EXHIBIT 4.20
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AMENDED AND RESTATED TRUST INDENTURE
AND SECURITY AGREEMENT
dated as of May 24, 2001
between
▇▇▇▇▇ FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual
capacity except as expressly set forth herein
but solely as Owner Trustee
and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, as Loan Trustee
One ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Model MD-83 Aircraft
Bearing U.S. Registration No. N9630A
Manufacturer's Serial No. 53561
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TABLE OF CONTENTS
GRANTING CLAUSE...................................................................................................2
HABENDUM CLAUSE...................................................................................................5
ARTICLE 1 DEFINITIONS
ARTICLE 2 THE EQUIPMENT NOTES
Section 2.01. Form of Equipment Notes.............................................................................7
Section 2.02. Issuance and Terms of Equipment Notes...............................................................7
Section 2.03. Method of Payment...................................................................................8
Section 2.04. Registration, Transfer and Exchange of Equipment Notes..............................................9
Section 2.05. Mutilated, Destroyed, Lost or Stolen Equipment Notes...............................................10
Section 2.06. Payment of Expenses on Transfer; Cancellation......................................................10
Section 2.07. Mandatory Redemption of Equipment Notes............................................................10
Section 2.08. Voluntary Redemption of Equipment Notes............................................................11
Section 2.09. Redemptions; Notice of Redemption to Noteholders...................................................11
Section 2.10. Purchase upon Indenture Event of Default...........................................................12
Section 2.11. Payment from Indenture Estate Only; Non-Recourse Obligations.......................................13
Section 2.12. Application of Payments............................................................................14
Section 2.13. Subordination......................................................................................14
Section 2.14. Certain Payments...................................................................................15
Section 2.15. Directions by Subordination Agent..................................................................16
Section 2.16. Repayment of Monies for Equipment Note Payments Held by the Loan Trustee...........................17
Section 2.17. Termination of Interest in Indenture Estate........................................................17
ARTICLE 3 RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS IN THE INDENTURE ESTATE
Section 3.01. Payment upon Issuance of Equipment Notes...........................................................17
Section 3.02. Basic Distributions................................................................................17
Section 3.03. Event of Loss; Optional Redemption; Voluntary Termination..........................................19
Section 3.04. Payments After Indenture Event of Default..........................................................19
Section 3.05. Certain Payments...................................................................................22
Section 3.06. Payments for Which No Application Is Otherwise Provided............................................22
Section 3.07. Payments to Owner Trustee..........................................................................22
ARTICLE 4 COVENANTS OF OWNER TRUSTEE
Section 4.01. Covenants of Owner Trustee.........................................................................23
ARTICLE 5 DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY INCLUDED IN THE INDENTURE
ESTATE DURING CONTINUATION OF LEASE
Section 5.01. Disposition, Substitution and Release of Property Included in the
Indenture Estate During Continuation of Lease................................................23
ARTICLE 6 [RESERVED]
ARTICLE 7 [RESERVED]
ARTICLE 8 DEFAULTS AND REMEDIES
Section 8.01. Indenture Events of Default........................................................................24
Section 8.02. Acceleration; Rescission and Annulment.............................................................26
Section 8.03. Certain Rights.....................................................................................27
Section 8.04. Remedies...........................................................................................28
Section 8.05. Return of Aircraft, Etc............................................................................30
Section 8.06. Remedies Cumulative................................................................................31
Section 8.07. Discontinuance of Proceedings......................................................................31
Section 8.08. Waiver of Past Defaults............................................................................32
Section 8.09. Loan Trustee Authorized to Execute Bills of Sale, Etc..............................................32
Section 8.10. Rights of Noteholders to Receive Payment...........................................................32
ARTICLE 9 DUTIES OF THE LOAN TRUSTEE
Section 9.01. Notice of Indenture Event of Default...............................................................32
Section 9.02. Action upon Instructions...........................................................................33
Section 9.03. Indemnification....................................................................................34
Section 9.04. No Duties Except as Specified in Indenture or Instructions.........................................34
Section 9.05. No Action Except Under Lease, Indenture or Instructions............................................34
Section 9.06. Notices, Etc.......................................................................................34
Section 9.07. Investment of Funds Held by Loan Trustee...........................................................34
Section 9.08. Replacement of Loan Trustee........................................................................35
Section 9.09. Successor Loan Trustee by Merger, Etc..............................................................36
Section 9.10. Eligibility; Disqualification......................................................................36
Section 9.11. Trustee's Liens....................................................................................37
Section 9.12. Withholding Taxes; Information Reporting...........................................................37
ARTICLE 10 THE OWNER TRUSTEE AND THE LOAN TRUSTEE
Section 10.01. Acceptance of Trusts and Duties...................................................................37
Section 10.02. Absence of Duties.................................................................................38
Section 10.03. No Representations or Warranties as to Aircraft or Documents......................................38
Section 10.04. No Segregation of Moneys; No Interest.............................................................38
Section 10.05. Reliance; Agents; Advice of Counsel...............................................................39
Section 10.06. Capacity in Which Acting..........................................................................39
Section 10.07. Compensation......................................................................................39
Section 10.08. May Become Noteholder.............................................................................40
Section 10.09. Further Assurances; Financing Statements..........................................................40
ARTICLE 11 INDEMNIFICATION OF LOAN TRUSTEE BY OWNER TRUSTEE
Section 11.01. Scope of Indemnification..........................................................................40
ARTICLE 12 SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE AND OTHER DOCUMENTS
Section 12.01. Amendments to This Indenture Without Consent of Noteholders.......................................41
Section 12.02. Amendments to This Indenture with Consent of Noteholders..........................................42
Section 12.03. Revocation and Effect of Consents.................................................................43
Section 12.04. Notation on or Exchange of Equipment Notes........................................................43
Section 12.05. Amendments, Waivers, Etc., of Other Operative Documents...........................................43
Section 12.06. Trustees Protected................................................................................46
Section 12.07. Documents Mailed to Noteholders...................................................................46
ARTICLE 13 MISCELLANEOUS
Section 13.01. Termination of Indenture..........................................................................46
Section 13.02. No Legal Title to Indenture Estate in Noteholders.................................................47
Section 13.03. Sale of Indenture Estate by Loan Trustee is Binding...............................................47
Section 13.04. Indenture for Benefit of Owner Trustee, Loan Trustee, Owner Participant,
Noteholders, Other Indenture Indemnitees and Lessee...............................................47
Section 13.05. No Action Contrary to Lessee's Rights Under the Lease.............................................47
ii
Section 13.06. Notices...........................................................................................47
Section 13.07. Severability......................................................................................48
Section 13.08. Oral Modifications or Continuing Waivers..........................................................48
Section 13.09. Successors and Assigns............................................................................48
Section 13.10. Headings..........................................................................................48
Section 13.11. Normal Commercial Relations.......................................................................48
Section 13.12. GOVERNING LAW.....................................................................................48
Section 13.13. Execution in Counterparts.........................................................................48
Annex A - Definitions
Exhibit A - Form of Equipment Note
Exhibit B - Form of Trust Agreement and Indenture Supplement
Schedule I - Description of Aircraft
Schedule II - Terms of Equipment Notes
Schedule III - List of Pass Through Trust Agreements
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AMENDED AND RESTATED
TRUST INDENTURE
AND SECURITY AGREEMENT
This AMENDED AND RESTATED
TRUST INDENTURE AND SECURITY
AGREEMENT, dated as of May 24, 2001, between ▇▇▇▇▇ FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity except as otherwise expressly provided herein, but solely as Owner
Trustee under the Trust Agreement (capitalized terms used herein without
definition having the respective meanings specified therefor in Article 1), and
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association, as Loan Trustee hereunder.
WITNESSETH:
WHEREAS, the Owner Participant and the Owner Trustee in its
individual capacity have entered into the Trust Agreement whereby, among other
things, (i) the Owner Trustee has established a certain trust for the use and
benefit of the Owner Participant subject, however, to the Indenture Estate
created pursuant hereto for the use and benefit of, and with the priority of
payment to, the holders of the Equipment Notes issued hereunder, and (ii) the
Owner Trustee has been authorized and directed to execute and deliver this
Indenture;
WHEREAS, the Owner Trustee and Wilmington Trust Company as
Indenture Trustee (the "Indenture Trustee") entered into the Original Indenture
described in Schedule I;
WHEREAS, the Original Indenture was recorded with the FAA on
April 9, 2001 and was assigned the Conveyance No. specified in Schedule I;
WHEREAS, the Indenture Trustee under the Original Indenture
has resigned and has been replaced in such capacity by the Loan Trustee under
the Instrument of Resignation being filed with the FAA simultaneously herewith;
WHEREAS, the parties desire by this Indenture, among other
things, (i) to amend and restate in its entirety the Original Indenture, (ii) to
provide for the issuance by the Owner Trustee of the Equipment Notes and (iii)
to provide for the assignment, mortgage and pledge by the Owner Trustee to the
Loan Trustee, as part of the Indenture Estate hereunder, among other things, of
certain of the Owner Trustee's right, title and interest in and to the Aircraft
and the Operative Documents and certain payments and other amounts received
hereunder or thereunder in accordance with the terms hereof, as security for,
among other things, the Owner Trustee's obligations to the Loan Trustee, the
Noteholders and the Indenture Indemnitees, for the ratable benefit and security
of the Noteholders, subject to Section 2.13 and Article 3;
WHEREAS, all things have been done to make the Equipment
Notes, when executed by the Owner Trustee and authenticated and delivered by the
Loan Trustee hereunder, the valid, binding and enforceable obligations of the
Owner Trustee; and
WHEREAS, all things necessary to make this Indenture the
legal, valid and binding obligation of the Owner Trustee and the Loan Trustee,
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 of, Make-Whole
Amount, if any, and interest on and all other amounts due with respect to, all
Equipment Notes from time to time outstanding and the performance and observance
by the Owner Trustee of all the agreements, covenants and provisions contained
herein and in the other Operative Documents to which it is a party for the
benefit of the Noteholders and the Indenture Indemnitees, and the prompt payment
of any amounts from time to time owing to the Noteholders and the Indenture
Indemnitees under the Participation Agreement by the Owner Trustee, the Owner
Participant and the Lessee, and for the uses and purposes and subject to the
terms and provisions hereof, and in consideration of the premises and of the
covenants herein contained, and of the acceptance of the Equipment Notes by the
Noteholders, and of the sum of $1 paid to the Owner Trustee by the Loan Trustee
at or before the delivery hereof, the receipt whereof is hereby acknowledged,
the Owner Trustee 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 Loan Trustee, its
successors and assigns, for the security and benefit of the Noteholders and the
Indenture Indemnitees from time to time, a first priority security interest in
and mortgage Lien on all estate, right, title and interest of the Owner Trustee
in, to and under the following described property, rights, interests and
privileges (which collectively, including all property hereafter specifically
subjected to the Lien of this Indenture by any instrument supplemental hereto,
but excluding the Excepted Property, are herein called the "Indenture Estate"):
(1) the Aircraft (including the Airframe and the Engines more
fully described in Schedule I hereto), and all replacements thereof and
substitutions therefor in which the Owner Trustee shall from time to
time acquire an interest as provided herein and in accordance with the
Lease, as more particularly described in the Trust Agreement and
Indenture Supplement executed and delivered with respect to the
Aircraft or any such replacements thereof or substitutions therefor, as
provided in this Indenture, including all logs, manuals and data, and
inspection, modification and overhaul records required to be maintained
with respect thereto under applicable rules and regulations of the FAA
and, if the Aircraft has been registered under the laws of a
jurisdiction other than the United States, of the applicable foreign
governmental authority;
(2) the Lease, each Lease Supplement and all Rent thereunder,
including, without limitation, all amounts of Basic Rent, Supplemental
Rent, and payments of any kind thereunder; the Purchase Agreement (to
the extent assigned by the Purchase Agreement Assignment), and the
Purchase Agreement Assignment, in each case including, without
limitation, (x) all rights of the Owner Trustee to receive any payments
or other amounts or to exercise any election or option or to make any
decision or determination or to give or receive any notice, consent,
waiver or approval or to take any other action under or in respect of
any such document or to accept surrender or redelivery of the Aircraft
or any part thereof, as well as all the rights, powers and remedies on
the part of the Owner Trustee, whether acting under any such document
or by statute or at law or in equity, or otherwise, arising out of any
Lease Event of Default, and (y) any right
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to restitution from the Lessee or any other Person in respect of any
determination of invalidity of any such document;
(3) all rents, issues, profits, revenues and other income of
the property subjected or required to be subjected to the Lien of this
Indenture, including all payments or proceeds payable to the Owner
Trustee after termination of the Lease with respect to the Aircraft as
the result of the sale, lease or other disposition thereof, and all
estate, title and interest of every nature whatsoever of the Owner
Trustee in and to the same and every part thereof;
(4) all requisition proceeds with respect to the Aircraft or
any part thereof and all insurance proceeds with respect to the
Aircraft or any part thereof, but excluding any insurance maintained by
the Owner Trustee, the Owner Participant or the Lessee and not required
under Section 11 of the Lease;
(5) all moneys and securities now or hereafter paid or
deposited or required to be paid or deposited to or with the Loan
Trustee by or for the account of the Owner Trustee pursuant to any term
of any Operative Document and held or required to be held by the Loan
Trustee hereunder;
(6) all rights of the Owner Trustee to amounts paid or payable
by the Lessee to the Owner Trustee under the Participation Agreement
and all rights of the Owner Trustee to enforce payment of any such
amounts thereunder; and
(7) all proceeds of the foregoing (the Owner Trustee having
delivered to the Loan Trustee the original executed Lease and executed
counterparts of the Trust Agreement and the Purchase Agreement
Assignment);
Notwithstanding the foregoing provisions:
(a) there shall be excluded from the Indenture Estate and from
the security interest granted by this Indenture all Excepted Property;
(b) (i) whether or not a Lease Event of Default shall occur
and be continuing, the Owner Trustee and the Owner Participant shall at
all times retain the right, to the exclusion of the Loan Trustee, (A)
to retain the rights of the "Lessor" with respect to the election to
retain or sell the Aircraft pursuant to Section 9 of the Lease and (B)
to retain the right of the "Lessor" in connection with the
determination of the fair market rental value or fair market sales
value pursuant to Section 20 of the Lease;
(ii) whether or not a Lease Event of Default or an Indenture
Event of Default shall occur and be continuing, (A) the Owner Trustee
and the Owner Participant shall at all times retain the right, to the
exclusion of the Loan Trustee, (x) to exercise any election or option
or make any decision or determination, or to give or receive any
notice, consent, waiver or approval, or to demand, collect, ▇▇▇ for or
otherwise receive and enforce the payment of Excepted Property due and
payable to it or to take any other action in respect of, but in each
case only to the extent relating to, Excepted Property and to commence
an action at law to obtain such Excepted Property, (y) to retain all
rights
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with respect to insurance maintained for its own account in conformity
with Section 11(f) of the Lease, and (z) to exercise, to the extent
necessary to enable it to exercise its rights under Section 8.03
hereof, the rights of the "Lessor" under Section 23 of the Lease; and
(B) the Owner Trustee and the Loan Trustee shall each retain the right,
separately but not to the exclusion of the other, (w) to receive from
the Lessee all notices, certificates, reports, filings, opinions of
counsel, copies of all documents and all information which the Lessee
is permitted or required to give or furnish to the "Lessor" or to the
"Owner Trustee" pursuant to any Operative Document, (x) to give any
notice of default under Section 15 of the Lease and to declare the
Lease in default in respect thereof, (y) to cause the Lessee to take
any action and execute and deliver such documents, financial
information and assurances as the "Lessor" may from time to time
reasonably request pursuant to Section 17 of the Lease and (z) to
exercise inspection rights pursuant to Section 12 of the Lease;
(iii) without limiting the effect of clause (ii) above, so
long as no Indenture Event of Default shall have occurred and be
continuing (but subject to the provisions of Article 12), the Owner
Trustee shall retain the right, to the exclusion of the Loan Trustee,
to exercise all other rights of the "Lessor" under the Lease including,
without limitation, (A) the right to approve as satisfactory any
accountants, engineers or counsel to render services for or issue
opinions to the Owner Trustee pursuant to express provisions of the
Operative Documents and to exercise all rights with respect to the
Lessee's use, operation, and maintenance or modification of the
Aircraft or Engines which the Lease specifically provides to the Lessor
and (B) the right to consent to reregistration of the Aircraft pursuant
to Section 12(l) of the Participation Agreement; provided that the
foregoing shall not limit (x) any rights separately and expressly
granted the Loan Trustee or any Noteholder under the Operative
Documents or (y) the right of the Loan Trustee to receive any funds to
be delivered to the "Lessor" under the Lease (except funds which
constitute or are delivered with respect to Excepted Property) and
under the Purchase Agreement;
(c) the leasehold interest granted to the Lessee under the
Lease shall not be subject to the security interest granted by this
Indenture, and nothing in this Indenture shall affect the rights of the
Lessee under the Lease so long as no Lease Event of Default has
occurred and is continuing; and
(d) as between the Owner Trustee and the Loan Trustee, nothing
contained in this Granting Clause shall prevent the Owner Trustee or
the Owner Participant from seeking specific performance of the
covenants of the Lessee under the Lease relating to the protection,
insurance, maintenance, possession and use of the Aircraft, provided
such action shall not interfere with the exercise by the Loan Trustee
of its remedies under Article 8 hereof or Section 15 of the Lease, or
from maintaining separate insurance with respect to the Aircraft to the
extent permitted by Section 11 of the Lease.
Notwithstanding the foregoing, the Loan Trustee shall at all
times have the right, to the exclusion of the Owner Trustee and the Owner
Participant, to (a) declare the Lease to be in default under Section 15 thereof
and (b) subject only to the provisions of Sections 8.03 and
4
8.04(a) hereof, exercise the remedies set forth in such Section 15 (other than
in connection with Excepted Property) and in Article 8 hereof.
HABENDUM CLAUSE
TO HAVE AND TO HOLD all and singular the aforesaid property
unto the Loan Trustee, its successors and assigns, in trust for the benefit and
security of the Noteholders and the Indenture Indemnitees from time to time,
without any priority of any one Equipment Note over any other except as provided
in Section 2.13 and Article 3 hereof, and for the uses and purposes and subject
to the terms and provisions set forth in this Indenture.
The Owner Trustee agrees that this Indenture is intended to
create and shall create and grant to the Loan Trustee a security interest in the
Aircraft, which security interest shall attach on and as of the Commencement
Time. The security interest created by this Indenture and granted to the Loan
Trustee hereunder in the Indenture Estate other than in the Aircraft shall
attach upon the delivery hereof.
