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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
________
Date of Report (Date of earliest event reported): May 4, 1995.
UNITED AIR LINES, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-21220* 36-2675206
(State or other jurisdiction (Commission (I.R.S. employer
of incorporation) file number) identification no.)
1200 East Algonquin Road
Elk Grove Township, Illinois
Mailing Address: P.O. Box 66100, Chicago, Illinois 60666
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, include area code: (708) 952-4000
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* Registrant is the wholly-owned subsidiary of UAL Corporation (File 1-6033).
Registrant became subject to filing periodic reports under the Securities
Exchange Act of 1934 as a result of a public offering of securities which became
effective June 3, 1988 (Registration Nos. 33-21220 and 22-18246).
Page 1 of 6 pages
Exhibit Index at sequentially numbered page 5.
Item 7. Financial Statements and Exhibits.
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The following documents are being filed in connection with, and
incorporated by reference into, United Air Lines, Inc.'s Registration
Statement on Form S-3 (Registration No. 33-46033) as declared effective on
April 27, 1992, relating to Pass Through Certificates, Series 1995-A.
Capitalized terms not otherwise defined shall have the same meanings
ascribed thereto in the related Prospectus Supplement dated May 2, 1995 and
filed with the Commission pursuant to Rule 424(b).
Exhibits
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Exhibit 1(e) - Form of Underwriting Agreement
relating to the issuance of
Pass Through Certificates,
Series 1995-A.
Exhibit 4(a)(1)(A) - Form of Amended and Restated
Pass Through Trust Agreement
between United and State Street
Bank and Trust Company of
Connecticut, National
Association.
Exhibit 4(a)(7) - Forms of Pass Through Trust
Supplement Nos. 1995-A1 and
1995-A2 between United and the
First Security Bank of Utah,
National Association relating
to Pass Through Certificates,
Series 1995-A1 and 1995-A2,
respectively.
Exhibit 4(a)(8) - Forms of Pass Through
Certificates, Series 1995-A1
and 1995-A2, respectively
(included in Exhibit 4(a)(7)).
Exhibit 4(b)(36) - Forms of Trust Indenture and
Mortgage between the Owner
Trustee and the Loan Trustee
relating to the Equipment Notes
for Aircraft No. 1, Aircraft
No. 2 and Aircraft No. 3,
respectively.
Exhibit 4(b)(37) - Forms of Equipment Notes
(included in Exhibit 4(b)(36)).
-2-
Exhibits
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Exhibit 4(b)(38) - Forms of Participation
Agreement among United, the
Owner Participant, the Loan
Trustee, the Owner Trustee and
the Trustee, relating to the
Equipment Notes for Aircraft
No. 1, Aircraft No. 2 and
Aircraft No. 3, respectively.
Exhibit 4(b)(39) _ Forms of Lease Agreement
between United and the Owner
Trustee relating to the
Equipment Notes for Aircraft
No. 1, Aircraft No. 2 and
Aircraft No. 3, respectively.
Exhibit 4(b)(40) - Forms of Trust Agreement
between the Owner Participant
and the Owner Trustee relating
to the Equipment Notes for
Aircraft No. 1, Aircraft No. 2
and Aircraft No. 3,
respectively.
Exhibit 4(b)(41) - Form of Redemption and
Refinancing Agreement among
United, the Trustee, the Owner
Participant, the Owner Trustee,
the Loan Trustee and the
Original Loan Participant
relating to the Equipment Notes
for Aircraft No. 3.
Exhibit 5(c) - Opinion of Ray, Quinney &
Nebeker, counsel for First
Security Bank of Utah, National
Association as Trustee and Loan
Trustees.
Exhibit 23(d) - Consent of Ray, Quinney &
Nebeker (included in Exhibit
5(c).
Exhibit 25(a) - Statement of Eligibility of
Trustee on Form T-1 for First
Security Bank of Utah, National
Association.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
UNITED AIR LINES, INC.
May 4, 1995 By: /s/DOUGLAS A. HACKER
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Douglas A. Hacker
Senior Vice President-
Finance
INDEX TO EXHIBITS
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Exhibits Page
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Exhibit 1(e) - Form of Underwriting
Agreement relating to the
issuance of Pass Through
Certificates, Series 1995-A.
Exhibit 4(a)(1)(A) - Form of Amended and
Restated Pass Through Trust
Agreement between United
and State Street Bank and
Trust Company of
Connecticut, National
Association.
Exhibit 4(a)(7) - Forms of Pass Through Trust
Supplement Nos. 1995-A1 and
1995-A2 between United and
the First Security Bank of
Utah, National Association
relating to Pass Through
Certificates, Series 1995-
A1 and 1995-A2,
respectively.
Exhibit 4(a)(8) - Forms of Pass Through
Certificates, Series 1995-
A1 and 1995-A2,
respectively (included in
Exhibit 4(a)(7)).
Exhibit 4(b)(36) - Forms of Trust Indenture
and Mortgage between the
Owner Trustee and the Loan
Trustee relating to the
Equipment Notes for
Aircraft No. 1, Aircraft
No. 2 and Aircraft No. 3,
respectively.
Exhibit 4(b)(37) - Forms of Equipment Notes
(included in Exhibit
4(b)(36)).
Exhibits Page
- -------- ----
Exhibit 4(b)(38) - Forms of Participation
Agreement among United, the
Owner Participant, the Loan
Trustee, the Owner Trustee
and the Trustee, relating
to the Equipment Notes for
Aircraft No. 1, Aircraft
No. 2 and Aircraft No. 3,
respectively.
Exhibit 4(b)(39) - Forms of Lease Agreement
between United and the
Owner Trustee relating to
the Equipment Notes for
Aircraft No. 1, Aircraft
No. 2 and Aircraft No. 3,
respectively.
Exhibit 4(b)(40) - Forms of Trust Agreement
between the Owner
Participant and the Owner
Trustee relating to the
Equipment Notes for
Aircraft No. 1, Aircraft
No. 2 and Aircraft No. 3,
respectively.
Exhibit 4(b)(41) - Form of Redemption and
Refinancing Agreement among
United, the Trustee, the
Owner Participant, the
Owner Trustee, the Loan
Trustee and the Original
Loan Participant relating
to the Equipment Notes for
Aircraft No. 3.
Exhibit 5(c) - Opinion of Ray, Quinney &
Nebeker, counsel for First
Security Bank of Utah,
National Association as
Trustee and Loan Trustees.
Exhibit 23(d) - Consent of Ray, Quinney &
Nebeker (included in
Exhibit 5(c).
Exhibit 25(a) - Statement of Eligibility of
Trustee on Form T-1 for
First Security Bank of
Utah, National Association.
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UNITED AIR LINES, INC.
$________________
Pass Through Certificates, Series 1995-A1 and 1995-A2
PURCHASE AGREEMENT
Dated: May 2, 1995
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UNITED AIR LINES, INC.
$____________
Pass Through Certificates, Series 1995-A1 and 1995-A2
Purchase Agreement
New York, New York
May 2, 1995
To the Underwriters named in Schedule I:
Dear Sirs:
United Air Lines, Inc., a Delaware corporation (the "Company"), in
connection with the financing of two leveraged lease transactions and the
refinancing of one leveraged lease transaction in which the Company, as lessee,
proposes that First Security Bank of Utah, National Association ("First
Security"), as trustee (the "Trustee"), will issue and sell to the underwriters
named in Schedule I hereto its pass through certificates in the aggregate
principal amounts and with the interest rates and final distribution dates set
forth on Schedule A hereto (the "Offered Certificates") on the terms and
conditions stated herein and in Schedule II. The aggregate principal amount of
Offered Certificates due on each such final distribution date is referred to as
a "Pass Through Certificate Designation". As used herein, unless the context
otherwise requires, the term "Underwriters" shall mean the firms named as
Underwriters in Schedule I and the term "you" shall mean the Underwriters as
indicated in Schedule I.
The Offered Certificates will be issued under a Pass Through Trust
Agreement dated as of February 1, 1992, as amended and restated as of May 1,
1995 (the "Basic Agreement"), among the Company, State Street Bank and Trust
Company of Connecticut, National Association, as original trustee ("State
Street") and First Security as sucessor trustee, as supplemented with respect to
each of the Pass Through Certificate Designations by a Trust Supplement, dated
as of the date hereof (each a "Trust Supplement"), between the Company and the
Trustee (the Basic Agreement as it is to be supplemented to by either such Trust
Supplement being referred to herein as a "Designated Agreement"; collectively
the
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"Designated Agreements"). The Offered Certificates and each Designated
Agreement are more fully described in the Prospectus referred to below.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") (i) a registration statement (No. 33-46033) on
Form S-3 ("Registration Statement 33-46033") relating to certain securities,
including the Offered Securities, and (ii) a registration statement (No. 33-
57192) on Form S-3 ("Registration Statement 33-57192") relating to certain
securities, and, in each case, the offering thereof from time to time in
accordance with Rule 415 under the Securities Act of 1933, as amended (the "1933
Act"). Each such registration statement, as amended, has been declared
effective by the Commission. As provided in Section 3(a), a final prospectus
supplement reflecting the terms of the Offered Certificates, the terms of the
offering thereof and the other matters set forth therein has been prepared and
will be filed pursuant to Rule 424 under the 1933 Act. Such prospectus
supplement, in the form first filed on or after the date hereof pursuant to Rule
424, is herein referred to as the "Prospectus Supplement" and any such
prospectus supplement in the form or forms filed prior to the Prospectus
Supplement is herein referred to as a "Preliminary Prospectus Supplement".
Registration Statement 33-46033, including the exhibits thereto and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, as amended at the date hereof, is herein called the
"Registration Statement", and the basic prospectus included in Registration
Statement 33-57192 relating to offerings of pass through certificates under
Registration Statement 33-46033 and Registration Statement 33-57192, as
supplemented by the Prospectus Supplement, and including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, is herein called the "Prospectus", except that, if such basic prospectus is
amended or supplemented on or prior to the date on which the Prospectus
Supplement is first filed pursuant to Rule 424, the term "Prospectus" shall
refer to the basic prospectus as so amended or supplemented and as supplemented
by the Prospectus Supplement, in either case including the documents filed by
the Company with the Commission pursuant to the Securities Exchange Act of 1934,
as amended (the "1934 Act"), that are incorporated by reference therein.
Capitalized terms not otherwise defined in this Agreement shall have
the meanings specified in the Designated Agreements or in the Indentures (as
defined in the Designated Agreements) referred to in the Designated Agreements,
provided that, as used in this Agreement, the term "Operative Documents" shall
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include the Designated Agreements and the term "Financing Agreements" shall mean
any of the Note Purchase Agreements as defined in the Designated Agreements.
The Company understands that you propose to make a public offering of
the Certificates as soon as you deem advisable after this Agreement has been
executed and delivered.
Section 1. Representations and Warranties. (a) The Company
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represents and warrants to and agrees with each of the Underwriters that:
(i) The Company meets the requirements for use of Form S-3 under the
1933 Act; the Registration Statement has become effective; (A) on the
original
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effective date of the Registration Statement, on the effective
date of the most recent post-effective amendment thereto, if any, and on
the date of the filing by the Company of any annual report on Form 10-K
after the original effective date of the Registration Statement, the
Registration Statement and any amendments and supplements thereto complied
in all material respects with the requirements of the 1933 Act and the
rules and regulations of the Commission thereunder (the "1933 Act
Regulations") and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and (B) on the date hereof and
at all times subsequent thereto up to the Closing Time (as defined below),
(I) neither the Registration Statement nor any amendment or supplement
thereto contains or will contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (II) neither the Prospectus
nor any amendment or supplement thereto includes or will include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the Company makes
no representation or warranty as to statements or omissions made in
reliance upon and in conformity with information furnished or confirmed in
writing to the Company by or on behalf of you expressly for use in the
Registration Statement or the Prospectus or to statements or omissions in
that part of the Registration Statement which constitutes a Statement of
Eligibility under the Trust Indenture Act of 1939, as amended (the "1939
Act") (Form T-1).
(ii) The documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time they were
or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations").
(iii) Arthur Andersen LLP, who have reported upon the audited
consolidated financial statements and the financial statement schedules, if
any, included or incorporated by reference in the Registration Statement,
are independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iv) This Agreement has been duly authorized, executed and delivered
by the Company.
(v) The consolidated financial statements included or incorporated by
reference in the Registration Statement present fairly the financial
position of the Company and its consolidated subsidiaries as of the dates
indicated and the consolidated results of operations and changes in
financial position of the Company and its consolidated subsidiaries for the
periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles
4
applied on a consistent basis throughout the periods involved, except as
may be indicated therein. The financial statement schedules, if any,
included or incorporated by reference in the Registration Statement present
fairly the information required to be stated therein. The selected
consolidated financial data included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited consolidated financial statements incorporated by
reference in the Registration Statement.
(vi) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with corporate
power and authority under such laws to own, lease and operate its
properties and conduct its business as described in the Prospectus and to
perform its obligations under this Agreement, the Designated Agreements and
the other Operative Documents to which the Company is or is to be a party;
and the Company is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which it
owns or leases property of a nature, or transacts business of a type, that
would make such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, considered as one
enterprise.
(vii) The Company is a "citizen of the United States" within the
meaning of Section 40102(a)(15) of Title 49 of the United States Code, as
amended, holding an air carrier operating certificate issued by the
Secretary of Transportation pursuant to Chapter 447 of Title 49 of the
United States Code, as amended, for aircraft capable of carrying 10 or more
individuals or 6,000 pounds or more cargo. All of the outstanding shares
of capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable and are owned by UAL
Corporation ("UAL"), directly, free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any kind.
(viii) Each of the Designated Agreements and the other Operative
Documents to which the Company is or is to be a party has been duly
authorized by the Company, is or will be substantially in the form
heretofore supplied to you and, constitutes or, when duly executed and
delivered by the Company and the other parties thereto, will constitute, a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law) and except that the enforceability of the
Leases and the Indentures may also be limited by applicable laws which may
affect the remedies provided therein but which do not affect the validity
of the Leases or the Indentures or make such remedies inadequate for the
practical
5
realization of the benefits intended to be provided thereby. The Basic
Agreement as executed is substantially in the amended form to be filed as
an exhibit to the Registration Statement and has been duly qualified under
the 1939 Act. At the Closing Time, the Leases and other Operative Documents
to which the Company is or is to be a party will constitute the valid and
binding obligations of the Company. The Equipment Notes, the Indentures,
the Designated Agreements and the Leases and the other Operative Documents
to which the Company is or is to be a party will conform in all material
respects to the descriptions thereof in the Prospectus.
