Purchaser and its
respective successors and registered assigns, including any
Certificate Holder.
"LOAN PARTICIPANT LIENS" means any Lien which arises
from acts or claims against any Loan Participant not related
to the transactions contemplated by the Operative Documents.
"MAJORITY IN INTEREST OF CERTIFICATE HOLDERS" as of a
particular date of determination shall mean the holders of
more than a majority in aggregate unpaid Principal Amount of
all Secured Certificates outstanding as of such date
(excluding any Secured Certificates held by the Owner or its
affiliates[, it being understood that the Class D Trustee
shall be an affiliate of the Owner as long as more than 50% in
the aggregate face amount of the Pass Through Certificates
issued by the Class D Pass Through Trust are held by an
affiliate of the Owner or the Class D Trustee is otherwise
under the control of such affiliate of the Owner -- A319's and
757's] (unless all Secured Certificates then outstanding shall
be held by the Owner or its affiliates)).
"MAKE-WHOLE AMOUNT" means, with respect to any
Secured Certificate, the amount (as determined by an
independent investment banker selected by the Owner and
reasonably acceptable to the Indenture Trustee) by which (a)
the present value of the remaining scheduled payments of
principal and interest from the redemption date to maturity of
such Secured Certificate computed by discounting each such
payment on a semiannual basis from its respective Payment
Annex A-9
Date (assuming a 360-day year of twelve 30-day months) using a
discount rate equal to the Treasury Yield EXCEEDS (b) the
outstanding principal amount of such Secured Certificate plus
accrued interest. For purposes of determining the Make-Whole
Amount, "TREASURY YIELD" at the time of determination with
respect to any Secured Certificate means the interest rate
(expressed as a semiannual equivalent and as a decimal and, in
the case of United States Treasury bills, converted to a bond
equivalent yield) determined to be the per annum rate equal to
the semiannual yield to maturity for United States Treasury
securities maturing on the Average Life Date of such Secured
Certificate and trading in the public securities market either
as determined by interpolation between the most recent weekly
average yield to maturity for two series of United States
Treasury securities, trading in the public securities markets,
(A) one maturing as close as possible to, but earlier than,
the Average Life Date of such Secured Certificate and (B) the
other maturing as close as possible to, but later than, the
Average Life Date of such Secured Certificate, in each case as
published in the most recent H.15(519) or, if a weekly average
yield to maturity for United States Treasury securities
maturing on the Average Life Date of such Secured Certificate
is reported on the most recent H.15(519), such weekly average
yield to maturity as published in such H.15(519). "H.15(519)"
means the weekly statistical release designated as such, or
any successor publication, published by the Board of Governors
of the Federal Reserve System. The date of determination of a
Make-Whole Amount shall be the third Business Day prior to the
applicable redemption date and the "MOST RECENT H.15(519)"
means the H.15(519) published prior to the close of business
on the third Business Day prior to the applicable redemption
date.
"MANUFACTURER" means [Airbus Industrie, G.I.E., a
Groupement d'Interet Economique established under Ordonnance
67-821, dated September 23, 1967, of the Republic of France]
[The Boeing Company, a Delaware corporation].
["MANUFACTURER CONSENT AND AGREEMENT TO ASSIGNMENT OF
WARRANTIES" means the Manufacturer Consent and Agreement to
Assignment of Warranties [NW ____ __], dated as of the date
hereof, executed by the Manufacturer, as the same may be
amended, modified or supplemented from time to time in
accordance with the applicable provisions thereof. -- A319'S
ONLY]
"MANUFACTURER DOCUMENTS" means [the Manufacturer
Consent and Agreement to Assignment of Warranties and the
Guaranty.-- A319'S] [the Purchase Agreement and the Consent
and Agreement.-- 757'S AND 747'S]
["MORTGAGE" means that certain Mortgage and Security
Agreement, dated as of [________________].]
"MORTGAGED PROPERTY" shall have the meaning specified
in Section 3.03 of the Trust Indenture.
Annex A-10
"NOTE PURCHASE AGREEMENT" means that certain Note
Purchase Agreement, dated as of the Issuance Date, among
Northwest Airlines, Inc., the Subordination Agent, ▇▇▇▇▇ Fargo
Bank Northwest, National Association, as Escrow Agent, State
Street Bank and Trust Company of Connecticut, National
Association, as Paying Agent and the Pass Through Trustee
under each Pass Through Trust Agreement [other than the Class
D Pass Through Trust -- A319's and 757's] providing for, among
other things, the issuance and sale of certain secured
certificates.