It is expressly agreed that, anything herein contained to the
contrary notwithstanding, the Owner Trustee shall remain liable under each of
the Operative Documents to which it is a party to perform all of the obligations
assumed by it thereunder, all in accordance with and pursuant to the terms and
provisions thereof, and the Loan Trustee and the Noteholders shall have no
obligation or liability under any of the Operative Documents to which the Owner
Trustee is a party by reason of or arising out of the assignment hereunder, nor
shall the Loan Trustee (except as to the Loan Trustee, if the Loan Trustee shall
have become the "Lessor" under the Lease) be required or obligated in any manner
to perform or fulfill any obligations of the Owner Trustee under or pursuant to
any of the Operative Documents to which the Owner Trustee is a party or, except
as herein or therein 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.
Subject to the terms and conditions hereof, the Owner Trustee
does hereby constitute the Loan Trustee the true and lawful attorney of the
Owner Trustee, irrevocably, with full power (in the name of the Owner Trustee or
otherwise) to ask, require, demand, receive, compound and give acquittance for
any and all moneys and claims for moneys due and to become due to the Owner
Trustee (other than Excepted Property) under or arising out of the Indenture
Documents and all other property which now or hereafter constitutes part of the
Indenture Estate (subject to the provisions of Section 12.05(b)(i)), to endorse
any checks or other instruments or orders in connection therewith and to file
any claims or take any action or institute any proceedings which the Loan
Trustee may deem to be necessary or advisable in the premises. The Owner Trustee
has directed the Lessee to make all payments of Rent (other than Excepted
Property) payable to the Owner Trustee by the Lessee and all other amounts which
are required to be paid to or deposited with the Owner Trustee pursuant to the
Lease directly to the Loan Trustee at such address as the Loan Trustee shall
specify, for application as provided in this Indenture. The Owner Trustee agrees
that promptly on receipt thereof, it will transfer to the Loan Trustee any and
all moneys from time to time received by it constituting part of the Indenture
Estate, for distribution by the Loan Trustee pursuant to this Indenture, except
that the
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Owner Trustee shall accept for distribution pursuant to the Trust Agreement any
amounts distributed to it by the Loan Trustee as expressly provided in this
Indenture and any Excepted Property.
The Owner Trustee agrees that at any time and from time to
time, upon the written request of the Loan Trustee, the Owner Trustee will
promptly and duly execute and deliver or cause to be duly executed and delivered
to the Loan Trustee any and all such further instruments and documents as the
Loan Trustee may reasonably deem desirable in obtaining the full benefits of the
mortgage and security interest granted hereby and of the rights and powers
herein granted.
The Owner Trustee does hereby warrant and represent that it
has not mortgaged, assigned or pledged, and hereby covenants that it will not
mortgage, assign or pledge, so long as the Lien of this Indenture shall or is
intended to remain in effect, any of its right, title or interest subject to the
mortgage and security interest hereby created, to anyone other than the Loan
Trustee, and that it will not (other than in respect of Excepted Property),
except as provided in or permitted by this Indenture, accept any payment from
the Lessee, enter into an agreement amending or supplementing any of the
Operative Documents to which it is a party, execute any waiver or modification
of, or consent under the terms of any of the Operative Documents to which it is
a party, settle or compromise any claim against the Lessee arising under any of
the Operative Documents, or submit or consent to the submission of any dispute,
difference or other matter arising under or in respect of any of the Operative
Documents to which it is a party to arbitration thereunder.
The Owner Trustee does hereby agree that it will not without
the written consent of the Loan Trustee:
(a) receive or collect or agree to the receipt or collection
of any payment (other than Excepted Payments) of Rent, including Basic
Rent, Stipulated Loss Value, Termination Value or any other payment to
be made pursuant to Section 9 or 10 of the Lease prior to the date for
the payment thereof provided for by the Lease or assign, transfer or
hypothecate (other than to the Loan Trustee hereunder) any payment of
Rent, including Basic Rent, Stipulated Loss Value, Termination Value or
any other payment to be made pursuant to Section 9 or 10 of the Lease,
then due or to accrue in the future under the Lease in respect of the
Airframe and Engines; or
(b) except as contemplated by the Trust Agreement in
connection with the appointment of a successor owner trustee, sell,
mortgage, transfer, assign or hypothecate (other than to the Loan
Trustee hereunder) its interest in the Airframe and Engines or any part
thereof or in any amount to be received by it from the use or
disposition of the Airframe and Engines, other than amounts distributed
to it pursuant to Article 3 hereof.
It is hereby further agreed that any and all property
described or referred to in the granting clauses hereof which is hereafter
acquired by the Owner Trustee shall ipso facto, and without any other
conveyance, assignment or act on the part of the Owner Trustee or the Loan
Trustee, become and be subject to the Lien herein granted as fully and
completely as though
6
specifically described herein, but nothing contained in this paragraph shall be
deemed to modify or change the obligations of the Owner Trustee contained in the
foregoing paragraphs.
The Owner Trustee does hereby ratify and confirm the Lease and
does hereby agree that it will not violate any covenant or agreement made by it
therein, herein or in any other Operative Document.
IT IS HEREBY COVENANTED AND AGREED by and among the parties
hereto as follows:
ARTICLE 1
DEFINITIONS
Unless the context otherwise requires, all capitalized terms
used but not defined herein shall have the respective meanings set forth, and
shall be construed and interpreted in the manner described, in Annex A hereto
for all purposes of this Indenture.
ARTICLE 2
THE EQUIPMENT NOTES
Section 2.01. Form of Equipment Notes. The Equipment Notes
shall be substantially in the form set forth in Exhibit A hereto.
Section 2.02. Issuance and Terms of Equipment Notes. The
Equipment Notes shall be dated the date of issuance thereof, shall be issued in
(a) five (or if the Series E Equipment Notes are issued, six) separate series
consisting of Series A-1 Equipment Notes, Series A-2 Equipment Notes, Series B
Equipment Notes, Series C Equipment Notes, Series D Equipment Notes and, if
issued, Series E Equipment Notes and (b) the respective maturities and principal
amounts specified in Schedule II and shall bear interest at the respective
interest rates per annum specified in Schedule II (or, in the case of a Series E
Equipment Note issued after the Closing Date, as specified in an amendment to
this Indenture). On the Closing Date, each Series A-1 Equipment Note, Series A-2
Equipment Note, Series B Equipment Note, Series C Equipment Note and Series D
Equipment Note shall be issued to the Subordination Agent on behalf of each of
the Pass Through Trustees for the Pass Through Trusts created under the Pass
Through Trust Agreements referred to in Schedule III. Subject to complying with
the conditions set forth in Section 20(d) of the Participation Agreement, the
Owner Trustee shall have the option to issue Series E Equipment Notes at or
after the Closing Date. The Equipment Notes shall be issued in registered form
only. The Equipment Notes shall be issued in denominations of $1,000 and
integral multiples thereof, except that one Equipment Note of each Series may be
in an amount that is not an integral multiple of $1,000.
Each Equipment Note shall bear interest at the Debt Rate
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months), payable in arrears on each Payment Date on the unpaid principal amount
thereof from time to time outstanding until such principal amount is paid in
full, as further provided in the form of Equipment Note set forth in Exhibit A.
The principal amount of each Equipment Note shall be payable as specified in
Schedule II. Each
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Equipment Note shall bear interest, payable on demand, at the Past Due Rate (and
not at the Debt Rate) (calculated on the basis of a year of 360 days comprised
of twelve 30-day months) on any principal amount and (to the extent permitted by
applicable law) Make-Whole Amount, if any, interest and any other amounts
payable thereunder not paid when due for any period during which the same shall
be overdue, in each case for the period the same is overdue. Amounts shall be
overdue under an Equipment Note if not paid in the manner provided therein or in
this Indenture when due (whether at stated maturity, by acceleration or
otherwise). Notwithstanding anything to the contrary contained herein, if any
date on which a payment hereunder or under any Equipment Note becomes due and
payable is not a Business Day, then such payment shall not be made on such
scheduled date but shall be made on the next succeeding Business Day with the
same force and effect as if made on such scheduled date, and if such payment is
made on such next succeeding Business Day, no interest shall accrue on the
amount of such payment from and after such scheduled date.
The Equipment Notes shall be executed on behalf of the Owner
Trustee by the manual or facsimile signature of one of its authorized officers.
Equipment Notes bearing the signatures of individuals who were at the time of
execution the proper officers of the Owner Trustee shall be valid,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Equipment Notes or did
not hold such offices at the respective dates of such Equipment Notes. No
Equipment Note shall be secured by or entitled to any benefit under this
Indenture or be valid or obligatory for any purposes unless there appears on
such Equipment Note a certificate of authentication in the form provided herein
executed by the Loan Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Equipment Notes shall be conclusive
evidence, and the only evidence, that such Equipment Note has been duly
authenticated and delivered hereunder.
Section 2.03. Method of Payment. The principal amount of,
interest on, Make-Whole Amount, if any, and, except to the extent expressly
provided herein, all other amounts due to any Noteholder under each Equipment
Note or otherwise payable hereunder shall be payable by the Owner Trustee in
Dollars by wire transfer of immediately available funds not later than 11:00
a.m. (New York City time) on the due date of payment to the Loan Trustee at the
Corporate Trust Office for distribution among the Noteholders in the manner
provided herein. The Owner Trustee shall not have any responsibility for the
distribution of such payment to any Noteholder. Notwithstanding the foregoing or
any provision in any Equipment Note to the contrary, the Loan Trustee will use
reasonable efforts to pay or cause to be paid, if so directed in writing by any
Noteholder (with a copy to the Owner Trustee), all amounts paid by the Owner
Trustee hereunder and under such Noteholder's Equipment Note or Equipment Notes
to such Noteholder or a nominee therefor (including all amounts distributed
pursuant to Article 3) by transferring, or causing to be transferred, by wire
transfer of immediately available funds in Dollars, prior to 12:00 Noon (New
York City time) on the due date of payment, to an account maintained by such
Noteholder with a bank located in the continental United States the amount to be
distributed to such Noteholder, for credit to the account of such Noteholder
maintained at such bank; provided that, in the event the Equipment Notes are not
held by the Subordination Agent on behalf of the Pass Through Trustees, the Loan
Trustee may at its option pay such amounts by check mailed to the Noteholder's
address as it appears on the Equipment Note Register. If, after its receipt of
funds at the place and prior to the time specified above in the immediately
preceding sentence, the Loan Trustee shall fail (other than as a result of a
failure of
8
the Noteholder to provide it with wire transfer instructions) to make any such
payment required to be paid by wire transfer as provided in the immediately
preceding sentence on the Business Day it receives such funds, the Loan Trustee,
in its individual capacity and not as trustee, agrees to compensate such
Noteholders for loss of use of funds at the Federal Funds Rate until such
payment is made and the Loan Trustee shall be entitled to any interest earned on
such funds until such payment is made. Any payment made hereunder shall be made
without any presentment or surrender of any Equipment Note, except that, in the
case of the final payment in respect of any Equipment Note, such Equipment Note
shall be surrendered to the Loan Trustee for cancellation. Notwithstanding any
other provision of this Indenture to the contrary, the Loan 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 Loan 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 1:00 p.m. (New York City time) at the place of
payment.
Section 2.04. Registration, Transfer and Exchange of Equipment
Notes. The Loan Trustee shall keep a register or registers (the "Equipment Note
Register") in which the Loan Trustee shall provide for the registration of
Equipment Notes and the registration of transfers of Equipment Notes. No such
transfer shall be given effect unless and until registration hereunder shall
have occurred. The Equipment Note Register shall be kept at the Corporate Trust
Office of the Loan Trustee. The Loan Trustee is hereby appointed "Equipment Note
Registrar" for the purpose of registering Equipment Notes and transfers of
Equipment Notes as herein provided. A holder of any Equipment Note intending to
exchange or transfer such Equipment Note shall surrender such Equipment Note to
the Loan Trustee at the Corporate Trust Office, together with a written request
from the registered holder thereof for the issuance of a new Equipment Note of
the same Series, specifying, in the case of a surrender for transfer, the name
and address of the new holder or holders. Upon surrender for registration of
transfer of any Equipment Note and subject to satisfaction of Section 2.06, the
Owner Trustee shall execute, and the Loan Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Equipment Notes of a like aggregate principal amount and of the same Series.
At the option of the Noteholder, Equipment Notes may be exchanged for other
Equipment Notes of the same Series of any authorized denominations of a like
aggregate principal amount, upon surrender of the Equipment Notes to be
exchanged to the Loan Trustee at the Corporate Trust Office. Whenever any
Equipment Notes are so surrendered for exchange, the Owner Trustee shall
execute, and the Loan Trustee shall authenticate and deliver, the Equipment
Notes which the Noteholder making the exchange is entitled to receive. All
Equipment Notes issued upon any registration of transfer or exchange of
Equipment Notes (whether under this Section 2.04 or under Section 2.05 or
otherwise under this Indenture) shall be the valid obligations of the Owner
Trustee evidencing the same respective obligations, and entitled to the same
security and benefits under this Indenture, as the Equipment Notes surrendered
upon such registration of transfer or exchange. Every Equipment Note presented
or surrendered for registration of transfer, shall be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the Loan
Trustee, duly executed by the Noteholder or such Noteholder's attorney duly
authorized in writing, and the Loan Trustee shall require evidence satisfactory
to it as to the compliance of any such transfer with the Securities Act of 1933,
as amended, and the securities laws of any applicable state or jurisdiction. The
Loan Trustee shall make a notation on each new Equipment Note of the amount of
all payments of principal amount previously made on the old Equipment Note or
Equipment Notes with respect
9
to which such new Equipment Note is issued and the date to which interest on
such old Equipment Note or Equipment Notes has been paid. Principal, interest
and all other amounts shall be deemed to have been paid on such new Equipment
Note to the date on which such amounts shall have been paid on such old
Equipment Note. The Loan Trustee shall not be required to exchange any
surrendered Equipment Notes as provided above (a) during the ten-day period
preceding the due date of any payment on such Equipment Note or (b) that has
been called for redemption. The Owner Trustee and the Loan Trustee shall in all
cases deem and treat the Person in whose name any Equipment Note shall have been
issued and registered on the Equipment Note Register as the absolute owner and
Noteholder of such Equipment Note for the purpose of receiving payment of all
amounts payable with respect to such Equipment Note and for all other purposes,
and neither the Owner Trustee nor the Loan Trustee shall be affected by any
notice to the contrary. The Loan Trustee will promptly notify the Owner Trustee
of each registration of a transfer of an Equipment Note. Any such transferee of
an Equipment Note, by its acceptance of an Equipment Note, agrees to the
provisions of the Operative Documents applicable to Noteholders, and shall be
deemed to have represented, warranted and covenanted to the parties to the
Participation Agreement as to the matters represented, warranted and covenanted
by the Noteholders, including the Pass Through Trustees, in the Participation
Agreement. Subject to compliance by the Noteholder and its transferee (if any)
of the requirements set forth in this Section 2.04 and in Section 2.06, the Loan
Trustee and the Owner Trustee shall use all reasonable efforts to issue new
Equipment Notes upon transfer or exchange within ten Business Days of the date
an Equipment Note is surrendered for transfer or exchange.
Section 2.05. Mutilated, Destroyed, Lost or Stolen Equipment
Notes. If any Equipment Note shall become mutilated, destroyed, lost or stolen,
the Owner Trustee shall, upon the written request of the holder of such
Equipment Note, issue and execute, and the Loan Trustee shall authenticate and
deliver, in replacement thereof, a new Equipment Note of the same Series in the
same principal amount and dated the same date as the Equipment Note so
mutilated, destroyed, lost or stolen. If the Equipment Note being replaced has
become mutilated, such Equipment Note shall be surrendered to the Loan Trustee.
If the Equipment Note being replaced has been destroyed, lost or stolen, the
related Noteholder shall furnish to the Owner Trustee and the Loan Trustee such
security or indemnity as may be required by each of them to save the Owner
Trustee and the Loan Trustee harmless and evidence satisfactory to the Owner
Trustee and the Loan Trustee of the destruction, loss or theft of such Equipment
Note and of the ownership thereof.
Section 2.06. Payment of Expenses on Transfer; Cancellation.
(a) No service charge shall be made to a Noteholder for any registration of
transfer or exchange of Equipment Notes, but the Loan Trustee, as Equipment Note
Registrar, may require payment by such Noteholder of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Equipment Notes.
(b) The Loan Trustee shall cancel all Equipment Notes
surrendered for replacement, redemption, transfer, exchange, payment or
cancellation and shall destroy the canceled Equipment Notes.
Section 2.07. Mandatory Redemption of Equipment Notes. (a)
Upon the occurrence of an Event of Loss to the Airframe, all the Equipment Notes
shall be redeemed in
10
whole on the Loss Payment Date at a redemption price equal to the aggregate
unpaid principal amount thereof together with accrued and unpaid interest
thereon to, but not including, the redemption date. No Make-Whole Amount shall
be payable on the Equipment Notes in connection with their redemption as a
result of an Event of Loss in respect of the Airframe.
(b) If the Lease is terminated pursuant to Section 9(a)
thereof, on the date the Lease is so terminated, all the Equipment Notes shall
be redeemed in whole at a redemption price equal to the aggregate unpaid
principal amount thereof together with accrued and unpaid interest thereon to,
but not including, the redemption date and all other amounts then due and
payable hereunder and under all other Operative Documents to the Noteholders,
plus Make-Whole Amount, if any.
Section 2.08. Voluntary Redemption of Equipment Notes. All
(but not less than all) of the Equipment Notes may be redeemed by the Owner
Trustee upon at least 20 days' revocable prior written notice to the Loan
Trustee, at a redemption price equal to the aggregate unpaid principal amount
thereof together with accrued and unpaid interest thereon to, but not including,
the date of redemption and all other Secured Obligations payable to the
Noteholders, plus Make-Whole Amount, if any.
Section 2.09. Redemptions; Notice of Redemption to
Noteholders. Notice of redemption with respect to the Equipment Notes shall be
given by first-class mail, postage prepaid, mailed not less than 15 nor more
than 60 days prior to the redemption date, to each Noteholder of such Equipment
Notes to be redeemed, at such Noteholder's address appearing in the Equipment
Note Register; provided that, in the case of a redemption to be made pursuant to
Section 2.07(b) or 2.08, such notice shall be revocable and shall be deemed
revoked in the event that the Lease does not in fact terminate on the Lease
Termination Date or, in the case of a redemption under Section 2.08, in the
event the Loan Trustee receives written notice of such revocation from the
Lessee or the Owner Trustee 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 Equipment Note, and that, if any
such Equipment Notes are then outstanding, interest on such Equipment
Notes shall cease to accrue on and after such redemption date, and
(4) the place or places where such Equipment Notes are to be
surrendered for payment of the redemption price.
Notice of redemption or purchase of Equipment Notes to be redeemed shall be
given by the Loan Trustee.
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On or before the redemption date, the Owner Trustee (or any
person on behalf of the Owner Trustee) shall, to the extent an amount equal to
the redemption price for the Equipment Notes to be redeemed on the redemption
date shall not then be held in the Indenture Estate, deposit or cause to be
deposited with the Loan Trustee by 11:00 a.m. (New York City time) on the
redemption date in immediately available funds the redemption price of the
Equipment Notes to be redeemed or purchased.