(ix) The Offered Certificates have been duly authorized by the
Trustee. When executed, authenticated, issued and delivered in the manner
provided for in the Designated Agreements and sold and paid for as provided
in this Agreement, the Offered Certificates will constitute valid and
binding obligations of the Trustee entitled to the benefits of the relevant
Designated Agreement, enforceable against the Trustee in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law);
and the Offered Certificates will conform in all material respects to the
description thereof contained in the Prospectus.
(x) The Equipment Notes to be issued under each Indenture have been
duly authorized by the related Owner Trustee and, when duly executed and
delivered by the related Owner Trustee and duly authenticated by the
Indenture Trustee in accordance with the terms of such Indenture, will be
duly issued under such Indenture and will constitute the valid and binding
obligations of such Owner Trustee and the holders thereof will be entitled
to the benefits of such Indenture.
(xi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein or contemplated thereby, there has not been (A) any material
adverse change in the condition (financial or otherwise), earnings or
business affairs of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business, or
(B) any transaction entered into by the Company or any subsidiary, other
than in the ordinary course of business, that is material to the Company
and its subsidiaries, considered as one enterprise.
(xii) The Company is not in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which it is a party or by which it may be bound
or to which any of its properties may be subject, except for such defaults
that would not have a material adverse effect on the condition (financial
or otherwise), earnings or business affairs of the Company and its
6
subsidiaries, considered as one enterprise. The execution and delivery by
the Company of this Agreement, the Designated Agreements and the other
Operative Documents to which the Company is or is to be a party, the
consummation by the Company of the transactions contemplated in this
Agreement, in the Prospectus, in the Designated Agreements and in the other
Operative Documents to which the Company is or is to be a party, and
compliance by the Company with the terms of this Agreement, the Designated
Agreements and the other Operative Documents to which the Company is or is
to be a party, do not and will not result in any violation of the charter
or by-laws of the Company, and do not and will not conflict with, or result
in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance (other than Permitted Liens) upon any property or assets of the
Company under (A) any indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which the Company is a party or by which
it may be bound or to which any of its properties may be subject or (B) any
existing applicable law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of its properties other than
the securities or Blue Sky laws of the various states (except in the case
of either clause (A) or (B) above for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not have a material adverse
effect on the condition (financial or otherwise), earnings or business
affairs of the Company and its subsidiaries, considered as one enterprise).
(xiii) No authorization, approval, consent, order or license of or
filing with or notice to any government, governmental instrumentality or
court, domestic or foreign, is required for the valid authorization,
issuance, sale and delivery of the Offered Certificates, the valid
authorization, execution, delivery and performance by the Company of this
Agreement, the Designated Agreements, the Leases and the other Operative
Documents to which the Company is or is to be a party or the consummation
by the Company of the transactions contemplated by this Agreement, the
Designated Agreements, the Leases and the other Operative Documents to
which the Company is or is to be a party, except such as are required under
(x) the 1933 Act, the 1939 Act and the securities or Blue Sky laws of the
various states or similar laws of foreign jurisdictions, (y) the Sections
of Title 49 of the United States Code relating to aviation, as amended (the
"Aviation Act") and filings or recordings with the Federal Aviation
Administration (the "FAA") and (z) the Uniform Commercial Code as is in
effect in Massachusetts and Illinois and filings thereunder, which filings
listed in the preceding clauses (y) and (z) shall have been made or
obtained on or prior to the Closing Time.
(xiv) Except as disclosed in the Prospectus, there is no action, suit
or proceeding before or by any government, governmental instrumentality or
court, domestic or foreign, now pending or, to the knowledge of the
Company, threatened against or affecting the Company that is required to be
disclosed in the Prospectus or
7
that could reasonably be expected to result in any material adverse change
in the condition (financial or otherwise), earnings or business affairs of
the Company and its subsidiaries, considered as one enterprise, or that
could reasonably be expected to materially and adversely affect the
properties or assets of the Company and its subsidiaries, considered as one
enterprise, or that could reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated by this
Agreement or the Financing Agreements; the aggregate of all pending legal
or governmental proceedings to which the Company is a party or which affect
any of its properties that are not described in the Prospectus, including
ordinary routine litigation incidental to its business, are not reasonably
expected to have a material adverse effect on the condition (financial or
otherwise), earnings or business affairs of the Company and its
subsidiaries, considered as one enterprise.
(xv) There are no contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described and filed as
required.
(xvi) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of
and from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease, license
and use its properties and assets and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure to so
obtain or file would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(b) Any certificate signed by any officer of the Company and delivered
to an Underwriter or to counsel for the Underwriters in connection with this
Agreement or the offering of the Certificates shall be deemed a representation
and warranty by the Company to the Underwriters as to the matters covered
thereby.
Section 2. Sale and Delivery to the Underwriters; Closing. (a) On
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the basis of the representations and warranties herein contained, and subject to
the terms and conditions set forth herein and in Schedule II, if any, the
Company agrees to cause the Trustee to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Trustee, at
the purchase price specified in Schedule A hereto, the aggregate principal
amount of Offered Certificates of each Pass Through Certificate Designation set
forth opposite the name of such Underwriter in Schedule I.
(b) Payment of the purchase price for, and delivery of, the Offered
Certificates shall be made at the date, time and location specified in Schedule
II, or at such other date, time or location as shall be agreed upon by the
Company and you, or as shall otherwise be provided in Section 10 (such date and
time of payment and delivery being herein called the "Closing Time"). Unless
otherwise specified in Schedule II, delivery of the
8
Offered Certificates shall be made to The Depository Trust Company for the
respective accounts of the several Underwriters against payment by the
Underwriters of the purchase price thereof to or upon the order of the Trustee
by Federal funds check or other immediately available funds as designated by the
Trustee three business days in advance of the Closing Time. The Offered
Certificates shall be registered in the name of Cede & Co. or in such other
names, and in such denominations as you may request in writing at least two full
business days in advance of the Closing Time.
(c) As compensation to the Underwriters for their respective
commitments and obligations hereunder in respect of the Offered Certificates,
including their respective undertakings to distribute Offered Certificates, the
Owner Trustees will pay to each Underwriter an amount equal to that percentage
of the aggregate principal amount of each Pass Through Certificate Designation
purchased by it as set forth in Schedule A; provided that if the Owner Trustees
do not pay such amounts when due, the Company will pay such amounts. Such
payment shall be made simultaneously with the payment by the Underwriters to the
Trustee of the purchase price of the Offered Certificates as specified in
Section 2(b) hereof. Payment of such compensation shall be made by Federal
funds check or other immediately available funds.
Section 3. Certain Covenants of the Company. The Company covenants
--------------------------------
with each Underwriter as follows:
(a) If reasonably requested by you in connection with the offering of
the Offered Certificates, the Company will prepare a preliminary prospectus
supplement containing such information as you and the Company deem
appropriate, and, immediately following the execution of this Agreement,
the Company will prepare a Prospectus Supplement that complies with the
1933 Act and the 1933 Act Regulations and that sets forth the principal
amount of the Offered Certificates and their terms not otherwise specified
in the Indenture, the name of each Underwriter participating in the
offering and the principal amount of the Offered Certificates that each
severally has agreed to purchase, the name of each Underwriter, if any,
acting as representative of the Underwriters in connection with the
offering, the price at which the Offered Certificates are to be purchased
by the Underwriters from the Company, any initial public offering price,
any selling concession and reallowance and any delayed delivery
arrangements, and such other information as you and the Company deem
appropriate in connection with the offering of the Offered Certificates.
The Company will promptly transmit copies of the Prospectus Supplement to
the Commission for filing pursuant to Rule 424 under the 1933 Act and will
furnish to the Underwriters as many copies of any preliminary prospectus
supplement and the Prospectus as you shall reasonably request.
(b) If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Offered Certificates any event
shall occur or condition exist as a result of which it is necessary, in the
reasonable opinion of
9
counsel for the Underwriters or counsel for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that
the Prospectus will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
reasonable opinion of either such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations,
the Company will promptly prepare and file with the Commission, subject to
Section 3(d), such amendment or supplement as may be necessary to correct
such untrue statement or omission or to make the Registration Statement or
the Prospectus comply with such requirements.
(c) During the period when a prospectus is required by the 1933 Act to
be delivered in connection with sales of the Offered Certificates, the
Company will, subject to Section 3(d), file promptly all documents required
to be filed with the Commission pursuant to Section 13, 14 or 15(d) of the
1934 Act.
(d) During the period when a prospectus is required by the 1933 Act to
be delivered in connection with sales of the Offered Certificates, the
Company will inform you of its intention to file any amendment to the
Registration Statement, any supplement to the Prospectus or any document
that would as a result thereof be incorporated by reference in the
Prospectus; will furnish you with copies of any such amendment, supplement
or other document a reasonable time in advance of filing; and will not file
any such amendment, supplement or other document to which you or your
counsel shall reasonably object.
(e) The Company will comply to the best of its ability with the 1933
Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations
and the 1939 Act and the rules and regulations of the Commission thereunder
(the "1939 Act Regulations") so as to permit the completion of the
distribution of the Offered Certificates as contemplated in this Agreement
and in the Prospectus.
(f) During the period when a prospectus is required by the 1933 Act to
be delivered in connection with sales of the Offered Certificates, the
Company will notify you immediately, (i) of the effectiveness of any
amendment to the Registration Statement, (ii) of the transmittal to the
Commission for filing of any supplement to the Prospectus or any document
that would as a result thereof be incorporated by reference in the
Prospectus, (iii) of the receipt of any comments from the Commission with
respect to the Registration Statement, the Prospectus or the Prospectus
Supplement, (iv) of any request by the Commission for any amendment to the
Registration Statement or any supplement to the Prospectus or for
additional information relating thereto or to any document incorporated by
reference in the Prospectus and (v) of the issuance by the Commission of
any stop order suspending
10
the effectiveness of the Registration Statement, of the suspension of the
qualification of the Offered Certificates for offering or sale in any
jurisdiction, or of the institution or threatening of any proceeding for
any of such purposes. The Company will use every reasonable effort to
prevent the issuance of any such stop order or of any order suspending such
qualification and, if any such order is issued, to obtain the lifting
thereof at the earliest possible moment.
(g) The Company has furnished or will furnish to you one signed and as
many conformed copies of the Registration Statement (as originally filed)
and of all amendments thereto, whether filed before or after the
Registration Statement became effective, as many copies of all exhibits and
documents filed therewith or incorporated by reference therein pursuant to
Item 12 of Form S-3 under the 1933 Act (through the end of the period when
a prospectus is required by the 1933 Act to be delivered in connection with
sales of the Offered Certificates) and one signed and as many conformed
copies of all consents and certificates of experts as you may reasonably
request, and if requested by you, has furnished or will furnish to you, for
each of the Underwriters, one conformed copy of the Registration Statement
(as originally filed) and of each amendment thereto (including documents
incorporated by reference into the Prospectus but without exhibits).
(h) The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Offered Certificates for offering and sale
under the applicable securities laws of such states and other jurisdictions
as the Underwriters may reasonably designate and to maintain such
qualifications in effect for a period of not less than one year from the
effective date of the Registration Statement; provided, however,
-------- -------
that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as
a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. The Company will use
its reasonable efforts to file such statements and reports as may be
required by the laws of each jurisdiction in which the Offered Certificates
have been qualified as above provided. The Company will also supply you
with such information as is necessary for the determination of the legality
of the Offered Certificates for investment under the laws of such
jurisdictions as you may reasonably request.
(i) The Company will make generally available to its security holders
as soon as practicable, but not later than 45 days after the close of the
period covered thereby, an earnings statement of the Company (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations),
covering (i) a period of 12 months beginning after the effective date of
the Registration Statement and any post-effective amendment thereof but not
later than the first day of the Company's fiscal quarter next following
such effective date and (ii) a period of 12 months
11
beginning after the date of this Agreement but not later than the first day
of the Company's fiscal quarter next following the date of this Agreement.
(j) For a period of five years after the Closing Time, the Company
will make available upon request to the Underwriters, copies of all annual
reports, quarterly reports and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated
by the Commission, and such other documents, reports and information as
shall be furnished by the Company to the holders of Offered Certificates or
by UAL to its security holders generally.
(k) Between the date of this Agreement and the Closing Time or such
other date or time as may be specified in Schedule II, the Company will not
without your prior written consent directly or indirectly offer, sell, or
enter into any agreement to sell, any public debt securities registered
under the 1933 Act other than the Offered Certificates, except that the
Company may offer, sell or enter into agreements to sell, in other than an
underwritten offering, any securities registered or to be registered
pursuant to the Company's registration statement on Form S-3, File No.
33-57192, provided that, prior to any such sale or sales of notes having
--------
maturities of more than five years and aggregating more than $75 million,
the Company has provided you at least three business days' notice thereof.
(l) The Company will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for filing
under Rule 424(b) under the 1933 Act Regulations was received for filing by
the Commission and, in the event it was not, it will promptly file such
prospectus.
Section 4. Payment of Expenses. The Company will pay or cause to be
-------------------
paid all costs and expenses incident to the performance of its obligations under
this Agreement, including, without limitation, (a) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, the preliminary prospectuses and
the Prospectus and any amendments or supplements thereto, and the cost of
furnishing copies thereof to the Underwriters, (b) the printing or processing
and distribution of this Agreement, the Designated Agreements, the Offered
Certificates, the other Operative Documents, the Blue Sky Survey and any Legal
Investment Survey, (c) the delivery of the Certificates, (d) the fees and
disbursements of the Company's counsel and accountants, (e) the qualification of
the Offered Certificates under the applicable securities laws in accordance with
Section 3(h), including filing fees and fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the Blue Sky
Survey, (f) any fees charged by rating agencies for rating the Offered
Certificates (including annual surveillance fees related to the Offered
Certificates as long as they are outstanding), (g) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee, in
connection with the Designated Agreements, the Offered Certificates and the
Financing Agreements and (h) certain fees and disbursements of counsel for the
Underwriters, as heretofore agreed. The Company will also cause to be paid all
expenses
12
incident to the performance of its obligations under the Leases and the
Indentures and each of the other agreements and instruments referred to in the
Indentures and the Financing Agreements.
If this Agreement is terminated by the Underwriters in accordance with
the provisions of Section 5 or 9(a)(i), the Company shall reimburse the
Underwriters for all their reasonable out-of-pocket expenses, including the fees
and disbursements of counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. Except as
---------------------------------------
otherwise provided in Schedule II, the obligations of the Underwriters to
purchase and pay for the Offered Certificates they have respectively agreed to
purchase pursuant to this Agreement are subject to the accuracy of the
representations and warranties of the Company contained herein or in
certificates of any officer of the Company delivered pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder, and to
the following further conditions:
(a) At the Closing Time, no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or shall be pending
or, to your knowledge or the knowledge of the Company, shall be
contemplated by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
satisfaction of counsel for the Underwriters.