"OPERATIVE DOCUMENTS" and "OPERATIVE DOCUMENT" means
each of the Participation Agreement, the Trust Indenture, the
Trust Indenture Supplement covering the Aircraft, the Secured
Certificates, the Purchase Agreement (insofar as it relates to
the Aircraft), the Consent and Agreement and the Guarantee.
"OVERALL TRANSACTION" means all the transactions
contemplated by the Operative Documents.
"OWNER DOCUMENTS" means the Participation Agreement,
the Trust Indenture and the Purchase Agreement (insofar as it
relates to the Aircraft).
"PARTICIPANTS" means and includes the Loan
Participants.
"PARTICIPATION AGREEMENT" means that certain
Participation Agreement [NW ____ _], dated as of
[_______________], among the Owner, the Subordination Agent,
the Indenture Trustee, the Guarantor, and the Purchasers as
the same may from time to time be supplemented or further
amended, or the terms thereof waived or modified, to the
extent permitted by, and in accordance with, the terms
thereof.
"PARTIES" means the Indenture Trustee and the
Participants.
"PARTS" means all appliances, parts, instruments,
appurtenances, accessories, furnishings and other equipment of
whatever nature (other than (a) complete Engines or engines,
(b) any items leased by the Owner from a third party (other
than Lessor) and (c) cargo containers) which may from time to
time be incorporated or installed in or attached to the
Airframe or any Engine.
"PASS THROUGH CERTIFICATES" means the pass through
certificates to be issued by the Pass Through Trustee in
connection with the Overall Transaction.
"PASS THROUGH TRUST" means each of the [four] [five
-- A319's and 757's] separate pass through trusts created
under the Pass Through Trust Agreements.
"PASS THROUGH TRUST AGREEMENT" means the pass through
trust agreement and each of the [four] [five -- A319's and
757's] separate pass through trust supplements referred to on
Schedule III to the Participation Agreement.
Annex A-11
"PASS THROUGH TRUSTEE" means State Street Bank and
Trust Company of Connecticut, National Association, a national
banking association, in its capacity as trustee under each
Pass Through Trust Agreement, and each other person that may
from time to time be acting as successor trustee under any
such Pass Through Trust Agreement.
"PAST DUE RATE" shall mean, with respect to the
Secured Certificates, the rate per annum equal to 2% over the
Debt Rate as in effect from time to time.
"PAYMENT DATE" shall mean each [April 1 and October
1], commencing on [April/October 1, ____] (or, if any such day
is not a Business Day, the immediately succeeding Business
Day) until the Secured Certificates have been paid in full.
"PERMITTED LIEN" means any Lien referred to in
clauses (i) through (viii) of Section 7.01 of the Trust
Indenture.
"PERMITTED LESSEE" means any entity domiciled in a
country listed in Schedule III to the Trust Indenture.
"PERSON" means any individual, corporation,
partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization or government or any agency or political
subdivision thereof.
"PRINCIPAL AMOUNT" with respect to a Secured
Certificate means the stated original principal amount of such
Secured Certificate and, with respect to all Secured
Certificates, means the aggregate stated original principal
amounts of all Secured Certificates.
"PRINCIPAL AMOUNT REPAYMENT DATE" shall mean each
Payment Date on which any portion of the Principal Amount is
due and payable in accordance with the Amortization Schedule.
"PURCHASE AGREEMENT" means that certain [Airbus A319
Purchase Agreement, dated as of September 19, 1997] [Purchase
Agreement No. 2159, dated January 16, 2001] [Purchase
Agreement No. 1630, dated December 1, 1989], between the
[Supplier] [Manufacturer] and the Owner relating to the
purchase by the Owner of the Aircraft, as originally executed
or as modified, amended or supplemented in accordance with the
terms thereof, but only insofar as the foregoing relates to
the Aircraft.
"PURCHASERS" means the Pass Through Trustees under
each Pass Through Trust Agreement.
"QIB" shall have the meaning specified in Section
2.08 of the Trust Indenture.
Annex A-12
"RELATED INDEMNITEE GROUP" means, with respect to any
Indemnitee, any officer, director, servant, employee, agent or
Affiliate thereof.
"REPLACEMENT AIRFRAME" shall mean any airframe
substituted for the Airframe pursuant to Section 7.06 of the
Trust Indenture.
"REPLACEMENT ENGINE" shall mean any engine
substituted for an Engine pursuant to Section 7.06 of the
Trust Indenture.