Notice of redemption having been given as aforesaid (and not
deemed revoked as contemplated in the proviso to this Section 2.09), the
Equipment Notes to be redeemed or purchased shall, on the redemption date,
become due and payable at the principal corporate trust office of the Loan
Trustee or at any office or agency maintained for such purposes pursuant to this
Indenture, and from and after such redemption date (unless there shall be a
default in the payment of the redemption price) any such Equipment Notes then
outstanding shall cease to bear interest. Upon surrender of any Equipment Note
for redemption in accordance with said notice such Equipment Note shall be paid
at the redemption price.
If any Equipment Note 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
Debt Rate in effect for such Equipment Note as of such redemption date.
Section 2.10. Purchase upon Indenture Event of Default. At any
time (a) while a Lease Event of Default has occurred and is continuing during
which the Loan Trustee has not declared the Lease to be in default as a
consequence thereof, (b) after the Equipment Notes shall have become due and
payable as provided in Article 8 hereof, (c) in the event of a bankruptcy
proceeding affecting the Lessee, (i) during the 60-day period under Section
1110(a)(2)(A) of the Bankruptcy Code (or such longer period as may apply under
Section 1110(b) of the Bankruptcy Code) the trustee in such proceeding or the
Lessee does not agree to perform its obligations under the Lease or (ii) at any
time after agreeing to perform such obligations, such trustee or the Lessee
ceases to perform such obligations such that the stay period applicable under
the Bankruptcy Code comes to an end; or (d) after the Loan Trustee has given to
the Owner Trustee or the Owner Participant the notice regarding, or has
otherwise commenced, exercise of remedies referred to in Section 8.04 (including
declaration of the Lease to be in default), the Owner Participant may at any
time elect to purchase all, but not less than all, Equipment Notes then
outstanding in accordance with the provisions of this Section 2.10. To exercise
such election the Owner Participant shall give written notice thereof to the
Loan Trustee (which will promptly notify each Noteholder). Such notice to the
Loan Trustee shall state that it is irrevocable and shall designate a date
within 15 days of such notice as the payment date and from the date of receipt
of such notice until the specified payment date the Loan Trustee shall not
exercise any remedies under Section 8.04 (or if the Loan Trustee has commenced
the exercise of such remedies, the Loan Trustee shall stay the exercise of such
remedies) unless, in the case of an Indenture Event of Default which does not
result from a Lease Event of Default or a Lease Default, the Loan Trustee or a
Majority in Interest of Noteholders shall reasonably conclude that the
non-exercise or stay of remedies would materially adversely affect the rights of
the Loan Trustee or the Noteholders under this Indenture. Each Noteholder agrees
that on such specified payment date, such Noteholder will, upon payment to the
Loan Trustee for such Noteholder's account in the manner provided for in Section
2.03 hereof from the Owner Participant of an
12
amount equal to the aggregate unpaid principal amount of all Equipment Notes
then held by such Noteholder, together with accrued and unpaid interest thereon
to the date of payment, and all other sums then due and payable to such
Noteholder hereunder, under such Equipment Notes or under the Participation
Agreement, forthwith sell, assign, transfer and convey to the Owner Participant
(without recourse, representation or warranty of any kind except for its own
acts), all of the estate, right, title and interest of such Noteholder in and to
the Indenture Estate, this Indenture, all Equipment Notes held by such
Noteholder and the Participation Agreement (excluding all estate, right, title
and interest under any of the foregoing to the extent such right, title or
interest is with respect to an obligation not then due and payable or past due
and not satisfied by the Owner Participant's payment hereunder with respect to
any action or inaction or state of affairs occurring prior to such sale).
However, if the election to purchase Equipment Notes is exercised pursuant to
clause (a) above at any time when there shall have occurred and be continuing
for less than 180 days a Lease Event of Default, the purchase price of the
Equipment Notes shall equal the price provided in the immediately preceding
sentence plus Make-Whole Amount, if any. The Owner Participant shall assume all
of such Noteholder's obligations under the Participation Agreement and this
Indenture arising subsequent to such sale. If the Owner Participant shall so
request, such Noteholder will comply with all the provisions of Section 2.04
hereof to enable new Equipment Notes to be issued to the Owner Participant in
such authorized denominations as the Owner Participant shall request. All
charges and expenses required pursuant to Section 2.06 hereof in connection with
the issuance of any such new Equipment Note pursuant to this Section shall be
borne by the Owner Participant.
Section 2.11. Payment from Indenture Estate Only; Non-Recourse
Obligations. Notwithstanding any other provision herein or in the Equipment
Notes to the contrary, all amounts payable by the Loan Trustee and the Owner
Trustee under the Equipment Notes and this Indenture shall be made only from the
income and proceeds of the Indenture Estate and each Noteholder, by its
acceptance of such Equipment Note, agrees that (a) it will look solely to the
income and proceeds of the Indenture Estate for the payment of such amounts, to
the extent available for distribution to it as herein provided, and (b) none of
the Owner Trustee, the Owner Participant or the Loan Trustee is or shall be
personally liable to any Noteholder for any amount payable under such Equipment
Note or this Indenture or, except as expressly provided in this Indenture or the
Participation Agreement in the case of the Owner Trustee and the Loan Trustee,
for any liability under such Equipment Note or hereunder.
▇▇▇▇▇ Fargo Bank Northwest, National Association is entering
into this Indenture solely as Owner Trustee under the Trust Agreement and not in
its individual capacity, and in no case whatsoever shall ▇▇▇▇▇ Fargo Bank
Northwest, National Association (or any entity acting as successor trustee under
the Trust Agreement) be personally liable for, or for any loss in respect of,
any statements, representations, warranties, agreements or obligations hereunder
or thereunder; provided that ▇▇▇▇▇ Fargo Bank Northwest, National Association
shall be liable hereunder in its individual capacity (i) for the performance of
its agreements undertaken in its individual capacity under Section 12 of the
Participation Agreement and (ii) for its own willful misconduct or negligence.
If a successor Owner Trustee is appointed in accordance with the terms of the
Trust Agreement and the Participation Agreement, such successor Owner Trustee
shall, without any further act, succeed to all of the rights, duties, immunities
and obligations hereunder, and its predecessor Owner Trustee and ▇▇▇▇▇ Fargo
Bank Northwest, National Association shall be released from all further duties
and obligations hereunder, without prejudice
13
to any claims against ▇▇▇▇▇ Fargo Bank Northwest, National Association or such
predecessor Owner Trustee for any default by ▇▇▇▇▇ Fargo Bank Northwest,
National Association or such predecessor Owner Trustee, respectively, in the
performance of its obligations hereunder prior to such appointment.
Section 2.12. Application of Payments. Subject always to
Section 2.11 and except as otherwise provided in Article 3, in the case of each
Equipment Note, each payment of an installment of principal amount, Make-Whole
Amount, if any, and interest paid thereon shall be applied:
first, to the payment of accrued interest on such Equipment
Note (as well as any interest on any overdue principal amount and (to
the extent permitted by law) any overdue Make-Whole Amount, if any, any
overdue interest and any other overdue amounts thereunder) to the date
of such payment;
second, to the payment of Make-Whole Amount, if any; and
third, to the payment of principal amount of such Equipment
Note (or portion thereof) then due thereunder.
Section 2.13. Subordination. (a) The indebtedness evidenced by
the Series A-1 Equipment Notes and Series A-2 Equipment Notes shall rank in
right of payment equally with all other Series A-1 Equipment Notes and Series
A-2 Equipment Notes. The indebtedness evidenced by the Series B Equipment Notes
is, to the extent and in the manner provided in this 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 Equipment Notes and Series A-2
Equipment Notes, and the Series B Equipment Notes are issued subject to such
provisions. The indebtedness evidenced by the Series C Equipment Notes is, to
the extent and in the manner provided in this 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 Equipment Notes, the Series A-2 Equipment Notes and
the Series B Equipment Notes, and the Series C Equipment Notes are issued
subject to such provisions. The indebtedness evidenced by the Series D Equipment
Notes is, to the extent and in the manner provided in this 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 Equipment Notes and Series A-2
Equipment Notes, the Series B Equipment Notes and the Series C Equipment Notes,
and the Series D Equipment Notes are issued subject to such provisions. The
indebtedness evidenced by the Series E Equipment Notes, if issued, shall be, to
the extent and in the manner provided in this 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 Equipment Notes, the Series A-2 Equipment Notes, the
Series B Equipment Notes, the Series C Equipment Notes and the Series D
Equipment Notes, and the Series E Equipment Notes, if issued, shall be issued
subject to such provisions. By acceptance of its Equipment Notes of any Series,
each Noteholder of such Series (i) agrees to and shall be bound by such
provisions, (ii) authorizes and directs the Loan Trustee on such Noteholder's
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Indenture and (iii) appoints the Loan Trustee
as such Noteholder's attorney-in-fact for such purpose.
14
(b) The Owner Trustee, the Loan Trustee and, by acceptance of
its Equipment Notes of any Series, each Noteholder of such Series, hereby agree
that no payment or distribution shall be made on or in respect of the Secured
Obligations owed to such Noteholder of such Series, including any payment or
distribution of cash, property or securities, after the occurrence of any of the
events referred to in Section 8.01(g) or after the commencement of any
proceedings of the type referred to in Section 8.01(h), except as expressly
provided in Article 3.
(c) By the acceptance of its Equipment Notes of any Series,
each Noteholder of such Series agrees that if such Noteholder, in its capacity
as a Noteholder, shall receive any payment or distribution on any Secured
Obligations in respect of such Series that it is not entitled to receive under
this Section 2.13 or Article 3 hereof, it will hold any amount so received in
trust for the Loan Trustee and forthwith turn over such amount to the Loan
Trustee in the form received to be applied as provided in Article 3.
Section 2.14. Certain Payments. The Owner Trustee agrees to
pay to the Loan Trustee for distribution in accordance with Section 3.05:
(a) an amount or amounts equal to the fees payable to the
Liquidity Provider under Section 2.03 of each Liquidity Facility and
the related Fee Letter (as defined in the Intercreditor Agreement),
multiplied by a fraction, the numerator of which shall be the sum of
the then outstanding aggregate principal amount of the Series A-1
Equipment Notes, Series A-2 Equipment Notes, Series B Equipment Notes
and Series C Equipment Notes and the denominator of which shall be the
sum of the then outstanding aggregate principal amount of all "Series
A-1 Equipment Notes," "Series A-2 Equipment Notes," "Series B Equipment
Notes" and "Series C Equipment Notes" (in each case as defined in the
Intercreditor Agreement);
(b) the amount equal to interest on any Downgrade Advance
(other than any Applied Downgrade Advance) payable under Section 3.07
of each Liquidity Facility minus Investment Earnings from such
Downgrade Advance, multiplied by the fraction specified in the
foregoing clause (a);
(c) the amount equal to interest on any Non-Extension Advance
(other than any Applied Non-Extension Advance) payable under Section
3.07 of each Liquidity Facility minus Investment Earnings from such
Non-Extension Advance, multiplied by the fraction specified in the
foregoing clause (a);
(d) if any payment default shall have occurred and be
continuing with respect to interest on any Series A-1 Equipment Note,
Series A-2 Equipment Note, Series B Equipment Note or Series C
Equipment Note, (i) the excess, if any, of (A) the amount equal to the
sum of interest on any Unpaid Advance or Applied Provider Advance
payable under Section 3.07 of each Liquidity Facility plus any other
amounts payable in respect of such Unpaid Advance or Applied Provider
Advance under Section 3.01, 3.03 or 3.09 of the Liquidity Facility
under which such Unpaid Advance or Applied Provider Advance was made
over (B) the sum of Investment Earnings from any Final Advance plus any
amount of interest at the Past Due Rate actually payable (whether or
not in fact paid) in respect of the overdue scheduled interest on the
Equipment Notes in respect of
15
which such Unpaid Advance or Applied Provider Advance was made,
multiplied by (ii) a fraction, the numerator of which shall be the then
aggregate overdue amounts of interest on the Series A-1 Equipment
Notes, Series A-2 Equipment Notes, Series B Equipment Notes and Series
C Equipment Notes (other than interest becoming due and payable solely
as a result of acceleration of any such Equipment Notes) and the
denominator of which shall be the then aggregate overdue amounts of
interest on all "Series A-1 Equipment Notes", "Series A-2 Equipment
Notes", "Series B Equipment Notes" and "Series C Equipment Notes" (in
each case as defined in the Intercreditor Agreement) (other than
interest becoming due and payable solely as a result of acceleration of
any such "Equipment Notes");
(e) any amounts owed to the Liquidity Provider by the
Subordination Agent as borrower under Section 3.01 (other than in
respect of an Unpaid Advance or Applied Provider Advance), 3.03 (other
than in respect of an Unpaid Advance or Applied Provider Advance ),
7.05 and 7.07 of each Liquidity Facility (or similar provisions of any
Replacement Liquidity Facility) multiplied by the fraction specified in
the foregoing clause (a); and
(f) an amount or amounts equal to the compensation, including
reasonable expenses and disbursements, payable to the Subordination
Agent under Section 6.07 of the Intercreditor Agreement, multiplied by
the fraction specified in the foregoing clause (a) (but in any event
without duplication of any amount or amounts payable in respect of such
compensation under any other Operative Document or Pass Through Trust
Document).
For purposes of this paragraph, the terms "Advance", "Applied
Downgrade Advance", "Applied Non-Extension Advance", "Applied Provider Advance",
"Cash Collateral Account", "Downgrade Advance", "Final Advance", "Investment
Earnings", "Non-Extension Advance, "Replacement Liquidity Facility" and "Unpaid
Advance" shall have the meanings specified in each Liquidity Facility or the
Intercreditor Agreement.
Section 2.15. Directions by Subordination Agent. So long as
the Subordination Agent is a Noteholder, notwithstanding anything contained
herein or in any other Operative Document to the contrary, in exercising its
right to vote the Equipment Notes held by it, or in giving or taking any
direction, consent, request, demand, instruction, authorization, notice, waiver
or other action provided by this Indenture or in respect of the Equipment Notes
to be given or taken by a Noteholder (each such vote or other action, a
"Direction") in respect of such Equipment Notes, the Subordination Agent shall
act in accordance with any votes, directions, consents, requests, demands,
instructions, authorizations, notices, waivers or other actions given or taken
by any applicable Pass Through Trustee or the Controlling Party pursuant to the
Intercreditor Agreement, including without limitation pursuant to Section 2.06,
Article IV or Section 8.01(b) thereof. The Subordination Agent shall be
permitted (x) to give a Direction with respect to less than the entire principal
amount of any single Equipment Note held by it, and (y) to give different
Directions with respect to different portions of the principal amount of any
single Equipment Note held by it. Any Direction given by the Subordination Agent
at any time with respect to more than a majority in aggregate unpaid principal
amount of all of the
16
Equipment Notes issued and then outstanding hereunder shall be deemed to have
been given by a Majority in Interest of Noteholders.
Section 2.16. Repayment of Monies for Equipment Note Payments
Held by the Loan Trustee. Any money held by the Loan Trustee in trust for any
payment of the principal of, Make-Whole Amount, if any, or interest on and any
other amounts due on any Equipment Note, including, without limitation, any
money deposited pursuant to Section 2.09, and remaining unclaimed for two years
after the due date for such payment (or if earlier, one month prior to the
escheat period provided under applicable state law) shall be paid to the Owner
Trustee; and the Noteholders entitled to payment thereon shall thereafter, as
unsecured general creditors, look only to the Lessee on behalf of the Owner
Trustee (to the extent of such funds actually received by the Lessee) for
payment thereof, and all liability of the Loan Trustee with respect to such
trust money shall thereupon cease; provided that the Loan Trustee, before being
required to make any such repayment, may at the expense of the Lessee cause to
be mailed to each such Noteholder notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of mailing, any unclaimed balance of such money then remaining will be
repaid to the Owner Trustee as provided herein.
Section 2.17. Termination of Interest in Indenture Estate(a) .
A Noteholder shall have no further interest in, or other right with respect to,
the Indenture Estate when and if the principal amount of, Make-Whole Amount, if
any, and interest on all Equipment Notes held by such Noteholder and all other
sums due and payable to such Noteholder hereunder, under such Equipment Notes
and under the other Operative Documents (collectively, the "Secured
Obligations") shall have been paid in full.
ARTICLE 3
RECEIPT, DISTRIBUTION AND APPLICATION OF
FUNDS IN THE INDENTURE ESTATE
Section 3.01. Payment upon Issuance of Equipment Notes. On the
Closing Date, the Owner Trustee shall first, apply, or cause to be applied, the
proceeds of the sale of the Equipment Notes to the redemption of the notes
issued pursuant to the Original Indenture and second, distribute any remaining
amounts to the Owner Trustee.
Section 3.02. Basic Distributions. Except as otherwise
provided in Sections 3.03, 3.04 and 3.05, each installment of Basic Rent, any
payment of interest on overdue installments of Basic Rent and any payment
received by the Loan Trustee pursuant to Section 8.03 shall be promptly
distributed in the following order of priority:
first, 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 (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
Equipment Notes and Series A-2 Equipment Notes shall be distributed to
the Noteholders of Series A-1 Equipment Notes and Series A-2 Equipment
Notes ratably, without priority of one over the other, in the
proportion that the amount of such payment or payments
17
then due under each Series A-1 Equipment Note or Series A-2 Equipment
Note bears to the aggregate amount of the payments then due under all
Series A-1 Equipment Notes and Series A-2 Equipment Notes;
second, after giving effect to clause "first" 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 (as well as any interest on any overdue principal amount and,
to the extent permitted by applicable law, on any overdue interest and
other overdue amounts) then due under all Series B Equipment Notes
shall be distributed to the Noteholders of Series B Equipment Notes
ratably, without priority of one over the other, in the proportion that
the amount of such payment or payments then due under each Series B
Equipment Note bears to the aggregate amount of the payments then due
under all Series B Equipment Notes;
third, after giving effect to clause "second" 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 (as well as any interest on any overdue principal amount and,
to the extent permitted by applicable law, on any overdue interest and
any other overdue amounts) then due under all Series C Equipment Notes
shall be distributed to the Noteholders of Series C Equipment Notes
ratably, without priority of one over the other, in the proportion that
the amount of such payment or payments then due under each Series C
Equipment Note bears to the aggregate amount of the payments then due
under all Series C Equipment Notes;
fourth, after giving effect to clause "third" 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 (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 Equipment Notes
shall be distributed to the Noteholders of Series D Equipment Notes
ratably, without priority of one over the other, in the proportion that
the amount of such payment or payments then due under each Series D
Equipment Note bears to the aggregate amount of the payments then due
under all Series D Equipment Notes;
fifth, after giving effect to clause "fourth" 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 (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 E Equipment Notes
shall be distributed to the Noteholders of Series E Equipment Notes
ratably, without priority of one over the other, in the proportion that
the amount of such payment or payments then due under each Series E
Equipment Note bears to the aggregate amount of the payments then due
under all Series E Equipment Notes; and
sixth, the balance, if any, of such installment remaining
thereafter shall be distributed to the Owner Trustee to be held or
distributed in accordance with the terms of the Trust Agreement.