(b) At the Closing Time, the Underwriters shall have received the
following signed opinions of counsel, each dated as of the Closing Time, in
form and substance reasonably satisfactory to the Underwriters and counsel
for the Underwriters:
(1) An opinion of Vedder, Price, Kaufman & Kammholz as counsel
for the Company, substantially to the effect set forth on Exhibit A
attached hereto; and
(2) An opinion of Francesca M. Maher, Vice President-Law, Deputy
General Counsel and Corporate Secretary of the Company, substantially
to the effect set forth on Exhibit B attached hereto.
(c) A favorable opinion of Shearman & Sterling, counsel for the
Underwriters, to the effect that the opinions delivered pursuant to
Sections 5(b)(1) and (2) appear on their face to be appropriately
responsive to the requirements of this Agreement except, specifying the
same, to the extent waived by you and with respect to the incorporation and
legal existence of the Company, the Offered Certificates, this Agreement,
the Registration Statement, the Prospectus and such other related matters
as you may require. In giving such opinion such counsel may rely, as to
all matters
13
governed by the laws of jurisdictions other than the law of the
State of New York, the federal law of the United States (excluding the
Aviation Act) and the General Corporation Law of the State of Delaware,
upon the opinions of counsel satisfactory to you. Such counsel may also
state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of
the Company and certificates of public officials.
(d) (1) At the Closing Time, (i) there shall not have been, since the
respective dates as of which information is given in the Registration
Statement, any material adverse change in the condition (financial or
otherwise), earnings, business affairs or business prospects of the Company
and its subsidiaries, considered as one enterprise, whether or not arising
in the ordinary course of business, (ii) the Company shall have complied
with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time and (iii) the other
representations and warranties of the Company set forth in Section 1(a)
shall be accurate as though expressly made at and as of the Closing Time.
At the Closing Time, you shall have received a certificate of the President
or a Senior or Executive Vice President or Treasurer, and the Senior Vice
President and Chief Financial Officer, or other senior officer approved by
you, of the Company, dated as of the Closing Time, to such effect.
(2) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Time, there shall not have been any downgrading, nor
any notice given of any intended or potential downgrading or of a possible
change that does not indicate the direction of the possible change, in the
rating accorded any of the Company's securities, including the Offered
Certificates, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2) under
the 1933 Act.
(e) You shall have received on the date of this Agreement and at the
Closing Time the letters specified in Schedule III.
(f) The Company shall have furnished to the Underwriters and counsel
for the Underwriters, in form and substance satisfactory to them, such
other documents, certificates and opinions as such counsel may reasonably
request for the purpose of enabling such counsel to pass upon the matters
referred to in Section 5(c) and in order to evidence the accuracy and
completeness of any of the representations, warranties or statements, the
performance of any covenant by the Company theretofore to be performed, or
the compliance with any of the conditions in this Agreement.
(g) At the Closing Time, all conditions precedent specified in each of
the Financing Agreements with respect to the Trustee's purchase of the
Equipment Notes shall have been satisfied; the representations and
warranties of the Company contained in each of the Financing Agreements
shall be accurate as of the Closing Time (except
14
to the extent that they relate solely to an earlier date in which case they
shall be accurate as of such earlier date) and the Underwriters shall have
received a certificate of a Vice President or Treasurer of the Company,
dated as of the Closing Time, to such effect; and the Underwriters shall
have received a copy of each opinion required to be delivered under each of
the Financing Agreements, dated as of the Closing Time, and addressed to
the Underwriters, and of such other documents furnished in connection with
the fulfillment of such conditions as the Underwriters or counsel for the
Underwriters may reasonably request.
If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by you on notice to the Company at any time at or
prior to the Closing Time, and such termination shall be without liability of
any party to any other party, except as provided in Section 4. Notwithstanding
any such termination, the provisions of Sections 6, 7 and 8 shall remain in
effect.
Section 6. Indemnification. (a) The Company agrees to indemnify and
---------------
hold harmless each Underwriter and each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred (including fees and disbursements of counsel chosen
by you except as otherwise specifically provided in Section 6(c)), arising
out of an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto) and all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
an untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus supplement or the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred (including fees and disbursements of counsel chosen
by you except as otherwise specifically provided in Section 6(c)), to the
extent of the aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or body, commenced
or threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, if
such settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
fees and disbursements of counsel chosen by you except as otherwise
specifically provided in
15
Section 6(c)), reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement
or omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss, liability,
- -------- -------
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission (A) made in reliance upon and
in conformity with written information furnished to the Company by an
Underwriter expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus supplement or the Prospectus (or any
amendment or supplement thereto) or (B) made or omitted from a Statement of
Eligibility on Form T-1, other than any such untrue statement or omission made
therein or omitted therefrom in reliance upon information furnished in writing
by the Company for use therein.
The foregoing indemnity with respect to any untrue statement contained
in or omission from a preliminary prospectus supplement shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) from
whom the person asserting any such loss, liability, claim, damage or expense
purchased any of the Offered Certificates that are the subject thereof if the
Company shall sustain the burden of proving that such person was not sent or
given a copy of the Prospectus (or the Prospectus as amended or supplemented)
(in each case exclusive of the documents from which information is incorporated
by reference) at or prior to the written confirmation of the sale of such
Offered Certificates to such person and the untrue statement contained in or
omission from such preliminary prospectus supplement was corrected in the
Prospectus (or the Prospectus as amended or supplemented).
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in Section 6(a), as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus supplement or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus supplement or the Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have otherwise than
on account of this indemnity agreement. An indemnifying
16
party may participate at its own expense in the defense of such action. If it so
elects within a reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving such notice, may
assume the defense of such action with counsel chosen by it and approved by the
indemnified parties defendant in such action, provided that, if such indemnified
party or parties reasonably determine that there may be legal defenses available
to them which are different from or in addition to those available to such
indemnifying party or parties and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them, then such indemnifying party or parties shall not be entitled to
assume such defense. If the indemnifying party or parties are not entitled to
assume the defense of such action as a result of the proviso to the preceding
sentence, counsel for the indemnifying party or parties shall be entitled to
conduct the defense of such indemnifying party or parties and counsel for the
indemnified party or parties shall be entitled to conduct the defense of such
indemnified party or parties. If an indemnifying party assumes the defense of
such action, the indemnifying parties shall not be liable for any fees and
expenses of counsel for the indemnified parties incurred thereafter in
connection with such action. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one counsel for all indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
Section 7. Contribution. In order to provide for just and equitable
------------
contribution in circumstances under which the indemnity provided for in Section
6 is for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company and the Underwriters shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnity incurred by the Company and one or
more of the Underwriters, as incurred, in such proportions that the Underwriters
are responsible for that portion represented by the percentage that the
underwriting commission appearing in Schedule II herein bears to the initial
public offering price appearing on the cover page of the Prospectus and the
Company is responsible for the balance; provided, however, that no person guilty
-------- -------
of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section, each person,
if any, who controls an Underwriter within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as the
Company.
17
Section 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. The representations, warranties, indemnities, agreements and other
- --------
statements of the Company or its officers set forth in or made pursuant to this
Agreement will remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company or an Underwriter or
controlling person and will survive delivery of and payment for the Offered
Certificates.
Section 9. Termination of Agreement. (a) The Underwriters may
------------------------
terminate this Agreement, by notice to the Company, at any time at or prior to
the Closing Time (i) if there has been, since the respective dates as of which
information is given in the Registration Statement and in the Prospectus, any
material adverse change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets, or any outbreak of hostilities or escalation thereof or other
calamity or crisis the effect of which is such as to make it, in your reasonable
judgment, impracticable to market the Offered Certificates or enforce contracts
for the sale of the Offered Certificates or (iii) if trading in any securities
of the Company or UAL has been suspended by the Commission, by the National
Association of Securities Dealers, Inc., or on any exchange or generally in the
over-the-counter market, or if trading generally on the New York Stock Exchange
or in the over-the-counter market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by such exchange or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority or (iv) if a banking moratorium has been declared by
federal, New York or Illinois authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 4. Notwithstanding any such termination, the
provisions of Sections 6, 7 and 8 shall remain in effect.
(c) This Agreement may also terminate pursuant to the provisions of
Section 2 or Section 5, with the effect stated in such Section.
Section 10. Default by One of the Underwriters. If either
----------------------------------
Underwriter shall fail at the Closing Time to purchase the Offered Certificates
which it is obligated to purchase hereunder (the "Defaulted Certificates"), you
shall have the right, but not the obligation, within 24 hours thereafter, to
make arrangements for the non-defaulting Underwriter or any other underwriters
(the "Non-Defaulting Underwriter"), to purchase all, but not less than all, of
the Defaulted Certificates upon the terms herein set forth; if, however, the
Non-Defaulting Underwriter shall have not completed such arrangements within
such 24-hour period, then this Agreement shall terminate without liability on
the part of the Non-Defaulting Underwriter.
18
No action pursuant to this Section shall relieve a defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Non-Defaulting Underwriter or the
Company shall have the right to postpone the Closing Time for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As used in
this Section, the term "Underwriter" includes any person substituted for an
Underwriter under this Section.
Section 11. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if delivered,
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed as set forth in Schedule I. Notices to the
Company shall be directed to it by mail at United Air Lines, Inc., P.O. Box
66100, Chicago, Illinois 60666, attention of Senior Vice President-Finance, or
at United Air Lines, Inc., 1200 East Algonquin Road, Elk Grove Township,
Illinois 60007, attention of Senior Vice President-Finance.
Section 12. Parties. This Agreement is made solely for the benefit
-------
of the Underwriters, the Company and, to the extent expressed, any person
controlling the Company or an Underwriter, and the directors of the Company, its
officers who have signed the Registration Statement, and their respective
executors, administrators, successors and assigns and, subject to the provisions
of Section 10, no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include
any purchaser, as such purchaser, from the Underwriters of the Offered
Certificates. If there are two or more Underwriters, all of their obligations
hereunder are several and not joint.
Section 13. Governing Law and Time. This Agreement shall be governed
----------------------
by the internal laws of the State of New York. Specified times of the day refer
to New York City time.
Section 14. Counterparts. This Agreement may be executed in one or
------------
more counterparts and when a counterpart has been executed by each party, all
such counterparts taken together shall constitute one and the same agreement. A
party may submit its signed counterpart of this Agreement by telecopier and such
counterpart so received by telecopier shall for all purposes constitute an
original.
19
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon it will
become a binding agreement between the Company and the Underwriters in
accordance with its terms.
Very truly yours,
UNITED AIR LINES, INC.
By:
-------------------------------
Name:
Title:
Confirmed and Accepted as of
the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
LEHMAN BROTHERS INC.
By: MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By:
----------------------------
Name:
Title:
SCHEDULE A
(1995 Pass Through Certificates, Series 1995-A1 and 1995-A2)
UNITED AIR LINES
----------------
Pass
Through Aggregate Final Underwriting
Certificate Principal Interest Distribution Discounts and Purchase
Designation Amount Rate Date Commissions** Price
- ----------- --------- -------- ------------ ------------- --------
1995-A1 9.02%
1995-A2 9.56%
_______________________________
** Expressed as percentage of Aggregate Principal Amount
SCHEDULE I
to
Purchase
Agreement
Dated: _________, 1995
UNITED AIR LINES, INC.
Principal Amount
Being Purchased
---------------
1995-A1 1995-A2
------- -------
MERRILL LYNCH & CO. $ $
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
World Financial Center
250 Vesey Street
New York, New York 10281
Notice to: ________________
LEHMAN BROTHERS INC. $ $
American Express Tower
World Financial Center
New York, New York 10285
Notice to: Kirk L. Meighan
SCHEDULE II
to
Purchase
Agreement
Dated: ___________, 1995
UNITED AIR LINES, INC.
Underwriting fees,
discounts, commissions
or other compensation: $____________
Closing date, time and location: May 15, 1995
9:00 A.M.,
Chicago Time;
Vedder, Price, Kaufman
& Kammholz
222 North LaSalle Street
Chicago, Illinois 60601-1003
SCHEDULE III
to
Purchase
Agreement
Dated: __________, 1995
UNITED AIR LINES, INC.
Matters to be covered by Letter or Letters of
Independent Auditors
Arthur Andersen LLP shall have furnished to you the following letter,
dated as of the date hereof and as of the Closing Time, in form and substance
satisfactory to you, to the extent that:
(i) They are independent auditors with respect to the Company within
the meaning of the 1933 Act and the 1933 Act Regulations, and the answer to
Item 10 of the Registration Statement insofar as it relates to them is
none;
(ii) In their opinion, the audited consolidated financial statements
and schedules incorporated by reference in the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1934 Act and the published rules and
regulations thereunder with respect to registration statements on Form S-3;
(iii) On the basis of a reading of the unaudited consolidated
financial statements of the Company contained in the Company's Quarterly
Reports on Form 10-Q for the quarter ended March 31, 1995 incorporated by
reference in the Registration Statement, a reading of the latest unaudited
consolidated financial statements made available by the Company, a reading
of the minutes of the Board of Directors of the Company and any committees
thereof and of the consent of the sole stockholder of the Company, and a
reading of the minutes of the Board of Directors of UAL Corporation and any
committees thereof and of the stockholders of UAL Corporation, since the
date of the latest audited consolidated financial statements incorporated
by reference in the Registration Statement, inquiries of officials of the
Company responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, which do not
constitute an audit in accordance with generally accepted auditing
standards and which would not necessarily reveal matters of significance
with respect to the comments set forth in such letter, nothing came to
their attention that caused them to believe that:
2
(A) the unaudited consolidated financial statements incorporated
by reference in the Registration Statement do not comply as to form in
all material respects with the applicable accounting requirements of
the 1933 Act and the 1934 Act and the 1933 Act Regulations and the
1934 Act Regulations as they apply to Form 10-Q or are not presented
in conformity with generally accepted accounting principles applied on
a basis substantially consistent with that of the audited consolidated
financial statements of the Company incorporated by reference in the
Registration Statement;
(B) the unaudited consolidated balance sheet of the Company at
March 31, 1995 is not stated on a basis substantially consistent with
that of the audited consolidated financial statements of the Company
incorporated by reference in the Registration Statement;
(C) as of a specified date not more than five days prior to the
date of delivery of such letter, there has been any change in the
consolidated long-term debt of the Company, or any decrease in
consolidated net current assets of the Company or other items
specified by you, in each case as compared with amounts shown in the
latest unaudited consolidated balance sheet incorporated by reference
in the Registration Statement, except in each case for changes or
decreases which the Registration Statement discloses have occurred or
may occur or which are described in such letter; and
(iv) They have performed certain procedures specified in their letter
for the purpose of determining whether certain financial information with
respect to the Company and its consolidated subsidiaries appearing or
incorporated by reference in the Registration Statement and specified in
said letter agrees with indicated amounts in the applicable financial
statements or accounting records of the Company and its subsidiaries.