"RESPONSIBLE OFFICER" means a responsible officer in
the Corporate Trust Office of the Indenture Trustee.
"SECURED CERTIFICATES" shall mean and include any
Secured Certificates issued hereunder, and issued in exchange
therefor or replacement thereof.
"SECURED OBLIGATIONS" shall have the meaning
specified in Section 2.06 of the Trust Indenture.
"SECURITIES ACT" shall mean the Securities Act of
1933, as amended.
"SERIES A-1" or "SERIES A-1 SECURED CERTIFICATES"
means Secured Certificates issued and designated as "Series
A-1" hereunder, in the Principal Amount and maturities and
bearing interest as specified in Schedule I to the Trust
Indenture under the heading "Series A-1."
"SERIES A-2" or "SERIES A-2 SECURED CERTIFICATES"
means Secured Certificates issued and designated as "Series
A-2" hereunder, in the Principal Amount and maturities and
bearing interest as specified in Schedule I to the Trust
Indenture under the heading "Series A-2."
"SERIES B" or "SERIES B SECURED CERTIFICATES" means
Secured Certificates issued and designated as "Series B"
hereunder, in the Principal Amount and maturities and bearing
interest as specified in Schedule I to the Trust Indenture
under the heading "Series B."
"SERIES C" or "SERIES C SECURED CERTIFICATES" means
Secured Certificates issued and designated as "Series C"
hereunder, in the Principal Amount and maturities and bearing
interest as specified in Schedule I to the Trust Indenture
under the heading "Series C."
["SERIES D" or "SERIES D SECURED CERTIFICATES" means
Secured Certificates issued and designated as "Series D"
hereunder, in the Principal Amount and maturities and bearing
interest as specified in Schedule I to the Trust Indenture
under the heading "Series D." -- A319's and 757's]
"STATE STREET" means State Street Bank and Trust
Company, a Massachusetts trust company, not in its capacity as
Indenture Trustee under the Trust Indenture, but in its
individual capacity.
Annex A-13
"SUBORDINATION AGENT" means State Street Bank and
Trust Company, a Massachusetts trust company, as subordination
agent under the Intercreditor Agreement, or any successor
thereto.
["SUPPLIER" means AVSA, S.A.R.L., a French societe a
responsabilite limitee, organized and existing under the laws
of the French Republic, and its successors.-- A319'S ONLY]
["SUPPLIER CONSENT AND AGREEMENT TO ASSIGNMENT OF
WARRANTIES" means the Supplier Consent and Agreement to
Assignment of Warranties [NW ____ _], dated as of the date
hereof, executed by the Supplier, as the same may be amended,
modified or supplemented from time to time in accordance with
the applicable terms thereof. -- A319'S ONLY]
["SUPPLIER DOCUMENTS" means the Purchase Agreement
and the Supplier Consent and Agreement to Assignment of
Warranties.-- A319'S ONLY]
"TAX INDEMNITEE" means (i) the Indenture Trustee, its
successors and permitted assigns and (ii) the Trust Indenture
Estate.
"TAXES" means any and all fees (including, without
limitation, license, recording, documentation and registration
fees), taxes (including, without limitation, income, gross
receipts, sales, rental, use, turnover, value added, property
(tangible and intangible), excise and stamp taxes), license,
levies, imposts, duties, charges, assessments or withholdings
of any nature whatsoever, together with any and all penalties,
fines, additions to tax and interest thereon (each,
individually a "TAX").
"TRANSACTIONS" means the transactions contemplated by
the Participation Agreement and the other Operative Documents.
"TRUST INDENTURE", "THIS INDENTURE"," THE TRUST
INDENTURE", "INDENTURE", and "THE INDENTURE" shall mean the
Trust Indenture and Security Agreement [NW ____ _], dated as
of [______] between the Owner and the Indenture Trustee, as it
may from time to time be supplemented or amended as herein
provided, including supplementing by a Trust Indenture
Supplement pursuant thereto.
"TRUST INDENTURE ESTATE" shall mean all estate,
right, title and interest of the Indenture Trustee in and to
the properties referred to in the Granting Clause of the Trust
Indenture.
"TRUST INDENTURE SUPPLEMENT" shall mean a supplement
to the Trust Indenture, in substantially the form of Exhibit A
thereto, which shall particularly describe the Aircraft, and
any Replacement Airframe and Replacement Engine.
"UNDERWRITING AGREEMENT" means that certain
Underwriting Agreement, dated as of May 22, 2001, among the
Owner, the Guarantor, and the underwriters named therein.