18
Section 3.03. Event of Loss; Optional Redemption; Voluntary
Termination. Except as otherwise provided in Sections 3.04 and 3.05 and subject
to the following proviso, any payments received by the Loan Trustee (a) with
respect to the Aircraft as the result of an Event of Loss, (b) pursuant to an
optional redemption of the Equipment Notes pursuant to Section 2.08 or (c)
pursuant to a voluntary termination of the Lease pursuant to Section 9 thereof
shall be applied to redemption of the Equipment Notes, and to payment of all
other Secured Obligations by applying such funds in the following order of
priority:
first, (i) to reimburse the Loan Trustee and the Noteholders
for any reasonable costs or expenses incurred in connection with such
redemption for which they are entitled to reimbursement, or indemnity
by the Lessee, under the Operative Documents; and then (ii) to pay any
other amounts then due (except as provided in clause "second" below) to
the Loan Trustee, the Noteholders and the other Indenture Indemnitees
under this Indenture, the Participation Agreement or the Equipment
Notes;
second, (i) to pay the amounts specified in subclause (i) of
clause "third" of Section 3.04 plus Make-Whole Amount, if any, then due
and payable in respect of the Series A-1 Equipment Notes and the Series
A-2 Equipment Notes; (ii) after giving effect to subclause (i) above,
to pay the amounts specified in subclause (ii) of clause "third" of
Section 3.04 plus Make-Whole Amount, if any, then due and payable in
respect of the Series B Equipment Notes; (iii) after giving effect to
subclause (ii) above, to pay the amounts specified in subclause (iii)
of clause "third" of Section 3.04 plus Make-Whole Amount, if any, then
due and payable in respect of the Series C Equipment Notes; (iv) after
giving effect to subclause (iii) above, to pay the amounts specified in
subclause (iv) of clause "third" of Section 3.04 plus Make-Whole
Amount, if any, then due and payable in respect of the Series D
Equipment Notes; (v) after giving effect to subclause (iv) above, to
pay the amount specified in subclause (v) of clause "third" of Section
3.04 plus Make-Whole Amount, if any, then due and payable in respect of
the Series E Equipment Notes; and
third, the balance, if any, of such payments shall be
distributed to the Owner Trustee to be held or distributed in
accordance with the terms of the Trust Agreement.
If one or more Replacement Engines are to be substituted for
one or more Engines subject to an Event of Loss as provided in Section 10(b) of
the Lease, any insurance, condemnation or similar proceeds resulting from such
Event of Loss that are received by the Loan Trustee shall be held by the Loan
Trustee as part of the Indenture Estate (and invested as provided in Section
9.07) and, unless otherwise applied pursuant to Section 3.04 hereof following an
Indenture Event of Default, such proceeds shall be released to the Lessee upon
the release of such Engine subject to the replacement thereof as provided in
Section 10(b) of the Lease.
No Make-Whole Amount shall be payable on the Equipment Notes
in connection with their redemption as a result of an Event of Loss in respect
of the Airframe.
Section 3.04. Payments After Indenture Event of Default.
Except as otherwise provided in Section 3.05, all payments received and amounts
held or realized by the Loan
19
Trustee (including any amounts realized by the Loan Trustee from the exercise of
any remedies pursuant to Section 15 of the Lease or Article 8) after both an
Indenture Event of Default shall have occurred and be continuing and the
Equipment Notes shall have become due and payable pursuant to Section 8.02, as
well as all payments or amounts then held by the Loan Trustee as part of the
Indenture Estate, shall be promptly distributed by the Loan Trustee in the
following order of priority:
first, so much of such payments or amounts as shall be
required to (i) reimburse the Loan Trustee, to the extent the Loan
Trustee is entitled to be reimbursed or indemnified under the Operative
Documents, 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
Indenture Estate and every part thereof pursuant to Section 8.05)
incurred by the Loan 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 Loan Trustee or the
Noteholders in the protection, exercise or enforcement of any right,
power or remedy or any damages sustained by the Loan Trustee or any
Noteholder, liquidated or otherwise, upon such Indenture Event of
Default shall be applied by the Loan Trustee as between itself and the
Noteholders in reimbursement of such expenses and any other expenses
for which the Loan Trustee or the Noteholders are entitled to
reimbursement under any Operative Document, and (ii) to pay all amounts
payable (except as provided in clauses "second" and "third" below) to
the other Indenture Indemnitees (including amounts payable to the Loan
Trustee on behalf of any Indenture Indemnitee) hereunder and under the
Participation Agreement and the Lease; and in case the aggregate amount
so to be 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 Noteholders for
payments made pursuant to Section 9.03 (to the extent not previously
reimbursed) shall be distributed to such then existing or prior
Noteholders 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 Noteholder pursuant to Section 9.03;
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 Equipment Notes and Series A-2 Equipment Notes and
the accrued but unpaid interest and all other Secured Obligations in
respect of the Series A-1 Equipment Notes and Series A-2 Equipment
Notes to the date of distribution shall be distributed to the
Noteholders of Series A-1 Equipment Notes and Series A-2 Equipment
Notes ratably, without priority of one over the other, in the
proportion that the aggregate unpaid principal amount of all Series A-1
Equipment Notes and Series A-2 Equipment Notes held by each Noteholder
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 Equipment Notes and Series A-2
Equipment Notes held by all such Noteholders plus the accrued but
unpaid interest and other amounts due thereon to the date of
distribution; (ii) after giving
20
effect to subclause (i) above, so much of such payments or amounts
remaining as shall be required to pay in full the aggregate unpaid
principal amount of all Series B Equipment Notes and the accrued but
unpaid interest and all other Secured Obligations in respect of the
Series B Equipment Notes to the date of distribution shall be
distributed to the Noteholders of Series B Equipment Notes ratably,
without priority of one over the other, in the proportion that the
aggregate unpaid principal amount of all Series B Equipment Notes held
by each Noteholder plus the accrued but unpaid interest and other
amounts due hereunder or thereunder to the date of distribution bears
to the aggregate unpaid principal amount of all Series B Equipment
Notes held by all such Noteholders plus the accrued but unpaid interest
and other amounts due thereon to the date of distribution; (iii) after
giving effect to subclause (ii) above, so much of such payments or
amounts remaining as shall be required to pay in full the aggregate
unpaid principal amount of all Series C Equipment Notes and the accrued
but unpaid interest and all other Secured Obligations in respect of the
Series C Equipment Notes to the date of distribution shall be
distributed to the Noteholders of Series C Equipment Notes ratably,
without priority of one over the other, in the proportion that the
aggregate unpaid principal amount of all Series C Equipment Notes held
by each Noteholder plus the accrued but unpaid interest and other
amounts due hereunder or thereunder to the date of distribution bears
to the aggregate unpaid principal amount of all Series C Equipment
Notes held by all such Noteholders plus the accrued but unpaid interest
and other amounts due thereon to the date of distribution; (iv) after
giving effect to subclause (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 Equipment Notes and the accrued
but unpaid interest and all other Secured Obligations in respect of the
Series D Equipment Notes to the date of distribution shall be
distributed to the Noteholders of Series D Equipment Notes, ratably,
without priority of one over the other, in the proportion that the
aggregate unpaid principal amount of all Series D Equipment Notes held
by each Noteholder 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 Equipment
Notes held by all such Noteholders plus the accrued but unpaid interest
and other amounts due thereon to the date of distribution; and (v)
after giving effect to subclause (iv) 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 E Equipment Notes and the accrued
but unpaid interest and all other Secured Obligations in respect of the
Series E Equipment Notes to the date of distribution shall be
distributed to the Noteholders of Series E Equipment Notes, ratably,
without priority of one over the other, in the proportion that the
aggregate unpaid principal amount of all Series E Equipment Notes held
by each Noteholder 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 E Equipment
Notes held by all such Noteholders plus the accrued but unpaid interest
and other amounts due thereon to the date of distribution; and
fourth, the balance, if any, of such payments or amounts shall
be distributed to the Owner Trustee to be held or distributed in
accordance with the terms of the Trust Agreement.
21
No Make-Whole Amount shall be payable on the Equipment Notes
as a consequence of or in connection with an Indenture Event of Default or the
acceleration of the Equipment Notes.
Section 3.05. Certain Payments. (a) Any payment received by
the Loan Trustee for which no provision as to the application thereof is made in
this Indenture and for which provision is made in any other Operative Document
shall be applied forthwith to the purpose for which such payment was made in
accordance with terms of such Operative Document. Notwithstanding anything in
this Article 3 or elsewhere in this Indenture to the contrary, the Loan Trustee
shall be obligated to distribute and shall distribute to the Owner Participant
or the Owner Trustee, as the case may be, any Excepted Property received by the
Loan Trustee promptly upon receipt thereof by the Loan Trustee.
(b) The Loan Trustee will distribute promptly upon receipt any
indemnity or other payment received by it from the Owner Trustee or the Lessee
in respect of the Loan Trustee in its individual capacity or any other Indenture
Indemnitee pursuant to Section 10(b) or 10(c) of the Participation Agreement
directly to the Person entitled thereto as such Person's interest may appear.
Any payment received by the Loan Trustee under Section 2.14 shall be distributed
to the Subordination Agent to be distributed in accordance with the terms of the
Intercreditor Agreement.
Section 3.06. Payments for Which No Application Is Otherwise
Provided. (a) Any payments received by the Loan Trustee for which no provision
as to the application thereof is made in the Lease or in another Operative
Document or elsewhere in this Indenture shall be distributed by the Loan Trustee
(i) to the extent received or realized at any time prior to the payment in full
of all obligations to the Noteholders secured by the Lien of this Indenture, in
the order of priority specified in Section 3.02 hereof, and (ii) to the extent
received or realized at any time after payment in full of all obligations to the
Noteholders secured by the Lien of this Indenture, in the following order of
priority: first in the manner provided in clause "first" of Section 3.04 hereof,
and second, in the manner provided in clause "fourth" of Section 3.04 hereof.
(b) Notwithstanding anything to the contrary set forth in this
Indenture, any amounts held by the Loan Trustee, including, without limitation,
pursuant to Section 10 or 11 of the Lease, and any other condemnation,
requisition, indemnity or other payments, amounts or proceeds of any kind or
nature received by it with respect to the Aircraft or other collateral subject
to the Lien of this Indenture, which are payable to the Lessee pursuant to the
terms of the Lease or the Operative Documents or held by the Loan Trustee in
accordance with Section 25 of the Lease shall be (i) so paid to the Lessee or
(ii) held by the Loan Trustee as security for the obligations of the Lessee, in
each case in accordance with the applicable provisions of the Lease (provided
that such monies held by the Loan Trustee shall be invested as provided in
Section 9.07).
Section 3.07. Payments to Owner Trustee. Any amounts
distributed hereunder by the Loan Trustee to the Owner Trustee shall be paid to
the Owner Trustee by wire transfer of funds of the type received by the Loan
Trustee at such office and to such account or accounts of
22
such entity or entities as shall be designated by notice from the Owner Trustee
to the Loan Trustee from time to time.
ARTICLE 4
COVENANTS OF OWNER TRUSTEE
Section 4.01. Covenants of Owner Trustee. The Owner Trustee
hereby covenants and agrees that:
(a) it will, subject always to Section 2.11, pay or cause to
be paid when due all amounts of principal and interest due under the
Equipment Notes (in any case, without duplication of amounts
theretofore paid to the Loan Trustee in respect thereof), and if
received from the Owner Participant or from the Lessee as Supplemental
Rent, Make-Whole Amount, if any, and any other amount due under the
Equipment Notes;
(b) in the event that any Responsible Officer of the Owner
Trustee shall have actual knowledge of an Indenture Event of Default or
Indenture Default or an Event of Loss, the Owner Trustee will give
prompt written notice thereof to the Loan Trustee, the Owner
Participant, each Noteholder and the Lessee;
(c) it will not, except as contemplated by the Operative
Documents or with the consent of the Loan Trustee, contract for,
create, incur, assume or suffer to exist any Debt, and will not
guarantee (directly or indirectly or by an instrument having the effect
of assuming another's payment or performance on any obligation or
capability of so doing or otherwise), endorse or otherwise be or become
contingently liable, directly or indirectly, in connection with the
Debt of any other Person; and
(d) it will not, in its capacity as Owner Trustee, engage in
any business or other activity, except as contemplated hereby or by the
other Operative Documents.
ARTICLE 5
DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY
INCLUDED IN THE INDENTURE ESTATE DURING
CONTINUATION OF LEASE
Section 5.01. Disposition, Substitution and Release of
Property Included in the Indenture Estate During Continuation of Lease. So long
as the Lease is in effect:
(a) Parts. Any Parts and alterations, improvements and
modifications in and additions to the Aircraft shall, to the extent
required or specified by the Lease, become subject to the Lien of this
Indenture and be leased to the Lessee under the Lease; provided that,
to the extent permitted by and as provided in the Lease, the Lessee
shall have the right, at any time and from time to time, without any
release from or consent by the Owner Trustee or the Loan Trustee, to
remove, replace and pool Parts and to make alterations, improvements
and modifications in, and additions to, the Aircraft. The Loan
23
Trustee agrees that, to the extent permitted by and as provided in the
Lease, title to any such removed or replaced Part shall vest in the
Lessee.
(b) Substitution Under the Lease upon an Event of Loss
Occurring to Engines or upon Voluntary Termination of Lease with
Respect to Engines. Upon (i) the occurrence of an Event of Loss
occurring to an Engine, or (ii) a voluntary termination of the Lease
with respect to an Engine, the Lessee shall substitute an engine and
upon satisfaction of all conditions to such substitution specified in
Section 10 of the Lease, the Loan Trustee shall release all of its
right, interest and Lien in and to such Engine in accordance with the
provisions of the following two sentences and the Lease. The Loan
Trustee shall execute and deliver to the Owner Trustee an instrument
releasing its Lien in and to such Engine and shall execute for
recording in public offices, at the expense of the Lessee, such
instruments in writing as the Owner Trustee or the Lessee shall
reasonably request and as shall be reasonably acceptable to the Loan
Trustee in order to make clear upon public records that such Lien has
been released under the laws of the applicable jurisdiction. The Owner
Trustee hereby waives and releases any and all rights existing or that
may be acquired to any penalties, forfeit or damages from or against
the Loan Trustee for failure to execute and deliver any document in
connection with the release of a Lien or to file any certificate in
compliance with any law or statute requiring the filing of the same in
connection with the release of a Lien, except for failure by the Loan
Trustee to execute and deliver any document or to file any certificate
as may be specifically requested in writing by the Owner Trustee or the
Lessee.
ARTICLE 6
[RESERVED]
ARTICLE 7
[RESERVED]
ARTICLE 8
DEFAULTS AND REMEDIES
Section 8.01. Indenture Events of Default. "Indenture Event of
Default" shall mean any of the following events (whatever the reason for such
Indenture 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) and each such
Indenture Event of Default shall be deemed to exist so long as, but only so long
as, it shall not be remedied:
(a) any amount of interest on, principal of, Make-Whole
Amount, if any, or other amount due and payable under any Equipment
Note or hereunder shall not be paid when due and payable (other than as
a result of a Lease Default or Lease Event of Default), and such
default in payment shall continue unremedied for more than 15 days
after such amount shall have become due and payable, in the case of any
payment of
24
interest, principal or Make-Whole Amount, if any, thereon and, in the
case of any other amount, for more than 20 days after the Owner Trustee
or the Owner Participant receives written demand from the Loan Trustee
or any Noteholder; or
(b) [reserved]
(c) if at any time when the Aircraft is registered under the
laws of the United States, the Owner Participant shall not be a Citizen
of the United States, and as the result thereof the registration of the
Aircraft under the Federal Aviation Act, and regulations then
applicable thereunder, shall cease to be effective; provided that no
Indenture Event of Default shall be deemed to have occurred under this
subsection (c) unless such circumstances continue unremedied for more
than 60 days after the Owner Participant has actual knowledge of the
state of facts that resulted in such ineffectiveness and of such loss
of citizenship; or
(d) other than as provided in (c) above and (i) below, any
failure by the Owner Trustee or the Owner Participant, to observe or
perform any other covenant or obligation of the Owner Trustee or the
Owner Participant, as the case may be, for the benefit of the Loan
Trustee or the Noteholders contained in this Indenture, Section 4.3(a)
of the Trust Agreement, the Participation Agreement or the Equipment
Notes which is not remedied within a period of 60 days after notice
thereof has been given to the Owner Trustee and the Owner Participant;
or
(e) any representation or warranty made by the Owner
Participant, the Owner Trustee or the Owner Participant Guarantor
herein, in the Participation Agreement, in the Owner Participant
Guaranty or in any certificate furnished by any of them to the Loan
Trustee or any Noteholder in connection with the transactions
contemplated by the Operative Documents shall prove at any time to have
been false or incorrect when made in any material respect and continues
to be material and adverse to the rights and interests of the Loan
Trustee or the Noteholders; and if such misrepresentation is capable of
being corrected and if such correction is being sought diligently, such
misrepresentation and its consequences shall not have been corrected
within 60 days (or, without affecting Section 8.01(c) hereof, in the
case of the representations made in Sections 11(e)(xi) and 11(f)(v)of
the Participation Agreement as to the citizenship of the Owner Trustee
in its individual capacity and of the Owner Participant, respectively,
as soon as is reasonably practicable but in any event within 60 days)
after notice thereof has been given to the Owner Participant and the
Owner Trustee by the Loan Trustee or any Noteholder; or
(f) any Lease Event of Default; or
(g) either the Trust Estate or the Owner Trustee with respect
thereto (and not in its individual capacity), the Owner Participant or
the Owner Participant Guarantor, as the case may be, shall (i) file, or
consent by answer or otherwise to the filing against it of a petition
for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, (ii) make an assignment for the
benefit of its creditors, or (iii) consent to the
25
appointment of a custodian, receiver, trustee or other officer with
similar powers of itself or any substantial part of its property; or
(h) a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent by the
Trust Estate or the Owner Trustee with respect thereto (and not in its
individual capacity), the Owner Participant, or the Owner Participant
Guarantor, as the case may be, a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, or constituting an order for relief
or approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of the Trust Estate or the Owner
Trustee with respect thereto (and not in its individual capacity), the
Owner Participant, or the Owner Participant Guarantor, as the case may
be, and any such order or petition is not dismissed or stayed within 90
days after the earlier of the entering of any such order or the
approval of any such petition; or
(i) any Lessor's Lien required to be discharged by the Owner
Participant or the Owner Trustee, in its individual capacity, pursuant
to Section 19(b) of the Participation Agreement (in the case of the
Owner Participant) or Section 12(h) of the Participation Agreement (in
the case of the Owner Trustee) shall remain undischarged for a period
of 30 days after the Owner Participant and the Owner Trustee shall have
received written notice from the Loan Trustee or any Noteholder of such
Lien, or
(j) any Owner Participant Guaranty ceases to be a valid and
enforceable obligation of the Owner Participant Guarantor.