Exhibit A
to
Purchase
Agreement
(Pass Through Certificates, Series 1995-A1 and 1995-A2)
[Provisions of Opinion of
Vedder, Price, Kaufman & Kammholz]
United Air Lines, Inc.
Pass Through Certificates, Series 1995-A1 and 1995-A2
-----------------------------------------------------
(1) The Offered Certificates have been duly authorized, executed,
delivered and authenticated by the Trustee pursuant to the Designated
Agreements and constitute valid and binding obligations of the Trustee
enforceable against the Trustee in accordance with their terms; and
the holders of Offered Certificates are entitled to the benefits of
the relevant Designated Agreement.
(2) The Offered Certificates, the Designated Agreements and the other
Operative Documents conform in all material respects as to legal
matters to the descriptions thereof, if any, contained in the
Prospectus, and the description of the Offered Certificates conforms
in all material respects to the rights set forth in the instruments
defining the same.
(3) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(4) No authorization, approval, consent, order or license of or filing
with or notice to any government, governmental instrumentality or
court, domestic or foreign (other than under the 1933 Act, the 1939
Act and the securities or Blue Sky laws of the various states) on the
part of the Company, is required for the valid authorization,
issuance, sale and delivery of the Offered Certificates, the valid
authorization, execution, delivery and performance by the Company of
the Purchase Agreement, the Designated Agreements and the other
Operative Documents to which the Company is or is to be a party or the
consummation by the Company of the transactions contemplated by the
Purchase Agreement, the Designated Agreements and the other Operative
Documents to which the Company is or is to be a party, or, if so
required, all such authorizations, approvals, consents and licenses,
including filings under the Uniform Commercial Code as is in effect in
Massachusetts and Illinois, have been made
2
or obtained and are in full force and effect, except for any
filings that may be required under the Aviation Act, as to which we
express no opinion.
(5) The statements made in the Prospectus under the headings "Federal
Income Tax Consequences" and "ERISA Considerations", to the extent
that they constitute matters of law or legal conclusions with respect
thereto, have been reviewed by us and fairly present the information
disclosed therein in all material respects.
(6) The Registration Statement has been declared effective under the 1933
Act; any required filing of the Prospectus or any supplement thereto
pursuant to Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b); the Basic Agreement has been duly
qualified under the 1939 Act; and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or are contemplated under the 1933 Act.
(7) The Registration Statement, the Prospectus and each amendment or
supplement thereto (except for the financial statements and other
financial or statistical data included therein or omitted therefrom
and the documents incorporated by reference in the Prospectus, as to
which we express no opinion), as of their respective effective or
issue dates, complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations, and the
Designated Agreements and the Statement of Eligibility on Form T-1
filed with the Commission as part of the Registration Statement
complied as to form in all material respects with the requirements of
the 1939 Act and the 1939 Act Regulations.
(8) The Financing Agreements and the Designated Agreements have each been
duly authorized, executed and delivered by the Company and each is a
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other
similar laws affecting enforcement of creditors' rights generally and
by general principles of equity.
(9) The Leases and other Operative Documents to which the Company is, or
is to be, a party have been duly authorized and, at the Closing Time,
the related Leases and other Operative Documents to which the Company
is, or is to be, a party, upon due execution and delivery by the
Company, will each be a valid and binding obligation of the Company
enforceable against the Company in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws affecting
3
enforcement of creditors' rights generally and by general principles
of equity and, except, in the case of each Lease, as limited by
applicable laws which may affect the remedies provided in such Lease,
which laws, however, do not in such counsel's opinion make the
remedies provided in such Lease inadequate for the practical
realization of the rights and benefits provided thereby.
(10) The Trust created by each of the Designated Agreements would not be
classified as an association taxable as a corporation for federal
income tax purposes, but rather, would be classified as a grantor
trust under subpart E, Part I of Subchapter J of the Internal Revenue
Code of 1986, as amended, and each Certificate Owner should be treated
as the owner of a pro rata undivided interest in each of the Equipment
Notes or any other property held in such Trust.
(11) Upon consummation of the transactions contemplated by the Financing
Agreements, each Owner Trustee, as lessor under the related Lease, and
the Indenture Trustee, as assignee of the Owner Trustee's rights under
such Lease pursuant to the Indenture corresponding to such Lease, is
or will be entitled to the benefits of Section 1110 of the Bankruptcy
Code with respect to the Aircraft initially delivered under such Lease
and subjected to the related Indenture; and Section 1110 of the
Bankruptcy Code conforms in all material respects to the description
thereof contained in "Description of the Equipment Notes" in the
Prospectus.
(12) None of the Trusts is required to be registered under the Investment
Company Act of 1940, as amended.
(13) Upon consummation of the transactions contemplated by the Financing
Agreements, assuming due authorization, execution and delivery by the
related Owner Trustee and due authentication by the Indenture Trustee,
the Equipment Notes will constitute valid and binding obligations of
such Owner Trustee, enforceable against such Owner Trustee in
accordance with their terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights generally and by general principles
of equity; and the holders of the Equipment Notes will be entitled to
the benefits of the respective Indentures.
(14) Assuming due authorization, execution and delivery of the Designated
Agreements by the Trustee, each such Designated Agreement constitutes
the valid and binding obligation of the Trustee, enforceable in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
enforcement of creditors' rights generally and by general principles
of equity.
4
In connection with the preparation of the Registration Statement and
the Prospectus, such counsel has examined various documents and other papers,
including the documents incorporated by reference in the Registration Statement
and the Prospectus, and participated in conferences with representatives of the
Company and its independent accountants and with your representatives and your
counsel, at which conferences the contents of the Registration Statement and the
Prospectus and related matters were discussed. Such counsel has not
participated in the preparation of the documents incorporated by reference in
the Registration Statement or the Prospectus; such counsel has not verified, are
not passing upon and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, or the documents incorporated by reference therein;
and such counsel has not made an independent investigation of facts for the
purpose of rendering this opinion. Such counsel confirms, however, that in the
course of our examination and during the above-mentioned conferences, no facts
came to such counsel's attention that cause such counsel to believe (A) that the
Registration Statement or any amendment thereto (except for the financial
statements and other financial or statistical data included therein or omitted
therefrom and the Statement of Eligibility on Form T-1, as to which such counsel
expresses no opinion), at the time the Registration Statement or any such
amendment became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (B) that the Prospectus or any
amendment or supplement thereto (except for the financial statements and other
financial or statistical data included therein or omitted therefrom, as to which
we express no opinion), at the time the Prospectus was issued, at the time any
such amended or supplemented prospectus was issued or at the Closing Time,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading or (C)
that the documents incorporated by reference in the Prospectus (except for the
financial statements and other financial or statistical data included therein or
omitted therefrom, as to which such counsel expresses no opinion), as of the
dates they were filed with the Commission, included an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
Such counsel notes that the "governing law" provisions of certain of
the documents as to which such counsel expresses an opinion provide that the
laws of the State of New York are to govern them. In such counsel's opinion, a
court applying Illinois conflict of laws rules should give effect to such choice
of New York law.
For purposes of its opinion set forth above, such counsel has (i)
assumed that a court would apply the substantive laws of New York with regard to
the documents referred to in the preceding paragraph and (ii) assumed that the
substantive laws of New York governing the interpretation and enforcement of
each provision of such documents do not differ in any material respect from the
substantive laws of Illinois.
5
In rendering the opinion set forth above, such counsel has assumed
that each of the parties to each of the applicable documents, other than the
Company, has full power, authority and legal right to enter into such documents
and that each such document has been duly authorized, executed and delivered by
each of such parties. In addition, such counsel has relied, to the extent such
counsel has deemed necessary for purposes of rendering the opinion set forth in
paragraph 1 above, upon the opinions of counsel for the Trustee. In addition,
such counsel has relied upon the opinion of Crowe & Dunlevy, special counsel for
Aviation Act matters, as to all matters dealing with the Aviation Act.
Exhibit B
to
Purchase
Agreement
(Pass Through Certificates, Series 1995-A1 and 1995-A2)
[Provisions of Opinion of General Counsel
of United Air Lines, Inc.]
United Air Lines, Inc.
Pass Through Certificates, Series 1995-A1 and 1995-A2
-----------------------------------------------------
(1) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with corporate
power and authority under such laws to own, lease and operate its
properties and conduct its business as described in the Prospectus and
to perform its obligations under the Purchase Agreement, the
Designated Agreements and the other Operative Documents to which the
Company is or is to be a party and the Financing Agreements.
(2) The Company is duly qualified to transact business as a foreign
corporation and is in good standing in Illinois, except to the extent
that the failure to so qualify or be in good standing would not have a
material adverse effect on the Company and its subsidiaries,
considered as one enterprise.
(3) The Company is a "citizen of the United States" within the meaning of
Section 40102(a)(15) of Title 49 of the United States Code, as
amended, holding an air carrier operating certificate issued by the
Secretary of Transportation pursuant to Chapter 447 of Title 49 of the
United States Code, as amended, for aircraft capable of carrying 10 or
more individuals or 6,000 pounds or more cargo. All of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable
and are owned by UAL, directly, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind.
(4) To the best of such counsel's knowledge, there are no statutes or
regulations, or any pending or threatened legal or governmental
proceedings, required under the 1933 Act to be described in the
Prospectus that are not described as required, nor any contracts or
documents of a character required to be described or referred to in
the Registration Statement or the Prospectus or to
2
be filed as exhibits to the Registration Statement that are not
described, referred to or filed as required.
(5) The descriptions in the Prospectus of the statutes, regulations, legal
or governmental proceedings therein described are accurate in all
material respects and fairly summarize the information required to be
shown.
(6) To such counsel's knowledge, no event of default or event which with
the passage of time or the giving of notice or both would become such
an event of default has occurred under any agreement or instrument
under which indebtedness of the Company is outstanding or by which it
may be bound or any of its properties may be subject, and no default
exists in the performance or observance of any material obligation,
agreement, covenant or condition contained in any material contract,
agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed as an exhibit to the
Registration Statement.
(7) The execution and delivery by the Company of the Purchase Agreement,
the Designated Agreements, and the other Operative Documents to which
the Company is or is to be a party and the Financing Agreements, the
issuance and sale of the Offered Certificates, the consummation by the
Company of the transactions contemplated in the Purchase Agreement, in
the Registration Statement, in the Designated Agreements, and in the
other Operative Documents to which the Company is or is to be a party
and in the Financing Agreements and compliance by the Company with the
terms of the Purchase Agreement, the Designated Agreements, and the
other Operative Documents to which the Company is or is to be a party
do not and will not result in any violation of the charter or by-laws
of the Company, and do not and will not conflict with, or result in a
breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance (except for Permitted Liens) upon any property or assets
of the Company under (A) any indenture, mortgage, loan agreement,
note, lease or other agreement or instrument known to such counsel, to
which the Company is a party or by which it may be bound or to which
any of its properties may be subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise), (B) any
existing law, rule or regulation applicable to the Company (other than
the securities or Blue Sky laws of the various states, as to which
such counsel expresses no opinion), or (C) any judgment, order or
decree of any government, governmental instrumentality or court,
domestic or foreign, known to such counsel having jurisdiction over
the Company or any of its properties.
3
(8) The documents incorporated by reference in the Prospectus (except for
the financial statements and other financial or statistical data
included or incorporated by reference therein or omitted therefrom, as
to which such counsel expresses no opinion), as of the dates they were
filed with the Commission, complied as to form in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations.
Such counsel or lawyers under such counsel's supervision have
participated in the preparation of the Registration Statement, the Prospectus
and the documents incorporated by reference therein and no facts have come to
such counsel's attention to lead such counsel to believe (A) that the
Registration Statement or any amendment thereto (except for the financial
statements and other financial or statistical data included therein or omitted
therefrom and the Statement of Eligibility on Form T-1, as to which such counsel
expresses no opinion), at the time the Registration Statement or any such
amendment became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (B) that the Prospectus or any
amendment or supplement thereto (except for the financial statements and other
financial or statistical data included therein or omitted therefrom, as to which
such counsel expresses no opinion), at the time the Prospectus was issued, at
the time any such amended or supplemented prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or (C) that the documents incorporated by reference in the
Prospectus (except for the financial statements and other financial or
statistical data included therein or omitted therefrom, as to which such counsel
expresses no opinion), as of the dates they were filed with the Commission,
included an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
S&S FINAL DRAFT
UNITED AIR LINES, INC.