Annex A-14
"U.S. AIR CARRIER" means any Certificated Air Carrier
as to which there is in force an air carrier operating
certificate issued pursuant to Part 121 of the regulations
under the Federal Aviation Act, or which may operate as an air
carrier by certification or otherwise under any successor or
substitute provisions therefor or in the absence thereof.
"WET LEASE" means any arrangement whereby the Owner
(or any Lessee) agrees to furnish the Airframe and Engines or
engines installed thereon to a third party pursuant to which
such Airframe and Engines or engines (i) shall be operated
solely by regular employees of the Owner (or any Lessee)
possessing all current certificates and licenses that would be
required under the Federal Aviation Act or, if the Aircraft is
not registered in the United States, all certificates and
licenses required by the laws of the jurisdiction of registry,
for the performance by such employees of similar functions
within the United States of America or such other jurisdiction
of registry (it is understood that cabin attendants need not
be regular employees of the Owner (or any Lessee)) and (ii)
shall be maintained by the Owner (or any Lessee) in accordance
with its normal maintenance practices.
Annex A-15
-----------------------------
EXHIBIT A
TO
TRUST INDENTURE
AND SECURITY AGREEMENT
-----------------------------
TRUST INDENTURE SUPPLEMENT
[NW ____ _]
This TRUST INDENTURE SUPPLEMENT [NW ____ _], dated
[_____________] (herein called this "TRUST INDENTURE SUPPLEMENT") of NORTHWEST
AIRLINES, INC. (the "OWNER").
W I T N E S S E T H:
WHEREAS, the
TRUST INDENTURE AND SECURITY AGREEMENT [NW ____
_], dated as of [_______________] (as amended and supplemented to the date
hereof, the "TRUST INDENTURE") between the Owner and STATE STREET BANK AND TRUST
COMPANY, as Indenture Trustee (the "INDENTURE TRUSTEE"), provides for the
execution and delivery of a supplement thereto substantially in the form hereof,
which shall particularly describe the Aircraft, and shall specifically mortgage
such Aircraft to the Indenture Trustee; and
WHEREAS, the Trust Indenture relates to the Airframe and
Engines described below, and a counterpart of the Trust Indenture is attached
hereto and made a part hereof and this Trust Indenture Supplement, together with
such counterpart of the Trust Indenture, is being filed for recordation on the
date hereof with the FAA as one document;
NOW, THEREFORE, this Trust Indenture Supplement witnesseth
that the Owner hereby confirms that the Lien of the Trust Indenture on the
Collateral covers all of the Owner's right, title and interest in and to the
following described property:
AIRFRAME
One airframe identified as follows:
FAA
REGISTRATION MANUFACTURER'S
MANUFACTURER MODEL NUMBER SERIAL NUMBER
------------ ----- ------ -------------
together with all of the Owner's right, title and interest in and to all Parts
of whatever nature, whether now owned or hereinafter acquired and which are from
time to time incorporated or installed in or attached to said airframe.
AIRCRAFT ENGINES
[Two] [Four] aircraft engines, each such engine having 750 or
more rated take-off horsepower or the equivalent thereof, identified as follows:
EXHIBIT A-1
MANUFACTURER MANUFACTURER'S MODEL SERIAL NUMBER
------------ -------------------- -------------
together with all of the Owner's right, title and interest in and to all Parts
of whatever nature, whether now owned or hereafter acquired and which are from
time to time incorporated or installed in or attached to any of such engines.
Together with all of the Owner's right, title and interest in
and to all Parts of whatever nature, which from time to time are included within
the definition of "Airframe" or "Engine", whether now owned or hereafter
acquired, including all substitutions, renewals and replacements of and
additions, improvements, accessions and accumulations to the Airframe and
Engines (other than additions, improvements, accessions and accumulations which
constitute appliances, parts, instruments, appurtenances, accessories,
furnishings or other equipment excluded from the definition of Parts).
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Indenture Trustee, its successors and assigns, in trust for the equal
and proportionate benefit and security of the Certificate Holders, except as
provided in Section 2.15 and Article III of the Trust Indenture without any
preference, distinction or priority of any one Secured Certificate over any
other by reason of priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses and
purposes and subject to the terms and provisions set forth in the Trust
Indenture.
This Trust Indenture Supplement shall be construed as
supplemental to the Trust Indenture and shall form a part thereof. The Trust
Indenture is each hereby incorporated by reference herein and is hereby
ratified, approved and confirmed.
This Trust Indenture Supplement is being delivered in the
State of New York.