Section 8.02. Acceleration; Rescission and Annulment. If an
Indenture Event of Default referred to in clause (g) or (h) of Section 8.01
hereof shall have occurred or a Lease Event of Default under Section 14(f), (g),
(h) or (i) of the Lease shall have occurred, then and in every such case the
unpaid principal of all Equipment Notes then outstanding, together with interest
accrued but unpaid thereon owing to the Noteholders and all other amounts due
thereunder and hereunder, shall immediately and without further act become due
and payable, without presentment, demand, protest or notice, all of which are
hereby waived.
If any other Indenture Event of Default occurs and is
continuing, the Loan Trustee, may, and upon the written instructions of a
Majority in Interest of Noteholders, the Loan Trustee shall, by notice to the
Lessee, the Owner Participant and the Owner Trustee, declare the principal of
all the Equipment Notes to be due and payable, subject to Section 8.03. Upon
such declaration, the principal of all Equipment Notes, together with accrued
interest thereon from the date in respect of which interest was last paid
hereunder to the date payment of such principal has been made or duly provided
for shall be immediately due and payable.
At any time after the principal of the Equipment Notes shall
have become so due and payable, and before any judgment or decree for the
payment of the money so due, or any thereof, shall be entered, a Majority in
Interest of Noteholders, by notice to the Loan Trustee, the Owner Trustee and
the Owner Participant, may rescind such a declaration and thereby annul its
26
consequences if (i) an amount sufficient to pay all principal of, Make-Whole
Amount, if any, and interest on, such Equipment Notes, to the extent each such
amount is due or past due, if any, in respect of the outstanding Equipment Notes
other than by reason of such acceleration and all sums due and payable to the
Loan Trustee has been deposited with the Loan Trustee, (ii) the rescission would
not conflict with any judgment or decree and (iii) all existing Indenture
Defaults and Indenture Events of Default under this Indenture have been cured or
waived except nonpayment of principal of, or interest on the Equipment Notes
that has become due solely because of such acceleration. No Make-Whole Amount
shall be payable on the Equipment Notes as a result of the acceleration of the
Equipment Notes.
Section 8.03. Certain Rights. The Loan Trustee shall give the
Noteholders, the Owner Trustee and the Owner Participant prompt written notice
of any Indenture Event of Default of which the Indenture Trustee has actual
knowledge and shall give the Noteholders, the Owner Trustee and the Owner
Participant not less than ten (10) Business Days' prior written notice of the
date (the "Enforcement Date") on or after which the Loan Trustee may commence
and consummate the exercise of any remedy or remedies described in Section 8.02,
8.04, 8.05 or 8.06, or the exercise of any remedy or remedies pursuant to the
provisions of Section 15 of the Lease. If an Indenture Event of Default shall
have occurred and be continuing, the Owner Trustee shall have the following
rights hereunder, any of which may be exercised directly by the Owner
Participant.
If as a result of any default by the Lessee in the payment of
any installment of Basic Rent due under the Lease, the Loan Trustee shall have
insufficient funds to make any payment of the principal of and interest on any
Equipment Note on the day it becomes due and payable, the Owner Trustee or the
Owner Participant through the Owner Trustee, may pay to the Loan Trustee prior
to the Enforcement Date, as provided in Section 2.03 hereof, for application in
accordance with Section 3.02 hereof a sum equal to the amount of all (but not
less than all) of the principal and interest (including interest, if any, on any
overdue payment of such principal and interest) as shall then (without regard to
any acceleration pursuant to Section 8.02 hereof) be due and payable on the
Equipment Notes and, unless the Owner Trustee has cured Indenture Events of
Default in respect of payments of Basic Rent on each of the three immediately
preceding Basic Rent payment dates or the Owner Trustee has cured an aggregate
of six previous Indenture Events of Default in respect of payments of Basic
Rent, such payment by the Owner Trustee shall, solely for purposes of this
Indenture, be deemed to cure any Indenture Event of Default which would
otherwise have arisen on account of the nonpayment by the Lessee of such
installment of Basic Rent (but not as to any other Indenture Default or
Indenture Event of Default which shall have occurred and be continuing).
In the event of any default by the Lessee in any obligation
under the Lease other than the payment of Basic Rent, if such default can be
remedied by the payment of money (it being understood that defaults requiring
action such as the obtaining of insurance and the procuring of maintenance
services can be so remedied) and the Owner Trustee shall have been furnished (by
the Owner Participant) with all funds necessary for remedying such default, the
Owner Trustee may, prior to the Enforcement Date, without the consent or
concurrence of any Noteholder, instruct the Owner Trustee to exercise the Owner
Trustee's rights under Section 23 of the Lease to perform such obligation on
behalf of the Lessee or the Owner Participant may directly exercise the Owner
Trustee's rights under Section 23 of the Lease.
27
Solely for the purpose of determining whether there exists an
Indenture Event of Default, (a) any payment by the Owner Trustee, pursuant to,
and in compliance with, the first sentence of this Section 8.03 shall be deemed
to remedy any default by the Lessee in the payment of installments of Basic Rent
theretofore due and payable and to remedy any corresponding default by the Owner
Trustee in payment of any amount due and payable under the Equipment Notes or
hereunder, and (b) any performance by the Owner Trustee or the Owner Participant
of any obligation of the Lessee under the Lease pursuant to, and in compliance
with, the second sentence of this Section 8.03 shall be deemed to remedy any
Lease Event of Default to the same extent that like performance by the Lessee
itself would have remedied such Lease Event of Default (but any such payment or
performance shall not relieve the Lessee of its duty to pay all Rent and perform
all of its obligations pursuant to the Lease). If, on the basis specified in the
preceding sentence, such Lease Event of Default shall have been remedied, then
any declaration pursuant to Section 15 of the Lease that the Lease is in
default, and any declaration pursuant to this Indenture that the Equipment Notes
are due and payable or that an Indenture Event of Default exists hereunder,
based upon such Lease Event of Default, shall be deemed to be rescinded.
Except as hereinafter in this Section 8.03 provided, neither
the Owner Trustee nor the Owner Participant shall, as a result of exercising the
right to cure any such Indenture Event of Default, obtain any Lien on any of the
Indenture Estate or any Rent payable under the Lease for or on account of costs
or expenses incurred in connection with the exercise of such right, nor shall
any claim of the Owner Trustee or the Owner Participant against Lessee or any
other party for the repayment of such costs or expenses impair the prior right
and security interest of the Loan Trustee in and to the Indenture Estate. The
Owner Participant or the Owner Trustee, as applicable, shall (to the extent of
any such payments made by it) be subrogated to the rights of the Noteholders
hereunder to receive such payment of Basic Rent or Supplemental Rent from the
Loan Trustee (and the payment of interest on account of such Rent being
overdue), and shall be entitled, so long as no other Indenture Default or
Indenture Event of Default shall have occurred or would result therefrom, to
receive such payment upon receipt thereof by the Loan Trustee; provided that (a)
if the principal of and interest on the Equipment Notes shall have become due
and payable pursuant to Section 8.02 hereof, such subrogation shall, until the
principal of, interest on, Make-Whole Amount, if any, and all other amounts due
with respect to all Equipment Notes shall have been paid in full, be subordinate
to the rights of the Loan Trustee and the Noteholders in respect of such payment
of overdue Basic Rent, Supplemental Rent and such interest and (b) the Owner
Participant or the Owner Trustee, as applicable, shall not otherwise attempt to
recover any such amount paid by it on behalf of the Lessee pursuant to this
Section 8.03 except by demanding of the Lessee payment of such amount or by
commencing an action at law and obtaining and enforcing a judgment against the
Lessee for the payment of such amount or taking appropriate action in a pending
action at law against the Lessee; provided further that at no time while an
Indenture Event of Default shall have occurred and be continuing shall any such
demand be made or shall any such action be commenced (or continued) and any
amounts nevertheless received by the Owner Participant or the Owner Trustee, as
applicable, in respect thereof shall be held in trust for the benefit of and
promptly paid to, the Loan Trustee for distribution as provided in Section 3.04
hereof.
Section 8.04. Remedies. (a) If an Indenture Event of Default
shall have occurred and be continuing and so long as the same shall be
continuing unremedied, then and in every
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such case the Loan Trustee may, subject to Section 2.10, Section 8.03 and the
second paragraph of this Section 8.04(a), exercise any or all of the rights and
powers and pursue any and all of the remedies pursuant to this Article 8 and
shall have and may exercise all of the rights and remedies of a secured party
under the Uniform Commercial Code and, in the event such Indenture Event of
Default is a Lease Event of Default, any and all of the remedies pursuant to
Section 15 of the Lease and may take possession of all or any part of the
properties covered or intended to be covered by the Lien and security interest
created hereby or pursuant hereto (but, in the case of the Aircraft, only as
permitted by Section 15 of the Lease) and may exclude the Owner Participant, the
Owner Trustee and (to the extent permitted by Section 15 of the Lease) the
Lessee and all Persons claiming under any of them or wholly or partly therefrom;
provided that the Loan Trustee shall give the Owner Trustee and the Owner
Participant twenty days' prior written notice of its intention to sell the
Aircraft, and provided further that, in the event the Loan Trustee shall have
validly terminated the Lease, the Loan Trustee shall not sell or lease, or
otherwise afford the use of, the Aircraft or any portion thereof to the Lessee
or any Affiliate thereof. Unless an Indenture Event of Default not resulting
from or relating to a Lease Event of Default has occurred and is continuing, the
Owner Participant may bid at the sale and become the purchaser. Without limiting
any of the foregoing, but subject to any conditions provided for herein or under
applicable law, it is understood and agreed that the Loan Trustee may exercise
any right of sale of the Aircraft available to it, even though it shall not have
taken possession of the Aircraft and shall not have possession thereof at the
time of such sale.
Anything in this Indenture to the contrary notwithstanding, if
an Indenture Event of Default which arises solely by reason of one or more
events or circumstances which constitute a Lease Event of Default shall have
occurred and be continuing, if the Loan Trustee shall proceed to foreclose the
Lien of this Indenture, it shall concurrently therewith, to the extent the Loan
Trustee is then entitled to do so hereunder and under the Lease, and is not then
stayed or otherwise prevented from doing so by operation of law, proceed (to the
extent it has not already done so) to declare the Lease to be in default and
exercise one or more dispossessory remedies referred to in Sections 15 of the
Lease; provided that such requirement to exercise one or more of such remedies
under the Lease shall not apply in circumstances where the Loan Trustee is, and
has been, for a continuous period in excess of 60 days or such other period as
may be specified in Section 1110 of the Bankruptcy Code (such 60-day or other
period being the "Section 1110 Period"), involuntarily stayed or prohibited by
applicable law or court order from exercising such remedies under the Lease (a
"Continuous Stay Period"); provided further that the requirement to exercise one
or more of such remedies under the Lease shall nonetheless be applicable during
a Continuous Stay Period subsequent to the expiration of the Section 1110 Period
to the extent that the continuation of such Continuous Stay Period subsequent to
the expiration of the Section 1110 Period (i) results from an agreement by the
trustee or the debtor-in-possession in such proceeding during the Section 1110
Period with the approval of the relevant court to perform the Lease in
accordance with Section 1110(a)(2)(A) of the Bankruptcy Code and continues to
perform as required by Section 1110(a)(2)(A-B) of the Bankruptcy Code or (ii) is
an extension of the Section 1110 Period with the consent of the Loan Trustee
pursuant to Section 1110(b) of the Bankruptcy Code or (iii) is the consequence
of the Loan Trustee's own failure to give any requisite notice to any Person. In
the event that the applicability of Section 1110 of the Bankruptcy Code to the
Aircraft is being contested by Lessee in judicial proceedings, both the Loan
Trustee and the Owner Trustee (without affecting in any way any right or remedy
of the Loan Trustee hereunder) shall have the right to participate in such
proceedings.
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It is expressly understood and agreed that, subject to the
restrictions set forth in the immediately preceding paragraph, the
above-described inability of the Loan Trustee to exercise any right or remedy
under the Lease shall in no event and under no circumstance (except as provided
in the immediately preceding paragraph) prevent the Loan Trustee from exercising
all of its rights, powers and remedies under this Indenture, including without
limitation this Article 8.
(b) The Noteholders shall be entitled, at any sale pursuant to
Section 15 of the Lease or this Section 8.04, to credit against any purchase
price bid at such sale by such Noteholders all or any part of the unpaid
obligations owing to such Noteholders and secured by the Lien of this Indenture
(only to the extent that such purchase would have been paid to such Noteholder
pursuant to Article 3 hereof if such purchase price were paid in cash and the
foregoing provisions of this subsection (b) were not given effect).
(c) In the event of any sale of the Indenture Estate, or any
part thereof, pursuant to any judgment or decree of any court or otherwise in
connection with the enforcement of any of the terms of this Indenture, the
unpaid principal of all Equipment Notes then outstanding, together with accrued
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.
(d) 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 Noteholder, the Loan Trustee will not be authorized or
empowered to acquire title to any Indentured Property or take any action with
respect to any Indentured Property so acquired by it if such acquisition or
action would cause any Trust to fail to qualify as a grantor trust for federal
income tax purposes.
Section 8.05. Return of Aircraft, Etc. (a) Unless the Owner
Participant shall have purchased the Equipment Notes pursuant to Section 2.10
hereof, if an Indenture Event of Default shall have occurred and be continuing
and the Equipment Notes shall have been accelerated, at the request of the Loan
Trustee, the Owner Trustee shall promptly execute and deliver or cause to be
delivered to the Loan Trustee such instruments of title and other documents as
the Loan Trustee may deem necessary or advisable to enable the Loan Trustee or
an agent or representative designated by the Loan Trustee, at such time or times
and place or places as the Loan Trustee may specify, to obtain possession of all
or any part of the Indentured Property to which the Loan Trustee shall at the
time be entitled hereunder. If the Owner Trustee shall for any reason fail to
execute and deliver or cause to be delivered such instruments and documents
after such request by the Loan Trustee, the Loan Trustee may (i) obtain a
judgment conferring on the Loan Trustee the right to immediate possession and
requiring the Owner Trustee to execute and deliver or cause to be delivered such
instruments and documents to the Loan Trustee, to the entry of which judgment
the Owner Trustee hereby specifically consents to the fullest extent it may
lawfully do so, and (ii) to the extent permitted by law, pursue all or part of
such Indentured Property wherever it may be found (but not in violation of the
Lease) and may enter any of the premises of the Lessee wherever such Indentured
Property may be or is supposed to be and search for such Indentured Property and
take possession of and remove such Indentured Property (but not in violation of
the Lease). All expenses of obtaining such judgment
30
or of pursuing, searching for and taking such property shall, until paid, be
secured by the Lien of this Indenture.
(b) Upon every such taking of possession, the Loan Trustee
may, from time to time, at the expense of the Indenture Estate, make all such
expenditures for maintenance, insurance, repairs, replacements, alterations,
additions and improvements to and of the Indentured Property, as it may
reasonably deem proper. In each such case, the Loan Trustee shall have the right
to maintain, use, operate, store, lease, control or manage the Indentured
Property and to carry on the business and to exercise all rights and powers of
the Owner Trustee relating to the Indentured Property, as the Loan Trustee shall
deem best, including the right to enter into any and all such agreements with
respect to the maintenance, insurance, use, operation, storage, leasing,
control, management or disposition of the Indentured Property or any part
thereof as the Loan Trustee may reasonably determine; and the Loan Trustee shall
be entitled to collect and receive directly all tolls, rents (including Rent),
revenues, issues, income, products and profits of the Indentured Property and
every part thereof, except Excepted Property, without prejudice, however, to the
right of the Loan Trustee under any provision of this Indenture to collect and
receive all cash held by, or required to be deposited with, the Loan Trustee
hereunder. Such tolls, rents (including Rent), revenues, issues, income,
products and profits shall be applied to pay the expenses of maintenance, use,
operation, storage, leasing, insurance control, management, modification,
alteration or disposition of the Indentured Property and of conducting the
business thereof, and of all maintenance, repairs, replacements, alterations,
additions and improvements, and to make all payments which the Loan Trustee may
be required or may elect to make, if any, for taxes, assessments, insurance or
other proper charges upon the Indentured Property or any part thereof, and all
other payments which the Loan Trustee may be required or authorized to make
under any provision of this Indenture, as well as just and reasonable
compensation for the services of the Loan Trustee, and of all Persons properly
engaged and employed by the Loan Trustee. Nothing in Section 8.04 or in this
Section 8.05 shall impair the rights of quiet enjoyment provided in Section 4(b)
of the Lease.
Section 8.06. Remedies Cumulative. To the extent permitted
under applicable law, each and every right, power and remedy given to the Loan
Trustee specifically or otherwise in this Indenture shall be cumulative and
shall be in addition to every other right, power and remedy herein specifically
given or now or hereafter existing at law, in equity or by statute, and each and
every right, power and remedy whether specifically herein given or otherwise
existing may be exercised from time to time and as often and in such order as
may be deemed expedient by the Loan 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 Loan 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 Trustee or the Lessee or to be an acquiescence therein.
Section 8.07. Discontinuance of Proceedings. In case the Loan
Trustee shall have instituted any proceeding to enforce any right, power or
remedy under this Indenture by foreclosure, entry or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Loan Trustee, then and in every such case
the Owner Trustee, the Loan Trustee and the Lessee shall, subject to any
determination
31
in such proceedings, be restored to their former positions and rights hereunder
with respect to the Indentured Property, and all rights, remedies and powers of
the Loan Trustee shall continue as if no such proceedings had been instituted.
Section 8.08. Waiver of Past Defaults. Upon written
instructions from a Majority in Interest of Noteholders, the Loan Trustee shall
waive any existing default hereunder and its consequences and upon any such
waiver such default shall cease to exist and any Indenture Event of Default (as
well as any Lease Event of Default giving rise to such Indenture Event of
Default) arising therefrom shall be deemed to have been cured for every purpose
of this Indenture, but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon; provided, however, that in the
absence of written instructions from the Noteholder affected thereby, the Loan
Trustee shall not waive any default (i) in the payment of the principal of,
Make-Whole Amount, if any, or interest due under, any Equipment Note then
outstanding, or (ii) in respect of a covenant or provision hereof which, under
Article 12 hereof, cannot be modified or amended without the consent of each
affected Noteholder.
Section 8.09. Loan Trustee Authorized to Execute Bills of
Sale, Etc. Subject to the provisions of this Indenture, the Owner Trustee
irrevocably appoints the Loan Trustee the true and lawful attorney-in-fact of
the Owner Trustee (which appointment is coupled with an interest) in its name
and stead and on its behalf, for the purpose of effectuating any sale,
assignment, transfer or delivery for the enforcement of the Lien of this
Indenture, whether pursuant to foreclosure or power of sale, assignments and
other instruments as may be necessary or appropriate, with full power of
substitution, the Owner Trustee 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 Loan Trustee or any
purchaser, the Owner Trustee shall ratify and confirm any such sale, assignment,
transfer or delivery, by executing and delivering to the Loan 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 8.10. Rights of Noteholders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Noteholder to receive payment of principal of, and Make-Whole Amount, if any,
and interest on an Equipment Note on or after the respective due dates expressed
in such Equipment Note, to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Noteholder.