and
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, National Association,
as Trustee
--------------------------------
PASS THROUGH TRUST AGREEMENT
Dated as of February 1, 1992,
As Amended And Restated
as of May 1, 1995
--------------------------------
TABLE OF CONTENTS
Section Page
------- ----
ARTICLE I
DEFINITIONS
1.01. Definitions........................................... 2
1.02. Compliance Certificates and Opinions.................. 11
1.03. Form of Documents Delivered to Trustee................ 11
1.04. Acts of Certificateholders............................ 12
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
2.01. Amount Unlimited; Issuable in Series.................. 14
2.02. Acquisition of Equipment Notes........................ 16
2.03. Acceptance by Trustee................................. 17
2.04. Limitation of Powers.................................. 18
ARTICLE III
THE CERTIFICATES
3.01. Form, Denomination and Execution of Certificates...... 18
3.02. Authentication of Certificates........................ 19
3.03. Temporary Certificates................................ 19
3.04. Registration of Transfer and Exchange of Certificates. 20
3.05. Mutilated, Destroyed, Lost or Stolen Certificates..... 20
3.06. Persons Deemed Owners................................. 21
3.07. Cancellation.......................................... 21
3.08. Limitation of Liability for Payments.................. 21
3.09. Book-Entry and Definitive Certificates................ 21
ii
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
4.01. Certificate Account and Special Payments Account...... 24
4.02. Distributions from Certificate Account and Special
Payments Account..................................... 24
4.03. Statements to Certificateholders...................... 26
4.04. Investment of Special Payment Moneys.................. 26
ARTICLE V
THE COMPANY
5.01. Maintenance of Corporate Existence.................... 27
5.02. Consolidation, Merger, etc............................ 27
ARTICLE VI
DEFAULT
6.01. Events of Default..................................... 28
6.02. Incidents of Sale of Equipment Notes.................. 29
6.03. Judicial Proceedings Instituted by Trustee;
Trustee May Bring Suit............................... 29
6.04. Control by Certificateholders......................... 30
6.05. Waiver of Past Defaults............................... 30
6.06. Right of Certificateholders to Receive Payments
Not to Be Impaired................................... 31
6.07. Certificateholders May Not Bring Suit Except Under
Certain Conditions................................... 31
6.08. Remedies Cumulative................................... 32
ARTICLE VII
THE TRUSTEE
7.01. Notice of Defaults.................................... 32
7.02. Certain Rights of Trustee............................. 33
7.03. Not Responsible for Recitals or Issuance of
Certificates......................................... 34
7.04. May Hold Certificates................................. 34
7.05. Money Held in Trust................................... 34
7.06. Compensation and Reimbursement........................ 34
7.07. Corporate Trustee Required; Eligibility............... 35
7.08. Resignation and Removal; Appointment of Successor..... 36
iii
7.09. Acceptance of Appointment by Successor................ 38
7.10. Merger, Conversion, Consolidation or Succession
to Business.......................................... 38
7.11. Maintenance of Agencies............................... 39
7.12. Money for Certificate Payments to Be Held in Trust.... 40
7.13. Registration of Equipment Notes in Trustee's Name..... 40
7.14. Representations and Warranties of Trustee............. 41
7.15. Withholding Taxes; Information Reporting.............. 41
7.16. Trustee's Liens....................................... 42
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
8.01. The Company to Furnish Trustee with Names and
Addresses of Certificateholders...................... 42
8.02. Preservation of Information; Communications to
Certificateholders................................... 43
8.03. Reports by Trustee.................................... 43
8.04. Reports by the Company................................ 43
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
9.01. Supplemental Agreements Without Consent of
Certificateholders................................... 44
9.02. Supplemental Agreements with Consent of
Certificateholders................................... 45
9.03. Documents Affecting Immunity or Indemnity............. 46
9.04. Execution of Supplemental Agreements.................. 46
9.05. Effect of Supplemental Agreements..................... 46
9.06. Conformity with Trust Indenture Act................... 46
9.07. Reference in Certificates to Supplemental Agreements.. 47
ARTICLE X
AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS
10.01. Amendments and Supplements to Indenture and Other Note
Documents........................................... 47
iv
ARTICLE XI
TERMINATION OF TRUSTS
11.01. Termination of the Trusts............................ 47
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.01. Limitation on Rights of Certificateholders........... 49
12.02. Certificates Nonassessable and Fully Paid............ 49
12.03. Notices.............................................. 49
12.04. Governing Law........................................ 50
12.05. Severability of Provisions........................... 51
12.06. Trust Indenture Act Controls......................... 51
12.07. Effect of Headings and Table of Contents............. 51
12.08. Successors and Assigns............................... 51
12.09. Benefits of Agreement................................ 51
12.10. Legal Holidays....................................... 51
12.11. Counterparts......................................... 51
Exhibit A - Form of Certificate
This PASS THROUGH TRUST AGREEMENT, dated as of February 1, 1992, as amended
and restated as of May 1, 1995, between United Air Lines, Inc., a Delaware
corporation, and State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, as Trustee, is made with respect to
the formation from time to time of separate United Air Lines Pass Through
Trusts, and the issuance from time to time of separate series of Pass Through
Certificates representing fractional undivided interests in the respective
Trusts.
WITNESSETH:
WHEREAS, from time to time the Company (this and certain other defined
terms used herein are defined in Section 1.01) may enter into a Trust Supplement
with the Trustee named therein pursuant to which such Trustee shall declare the
creation of a separate Trust for the benefit of the Holders of the series of
Certificates to be issued in respect of such Trust, and the initial Holders of
the Certificates of such series, as the grantors of such Trust, by their
respective acceptances of the Certificates of such series, shall join in the
creation of such Trust with the Trustee;
WHEREAS, all Certificates to be issued in respect of each separate Trust
will be issued as a separate series pursuant to this Agreement, will evidence
fractional undivided interests in such Trust and will have no rights, benefits
or interests in respect of any other separate Trust or the property held
therein;
WHEREAS, from time to time, pursuant to the terms and conditions of this
Agreement with respect to each separate Trust formed hereunder, the Trustee on
behalf of such Trust shall purchase one or more issues of Equipment Notes having
the same interest rate as, and final maturity dates not later than the final
Regular Distribution Date of, the series of Certificates issued in respect of
such Trust and shall hold such Equipment Notes in trust for the benefit of the
Certificateholders of such Trust;
WHEREAS, to facilitate the sale of Equipment Notes to, and the purchase of
Equipment Notes by, the Trustee on behalf of each Trust created from time to
time pursuant to this Agreement, the Company has duly authorized the execution
and delivery of this Basic Agreement and each Trust Supplement as the "issuer",
as such term is defined in and solely for purposes of the Securities Act of
1933, as amended, of the Certificates to be issued in respect of each Trust and
as the "obligor", as such term is defined in and solely for purposes of the
Trust Indenture Act of 1939, as amended, with respect to all such Certificates
and is undertaking to perform certain administrative and ministerial duties
hereunder and is also undertaking to pay the fees and expenses of the Trustee;
WHEREAS, this Basic Agreement, as amended or supplemented from time to
time, is subject to the provisions of the Trust Indenture Act of 1939, as
amended, and shall, to the extent applicable, be governed by such provisions;
2
WHEREAS, State Street Bank and Trust Company of Connecticut, National
Association ("State Street"), as Trustee, and United Air Lines, Inc. wish to
effect certain corrections and supplements, none of which are material or
adversely affect the interests of the Certificateholders of any series, to this
Basic Agreement as originally executed and delivered;
NOW THEREFORE, in consideration of the mutual agreements herein contained,
and of other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree (and agree that this Basic
Agreement is hereby amended and restated to read) as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For all purposes of this Basic Agreement,
-----------
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms used herein that are defined in this Article have the
meanings assigned to them in this Article, and include the plural as well
as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all references in this Basic Agreement to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and other subdivisions of this Basic Agreement;
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Basic Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(5) the term "this Agreement" (as distinguished from "this Basic
Agreement") refers, unless the context otherwise requires, to this Basic
Agreement as supplemented by the Trust Supplement creating a particular
Trust and establishing the series of Certificates issued or to be issued in
respect thereof, with reference to such Trust and each series of
Certificates, as this Basic Agreement as so supplemented may be further
supplemented with respect to such Trust and such series of Certificates.
3
Act: With respect to any Certificateholder has the meaning specified
---
in Section 1.04.
Affiliate: With respect to any specified Person, means any other
---------
Person directly or indirectly controlling or controlled by or under direct
of indirect common control with such Person. For the purposes of this
definition, "control", when used with respect to any specified Person,
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
Aircraft: Means an aircraft, including engines therefor, owned by or
--------
leased to the Company and securing one or more Equipment Notes.
Authorized Agent: With respect to the Certificates of any series,
----------------
means any Paying Agent or Registrar for the Certificates of such series.
Basic Agreement: Means this Pass Through Trust Agreement, as the same
---------------
may from time to time be supplemented, amended or modified, but does not
include any Trust Supplement.
Book-Entry Certificates: With respect to the Certificates of any
-----------------------
series, means a beneficial interest in the Certificates of such series,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 3.09.
Business Day: With respect to the Certificates of any series, means
------------
any day other than a Saturday, a Sunday or a day on which commercial banks
are required or authorized to close in Chicago, Illinois, New York, New
York; and, so long as any such Certificate is outstanding, a city and state
in which the Trustee or any related Loan Trustee maintains its Corporate
Trust Office or receives and disburses funds.
Certificate: Means any one of the certificates executed and
-----------
authenticated by the Trustee, substantially in the form of Exhibit A
hereto.
Certificate Account: With respect to the Certificates or any series,
-------------------
means the account or accounts created and maintained for such series
pursuant to Section 4.01(a) and the related Trust Supplement.
Certificateholder or Holder: With respect to the Certificates of any
---------------------------
series, means the Person in whose name a Certificate of such series is
registered in the Register for Certificates of such series.
4
Certificate Owner: With respect to the Certificates of any series,
-----------------
means, for purposes of Section 3.09, the Person who owns a Book Entry
Certificate of such series.
Clearing Agency: Means an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
Clearing Agency Participant: Means a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time a Clearing
Agency effects, directly or indirectly, book-entry transfers and pledges of
securities deposited with the Clearing Agency.
Company: Means United Air Lines, Inc., a Delaware corporation, or its
-------
successor in interest pursuant to Section 5.02, or any other obligor with
respect to the Certificates (within the meaning of the Trust Indenture
Act).
Corporate Trust Office: With respect to the Trustee or any Loan
----------------------
Trustee, means the office of such trustee in the city at which at any
particular time its corporate trust business shall be principally
administered.
Cut-off Date: With respect to the Certificates of any series, means
------------
the date designated as such in this Agreement.
Definitive Certificates: With respect to the Certificate of any
-----------------------
series, has the meaning specified in Section 3.09.
Direction: Has the meaning specified in Section 1.04(c).
---------
Equipment Note: With respect to the Certificates of any series, has
--------------
the meaning given to "Certificate" in the related Indenture.
ERISA: Means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, or any successor federal statute.
Escrow Account: With respect to the Certificates of any series, has
--------------
the meaning specified in Section 2.02(b).
Escrowed Funds: With respect to any Trust, has the meaning specified
--------------
in Section 2.02(b).
5
Event of Default: Means, in respect of any Trust, the occurrence of
----------------
an Indenture Default under any Indenture pursuant to which Equipment Notes
held by such Trust were issued.
Fractional Undivided Interest: Means the fractional undivided
-----------------------------
interest in a Trust that is evidenced by a Certificate relating to such
Trust.
Indenture: With respect to any Trust, means each of the one or more
---------
separate trust indenture and security agreements or trust indentures and
mortgages or similar agreements described in, or on a schedule attached to,
this Agreement which relates to an issue of Equipment Notes to be held in
such Trust and an indenture having substantially the same terms and
conditions as such trust indenture and security agreement and which relates
to a Substitute Aircraft; as each such agreement may be amended or
supplemented in accordance with its respective terms; and Indentures means
----------
all of such agreements.
Indenture Default: With respect to any Indenture, means any Indenture
-----------------
Event of Default (as such term is defined in such Indenture).
Initial Regular Distribution Date: With respect to the Certificates
---------------------------------
of any series, means the first Regular Distribution Date on which a
Scheduled Payment is to be made.
Issuance Date: With respect to the Certificates of any series, means
-------------
the date of the issuance of such Certificates.
Lease: Means any lease between an Owner Trustee, as the lessor, and
-----
the Company, as the lessee, referred to in the related Indenture, as each
such lease may be amended or supplemented in accordance with its respective
terms; and Leases means all such Leases.
------
Letter of Representations: With respect to the Certificates of any
-------------------------
series, means the agreement among the Company, the Trustee and the initial
Clearing Agency substantially in the form attached as an Exhibit to the
related Trust Supplement.
Loan Trustee: With respect to any Equipment Note or the Indenture
------------
applicable thereto, means the bank or trust company designated as loan
trustee under such Indenture; and any successor to such Loan Trustee as
such trustee; and Loan Trustees means all of the Loan Trustees under the
-------------
Indentures.
6
Note Documents: With respect to any Equipment Note, means the related
--------------
Indenture, Note Purchase Agreement, and if the related Aircraft is leased
to the Company, the related Lease and the related Owner Trustee's Purchase
Agreement.
Note Purchase Agreement: With respect to the Certificates of any
-----------------------
series, means any note purchase, participation or similar agreement
providing for, among other things, the purchase of Equipment Notes by the
Trustee on behalf of the relevant Trust; and Note Purchase Agreements means
------------------------
all such agreements.
Officer's Certificate: Means a certificate signed, (a) in the case of
---------------------
the Company, by (i) the Chairman of the Board of Directors, the President
or any Senior Vice President of the Company, signing alone or (ii) any Vice
President of the Company signing together with the Secretary, the Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Company or, (b)
in the case of an Owner Trustee or a Loan Trustee, a Responsible Officer of
such Owner Trustee or such Loan Trustee, as the case may be.
Opinion of Counsel: Means a written opinion of legal counsel who (a)
------------------
in the case of counsel for the Company may be (i) a senior attorney in rank
of the officers of the Company a principal duty of which is furnishing
advice as to legal matters, (ii) Vedder, Price, Kaufman & Kammholz or (iii)
such other counsel designated by the Company and reasonably acceptable to
the Trustee and (b) in the case of any Owner Trustee or any Loan Trustee
may be such counsel as may be designated by any of them whether or not such
counsel is an employee of any of them, and who shall be reasonably
acceptable to the Trustee.
Outstanding: With respect to Certificates of any series, means, as of
-----------
the date of determination, all Certificates of such series theretofore
authenticated and delivered under this Agreement, except:
(i) Certificates of such series theretofore cancelled by the
Registrar or delivered to the Trustee or the Registrar for
cancellation;
(ii) All of the Certificates of such series if money in the full
amount required to make the final distribution with respect to such
series pursuant to Section 11.01 hereof has been theretofore deposited
with the Trustee in trust for the Holders of the Certificates of such
series as provided in Section 4.01 pending distribution of such money
to such Certificateholders pursuant to such final distribution
payment; and
7
(iii) Certificates of such series in exchange for or in lieu of
which other Certificates of such series have been authenticated and
delivered pursuant to this Basic Agreement.
Owner Participant: With respect to any Equipment Note, means the
-----------------
"Owner Participant", if any, as referred to in the Indenture pursuant to
which such Equipment Note is issued and any permitted successor or assign
of such Owner Participant; and Owner Participants at any time of
------------------
determination means all of the Owner Participants thus referred to in the
Indentures.
Owner Trustee: With respect to any Equipment Note, means the "Owner
-------------
Trustee", if any, as referred to in the Indenture pursuant to which such
Equipment Note is issued, not in its individual capacity but solely as
trustee; and Owner Trustees means all of the Owner Trustees party to any of
--------------
the respective Indentures.
Owner Trustee's Purchase Agreement: With respect to the certificates
----------------------------------
of any series, if the related Aircraft is leased to the Company, has the
meaning specified therefor in the related Lease.
Paying Agent: With respect to the Certificates of any series, means
------------
the paying agent maintained and appointed for the Certificates of such
series pursuant to Section 7.11.
Permitted Investments: Means obligations of the United States of
---------------------
America or agencies or instrumentalities thereof for the payment of which
the full faith and credit of the United States of America is pledged,
maturing in not more than 60 days or such lesser time as is necessary for
payment of any Special Payments on a Special Distribution Date.
Person: Means an person, including any individual, corporation,
------
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
Pool Balance: With respect to any Trust, means as of any date the
------------
aggregate unpaid principal amount of the Equipment Notes held in such Trust
on such date plus the amount of the principal payments on such Equipment
Notes held by the Trustee and not yet distributed plus the amount of any
moneys held in the related Escrow Account (other than earnings thereon).