AND, FURTHER, the Owner hereby acknowledges that the Aircraft
referred to in this Trust Indenture Supplement has been delivered to the Owner
and is included in the property of the Owner subject to the pledge and mortgage
thereof under the Trust Indenture.
EXHIBIT A-2
IN WITNESS WHEREOF, the Owner has caused this Trust Indenture
Supplement to be duly executed by one of its officers, thereunto duly
authorized, on the day and year first above written.
NORTHWEST AIRLINES, INC.
By: ____________________________
Name:
Title:
EXHIBIT A-3
SCHEDULE I
PRINCIPAL AMOUNT INTEREST RATE MATURITY DATE
---------------- ------------- -------------
Series A-1.............. $[_________] 7.041%
Series A -2............. $[_________] 6.841% April 1, 2011
Series B................ $[_________] 7.691%
Series C................ $[_________] 7.626%
[Series D............... $[_________] [______]%
-- A319's and 757's]
SCHEDULE I-1
SECURED CERTIFICATES AMORTIZATION
SERIES A-1
AIRCRAFT: N[_____]
Percentage of Principal
Payment Date Amount to be Paid
------------ -----------------------
SCHEDULE I-2
SERIES B
AIRCRAFT: N[_____]
Percentage of Principal
Payment Date Amount to be Paid
------------ -----------------------
SCHEDULE I-3
SERIES C
AIRCRAFT: N[_____]
Percentage of Principal
Payment Date Amount to be Paid
------------ -----------------------
SCHEDULE I-4
[SERIES D
AIRCRAFT: N[_____]
Percentage of Principal
Payment Date Amount to be Paid
------------ -----------------------
SCHEDULE I-5 -- A319's and 757's]
SCHEDULE II
PASS THROUGH TRUST AGREEMENTS
1. Pass Through Trust Agreement, dated as of June 3, 1999, among
Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank
and Trust Company of Connecticut, National Association, as supplemented
by Trust Supplement No. 2001-1A-1, dated as of June 1, 2001 among
Northwest Airlines, Inc.,
Northwest Airlines Corporation and State
Street Bank and Trust Company of Connecticut, National Association.
2. Pass Through Trust Agreement, dated as of June 3, 1999, among
Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank
and Trust Company of Connecticut, National Association, as supplemented
by Trust Supplement No. 2001-1A-2, dated as of June 1, 2001 among
Northwest Airlines, Inc.,
Northwest Airlines Corporation and State
Street Bank and Trust Company of Connecticut, National Association.
3. Pass Through Trust Agreement, dated as of June 3, 1999, among
Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank
and Trust Company of Connecticut, National Association, as supplemented
by Trust Supplement No. 2001-1B, dated as of June 1, 2001 among
Northwest Airlines, Inc., Northwest Airlines Corporation and State
Street Bank and Trust Company of Connecticut, National Association.
4. Pass Through Trust Agreement, dated as of June 3, 1999, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank
and Trust Company of Connecticut, National Association, as supplemented
by Trust Supplement No. 2001-1C, dated as of June 1, 2001 among
Northwest Airlines, Inc., Northwest Airlines Corporation and State
Street Bank and Trust Company of Connecticut, National Association.
[5. Pass Through Trust Agreement, dated as of June 3, 1999, among Northwest
Airlines Corporation, Northwest Airlines, Inc., and State Street Bank
and Trust Company of Connecticut, National Association, as supplemented
by Trust Supplement No. 2001-1D, dated as of [______ __, ____] among
Northwest Airlines, Inc., Northwest Airlines Corporation and State
Street Bank and Trust Company of Connecticut, National Association.--
A319's and 757's]
SCHEDULE II-1
SCHEDULE III
SCHEDULE OF DOMICILES OF PERMITTED LESSEES
Argentina Malta
Australia Mexico
Austria Morocco
Bahamas Netherlands
Belgium New Zealand
Brazil Norway
Canada Paraguay
Chile People's Republic of China
Denmark Philippines
Egypt Portugal
Finland Republic of China (Taiwan)(1)
France Singapore
Germany South Africa
Greece South Korea
Hungary Spain
Iceland Sweden
India Switzerland
Indonesia Thailand
Ireland Trinidad and Tobago
Italy United Kingdom
Japan Uruguay
Luxembourg Venezuela
Malaysia
----------
(1) So long as on the date of entering into the proposed lease such country
and the United States have diplomatic relations at least as good as
those in effect on the Closing Date.
SCHEDULE III-1