ARTICLE 9
DUTIES OF THE LOAN TRUSTEE
Section 9.01. Notice of Indenture Event of Default. In the
event the Loan Trustee shall have knowledge of an Indenture Event of Default, or
shall have knowledge of an Indenture Default arising from a failure to pay Rent,
the Loan Trustee shall give prompt written notice thereof to the Owner Trustee,
the Owner Participant, the Lessee and each Noteholder. Subject to the terms of
Sections 8.03, 8.04, 8.08, 9.02 and 9.03 hereof, the Loan Trustee shall take
such action, or refrain from taking such action, with respect to such Indenture
Event of Default or
32
Indenture Default (including with respect to the exercise of any rights or
remedies hereunder) as the Loan Trustee shall be instructed in writing by the
Majority in Interest of Noteholders. Subject to the provisions of Section 9.03
hereof, if the Loan Trustee shall not have received instructions as above
provided within 20 days after giving notice of such Indenture Default or
Indenture Event of Default to the Noteholders, the Loan Trustee may, subject to
instructions thereafter received pursuant to the preceding provisions of this
Section 9.01, 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
Indenture Default or Indenture Event of Default as it shall determine advisable
in the best interests of the Noteholders and shall use the same degree of care
and skill in connection therewith as a prudent person would use under the
circumstances in the conduct of his or her own affairs; provided that the Loan
Trustee may not sell the Aircraft or any Engine without the consent of the
Majority in Interest of Noteholders. In the event the Loan Trustee shall at any
time declare the Lease to be in default pursuant to Section 15 thereof or shall
elect, subject to Section 8.03, to foreclose or otherwise enforce this
Indenture, the Loan Trustee shall forthwith notify the Owner Participant, the
Noteholders, the Owner Trustee and the Lessee. For all purposes of this
Indenture, in the absence of actual knowledge on the part of the Loan Trustee,
the Loan Trustee shall not be deemed to have knowledge of an Indenture Event of
Default or an Indenture Default (except, in the case of the Loan Trustee, the
failure of the Lessee to pay any installment of Basic Rent, if any portion of
such installment was then required to be paid to the Loan Trustee, which failure
shall constitute knowledge of an Indenture Default one Business Day after such
Basic Rent was due) or the curing of an Indenture Event of Default unless
notified in writing by the Lessee, the Owner Trustee, the Owner Participant or
one or more Noteholders.
Section 9.02. Action upon Instructions. (a) Subject to the
terms of Sections 2.10, 8.03, 8.04(a), 8.08, 9.01 and 9.03, upon the written
instructions at any time and from time to time of a Majority in Interest of
Noteholders, the Loan Trustee shall take such of the following actions as may be
specified in such instructions: (i) give such notice, consent, waiver or
approval or exercise such right, remedy or power or take such other action
hereunder or in respect of any part or all of the Indenture Estate as shall be
specified in such instructions and as shall be consistent with the Operative
Documents; (ii) take such action with respect to, or to preserve or protect, the
Indenture Estate (including the discharge of Liens) as shall be specified in
such instructions and as are consistent with this Indenture; and (iii) take such
other action in respect of the subject matter of this Indenture as is consistent
with the terms hereof and the Indenture Documents. The Loan Trustee will execute
and file or cause to be filed such continuation statements with respect to
financing statements relating to the security interest created hereunder in the
Indenture Estate as may be specified from time to time in written instructions
of a Majority in Interest of Noteholders (which instructions may, by their
terms, be operative only at a future date and which shall be accompanied by the
execution form of such continuation statement so to be filed).
(b) If any Lease Event of Default shall have occurred and be
continuing and the Owner Participant shall have failed to cure or shall have
fully utilized its rights to cure such Lease Event of Default under and in
accordance with the provisions of Section 8.03 hereof, on request of a Majority
in Interest of Noteholders and subject to the terms and conditions of this
Indenture (including Section 9.01 hereof), the Loan Trustee shall exercise such
remedies under Section 15 of the Lease as shall be specified in such request.
33
Section 9.03. Indemnification. The Loan Trustee shall not be
required to take any action or refrain from taking any action under Section 9.01
(other than the first sentence thereof) or 9.02 or Article 8 hereof unless the
Loan Trustee shall have been indemnified against any liability, cost or expense
(including counsel fees) which may be incurred in connection therewith. The Loan
Trustee shall not be under any obligation to take any action under this
Indenture and nothing contained in this Indenture shall require the Loan Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it 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 Loan Trustee shall not be required to take any
action under Section 9.01 (other than the first sentence thereof) or 9.02 or
Article 8 hereof, nor shall any other provision of this Indenture be deemed to
impose a duty on the Loan Trustee to take any action, if the Loan Trustee shall
have been advised by counsel that such action is contrary to the terms hereof or
of the Lease or is otherwise contrary to law.
Section 9.04. No Duties Except as Specified in Indenture or
Instructions. The Loan Trustee shall not have any duty or obligation to use,
operate, store, lease, control, manage, sell, dispose of or otherwise deal with
the Aircraft or any other part of the Indenture Estate, or to otherwise take or
refrain from taking any action under, or in connection with, this Indenture or
any part of the Indenture Estate, except as expressly provided by the terms of
this Indenture or as expressly provided in written instructions from Noteholders
as provided in this Indenture; and no implied duties or obligations shall be
read into this Indenture against the Loan Trustee.
Section 9.05. No Action Except Under Lease, Indenture or
Instructions. The Owner Trustee and the Loan Trustee agree that they will not
use, operate, store, lease, control, manage, sell, dispose of or otherwise deal
with the Aircraft or any other part of the Indenture Estate except (i) as
required or permitted by the terms of the Lease or the Participation Agreement
and (ii) in accordance with the powers granted to, or the authority conferred
upon, the Owner Trustee and the Loan Trustee pursuant to this Indenture and in
accordance with the express terms hereof.
Section 9.06. Notices, Etc. The Loan Trustee shall deliver to
each Noteholder, promptly upon receipt thereof, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements,
opinions and other instruments received by it (i) in connection with the
Indentured Property or (ii) under or pursuant to any Operative Document, to the
extent that the same shall not have been required to be furnished pursuant
thereto or hereto to such Noteholders.
Section 9.07. Investment of Funds Held by Loan Trustee. (a)
Subject to subsection (b) below, any monies (including for the purpose of this
subsection any cash deposited with the Loan Trustee or Permitted Investments
purchased by the use of such cash pursuant to this subsection 9.07(a) or any
cash constituting the proceeds of the maturity, sale or other disposition of any
Permitted Investment) held by the Loan Trustee hereunder as part of the
Indenture Estate, until paid out by the Loan Trustee as herein provided, at any
time and from time to time, at the request of the Owner Trustee, shall be
invested and reinvested in Permitted Investments as specified in such request
(if such investments are reasonably available for purchase) and sold, in any
case at such prices, including accrued interest or its equivalent, as are
34
set forth in such request, and such Permitted Investments shall be held by the
Trustee in trust as part of the Indenture Estate until so sold. Unless otherwise
expressly provided in this Indenture, any profit, income, interest, dividend or
gain realized upon maturity, sale or other disposition of any such Permitted
Investment, net of the Loan Trustee's reasonable fees and expenses in making
such Permitted Investment, shall be held and applied by the Loan Trustee in the
same manner as the principal amount of such Permitted Investment is to be
applied and any loss realized upon maturity, sale or other disposition of any
such Permitted Investment shall be charged against the principal amount
invested.
(b) Notwithstanding anything to the contrary contained in
paragraph (a) above, any amounts held by the Loan Trustee hereunder as a part of
the Indenture Estate, until paid out by the Loan Trustee as herein provided,
which are either (i) amounts held pursuant to Section 25 of the Lease or (ii)
amounts held in connection with termination of the Lease pursuant to Section
9(a) of the Lease, at any time and from time to time, so long as no Lease Event
of Default shall have occurred and be continuing, at the request (given directly
by the Lessee to the Loan Trustee) of the Lessee acting as the agent of the
Owner Trustee, shall be invested and reinvested in Permitted Investments as
specified in such request (if such investments are reasonably available for
purchase) and sold, in any case at such prices, including accrued interest, or
its equivalent, as are set forth in such request, and such Permitted Investments
shall be held by the Loan Trustee in trust as a part of the Indenture Estate
until so sold; provided that the Lessee, on behalf of the Owner Trustee, as
agent of the Owner Trustee, shall upon demand pay to the Loan Trustee the amount
of any loss realized upon maturity, sale or other disposition of any such
Permitted Investment and, so long as no Lease Event of Default shall have
occurred and be continuing, be entitled to receive from the Loan Trustee, and
the Loan Trustee shall promptly pay to the Lessee, on behalf of the Owner
Trustee, any profit, income, interest, dividend or gain realized upon maturity,
sale or other disposition of any such Permitted Investment. If any Lease Event
of Default shall have occurred and be continuing, any net income, profit,
interest, dividend or gain realized upon maturity, sale or other disposition of
any Permitted Investment made pursuant to this paragraph (b) shall be held as
part of the Indenture Estate and shall be applied by the Loan Trustee at the
same time, on the same conditions and in the same manner as the amounts in
respect of which such income, profit, interest, dividend or gain was realized
are required to be distributed in accordance with the provisions hereof or of
the Lease pursuant to which such amounts were required to be held.
(c) The Loan Trustee shall not be responsible for any losses
on any investments or sales of Permitted Investments made pursuant to the
procedure specified in this Section.
Section 9.08. Replacement of Loan Trustee. (a) The resignation
or removal of the Loan Trustee and the appointment of a successor Loan Trustee
shall become effective only upon the successor Loan Trustee's acceptance of
appointment as provided in this Section.
(b) The Loan Trustee may resign by giving at least 30 days'
prior written notice to the Lessee and the Owner Trustee. The Majority in
Interest of Noteholders may remove the Loan Trustee by giving at least 30 days'
prior written notice to the Loan Trustee, the Owner Trustee, the Owner
Participant and the Lessee and may appoint a successor Loan Trustee for such
Equipment Notes with, so long as no Indenture Event of Default shall have
occurred and
35
be continuing, the Owner Trustee's and the Lessee's consent. The Owner Trustee
(acting pursuant to instructions from the Lessee) may remove the Loan Trustee
if:
(1) the Loan Trustee fails to comply with Section 9.10 hereof;
(2) the Loan Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or public officer takes charge of its property;
or
(4) the Loan Trustee becomes incapable of acting.
(c) If the Loan Trustee resigns or is removed, or if a vacancy
exists in the office of Loan Trustee for any reason and a new Loan Trustee has
not been appointed pursuant to Section 9.08(b), the Owner Trustee shall promptly
appoint a successor Loan Trustee.
(d) If a successor Loan Trustee does not take office within 30
days after the retiring Loan Trustee resigns or is removed, the retiring Loan
Trustee, the Lessee, the Owner Trustee or a Majority in Interest of Noteholders
may petition any court of competent jurisdiction for the appointment of a
successor Loan Trustee.
(e) If the Loan Trustee fails to comply with Section 9.10, any
Noteholder may petition any court of competent jurisdiction for the removal of
such Loan Trustee and the appointment of a successor Loan Trustee.
(f) A successor Loan Trustee shall deliver a written
acceptance of its appointment to the retiring Loan Trustee, to the Lessee and to
the Owner Trustee. Thereupon, the resignation or removal of the retiring Loan
Trustee shall become effective, and the successor Loan Trustee shall have all
the rights, powers and duties of the retiring Loan Trustee for which the
successor Loan Trustee is to be acting as Loan Trustee under this Indenture. The
retiring Loan Trustee shall promptly transfer all property and all books and
records relating to the administration of the Indenture Estate held by it as
Loan Trustee to the successor Loan Trustee subject to the Lien provided for in
Section 10.07. The Owner Trustee shall give notice of each appointment of a
successor Loan Trustee if there are Equipment Notes outstanding, by mailing
written notice of such event by first-class mail to the Noteholders.
Section 9.09. Successor Loan Trustee by Merger, Etc. If the
Loan Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business assets to, another
corporation, the successor corporation, without any further act, shall be the
successor Loan Trustee.
Section 9.10. Eligibility; Disqualification. This Indenture
shall at all times have a Loan Trustee which shall be a Citizen of the United
States and shall be a bank or trust company and have a combined capital and
surplus of at least $75,000,000 (or a combined capital and surplus in excess of
$5,000,000 and the obligations of which, whether now in existence or hereafter
incurred, are fully and unconditionally guaranteed by a corporation organized
and doing business under the laws of the United States, any State or Territory
thereof or of the District of Columbia and having a combined capital and surplus
of at least $75,000,000) or a corporation with a net worth of at least
$75,000,000, if there be such an institution willing, able
36
and legally qualified to perform the duties of the Loan Trustee hereunder and
upon reasonable or customary terms. If such corporation publishes reports of
conditions at least annually, pursuant to law or to the requirements of Federal,
State, Territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 9.10, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of conditions so published.
In case at any time the Loan Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.10, the Loan
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.08.
Section 9.11. Trustee's Liens. The Loan Trustee in its
individual capacity agrees that it will at its own cost and expense promptly
take such action as may be necessary to duly discharge and satisfy in full all
Liens ("Trustee's Liens") on the Indenture Estate which are either (i)
attributable to the Loan Trustee in its individual capacity and which are
unrelated to the transactions contemplated by the Operative Documents, or (ii)
attributable to the Loan Trustee as trustee hereunder or in its individual
capacity and which arise out of acts or omissions by it which are contrary to
the terms of this Indenture.
Section 9.12. Withholding Taxes; Information Reporting. The
Loan Trustee shall exclude and withhold at the appropriate rate from each
distribution of principal, Make-Whole Amount, if any, and interest and other
amounts due hereunder or under the Equipment Notes any and all withholding taxes
applicable thereto as required by law. The Loan Trustee agrees (i) to act as
such withholding agent and, in connection therewith, whenever any present or
future taxes or similar charges are required to be withheld with respect to any
amounts payable in respect of the Equipment Notes, to withhold such amounts and
timely pay the same to the appropriate authority in the name of and on behalf of
the Noteholders, (ii) that it will file any necessary withholding tax returns or
statements when due and (iii) that, as promptly as possible after the payment of
such amounts, it will deliver to each Noteholder appropriate documentation
showing the payment of such amounts, together with such additional documentary
evidence as such Noteholders may reasonably request from time to time. The Loan
Trustee agrees to file any other information reports as it may be required to
file under United States law.
ARTICLE 10
THE OWNER TRUSTEE AND THE LOAN TRUSTEE
Section 10.01. Acceptance of Trusts and Duties. The Loan
Trustee accepts the duties hereby created and applicable to it and agrees to
perform the same but only upon the terms of this Indenture and agrees to receive
and disburse all moneys constituting part of the Indenture Estate in accordance
with the terms hereof. The Loan Trustee shall not be answerable or accountable
under any circumstances in its individual capacity, except for its own willful
misconduct or negligence and its failure to use ordinary care in receiving,
handling or disbursing funds, except as provided in the third sentence of
Section 2.03 or Section 9.11 hereof or, except for liabilities that may result
from the inaccuracy of any representation or warranty of, or breach of any
covenant by, the Loan Trustee in Section 11 or Section 12 of the Participation
Agreement
37
or any other document. The Owner Trustee shall not be deemed a trustee for the
Noteholders for any purpose.
Section 10.02. Absence of Duties. In the case of the Loan
Trustee, except in accordance with written instructions furnished pursuant to
Section 9.01, 9.02 or 13.01 hereof, and except as provided in, and without
limiting the generality of, Sections 9.02, 9.03 and 9.04 hereof and, in the case
of the Owner Trustee, except as provided in Section 4.01 or 13.01 hereof, the
Owner Trustee and the Loan Trustee shall have no duty (i) to see to any
registration of the Aircraft or any recording or filing of the Lease or of this
Indenture or any other document, or to see to the maintenance of any such
registration, recording or filing, (ii) to see to any insurance on the Aircraft,
whether or not the Lessee shall be in default with respect thereto, (iii) to see
to the payment or discharge of any Lien of any kind against any part of the
Trust Estate or the Indenture Estate, (iv) to confirm, verify or inquire into
the failure to receive any financial statements of the Lessee or (v) to inspect
the Aircraft at any time or ascertain or inquire as to the performance or
observance of any of the Lessee's covenants under the Lease with respect to the
Aircraft.
Section 10.03. No Representations or Warranties as to Aircraft
or Documents. NONE OF THE LOAN TRUSTEE, THE OWNER TRUSTEE (IN ITS INDIVIDUAL
CAPACITY OR AS OWNER TRUSTEE) OR THE OWNER PARTICIPANT MAKES OR SHALL BE DEEMED
TO HAVE MADE, AND EACH HEREBY EXPRESSLY DISCLAIMS, ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS, VALUE,
WORKMANSHIP, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN, QUALITY,
DURABILITY, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR
PURPOSE OF THE AIRCRAFT OR ANY ENGINE OR ANY PART THEREOF, 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 WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE OR ANY PART THEREOF
WHATSOEVER, except that the Owner Trustee in its individual capacity warrants
that (i) at the Commencement Time for the Aircraft the Owner Trustee shall have
received or continued to hold whatever interest and title in the Aircraft and
the other property included in the Trust Estate was conveyed to it at or prior
to such Commencement Time subject to the rights of the parties to the Indenture
Documents and (ii) the Aircraft shall be free and clear of Lessor's Liens
attributable to the Owner Trustee in its individual capacity. Neither the Owner
Trustee nor the Loan Trustee makes or shall be deemed to have made any
representation or warranty as to the validity, legality or enforceability of
this Indenture, the Trust Agreement, the Equipment Notes or any Indenture
Documents or as to the correctness of any statement contained in any thereof,
except for the representations and warranties of the Owner Trustee and the Loan
Trustee made in their respective individual capacities under this Indenture or
in the Participation Agreement.
Section 10.04. No Segregation of Moneys; No Interest. Any
moneys paid to or retained by the Loan Trustee pursuant to any provision hereof
and not then required to be distributed to any Noteholder, the Lessee or the
Owner Trustee as provided in Article 3 hereof need not be segregated in any
manner except to the extent provided herein or as otherwise
38
required by law, and may, except as aforesaid, be deposited under such general
conditions as may be prescribed by law, and the Loan Trustee shall not (except
as otherwise provided in Section 9.07 hereof) be liable for any interest
thereon; provided that any payments received or applied hereunder by the Loan
Trustee shall be accounted for by the Loan Trustee so that any portion thereof
paid or applied pursuant hereto shall be identifiable as to the source thereof.