The Pool Balance as of any Regular Distribution Date or Special
Distribution Date with respect to such Trust shall be computed after giving
effect to the payment of principal, if any, on such Equipment Notes and
distribution thereof to are made on that date.
8
Pool Factor: With respect to any Trust, means as of any date the
-----------
quotient (rounded to the seventh decimal place) computed by dividing (i)
the Pool Balance as at such date by (ii) the aggregate original principal
amount of the Certificates of such Trust. The Pool Factor as of any
Regular Distribution Date or Special Distribution Date with respect to such
Trust shall be computed after giving effect to the payment of principal, if
any, on such Equipment Notes and distribution thereof to be made on that
date.
Postponed Notes: With respect to any Trust or the related series of
---------------
Certificates, means the Equipment Notes to be held in such Trust as to
which a Postponement Notice shall have been delivered pursuant to Section
2.02(b).
Postponement Notice: With respect to any Trust or the related series
-------------------
of Certificates, means an Officer's Certificate of the Company signed by an
officer of the Company (1) requesting that the Trustee temporarily postpone
purchase of the related Equipment Notes to a date later than the Issuance
Date of such series of Certificates, (2) identifying the amount of the
purchase price of each such Equipment Note and the aggregate purchase price
for all such Equipment Notes, (3) setting forth the reasons for such
postponement and (4) with respect to each such Equipment Note, either (a)
setting or resetting a new Transfer Date (which shall be on or prior to the
applicable Cut-off Date) for payment by the Trustee of such purchase price
and issuance of the related Equipment Note, or (b) indicating that such new
Transfer Date (which shall be on or prior to the applicable Cut-off Date)
will be set by subsequent written notice not less than one Business Day
prior to such new Transfer Date.
Record Date: With respect to any Trust or the related series of
-----------
Certificates, means (i) for Scheduled Payments to be distributed on any
Regular Distribution Date, other than the final distribution, with respect
to such series, the 15th day (whether or not a Business Day) preceding such
Regular Distribution Date, and (ii) for Special Payments to be distributed
on any Special Distribution Date, other than the final distribution, with
respect to such series, the 15th day (whether or not a Business Day)
preceding such Special Distribution Date.
Register and Registrar: With respect to the Certificates of any
----------------------
series, mean the register maintained and the registrar appointed for such
series pursuant to Sections 3.04 and 7.11.
Regular Distribution Date: With respect to distributions of Scheduled
-------------------------
Payments in respect of any series of Certificates, means each date
designated as such in this Agreement, until payment of all the Scheduled
Payments to be made under the Equipment Notes held in such Trust has been
made.
9
Request: Means a request by the Company setting forth the subject
-------
matter of the request accompanied by an Officer's Certificate and an
opinion of Counsel as provided in Section 1.02 of this Basic Agreement.
Responsible Officer: With respect to any Trustee, any Loan Trustee
-------------------
and any Owner Trustee, means any officer in the Corporate Trust ?
Department of the Trustee, Loan Trustee or Owner Trustee or any other
officer customarily performing functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of his knowledge of and
familiarity with a particular subject.
Scheduled Payment: With respect to any Equipment Note, means any
-----------------
payment (other than a Special Payment) of interest on or principal of and
interest on an Equipment Note due from the obligor thereon which
installment represents the installment of principal at the stated maturity
of such installment of principal on such Equipment Note or the payment of
regularly scheduled interest accrued on the unpaid principal amount of such
Equipment Note, or both.
SEC: Means the Securities and Exchange Commission, as from time to
---
time constituted or created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
Special Distribution Date: With respect to the Certificates of any
-------------------------
series, means each date on which a Special Payment is to be distributed as
specified in this Agreement.
Special Payment: With respect to a Special Distribution Date in
---------------
respect of the Certificates of any series, means (i) any payment of
principal of, premium, if any, and interest resulting from the redemption
or purchase of an Equipment Note held in the applicable Trust, (ii) any
payment of principal of and interest (including any interest accruing upon
default) on, or any other amount in respect of, any such Equipment Note
upon an Indenture Default in respect thereof or upon an acceleration under
the Indenture relating thereto, (iii) the amounts required to be
distributed in respect thereof pursuant to the last paragraph of Section
2.02(b), (iv) the amounts required to be distributed in respect thereof
pursuant to the penultimate paragraph of Section 2.02(b), (v) any Scheduled
Payment or any payment which is not in fact paid within five days of the
Regular Distribution Date applicable thereto or (vi) any proceeds from the
sale of any such Equipment Note by the Trustee pursuant to Article VI
hereof; and Special Payments means all of such Special Payments.
----------------
10
Special Payments Account: With respect to the Certificates of any
------------------------
series, means the account or accounts created and maintained for such
series pursuant to Section 4.01(b) and the related Trust Supplement.
Specified Investments: With respect to any Trust, means, unless
---------------------
otherwise specified in the related Trust Supplement, (i) obligations of, or
guaranteed by, the United States Government or agencies thereof, (ii) open
market commercial paper of any corporation incorporated under the laws of
the United States of America or any State thereof rated at least P-2 or its
equivalent by Moody's Investors Service, Inc. or at least A-2 or its
equivalent by Standard & Poor's Corporation, (iii) certificates of deposit
issued by commercial banks organized under the laws of the United States or
of any political subdivision thereof having a combined capital and surplus
in excess of $500,000,000 which banks or their holding companies have a
rating of A or its equivalent by Moody's Investors Service, Inc. or
Standard & Poor's Corporation; provided, however, that the aggregate amount
-------- -------
at an one time so invested in certificates of deposit issued by any one
bank shall not exceed 5% of such bank's capital and surplus, (iv) U.S.
dollar denominated offshore certificates of deposit issued by, or offshore
time deposits with, any commercial bank described in (iii) or any
subsidiary thereof and (v) repurchase agreements with any financial
institution having combined capital and surplus of at least $500,000,000
with any of the obligations described in clauses (i) through (iv) as
collateral; provided further that if all of the above investments are
-------- -------
unavailable, the entire amounts to be invested may be used to purchase
Federal Funds from an entity described in clause (iii) above; and
provided further that no investment shall be eligible as a "Specified
-------- -------
Investment" unless the final maturity or date of return of such investment
is on or before the Special Distribution Date next following the Cut-off
Date for such Trust by more than 20 days.
Substitute Aircraft: With respect to any Trust, means any Aircraft of
-------------------
the type specified in this Agreement and, at the election of the Company,
substituted prior to the applicable Cut-off Date, pursuant to the terms of
this Agreement.
Transfer Date: Has the meaning assigned to that term or any of the
-------------
terms "Delivery Date", "Funding Date" or "Closing Date" in a Note Purchase
Agreement.
Trust: With respect to the Certificates of any series, means the
-----
trust under this Agreement.
Trustee: Means the institution executing this Basic Agreement as
-------
Trustee, or its successor in interest, and any successor or other trustee
appointed as provided herein; provided that if the same institution is not
--------
acting as the Trustee in respect of all series of Certificates, the phrase
"the Trustee" shall, unless the context otherwise
11
requires, mean, as to any series of Certificates, the institution acting as
the Trustee in respect of such series.
Trust Indenture Act: Except as otherwise provided in Section 9.06,
-------------------
means the Trust Indenture Act of 1939 as in force at the date as of which
this Basic Agreement was executed.
Trust Property: With respect to any Trust, means the Equipment Notes
--------------
held as the property of such Trust and all monies at any time paid thereon
and all monies due and to become due thereunder, funds from time to time
deposited in the related Escrow Account, the related Certificate Account
and the related Special Payments Account and any proceeds from the sale by
the Trustee pursuant to Article VI hereof of any such Equipment Note.
Trust Supplement: Means an agreement supplemental hereto pursuant to
----------------
which (i) a separate Trust is created for the benefit of the Holders of the
Certificates of a series, (ii) the issuance of the Certificates of such
series representing fractional undivided interests in such Trust is
authorized and (iii) the terms of the Certificates of such series are
established.
Section 1.02. Compliance Certificates and Opinions. Upon any
------------------------------------
application or request by the Company, any Owner Trustee or any Loan Trustee to
the Trustee to take any action under any provision of this Basic Agreement or,
in respect of the Certificates of any series, this Agreement, the Company, such
Owner Trustee or such Loan Trustee, as the case may be, shall furnish to the
Trustee an Officers' Certificate stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Basic Agreement or this
Agreement relating to the proposed action have been complied with and an opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Basic Agreement or this Agreement
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Basic Agreement or, in respect of the
Certificates of any series, this Agreement (other than a certificate provided
pursuant to Section 8.04(d)) or any Trust Supplement shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions in this
Basic Agreement or this Agreement relating thereto;
12
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 1.03. Form of Documents Delivered to Trustee. In any case
--------------------------------------
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters and any such Person may certify or give an opinion as to
such matters in one or several documents.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Basic Agreement or, in respect of the Certificates of any
series, this Agreement, they may, but need not, be consolidated and form one
instrument.
Section 1.04. Acts of Certificateholders. (a) Any direction,
--------------------------
consent, waiver or other action provided by this Agreement in respect of the
Certificates of any series to be given or taken by Certificateholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Certificateholders in person or by an agent or proxy duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required pursuant to this
Agreement, to the Company or any Loan Trustee. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Certificateholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of such Trust
Supplement and conclusive in favor of the Trustee, the Company and the related
Loan Trustee, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the
13
Person executing such instrument acknowledged to him the execution thereof, or
by an affidavit of a witness to such execution sworn to before any such notary
or such other officer and where such execution is by an officer of a corporation
or association or a member of a partnership, on behalf of such corporation,
association or partnership, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other reasonable manner which the Trustee deems
sufficient.
(c) In determining whether the Certificateholders of the requisite
Fractional Undivided Interests of Certificates of any series Outstanding have
given any direction, consent or waiver (a "Direction"), under this Agreement,
Certificates owned by the Company, any related Owner Trustee, any related Owner
Participant or any Affiliate of any such Person shall be disregarded and deemed
not to be Outstanding for purposes of any such determination. In determining
whether the Trustee shall be protected in relying upon any such Direction, only
Certificates which the Trustee knows to be so owned shall be so disregarded.
Notwithstanding the foregoing, (i) if any such Person owns 100% of the
Certificates of any series Outstanding, such Certificates shall not be so
disregarded as aforesaid, and (ii) if any amount of Certificates of such series
so owned by any such Person have been pledged in good faith, such Certificates
shall not be disregarded as aforesaid if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the Company, any related Owner Trustee,
any related Owner Participant or any Affiliate of any such Person.
(d) The Company may at its option by delivery of an Officers'
Certificate to the Trustee set a record date to determine the Certificateholders
in respect of the Certificates of any series entitled to give any consent
request, demand, authorization, direction, notice, waiver or other Act.
Notwithstanding Section 316(c) of the Trust Indenture 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
Certificateholders 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
Certificateholders of record of the applicable series at the close of business
on such record date shall be deemed to be Certificateholders for the purposes of
determining whether Certificateholders of the requisite proportion of
Outstanding Certificates of such series have authorized or agreed or consented
to such consent, request, demand, authorization, direction, notice, waiver or
other Act, and for that purpose the Outstanding Certificates of such series
shall be computed as of such record date; provided that no such consent,
--------
request, demand, authorization, direction, notice, waiver or other act by the
Certificateholders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Basic Agreement not later
than one year after the record date.
14
(e) Any direction, consent, waiver or other action by the Holder of
any Certificate shall bind the Holder of every Certificate issued upon the
transfer thereof or in exchange therefor or in lieu thereof, whether or not
notation of such action is made upon such Certificate.
(f) Except as otherwise provided in Section 1.04(c), Certificates of
any series owned by or pledged to any Person shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority, or distinction as among all of the Certificates of such
series.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES;
ACQUISITION OF EQUIPMENT NOTES
Section 2.01. Amount Unlimited; Issuable in Series. (a) The aggregate
------------------------------------
principal amount of Certificates which may be authenticated and delivered under
this Basic Agreement is unlimited. The Certificates may be issued from time to
time in one or more series and shall be designated generally as the "Pass
Through Certificates", with such further designations added or incorporated in
such title for the Certificates of each series as specified in the related Trust
Supplement. Each Certificate shall bear upon its face the designation so
selected for the series to which it belongs. All Certificates of the same
series shall be substantially identical except that the Certificates of a series
may differ as to denomination and as may otherwise be provided in the Trust
Supplement establishing the Certificates of such series. Each series of
Certificates issued pursuant to this Agreement will evidence fractional
undivided interests in the related Trust and will have no rights, benefits or
interests in respect of any other Trust or the Trust Property held therein. All
Certificates of the same series shall be in all respects equally and ratably
entitled to the benefits of this Agreement without preference, priority or
distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this Agreement.
(b) The following matters shall be established with respect to the
Certificates of each series issued hereunder by a Trust Supplement executed and
delivered by and between the Company and the Trustee:
(1) the formation of the Trust as to which the Certificates of such
series represent fractional undivided interests and its designation (which
designation shall distinguish such Trust from each other Trust created
under this Basic Agreement and a Trust Supplement);
15
(2) the specific title of the Certificates of such series (which title
shall distinguish the Certificates of such series from each other series of
Certificates created under this Basic Agreement and a Trust Supplement);
(3) any limit upon the aggregate principal amount of the Certificates
of such series which may be authenticated and delivered (which limit shall
not pertain to Certificates authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Certificates of
the series pursuant to Sections 3.03, 3.04 and 3.05);
(4) the Cut-off Date with respect to the Certificates of such series;
(5) the Regular Distribution Dates applicable to the Certificates of
such series;
(6) the Special Distribution Dates applicable to the Certificates of
such series and the related Trust;
(7) if other than as provided in Section 7.11(b), the Registrar or the
Paying Agent for the Certificates of such series, including any Co-
Registrar or additional Paying Agent;
(8) if other than as provided in Section 3.01, the denominations in
which the Certificates of such series shall be issuable;
(9) the specific form of the Certificates of such series (including
the interest rate applicable thereto) and whether or not Certificates of
such series are to be issued as Book-Entry Certificates and, if such
Certificates are to be Book-Entry Certificates, the Form of Letter of
Representations, if any;
(10) a description of the Equipment Notes to be acquired and held in
the related Trust and of the related Aircraft and Note Documents;
(11) provisions with respect to the terms for which the definitions
set forth in Article I hereof or the terms of Section 11.01 hereof permit
or require further specification in the related Trust Supplement;
(12) any restrictions (including legends) in respect of ERISA; and
16
(13) any other terms of the Certificates of such series (which of
such terms shall not be inconsistent with the provisions of the Trust
Indenture Act), including any terms which may be required or advisable
under United States laws or regulations or advisable in connection with the
marketing of Certificates of the series.
(c) At any time and from time to time after the execution and delivery
of this Basic Agreement and a Trust Supplement forming a Trust and establishing
the terms of Certificates of a series, Certificates of such series shall be
executed, authenticated and delivered by the Trustee to the Person or Persons
specified by the Company upon request of the Company and upon satisfaction of
any conditions precedent set forth in such Trust Supplement or in any other
document to which a Trustee is a party relating to the issuance of the
Certificates of such series.
Section 2.02 Acquisition of Equipment Notes. (a) Unless otherwise
------------------------------
specified in the related Trust Supplement, on or prior to the Issuance Date of
the Certificates of a series, the Trustee shall execute and deliver the related
Note Purchase Agreements in the form delivered to the Trustee by the Company.
The Trustee shall issue and sell such Certificates, in authorized denominations
and in such Fractional Undivided Interests, so as to result in the receipt of
consideration in an amount equal to the aggregate principal amount of such
Equipment Notes and, concurrently therewith, the Trustee shall purchase,
pursuant to the terms and conditions of the Note Purchase Agreements, the
Equipment Notes at a purchase price equal to the amount of such consideration so
received. Except as provided in Sections 3.03, 3.04 and 3.05 hereof, the
Trustee shall not execute, authenticate or deliver Certificates of such series
in excess of the aggregate amount specified in this paragraph. The provisions
of this Subsection (a) are subject to the provisions of Subsection (b) below.
(b) If on or prior to the Issuance Date with respect to a series of
Certificates the Company shall deliver to the Trustee a Postponement Notice
relating to one or more Postponed Notes, the Trustee shall postpone the purchase
of such Postponed Notes and shall deposit into an escrow account (as to such
Trust, the "Escrow Account") to be maintained as a part of the related Trust an
amount equal to the purchase price of such Postponed Notes (the "Escrowed
Funds"). The Escrowed Funds so deposited shall be invested by the Trustee at
the direction and risk of, and for the benefit of, the Company in Specified
Investments (i) maturing no later than any scheduled Transfer Date relating to
such series of Certificates or (ii) if no such Transfer Date has been scheduled,
maturing on the next Business Day, or (iii) if the Company has given notice to
the Trustee that any Postponed Notes will not be issued, with respect to the
portion of the Escrowed Funds relating to such Postponed Notes, maturing on the
next applicable Special Distribution Date, if such investments are reasonably
available for purchase. The Trustee shall make withdrawals from the Escrow
Account only as provided in this Agreement. Upon request of the Company on one
or more occasions and the satisfaction of the closing conditions specified in
the applicable Note Purchase Agreements on or prior to the related Cut-off Date,
the Trustee
17
shall purchase the applicable Postponed Notes with the Escrowed Funds withdrawn
from the Escrow Account. The purchase price shall equal the principal amount of
such Postponed Notes.
The Trustee shall hold all Specified Investments until the maturity
thereof and will not sell or otherwise transfer Specified Investments. If
Specified Investments held in an Escrow Account mature prior to any applicable
Transfer Date, any proceeds received on the maturity of such Specified
Investments (other than any earnings thereon) shall be reinvested by the Trustee
at the direction and risk of, and for the benefit of, the Company in Specified
Investments maturing as provided in the preceding paragraph.
Any earnings on Specified Investments received from time to time by
the Trustee shall be promptly distributed to the Company. The Company shall pay
to the Trustee for deposit to the relevant Escrow Account an amount equal to any
losses on such Specified Investments as incurred. On the Initial Regular
Distribution Date in respect of the Certificates of any series, the Company will
pay (in immediately available funds) to the Trustee an amount equal to the
interest that would have accrued on any Postponed Notes, if any, purchased after
the Issuance Date if such Postponed Notes had been purchased on the Issuance
Date, from the Issuance Date to, but not including, the date of the purchase of
such Postponed Notes by the Trustee.
If, in respect of the Certificates of any series, the Company notifies
the Trustee prior to the Cut-off Date that any Postponed Notes will not be
issued on or prior to the Cut-off Date for any reason, on the next Special
Distribution Date for such Certificates occurring more than 20 days following
the date of such notice (i) the Company shall pay to the Trustee for deposit in
the related Special Payments Account, in immediately available funds, an amount
equal to the interest that would have accrued on the Postponed Notes designated
in such notice at a rate equal to the interest rate applicable to such
Certificates from the Issuance Date to, but not including, such Special
Distribution Date and (ii) the Trustee shall transfer an amount equal to that
amount of Escrowed Funds that would have been used to purchase the Postponed
Notes designated in such notice and the amount paid by the Company pursuant to
the immediately preceding clause (i) to the related Special Payments Account for
distribution as a Special Payment in accordance with the provisions hereof.
If, on such Cut-off Date, an amount equal to less than all of the
Escrowed Funds (other than Escrowed Funds referred to in the immediately
preceding paragraph) has been used to purchase Postponed Notes, on the next
Special Distribution Date occurring more than 20 days following such Cut-off
Date (i) the Company shall pay to the Trustee for deposit in such Special
Payments Account, in immediately available funds, an amount equal to the
interest that would have accrued on such Postponed Notes contemplated to be
purchased with such unused Escrowed Funds (other than Escrowed Funds referred to
in the
18
immediately preceding paragraph) but not so purchased at a rate equal to the
interest rate applicable to such Certificates from the Issuance Date to, but not
including, such Special Distribution Date and (ii) the Trustee shall transfer
such unused Escrowed Funds and the amount paid by the Company pursuant to the
immediately preceding clause (i) to such Special Payments Account for
distribution as a Special Payment in accordance with the provisions hereof.
Section 2.03. Acceptance by Trustee. The Trustee, upon the execution
---------------------
and delivery of a Trust Supplement creating a Trust and establishing a series of
Certificates, shall acknowledge its acceptance of all right, title and interest
in and to the Equipment Notes to be acquired pursuant to Section 2.02 hereof and
the Note Purchase Agreements and shall declare that the Trustee holds and will
hold such right, title and interest, together with all other property
constituting the Trust Property of such Trust, for the benefit of all then
present and future Certificateholders of such series, upon the trusts herein and
in such Trust Supplement set forth. By its payment for and acceptance of each
Certificate of such series issued to it under this Agreement, each initial
Certificateholder of such series as grantor of such Trust shall thereby join in
the creation and declaration of such Trust.
Section 2.04. Limitation of Powers. Each Trust shall be constituted
--------------------
solely for the purpose of making the investment in the Equipment Notes provided
for in the related Trust Supplement, and, except as set forth herein or in this
Agreement, the Trustee shall not be authorized or empowered to acquire any other
investments or engage in any other activities and, in particular, the Trustee
shall not be authorized or empowered to do anything that would cause such Trust
to fail to qualify as a "grantor trust" for federal income tax purposes
(including as subject to this restriction, acquiring the Aircraft (as defined in
the respective related Indentures) by bidding such Equipment Notes or otherwise,
or taking any action with respect to any such Aircraft once acquired).
ARTICLE III
THE CERTIFICATES
Section 3.01. Form, Denomination and Execution of Certificates. The
------------------------------------------------
Certificates shall be issued in registered form without coupons and shall be
substantially in the form attached hereto as Exhibit A, with such omissions,
variations and insertions as are permitted by this Agreement, and may have such
letters, numbers or other marks of identification and such legends or
endorsements printed, lithographed or engraved thereon, as may be required to
comply with the rules of any securities exchange on which such Certificates may
be listed or to conform to any usage in respect thereof, or as may, consistently
herewith, be prescribed by the Trustee or by the officer executing such
19
Certificates, such determination by said officer to be evidenced by his signing
the Certificates.
Except as provided in Section 3.09, the definitive Certificates of
such series shall be printed, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner permitted by
the rules of any securities exchange on which the Certificates may be listed,
all as determined by the officer executing such Certificates, as evidenced by
his execution of such Certificates.
Except as otherwise provided in the related Trust Supplement, the
Certificates of each series shall be issued in minimum denominations of $1,000
or integral multiples thereof except that one Certificate of such series may be
issued in a denomination of less than $1,000.
The Certificates of such series shall be executed on behalf of the
Trustee by manual or facsimile signature of a Responsible Officer of the
Trustee. Certificates of any series bearing the manual or facsimile signature
of an individual who was, at the time when such signature was affixed,
authorized to sign on behalf of the Trustee shall be valid and binding
obligations of the Trustee, notwithstanding that such individual has ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such office at the date of such Certificates. No Certificate of
any series shall be entitled to any benefit under this Agreement, or be valid
for any purpose unless there appears on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit B hereto executed
by the Trustee by manual signature, and such certificate of authentication upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates of any series shall be dated on the date of their authentication.
Section 3.02. Authentication of Certificates. The Trustee shall duly
------------------------------
authenticate and deliver Certificates of each series in authorized denominations
equalling in the aggregate the aggregate principal amount of the Equipment Notes
to be purchased by the Trustee pursuant to the related Note Purchase Agreements
and evidencing the entire ownership of the related Trust.
Section 3.03. Temporary Certificates. Pending the preparation of
----------------------
definitive Certificates of any series, the Trustee may execute, authenticate and
deliver temporary Certificates of such series which are printed, lithographed,
typewritten, or otherwise produced, in any denomination, containing
substantially the same terms and provisions as set forth in Exhibit A hereto,
except for such appropriate insertions, omissions, substitutions and other
variations relating to their temporary nature as the officer executing such
temporary Certificates may determine, as evidenced by its execution of such
temporary Certificates.
20
If temporary Certificates of any series are issued, the Company will
cause definitive Certificates of such series to be prepared without unreasonable
delay. After the preparation of definitive Certificates of such series, the
temporary Certificates shall be exchangeable for definitive Certificates upon
surrender of such temporary Certificates at the Corporate Trust Office of the
Trustee, or at the office or agency of the Trustee maintained in accordance with
Section 7.11, without charge to the holder. Upon surrender for cancellation of
any one or more temporary Certificates, the Trustee shall execute, authenticate
and deliver in exchange therefor definitive Certificates of like series, in
authorized denominations and of a like aggregate Fractional Undivided Interest.
Until so exchanged, such temporary Certificates shall in all respects be
entitled to the same benefits under this Agreement as definitive Certificates.
Section 3.04. Registration of Transfer and Exchange of Certificates.
-----------------------------------------------------
The Trustee shall cause to be kept at the office or agency to be maintained by
it in accordance with the provisions of Section 7.11 a register (the "Register")
for each series of Certificates in which, subject to such reasonable regulations
as it may prescribe, the Trustee shall provide for the registration of
Certificates of such series and of transfers and exchanges of such Certificates
as herein provided. The Trustee shall initially be the registrar (the "
Registrar") for the purpose of registering Certificates of each series and
transfers and exchanges of such Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office or such other office or agency, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of like series, in authorized
denominations of a like aggregate Fractional Undivided Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of like series, in authorized denominations and of a like
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute, authenticate and deliver
the Certificates that the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Registrar
duly executed by the Certificateholder thereof or its attorney duly authorized
in writing.
No service charge shall be made to a Certificateholder for any
registration of transfer or exchange of Certificates, but the Trustee shall
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
21
All Certificates surrendered for registration of transfer and exchange
shall be cancelled and subsequently destroyed by the Trustee.
Section 3.05. Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
(a) any mutilated Certificate is surrendered to the Registrar or the Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Registrar and the Trustee such
security, indemnity or bond, as may be required by them to save each of them
harmless, then, in the absence of notice to the Registrar or the Trustee that
such destroyed, lost or stolen Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate or Certificates of like series, in authorized denominations and of
like Fractional Undivided Interest. In connection with the issuance of any new
Certificate under this Section 3.05, the Trustee shall require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee and the Registrar) connected therewith. Any duplicate Certificate
issued pursuant to this Section 3.05 shall constitute conclusive evidence of the
appropriate Fractional Undivided Interest in the related Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
Section 3.06. Persons Deemed Owners. Prior to due presentation of a
---------------------
Certificate for registration of transfer, the Trustee, the Registrar and any
Paying Agent of the Trustee may treat the person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.02 and for all other purposes whatsoever,
and none of the Trustee, the Registrar or any Paying Agent of the Trustee shall
be affected by any notice to the contrary.
Section 3.07. Cancellation. All Certificates surrendered for payment
------------
or transfer or exchange, if surrendered to any Person party hereto other than
the Registrar, shall be delivered to the Registrar for cancellation. No
Certificates shall be authenticated in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Registrar
shall be destroyed and a certification of their destruction delivered to the
Trustee.
Section 3.08. Limitation of Liability for Payments. All payments
------------------------------------
distributions made to Certificateholders of any series under the related Trust
Supplement shall be made only from the Trust Property of the related Trust and
only to the extent that the Trustee shall have sufficient income or proceeds
from such Trust Property to make such payments in accordance with the terms of
Article IV of this Agreement. Each Certificateholder, by its acceptance of a
Certificate, agrees that it will look solely to the income and proceeds from the
Trust Property of the related Trust to the extent available for distribution to
such Certificateholder as provided in this Agreement.
22
Section 3.09. Book-Entry and Definitive Certificates. (a) Except
--------------------------------------
for one Certificate of each series that may be issued in a denomination of less
than $1,000, the Certificates of any series may be issued in the form of one or
more typewritten Certificates representing the Book-Entry Certificates of such
series, to be delivered to The Depository Trust Company, as the initial Clearing
Agency, by, or on behalf of, the Company. In such case, the Certificates of
such series delivered to The Depository Trust Company shall initially be
registered on the Register in the name of CEDE & Co., the nominee of the initial
Clearing Agency, and no Certificate Owner will receive a definitive certificate
representing such Certificate Owner's interest in the Certificates of such
series, except as provided above and in Subsection (d) below. As to the
Certificates of any series, except with respect to the one Certificate of such
series that may be issued in a denomination of less than $1,000, unless and
until definitive, fully registered Certificates (the "Definitive Certificates")
have been issued pursuant to Subsection (d) below:
(i) the provisions of this Section 3.09 shall be in full force and
effect;
(ii) the Company, the Paying Agent, the Registrar and the Trustee may
deal with the Clearing Agency for all purposes (including the making of
distributions on the Certificates) as the authorized representative of the
Certificate Owners;
(iii) to the extent that the provisions of this Section 3.09
conflict with any other provisions of this Agreement (other than the
provisions of any Trust Supplement amending this Section 3.09 as permitted
by this Basic Agreement), the provisions of this Section 3.09 shall
control;
(iv) the rights of Certificate Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency
Participants; and until Definitive Certificates are issued pursuant to
Subsection (d) below, the Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit
distributions of principal and interest and premium, if any, on the
Certificates to such Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of Certificateholders of such series
holding Certificates of such series evidencing a specified percentage of
the Fractional Undivided Interests in the related Trust, the Clearing
Agency shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Certificate Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in Certificates of such
series and has delivered such instructions to the Trustee. The Trustee
shall have no
23
obligation to determine whether the Clearing Agency has in fact received
any such instructions.