Section 10.05. Reliance; Agents; Advice of Counsel. Neither
the Owner Trustee nor the Loan Trustee shall 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 Owner Trustee and the Loan Trustee may accept a copy of a resolution of the
Board of Directors or any applicable 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 Equipment Notes
outstanding as of any date, the Owner Trustee may for all purposes hereof rely
on a certificate signed by any Vice President or other authorized corporate
trust officer of the Loan Trustee. As to any fact or matter relating to the
Lessee, the manner of ascertainment of which is not specifically described
herein, the Owner Trustee and the Loan Trustee may for all purposes hereof rely
on a certificate, signed by a Responsible Officer of the Lessee, as to such fact
or matter, and such certificate shall constitute full protection to the Owner
Trustee and the Loan Trustee for any action taken or omitted to be taken by them
in good faith in reliance thereon. The Loan Trustee shall assume, and shall be
fully protected in assuming, that the Owner Trustee is authorized by the Trust
Agreement to enter into this Indenture and to take all action to be taken by it
pursuant to the provisions hereof, and shall not inquire into the authorization
of the Owner Trustee with respect thereto. In the administration of the trusts
hereunder, the Loan Trustee may execute any of the trusts or powers hereof and
perform its powers and duties hereunder directly or through agents (provided
that, so long as no Lease Event of Default shall have occurred and be
continuing, any agent of the Loan Trustee shall have been consented to by the
Lessee) and may, at the expense of the Indenture Estate, consult with counsel,
accountants and other skilled persons to be selected and retained by it, and the
Loan 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 10.06. Capacity in Which Acting. The Loan Trustee acts
hereunder solely as trustee as herein provided, and the Owner Trustee acts
hereunder solely as trustee as in the Trust Agreement provided, and, in each
case, not in its individual capacity, except as otherwise expressly provided
herein.
Section 10.07. Compensation. The Loan Trustee shall be
entitled to reasonable compensation, including expenses and disbursements, for
all services rendered hereunder, which compensation shall be payable pursuant to
Section 12(a) of the Participation Agreement and shall have a first priority
claim on the Indenture Estate for the payment of such compensation, to the
extent that such compensation shall not have been paid by the Lessee, and shall
have the right to use or apply any moneys held by it hereunder in the Indenture
Estate toward such payments. The Loan Trustee agrees that it shall have no right
against any Noteholder or, other than as
39
provided in Section 12(a) of the Participation Agreement, the Owner Participant,
for any fee as compensation for its services as trustee under this Indenture.
Section 10.08. May Become Noteholder. Each of the institutions
acting as Owner Trustee and Loan Trustee hereunder may become a Noteholder and
have all rights and benefits of a Noteholder to the same extent as if it were
not the institution acting as Owner Trustee or Loan Trustee, as the case may be.
Section 10.09. Further Assurances; Financing Statements. At
any time and from time to time, upon the request of the Loan Trustee or the
Lessee or the Owner Participant, the Owner Trustee shall promptly and duly
execute and deliver any and all such further instruments and documents
including, without limitation, chattel paper originals of subsequent leases, as
may be specified in such request and as are 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 Loan Trustee the full
benefit of the specific rights and powers herein granted, including, without
limitation, the execution and delivery of Uniform Commercial Code financing
statements and continuation statements with respect thereto, or similar
instruments relating to the perfection of the mortgage, security interests or
assignments created or intended to be created hereby.
ARTICLE 11
INDEMNIFICATION OF LOAN TRUSTEE BY OWNER TRUSTEE
Section 11.01. Scope of Indemnification. The Owner Trustee,
not individually but solely in its capacity as Owner Trustee under the Trust
Agreement, hereby agrees, whether or not any of the transactions contemplated
hereby shall be consummated, to assume liability for, and does hereby indemnify,
protect, save and keep harmless the Loan Trustee, in its individual capacity,
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 Loan Trustee on or measured by any compensation received by the
Loan Trustee for its services under this Indenture), claims, actions, suits or
reasonable 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 Loan Trustee in its individual capacity (whether or not
also agreed to be indemnified against by any other person under any other
document) in any way relating to or arising out of this Indenture, the Trust
Agreement, the Indenture Documents 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, delivery, lease, possession, use,
operation, condition, sale, return or other disposition of the Aircraft
(including, without limitation, latent and other defects, whether or not
discoverable, and any claim for patent, trademark or copyright infringement), or
in any way relating to or arising out of the administration of the Indenture
Estate or the action or inaction of the Loan Trustee hereunder, except only (i)
in the case of willful misconduct or gross negligence of the Loan Trustee in the
performance of its duties hereunder or (ii) as may result from the inaccuracy of
any representation or warranty of the Loan Trustee in Section 11 of the
Participation Agreement or (iii) as otherwise provided in Section 2.03 and
Section 9.11 hereof or (iv) as otherwise excluded by the terms of Section 10(b)
or Section 10(c) of the Participation Agreement from the Lessee's
40
general indemnity and general tax indemnity under said Sections. The Loan
Trustee in its individual capacity shall be entitled to indemnification from the
Indenture Estate for any liability, obligation, loss, damage, penalty, claim,
action, suit, cost, expense or disbursement indemnified against pursuant to this
Section 11.01 to the extent not reimbursed by the Lessee or others, but without
releasing any of them from their respective agreements of reimbursement; and to
secure the same, the Loan Trustee shall have a prior lien on the Indenture
Estate; provided that, so long as the Lease is in effect, the Loan Trustee shall
not make any claim under this Section 11.01 for any claim or expense indemnified
against by the Lessee under the Participation Agreement without (but only if and
to the extent permitted by applicable law) first making demand on the Lessee
under the Participation Agreement for such claim or expense. Upon payment in
full by the Owner Trustee of any indemnity pursuant to this Section 11.01, the
Owner Trustee shall be subrogated to the rights, if any, of the Loan Trustee in
its individual capacity, or its agents and servants, as the case may be, in
respect of the matter as to which the indemnity was paid. The indemnities
contained in this Section 11.01 shall survive the termination of this Indenture.
ARTICLE 12
SUPPLEMENTS AND AMENDMENTS TO THIS INDENTURE AND OTHER DOCUMENTS
Section 12.01. Amendments to This Indenture Without Consent of
Noteholders. The Owner Trustee and the Loan Trustee may enter into one or more
agreements supplemental hereto without the consent of any Noteholder for any of
the following purposes:
(a) (i) to cure any defect or inconsistency herein or in the
Equipment Notes, or (ii) to cure any ambiguity or correct any mistake;
(b) to evidence the succession of another party as the Owner
Trustee in accordance with the terms of the Trust Agreement or to
evidence (in accordance with Article 9) the succession of a new trustee
hereunder, the removal of the trustee hereunder or the appointment of
any co-trustee or co-trustees or any separate or additional trustee or
trustees;
(c) to convey, transfer, assign, mortgage or pledge any
property to or with the Loan Trustee or to make any other provisions or
amendments with respect to matters or questions arising hereunder or
under the Equipment Notes or to amend, modify or supplement any
provision hereof or thereof so long as such action shall not adversely
affect the interests of any Noteholder;
(d) to correct or amplify the description of any property at
any time subject to the Lien of this Indenture or better to assure,
convey and confirm unto the Loan Trustee any property subject or
required to be subject to the Lien of this Indenture or to subject to
the Lien of this Indenture the Engines or engine substituted for the
Engines in accordance herewith or with the Lease; provided that Trust
Agreement and Indenture Supplements entered into for the purpose of
subjecting to the Lien of this Indenture the Engines in accordance with
the Lease need only be executed by the Owner Trustee;
41
(e) to add to the covenants of the Owner Trustee for the
benefit of the Noteholders, or to surrender any rights or power herein
conferred upon the Owner Trustee, the Owner Participant or the Lessee;
(f) to add to the rights of the Noteholders;
(g) to provide for compliance with applicable law;
(h) to provide for the issuance of Series E Equipment Notes;
or
(i) to include on the Equipment Notes any legend as may be
required by law.
Section 12.02. Amendments to This Indenture with Consent of
Noteholders. (a) With the written consent of a Majority in Interest of
Noteholders, the Owner Trustee and the Loan Trustee may enter into such
supplemental agreements to add any provisions to or to change or eliminate any
provisions of this Indenture or of any such supplemental agreements or to modify
the rights of the Noteholders; provided, however, that, without the consent of
each Noteholder affected thereby, an amendment under this Section 12.02 may not:
(i) reduce the principal amount of, any principal installment
payable with respect to, Make-Whole Amount, if any, or interest on, any
Equipment Note; or
(ii) change the date on which any principal of, Make-Whole
Amount, if any, or interest on any Equipment Note, is due or payable;
or
(iii) create any Lien on the Indenture Estate prior to or pari
passu with the Lien thereon under this Indenture except such as are
permitted by this Indenture, or deprive any Noteholder of all or any
part of the benefit of the Lien on the Indenture Estate created by this
Indenture; or
(iv) reduce the percentage in principal amount of the
outstanding Equipment Notes, the consent of whose holders is required
for any such supplemental agreement, or the consent of whose holders is
required for any waiver (of compliance with certain provisions of this
Indenture or of certain defaults hereunder or their consequences)
provided for in this Indenture; or
(v) make any change in Section 8.08, 8.09 or this Section
12.02(a); or
(vi) change the definition of "Indenture Estate" or the
amounts secured thereby, or
(vii) permit redemption of Equipment Notes earlier than
permitted under Section 2.07 or 2.08 hereof or the purchase of
Equipment Notes other than as permitted by Section 2.10 hereof.
(b) It is not necessary under this Section 12.02 for the
Noteholders to consent to the particular form of any proposed supplemental
agreement, but it is sufficient if they consent to the substance thereof.
42
Section 12.03. Revocation and Effect of Consents. The Owner
Trustee may at its option by delivery of an Officers' Certificate to the Loan
Trustee set a record date to determine the Noteholders entitled to give any
consent, request, demand, authorization, direction, notice, waiver or other act.
Such record date shall be the record date specified in such Officers'
Certificate which shall be a date not more than 30 days prior to the first
solicitation of Noteholders in connection therewith. If such a record date is
fixed, such consent, request, demand, authorization, direction, notice, waiver
or other act may be given before or after such record date, but only the
Noteholders of record at the close of business on such record date shall be
deemed to be Noteholders for the purposes of determining whether Noteholders
holding the requisite proportion of outstanding Equipment Notes have authorized
or agreed or consented to such consent, request, demand, authorization,
direction, notice, waiver or other act, and for that purpose the outstanding
Equipment Notes shall be computed as of such record date; provided that no such
consent, request, demand, authorization, direction, notice, waiver or other act
by the Noteholders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than one
year after the record date.
Section 12.04. Notation on or Exchange of Equipment Notes. The
Loan Trustee may place an appropriate notation about an amendment or waiver on
any Equipment Note thereafter executed. The Loan Trustee in exchange for such
Equipment Notes may execute new Equipment Notes that reflect the amendment or
waiver.
Section 12.05. Amendments, Waivers, Etc., of Other Operative
Documents. (a) Without the consent of a Majority in Interest of the Noteholders,
the respective parties to the Participation Agreement, the Lease, the Trust
Agreement and the Purchase Agreement Assignment may not modify, amend or
supplement any of said agreements, or give any consent, waiver, authorization or
approval thereunder, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions thereof or modifying in any
manner the rights of the respective parties thereunder; provided, however, that
the actions specified in subsection (b) of this Section 12.05 may be taken
without the consent of the Loan Trustee or any Noteholder.
(b) Subject to the provisions of subsection (c) of this
Section 12.05, the respective parties to the Participation Agreement, the Lease
and the Trust Agreement, at any time and from time to time without the consent
of the Loan Trustee or of any Noteholder, may:
(i) so long as no Indenture Event of Default shall have
occurred and be continuing, modify, amend or supplement the Lease, or
give any consent, waiver, authorization or approval with respect
thereto, except that without compliance with subsection (a) of this
Section 12.05 the parties to the Lease shall not modify, amend or
supplement, or give any consent, waiver, authorization or approval for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions thereof or of modifying in any manner
the rights of the respective parties thereunder, with respect to the
following provisions of the Lease as in effect on the Closing Date:
Section 2, Section 3(a) (if the result thereof would be to shorten the
Term of the Lease to a period shorter than the period ending with the
latest maturity date of any Equipment Notes), Section 3(b), Section
3(c) (except to the extent such Section relates to amounts payable
(whether directly or pursuant to the Indenture) to Persons other than
the Noteholders and
43
the Loan Trustee in its individual capacity), Section 3(d) (except
insofar as it relates to the address or account information of the
Owner Trustee or the Loan Trustee), Section 4, Section 6, Section 9
(except that further restrictions may be imposed on the ability of the
Lessee to terminate the Lease with respect to the Aircraft or an
Engine), Section 10 (except that additional requirements may be imposed
on the Lessee), Section 11 (except for Section 11(d) and except that
additional insurance requirements may be imposed on the Lessee),
Section 12 (except in order to increase the Lessee's liabilities or
enhance the Lessor's rights thereunder), Section 13 (except in the case
of an assignment by the Lessor in circumstances where the Aircraft
shall remain registrable under the FAA), Section 14 (except to impose
additional or more stringent Lease Events of Default), Section 15
(except to impose additional remedies), Section 16, Section 17 (except
to impose additional requirements on the Lessee), Section 19, Section
22, Section 25 and any definition of terms used in the Lease, to the
extent that any modification of such definition would result in a
modification of the Lease not permitted pursuant to this subsection
(b); provided that, in the event an Indenture Event of Default shall
have occurred and be continuing, the Loan Trustee shall have all rights
of the Owner Trustee as "Lessor" under the Lease to modify, amend or
supplement the Lease or give any consent, waiver, authorization or
approval thereunder, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions thereof or
of modifying in any manner the rights of the "Lessor" thereunder;
provided further that, without the prior consent of the Owner Trustee,
and whether or not an Indenture Event of Default shall have occurred
and be continuing, no such action shall be taken (x) with respect to
any of the provisions of Sections 1 (to the extent any modification of
a definition contained therein would result in a modification of the
Lease not permitted by this proviso), 3, 5, 6 (to the extent such
action would reduce the Lessee's obligations), 7, 8, 9, 10, 11 (except
to increase the amounts or types of insurance the Lessee must provide
thereunder at its expense), 12, 13, 14, 15, 17 (insofar as it relates
to the Lessor), 19, 20 and 28 of the Lease, (y) any other section of
the Lease to the extent such action shall affect the amount or timing
of any amounts payable by the Lessee under the Lease as originally
executed (or as subsequently modified with the consent of the Owner
Trustee) which, absent the occurrence and continuance of an Indenture
Event of Default, would be distributable to the Owner Trustee under
Article 3 or (z) which would otherwise materially and adversely affects
the rights of the Owner Trustee or the Owner Participant; and provided
further that the parties to the Lease may take any such action without
the consent of the Loan Trustee or any Noteholder to the extent such
action relates to the payment of amounts constituting, or the Owner
Trustee's, the Owner Participant's or the Lessee's rights or
obligations with respect to, Excepted Property;
(ii) modify, amend or supplement the Trust Agreement, or give
any consent, waiver, authorization or approval with respect thereto, in
each case only to the extent any such action shall not adversely impact
the interests of the Noteholders;
(iii) modify, amend or supplement the Participation Agreement,
or give any consent, waiver, authorization or approval with respect
thereto, except that without the consent of a Majority in Interest of
the Noteholders, the parties to the Participation Agreement shall not
modify, amend or supplement, or give any consent, waiver, authorization
or approval for the purpose of adding any provisions to or changing in
any
44
manner or eliminating any of the provisions thereof or of modifying in
any manner the rights of the respective parties thereunder, with
respect to the following provisions of the Participation Agreement as
in effect on the Closing Date: Section 10 (insofar as such Section 10
relates to the Loan Trustee, the Indenture Estate and the Noteholders
holding the Equipment Notes), Section 11, Sections 12(b) through 12(d),
▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇(▇) and, to the extent the Noteholders
would be adversely affected thereby, Section 19(c) and any definition
of terms used in the Participation Agreement, to the extent that any
modification of such definition would result in a modification of the
Participation Agreement not permitted pursuant to this subsection (b);
(iv) modify, amend or supplement any of said agreements in
order to cure any ambiguity, to correct or supplement any provisions
thereof which may be defective or inconsistent with any other provision
thereof or of any provision of this Indenture, or to make any other
provision with respect to matters or questions arising thereunder or
under this Indenture which shall not be inconsistent with the
provisions of this Indenture, provided the making of any such other
provision shall not adversely affect the interests of the Noteholders
unless such provision corrects a mistake or cures an ambiguity; and
(v) modify, amend or supplement any indemnities solely in
favor of the Owner Participant or any member of its Related Indemnitee
Group in such manner as shall be agreed by the Owner Participant and
the Lessee.
(c) No modification, amendment, supplement, consent, waiver,
authorization or approval with respect to the Lease or the Participation
Agreement, whether effected pursuant to subsection (a) or pursuant to subsection
(b) of this Section 12.05 and anything in such subsections or elsewhere in this
Indenture to the contrary notwithstanding, shall, without the consent of each
Noteholder affected thereby,
(i) modify, amend or supplement the Lease in such a way as to
extend the time of payment of Basic Rent or Supplemental Rent payable
in respect of the Make-Whole Amount or Stipulated Loss Value or any
other amounts payable upon the occurrence of an Event of Loss or
Termination Value and any other amounts payable upon termination of the
Lease with respect to the Aircraft, payable under, or as provided in,
the Lease in effect on the Closing Date, or reduce the amount of any
installment of Basic Rent or Supplemental Rent payable in respect of
the Make-Whole Amount as in effect on the Closing Date so that the same
is less than the payment of principal of, Make-Whole Amount, if any,
and interest on the Equipment Notes, as the case may be, to be made
from such installment of Basic Rent or Supplemental Rent payable in
respect of the Make-Whole Amount, or reduce the aggregate amount of
Stipulated Loss Value or any other amounts payable under, or as
provided in, the Lease as in effect on the Closing Date upon the
occurrence of an Event of Loss so that the same is less than the
accrued interest on and principal as of the Loss Payment Date, and
Make-Whole Amount, if any, of the Equipment Notes at the time
outstanding or reduce the amount of Termination Value and any other
amounts payable under, or as provided in, the Lease as in effect on the
Closing Date upon termination of the Lease with respect to the Aircraft
so that the same is less than the accrued interest on and principal as
of the Lease Termination Date and Make-Whole Amount, if any, of the
Equipment Notes at the time outstanding, or
45
(ii) modify, amend or supplement the Lease in such a way as
to, or consent to any assignment of the Lease or give any consent,
waiver, authorization or approval which would, release the Lessee from
its obligations in respect of payment of Basic Rent, Supplemental Rent
payable in respect of the Make-Whole Amount or Stipulated Loss Value
and any other amounts payable upon the occurrence of an Event of Loss,
or Termination Value and any other amounts payable upon termination of
the Lease with respect to the Aircraft, payable under, or as provided
in, the Lease as in effect on the Closing Date, except for any such
assignment pursuant to Section 16(e) of the Participation Agreement,
and except as provided in the Lease as in effect on the Closing Date.
Section 12.06. Trustees Protected. If, in the opinion of the
institution acting as Owner Trustee under the Trust Agreement or the institution
acting as Loan Trustee hereunder, any document required to be executed pursuant
to the terms of this Article affects any right, duty, immunity or indemnity with
respect to such institution under this Indenture such institution may in its
discretion decline to execute such document.
Section 12.07. Documents Mailed to Noteholders. Promptly after
the execution by the Owner Trustee or the Loan Trustee of any document entered
into pursuant to this Article, the Loan Trustee shall mail, by first-class mail,
postage prepaid, a copy thereof to each Noteholder at its address last set forth
in the Equipment Note Register, but the failure of the Loan Trustee to mail such
copies shall not impair or affect the validity of such document.
ARTICLE 13
MISCELLANEOUS
Section 13.01. Termination of Indenture. Upon (or at any time
after) payment in full of the principal of, Make-Whole Amount, if any, and
interest on and all other amounts due under, all Equipment Notes (provided that
following such payment there shall then be no other amounts due to the
Noteholders, the Indenture Indemnitees and the Loan Trustee hereunder or under
the Participation Agreement or any other Operative Document or otherwise secured
hereby), the Owner Trustee shall direct the Loan Trustee to execute and deliver
to or as directed in writing by the Owner Trustee or the Lessee an appropriate
instrument releasing the Aircraft, Airframe, or such Engine or Part, as
applicable, from the Lien of this Indenture and releasing the Indenture
Documents pertaining thereto from the assignment and pledge thereof hereunder,
and the Loan Trustee shall execute and deliver such instrument as aforesaid and
will execute and deliver such other instruments or documents as may be
reasonably requested by the Owner Trustee or the Lessee to give effect to such
release; provided, however, that this Indenture and the trusts created hereby
shall earlier terminate and this Indenture shall be of no further force or
effect upon any sale or other final disposition by the Loan Trustee of all
property part of the Indenture Estate and the final distribution by the Loan
Trustee of all moneys or other property or proceeds constituting part of the
Indenture Estate in accordance with the terms hereof. Except as aforesaid
otherwise provided, this Indenture and the trusts created hereby shall continue
in full force and effect in accordance with the terms hereof.
46
Section 13.02. No Legal Title to Indenture Estate in
Noteholders. No Noteholder shall have legal title to any part of the Indenture
Estate. No transfer, by operation of law or otherwise, of any Equipment Note or
other right, title and interest of any Noteholder in and to the Indenture Estate
or hereunder shall operate to terminate this Indenture or entitle such
Noteholder or any successor or transferee of such holder to an accounting or to
the transfer to it of legal title to any part of the Indenture Estate.
Section 13.03. Sale of Indenture Estate by Loan Trustee is
Binding. Any sale or other conveyance of the Indenture Estate or any interest
therein by the Loan Trustee made pursuant to the terms of this Indenture or of
the Lease shall bind the Noteholders and shall be effective to transfer or
convey all right, title and interest of the Loan Trustee, the Owner Trustee, the
Owner Participant and such Noteholders in and to the Indenture Estate or part
thereof. No purchaser or other grantee shall be required to inquire as to the
authorization, necessity, expediency or regularity of such sale or conveyance or
as to the application of any sale or other proceeds with respect thereto by the
Loan Trustee.
Section 13.04. Indenture for Benefit of Owner Trustee, Loan
Trustee, Owner Participant, Noteholders, Other Indenture Indemnitees and Lessee.
Nothing in this Indenture, whether express or implied, shall be construed to
give to any Person other than the Owner Trustee, the Loan Trustee, the Owner
Participant, the Noteholders, the other Indenture Indemnitees and, with respect
to this Section 13.04 and any other Section or provisions hereof requiring
payment to or otherwise granting any right or benefit to the Lessee, the Lessee,
any legal or equitable right, remedy or claim under or in respect of this
Indenture.
Section 13.05. No Action Contrary to Lessee's Rights Under the
Lease. The Owner Trustee and Loan Trustee agree that, except following a Lease
Event of Default that has occurred and is continuing, neither the Owner Trustee
nor the Loan Trustee nor any Person claiming by, through or under either the
Owner Trustee or the Loan Trustee will take or cause to be taken any action
inconsistent with Lessee's rights under the Lease and its right to quiet
enjoyment of, or otherwise interfere with or interrupt the Lessee's use,
operation and continuing possession of the Aircraft, the Airframe or any Engine
by the Lessee or any sublessee, assignee or transferee under any sublease,
assignment or transfer then in effect and permitted by the terms of the Lease.
Section 13.06. Notices. Unless otherwise expressly specified
or permitted by the terms hereof, all notices, requests, demands,
authorizations, directions, consents, waivers or documents provided or permitted
by this Indenture to be made, given, furnished or filed shall be in writing,
mailed by first-class mail, postage prepaid, by nationally recognized overnight
courier or by telecopy or confirmed telex, and (i) if to the Owner Trustee,
addressed to it at its office at Corporate Trust Services, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, (ii) if to the Loan Trustee, addressed to it at its
office at Corporate Trust Division, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square, Hartford,
Connecticut 06103 or (iii) if to any Participant, the Lessee or any Noteholder,
addressed to such party at such address as such party shall have furnished by
notice to the Owner Trustee and the Loan Trustee, or, until an address is so
furnished, addressed to the address of such party (if any) set forth in the
Participation Agreement. Whenever any notice in writing is required to be given
by the Owner Trustee or the Loan Trustee or any Noteholder to any of the other
of them or to the Lessee, such notice shall be deemed given and such requirement
satisfied
47
when such notice is received. Any party hereto may change the address to which
notices to such party will be sent by giving notice of such change to the other
parties to this Indenture.
Section 13.07. Severability. Any provision of this Indenture
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 13.08. Oral Modifications or Continuing Waivers. No
terms or provisions of this Indenture or the Notes may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party or other person against whom enforcement of the change, waiver,
discharge or termination is sought; and any waiver of the terms hereof or of any
Note shall be effective only in the specific instance and for the specific
purpose given.
Section 13.09. 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 successors and permitted assigns of each, all
as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by any Noteholder shall bind the successors and assigns of
such Noteholder. This Indenture and the Indenture Estate shall not be affected
by any amendment or supplement to the Trust Agreement or by any other action
taken under or in respect of the Trust Agreement, except that each reference in
this Indenture to the Trust Agreement shall mean the Trust Agreement as amended
and supplemented from time to time to the extent permitted hereby and thereby.
Section 13.10. Headings. The headings of the various Articles
and Sections herein and in the table of contents hereto are for the convenience
of reference only and shall not define or limit any of the terms or provisions
hereof.
Section 13.11. Normal Commercial Relations. Anything contained
in this Indenture to the contrary notwithstanding, any Participant or any bank
or other Affiliate of such Participant may conduct any banking or other
financial transactions, and have banking, trustee, custody, administrative
support or other commercial relationships, with the Lessee fully to the same
extent as if this Indenture were not in effect, including without limitation the
making of loans or other extensions of credit to the Lessee for any purpose
whatsoever, whether related to any of the transactions contemplated hereby or
otherwise.
Section 13.12. GOVERNING LAW. THIS INDENTURE HAS BEEN
DELIVERED IN THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 13.13. Execution in Counterparts. This Indenture may
be executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one instrument.
48
IN WITNESS WHEREOF, the Owner Trustee and the Loan Trustee
have caused this Indenture to be duly executed by their respective officers
thereunto duly authorized, as of the day and year first above written.
▇▇▇▇▇ FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION, not in its individual
capacity except as expressly provided
herein, but solely as Owner Trustee
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, as Loan Trustee
By /s/ Alison Della Bella
----------------------------------
Name: Alison Della Bella
Title: Assistant Vice President
49
Exhibit A to Amended and
Restated
Trust Indenture
and Security Agreement
Form of Equipment Notes
THIS EQUIPMENT NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR PURSUANT TO THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. ACCORDINGLY, THIS EQUIPMENT NOTE MAY
NOT BE OFFERED FOR SALE OR SOLD UNLESS EITHER REGISTERED UNDER THE ACT AND SUCH
APPLICABLE STATE OR OTHER LAWS OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS
ARE AVAILABLE.
SERIES 2001 [___] EQUIPMENT NOTE DUE [___]
ISSUED IN CONNECTION WITH THE ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ [______] AIRCRAFT
BEARING UNITED STATES REGISTRATION NUMBER N[_____]A
No.____ Date: [______,__] $_____
INTEREST RATE MATURITY DATE
[_____] [_________,_____]
▇▇▇▇▇ FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Owner Trustee (the "Owner Trustee") under the
Trust Agreement dated as of __________ between the Owner Trustee in its
individual capacity and the institution referred to therein as the "Owner
Participant" (as such Trustee Agreement may be amended or supplemented from time
to time, the "Trust Agreement") hereby promises to pay to ___________, or the
registered assignee thereof, the principal amount of ________________ Dollars
($_________) [on __________](1) [in installments on the Payment Dates set forth
in Schedule I hereto, each such installment to be in an amount computed by
multiplying the original principal amount of this Equipment Note by the
percentage set forth in Schedule I hereto opposite the Payment Date on which
such installment is due,] and to pay interest in arrears on each Payment Date at
the Debt Rate on the principal amount remaining unpaid from time to time
(calculated on the basis of a year of 360 days comprised of twelve 30-day
months) from the date hereof until paid in full. [Notwithstanding the foregoing,
the final payment made on this Equipment Note shall be in an amount sufficient
to discharge in full the unpaid principal amount and all accrued and unpaid
interest on, and any other amounts due under, this Equipment Note.](2)
Notwithstanding anything to the contrary contained herein, if any date on which
a payment under this Equipment Note becomes due and payable is not a Business
Day, then such payment shall not be made on such scheduled date but shall be
made on the next succeeding Business Day with the same force and effect as if
made on such scheduled date, and if such payment is made on such next succeeding
Business Day, no interest shall accrue on the amount of such payment from and
after such scheduled date.
---------
(1) To be inserted in non-installment Equipment Notes.
(2) To be inserted in installment Equipment Notes.
For purposes hereof, the term "Indenture" means the Amended
and Restated Indenture and Security Agreement, dated as of ___________, 2001,
between the Owner Trustee and State Street Bank and Trust Company of
Connecticut, National Association, as Loan Trustee (the "Loan Trustee"), as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms. All capitalized terms used in this Equipment Note and
not defined herein, unless the context otherwise requires, shall have the
respective meanings set forth or incorporated by reference, and shall be
construed and interpreted in the manner described, in the Indenture.
This Equipment Note shall bear interest, payable on demand, at
the Past Due Rate (and not at the Debt Rate) (calculated on the basis of a year
of 360 days comprised of twelve 30-day months) on any principal amount and (to
the extent permitted by applicable law) Make-Whole Amount, if any, interest and
any other amounts payable hereunder not paid when due for any period during
which the same shall be overdue, in each case for the period the same is
overdue. Amounts shall be overdue if not paid in the manner provided herein or
in the Indenture when due (whether at stated maturity, by acceleration or
otherwise).
All payment of principal, interest, Make-Whole Amount, if any,
and other amounts, if any, to be made by the Owner Trustee hereunder and under
the Indenture or the Participation Agreement shall be payable only from the
income and proceeds from the Trust Estate to the extent included in the
Indenture Estate and only to the extent that the Owner Trustee shall have
sufficient income or proceeds from the Trust Estate to the extent included in
the Indenture Estate to enable the Loan Trustee to make payments in accordance
with the terms of Section 2.03 and Article 3 of the Indenture, and each holder
hereof, by its acceptance of this Equipment Note, agrees that it will look
solely to the income and proceeds from the Indenture Estate to the extent
available for distribution to the holder hereof as above provided and that none
of the Owner Participant, the Owner Trustee and the Loan Trustee is personally
liable or liable in any manner extending to any assets other than the Indenture
Estate to the holder hereof for any amounts payable or any liability under this
Equipment Note or, except as provided in the Indenture or in the Participation
Agreement, for any liability under the Indenture or the Participation Agreement;
provided, however, that nothing herein contained shall limit, restrict or impair
the right of the Loan Trustee, subject always to the terms and provisions of the
Indenture, to accelerate the maturity of this Equipment Note upon occurrence of
an Indenture Event of Default under the Indenture in accordance with Section
8.02 of the Indenture, to bring suit and obtain a judgment against the Owner
Trustee on this Equipment Note for purposes of realizing upon the Indenture
Estate and to exercise all rights and remedies provided under the Indenture or
otherwise realize upon the Indenture Estate as provided under the Indenture.
There shall be maintained an Equipment Note Register for the
purpose of registering transfers and exchanges of Equipment Notes at the
Corporate Trust Office of the Loan Trustee, or at the office of any successor
trustee, in the manner provided in Section 2.04 of the Indenture.
The principal amount and interest and other amounts due
hereunder shall be payable in Dollars by wire transfer in immediately available
funds at the Corporate Trust Office of the Loan Trustee, or as otherwise
provided in the Indenture. The Owner Trustee shall not have any responsibility
for the distribution of any such payment to the Noteholder of this
A-2
Equipment Note. Each such payment shall be made on the date such payment is due
and without any presentment or surrender of this Equipment Note, except that in
the case of any final payment with respect to this Equipment Note, the Equipment
Note shall be surrendered to the Loan Trustee for cancellation.
The holder hereof, by its acceptance of this Equipment Note,
agrees that, except as provided in the Indenture, including the subordination
provisions referred to below, each payment of an installment of principal
amount, Make-Whole Amount, if any, and interest received by it hereunder shall
be applied: first, to the payment of accrued interest on this Equipment Note (as
well as any interest on any overdue principal amount, and, to the extent
permitted by law, any overdue Make-Whole Amount, if any, any overdue interest
and other overdue amounts hereunder) to the date of such payment; second, to the
payment of Make-Whole Amount, if any, and third, to the payment of the principal
amount of this Equipment Note (or portion hereof) then due.
This Equipment Note is one of the Equipment Notes referred to
in the Indenture which have been or are to be issued by the Owner Trustee
pursuant to the terms of the Indenture. The Indenture Estate is held by the Loan
Trustee as security, in part, for the Equipment Notes. The provisions of this
Equipment Note are subject to the Indenture and the Participation Agreement.
Reference is hereby made to the Indenture and the Participation Agreement for a
complete statement of the rights and obligations of the holder of, and the
nature and extent of the security for, this Equipment Note and the rights and
obligations of the holders of, and the nature and extent of the security for,
any other Equipment Notes executed and delivered under the Indenture, to all of
which terms and conditions in the Indenture and the Participation Agreement each
holder hereof agrees by its acceptance of this Equipment Note.
As provided in the Indenture and subject to certain
limitations therein set forth, this Equipment Note is exchangeable for a like
aggregate principal amount of Equipment Notes of the same Series of different
authorized denominations, as requested by the holder surrendering the same.
Prior to the due presentment for registration of transfer of this Equipment
Note, the Owner Trustee and the Loan Trustee shall deem and treat the Person in
whose name this Equipment Note is registered on the Equipment Note Register as
the absolute owner and holder hereof for the purpose of receiving all amounts
payable with respect to this Equipment Note and for all purposes, and neither of
the Owner Trustee nor the Loan Trustee shall be affected by notice to the
contrary.
This Equipment Note is subject to redemption as provided in
Sections 2.07 and 2.08 of the Indenture and to purchase as provided in Section
2.10 of the Indenture but not otherwise.
The indebtedness evidenced by this Equipment Note [shall rank
in right of payment equally with all Series A-2 Equipment Notes and all other
Series A-1 Equipment Notes.](3) [shall rank in right of payment equally with all
Series A-1 Equipment Notes and all other Series A-2 Equipment Notes.](4) [is, to
the extent and in the manner provided in the
---------
(3) To be inserted in the case of a Series A-1 Equipment Note.
(4) To be inserted in the case of a Series A-2 Equipment Note.
A-3
Indenture, subordinate and subject in right of payment to the prior payment in
full of the Secured Obligations (as defined in the Indenture) in respect of
[Series A-1 Equipment Notes and Series A-2 Equipment Notes](5) [Series A-1
Equipment Notes, Series A-2 Equipment Notes and Series B Equipment Notes](6)
[Series A-1 Equipment Notes, Series A-2 Equipment Notes, Series B Equipment
Notes and Series C Equipment Notes](7) [Series A-1 Equipment Notes, Series A-2
Equipment Notes, Series B Equipment Notes, Series C Equipment Notes and Series D
Equipment Notes](8) and this Equipment Note is issued subject to such
provisions. The Noteholder of this Equipment Note, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Loan Trustee on such Noteholder's behalf to take such action as may be necessary
or appropriate to effectuate the subordination as provided in the Indenture and
(c) appoints the Loan Trustee such Noteholder's attorney-in-fact for such
purpose.
Without limiting the foregoing, the]9 [The]10 Noteholder of
this Equipment Note, by accepting the same, agrees that if such Noteholder, in
its capacity as a Noteholder, shall receive any payment or distribution on any
Secured Obligation in respect of this Equipment Note that it is not entitled to
receive under Section 2.13 or Article 3 of the Indenture, it shall hold any
amount so received in trust for the Loan Trustee and forthwith turn over such
amount to the Loan Trustee in the form received to be applied as provided in
Article 3 of the Indenture.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Loan Trustee by manual signature, this Equipment
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
THIS EQUIPMENT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
---------
(5) To be inserted in the case of a Series B Equipment Note.
(6) To be inserted in the case of a Series C Equipment Note.
(7) To be inserted in the case of a Series D Equipment Note.
(8) To be inserted in the case of a Series E Equipment Note.
(9) To be inserted in the case of a Series B Equipment Note, a Series C
Equipment Note, a Series D Equipment Note or a Series E Equipment Note.
(10) To be inserted in the case of a Series A-1 Equipment Note or a Series A-2
Equipment Note.
A-4
IN WITNESS WHEREOF, the Owner Trustee has caused this
Equipment Note to be executed in its corporate name by its officer thereunto
duly authorized on the date hereof.
▇▇▇▇▇ FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Owner Trustee
By
----------------------------------
Name:
Title:
A-5
Exhibit B to Amended and
Restated
Trust Indenture
and Security Agreement
Form of Trust Agreement and Indenture Supplement
[Intentionally omitted from FAA filing counterpart]
LOAN TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Equipment Notes referred to in the
within-mentioned Indenture.
[ ],
--------------------------------
as Loan Trustee
By
----------------------------------
Name:
Title:
Schedule I to Amended and
Restated
Trust Indenture
and Security Agreement
[Insert descriptions of Airframe and Engines and FAA Conveyance No.
for Original Indenture]
Schedule II to Amended and
Restated
Trust Indenture
and Security Agreement
Terms of Equipment Notes
[Intentionally omitted from FAA filing counterpart]
Schedule III to Amended and
Restated
Trust Indenture
and Security Agreement
List of Pass Through Trust Agreements
[Intentionally omitted from FAA filing counterpart]