(b) Except with respect to the one Certificate of each series that may
be issued in a denomination of less than $1,000, whenever notice or other
communication to the Certificateholders of such series is required under this
Agreement, unless and until Definitive Certificates shall have been issued
pursuant to Subsection (d) below, the Trustee shall give all such notices and
communications specified herein to be given to Certificateholders of such series
to the Clearing Agency and/or the Clearing Agency Participants, and shall make
available additional copies as requested by such Clearing Agency Participants.
(c) Unless and until Definitive Certificates of a series are issued
pursuant to Subsection (d) below, on the Record Date prior to each applicable
Regular Distribution Date and Special Distribution Date, the Trustee will
request from the Clearing Agency a Securities Position Listing setting forth the
names of all Clearing Agency Participants reflected on the Clearing Agency's
books as holding interests in the Certificates on such Record Date. The Trustee
shall mail to each such Clearing Agency Participant the statements described in
Section 4.03 hereof.
(d) If with respect to the Certificates of any series (i) the Company
advises the Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities and the Trustee or the Company
is unable to locate a qualified successor, (ii) the Company at its option,
advises the Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency or (iii) after the occurrence of an Event of
Default, Certificate Owners of Book-Entry Certificates of such series evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in the related Trust, by Act of said Certificate Owners delivered to the Company
and the Trustee, advise the Company, the Trustee and the Clearing Agency through
the Clearing Agency Participants in writing that the continuation of a book-
entry system through the Clearing Agency is no longer in the best interests of
the Certificate Owners of such series, then the Trustee shall notify all
Certificate Owners of such series, through the Clearing Agency, of the
occurrence of any such event and of the availability of Definitive Certificates.
Upon surrender to the Trustee of all the Certificates of such series held by the
Clearing Agency, accompanied by registration instructions from the Clearing
Agency for registration of Definitive Certificates in the names of Certificate
Owners of such series, the Trustee shall issue and deliver the Definitive
Certificates of such series in accordance with the instructions of the Clearing
Agency. None of the Company, the Registrar, the Paying Agent or the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such registration
instructions. Upon the issuance of Definitive Certificates of such series, the
Trustee shall recognize the Person in whose name the
24
Definitive Certificates are registered in the Register as Certificateholders
hereunder. Neither the Company nor the Trustee shall be liable if the Trustee
or the Company is unable to locate a qualified successor Clearing Agency.
(e) Except as otherwise provided in the related Trust Supplement, the
Trustee shall enter into the applicable Letter of Representations with respect
to such series of Certificates and fulfill its responsibilities thereunder.
(f) The provisions of this Section 3.09 may be made inapplicable to
any series or may be amended with respect to any series in the related Trust
Supplement.
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
Section 4.01. Certificate Account and Special Payments Account. (a)
------------------------------------------------
The Trustee shall establish and maintain on behalf of the Certificateholders of
each series a Certificate Account as one or more non-interest-bearing accounts.
The Trustee shall hold the Certificate Account in trust for the benefit of the
Certificateholders of such series, and shall make or permit withdrawals
therefrom only as provided in this Agreement. On each day when a Scheduled
Payment is made under the Indenture to the Trustee, as holder of the Equipment
Notes issued under such Indenture, the Trustee upon receipt shall immediately
deposit the aggregate amount of such Scheduled Payment in the applicable
Certificate Account.
(b) The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Special Payments Account as one or more
accounts, which shall be non-interest bearing except as provided in Section
4.04. The Trustee shall hold the Special Payments Account in trust for the
benefit of the Certificateholders of such series and shall make or permit
withdrawals therefrom only as provided in this Agreement. On each day when one
or more Special Payments (other than a Special Payment that represents the
proceeds of any sale pursuant to Article VI hereof by the Trustee of an
Equipment Note) are made under the Indenture to the Trustee, as holder of the
Equipment Notes issued under such Indenture or pursuant to the last two
paragraphs of Section 2.02(b), the Trustee upon receipt shall immediately
deposit the aggregate amounts of such Special Payments in such Special Payments
Account. Upon the sale of the Equipment Notes by the Trustee pursuant to
Article VI hereof and the realization of any proceeds thereof, the Trustee shall
deposit the aggregate amount of such proceeds as a Special Payment in the
applicable Special Payments Account.
25
(c) The Trustee shall present to the Loan Trustee to which an
Equipment Note relates such Equipment Note on the date of its stated final
maturity or, in the case of any Equipment Note which is to be redeemed in whole
pursuant to the relevant Indenture, on the applicable redemption date under such
Indenture.
Section 4.02. Distributions from Certificate Account and Special
--------------------------------------------------
Payments Account. (a) On each Regular Distribution Date with respect to a
- ----------------
series of Certificates or as soon thereafter as the Trustee has confirmed
receipt of the payment of the Scheduled Payments due on the Equipment Notes held
in the related Trust on such date, the Trustee shall distribute out of the
applicable Certificate Account the entire amount deposited therein pursuant to
Section 4.01(a). There shall be so distributed to each Certificateholder of
record of such series on the Record Date with respect to such Regular
Distribution Date (other than as provided in Section 11.01 concerning the final
distribution) by check mailed to such Certificateholder, at the address
appearing in the Register, such Certificateholder's pro rata share (based on the
aggregate Fractional Undivided Interest in the related Trust held by such
Certificateholder) of the aggregate amount in the applicable Certificate Amount.
(b) On each Special Distribution Date with respect to any Special
Payment with respect to a series of Certificates or as soon thereafter as the
Trustee has confirmed receipt of the Special Payments due on the Equipment Notes
held in the related Trust or realized upon the sale of such Equipment Note, the
Trustee shall distribute out of the applicable Special Payments Account the
entire amount deposited therein pursuant to Section 4.01(b) of such Special
Payment. There shall be so distributed to each Certificateholder of record of
such series on the Record Date with respect to such Special Distribution Date
(other than as provided in Section 11.01 concerning the final distribution) by
check mailed to such Certificateholder, at the address appearing in the
Register, such Certificateholder's pro rata share (based on the aggregate
Fractional Undivided Interest in the related Trust held by such
Certificateholder) of the aggregate amount in the applicable Special Payments
Account on account of such Special Payment.
(c) The Trustee shall, at the expense of the Company, cause notice of
each Special Payment with respect to a series of Certificates to be mailed to
each Certificateholder of such series at his address as it appears in the
Register. In the event of redemption or purchase of Equipment Notes held in the
related Trust, such notice shall be mailed not less than 20 days prior to the
date any such Special Payment is scheduled to be distributed. In the case of
any other Special Payments, such notice shall be mailed as soon as practicable
after the Trustee has confirmed that it has received funds for such Special
Payment. Notices mailed by the Trustee shall set forth:
(i) the Special Distribution Date and the Record Date therefor (except
as otherwise provided in Section 11.01),
26
(ii) the amount of the Special Payment for each $1,000 face amount
Certificate (taking into account any payment to be made by the Company
pursuant to Section 2.02(b)) and the amount thereof constituting principal,
premium, if any, and interest,
(iii) the reason for the Special Payment, and
(iv) if the Special Distribution Date is the same date as a Regular
Distribution Date for the Certificates of such series, the total amount to
be received on such date for each $1,000 face amount Certificate.
If the amount of premium, if any, payable upon the redemption or purchase of an
Equipment Note has not been calculated at the time that the Trustee mails notice
of a Special Payment, it shall be sufficient if the notice sets forth the other
amounts to be distributed and states that any premium received will also be
distributed.
If any redemption of the Equipment Notes held in any Trust is
cancelled, the Trustee, as soon as possible after learning thereof, shall cause
notice thereof to be mailed to each Certificateholder of the related series at
its address as it appears on the Register.
Section 4.03. Statements to Certificateholders. (a) On each Regular
--------------------------------
Distribution Date and Special Distribution Date with respect to a series of
Certificates, the Trustee will include with each distribution to
Certificateholders of the related series a statement, giving effect to such
distribution to be made on such Regular Distribution Date or Special
Distribution Date, as the case may be, setting forth the following information
(per a $1,000 face amount Certificate as to (i) and (ii) below):
(i) The amount of such distribution allocable to principal and the
amount allocable to premium, if any;
(ii) The amount of such distribution allocable to interest; and
(iii) The Pool Balance and the Pool Factor of the related Trust.
(b) Within a reasonable period of time after the end of each calendar
year but not later than the latest date permitted by law, the Trustee shall
furnish to each Person who at any time during such calendar year was a
Certificateholder of record a statement containing the sum of the amounts
determined pursuant to clauses (a)(i) and (a)(ii) with respect to the related
Trust for such calendar year or, in the event such Person was a
Certificateholder of record during a portion of such calendar year, for the
applicable portion of such year, and such other items as are readily available
to the Trustee and which a
27
Certificateholder shall reasonably request as necessary for the purpose of such
Certificateholder's preparation of its Federal income tax returns.
Section 4.04. Investment of Special Payment Moneys. Any money
------------------------------------
received by the Trustee pursuant to Section 4.01(b) representing a Special
Payment which is not to be promptly distributed shall, to the extent
practicable, be invested in Permitted Investments by the Trustee pending
distribution of such Special Payment pursuant to Section 4.02. Any investment
made pursuant to this Section 4.04 shall be in such Permitted Investments having
maturities not later than the date that such moneys are required to be used to
make the payment required under Section 4.02 on the applicable Special
Distribution Date and the Trustee shall hold any such Permitted Investments
until maturity. The Trustee shall have no liability with respect to any
investment made pursuant to this Section 4.04, other than by reason of the
willful misconduct or negligence of the Trustee. All income and earnings from
such investments shall be distributed on such Special Distribution Date as part
of such Special Payment.
ARTICLE V
THE COMPANY
Section 5.01. Maintenance of Corporate Existence. The Company, at
----------------------------------
its own cost and expense, will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights and
franchises, except as otherwise specifically permitted in Section 5.02;
provided, however, that the Company shall not be required to preserve any right
- -------- -------
or franchise if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company.
Section 5.02. Consolidation, Merger, etc. The Company shall not
---------------------------
consolidate with or merge into any other corporation or convey, transfer or
lease substantially all of its assets as an entirety to any Person unless:
(a) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of the Company as an entirety shall
(i) be a citizen of the United States as defined in Section 40102(a)(15) of
Title 49 of the United States Code, as amended, and (ii) hold an air
carrier operating certificate issued by the Secretary of Transportation
pursuant to Chapter 447 of Title 49 of the United States Code, as amended,
for aircraft capable of carrying 10 or more individuals or 6,000 pounds or
more of cargo;
28
(b) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer or
lease substantially all of the assets of the Company as an entirety shall
execute and deliver to the Trustee applicable to the Certificates of each
series a duly authorized, valid, binding and enforceable agreement in form
and substance reasonably satisfactory to the Trustee containing an
assumption by such successor corporation or Person of the due and punctual
performance and observance of each covenant and condition of the Note
Documents and of this Agreement applicable to the Certificates of each
series to be performed or observed by the Company;
(c) immediately after giving effect to such transaction, no Event of
Default applicable to the Certificates of each series or event which is, or
after notice or passage of time, or both, would be, such an Event of
Default shall have occurred and be continuing; and
(d) the Company shall have delivered to the Trustee an Officers'
Certificate of the Company and an Opinion of Counsel of the Company
reasonably satisfactory to the Trustee, each stating that such
consolidation, merger, conveyance, transfer or lease and the assumption
agreement mentioned in clause (b) above comply with this Section 5.02 and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
Upon any consolidation or merger, or any conveyance, transfer or lease
of substantially all of the assets of the Company as an entirety in accordance
with this Section 5.02, the successor corporation or Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Agreement applicable
to the Certificates of each series with the same effect as if such successor
corporation or Person had been named as the Company herein. No such conveyance,
transfer or lease of substantially all of the assets of the Company as an
entirety shall have the effect of releasing the Company or any successor
corporation or Person which shall theretofore have become such in the manner
prescribed in this Section 5.02 from its liability in respect of any Note
Document and of this Agreement applicable to the Certificates of such series to
which it is a party.
ARTICLE VI
DEFAULT
Section 6.01. Events of Default. If, in respect of any Trust, any
-----------------
Indenture Default under any related Indenture shall occur and be continuing,
then, in each and every case, so long as such Event of Default shall be
continuing, the Trustee may (a) vote all
29
Equipment Notes issued under the relevant Indenture held in such Trust, and upon
the direction of the Certificateholders holding Certificates evidencing
Fractional Undivided Interests in such Trust aggregating not less than a
majority in interest in such Trust, the Trustee shall vote not less than a
corresponding majority of such Equipment Notes in favor of directing the Loan
Trustee under such Indenture to declare the unpaid principal amount of the
Equipment Notes then outstanding to which such Event of Default relates and
accrued interest thereon to be due and payable under, and in accordance with the
provisions of, such Indenture, and (b) may in accordance with the provisions of
the relevant Indenture vote such Equipment Notes held in such Trust to direct
the Loan Trustee regarding the exercise of remedies provided in such Indenture.
In addition, after an Indenture Default shall have occurred and be
continuing with respect to any Equipment Note held in a Trust, the Trustee
therein may in its discretion, and upon the direction of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in such Trust shall, by such officer or agent
as it may appoint, sell, convey, transfer and deliver such Equipment Note,
without recourse to or warranty by the Trustee or any Certificateholder, to any
Person. In any such case, the Trustee shall sell, assign, contract to sell or
otherwise dispose of and deliver such Equipment Note or Equipment Notes in one
or more parcels at public or private sale or sales, at any location or locations
at the option of the Trustee, all upon such terms and conditions as it may
reasonably deem advisable and at such prices as it may reasonably deem
advisable, for cash. If the Trustee so decides or is required to sell or
otherwise dispose of any Equipment Note pursuant to this Section, the Trustee
shall take such of the actions described above as it may reasonably deem most
effectual to complete the sale or other disposition of such Equipment Note, so
as to provide for the payment in full of all amounts due on the related series
of Certificates. Notwithstanding the foregoing, any action taken by the Trustee
under this Section shall not, in the reasonable judgment of the Trustee, be
adverse to the best interests of the Certificateholders of such series.
Section 6.02. Incidents of Sale of Equipment Notes. Upon any sale of
------------------------------------
all or any part of the Equipment Notes made either under the power of sale given
under this Agreement or otherwise for the enforcement of this Agreement, the
following shall be applicable:
(1) Certificateholders and Trustee May Purchase Equipment Notes. Any
-----------------------------------------------------------
Certificateholder, the Trustee in its individual or any other capacity or
any other Person may bid for and purchase any of the Equipment Notes, and
upon compliance with the terms of sale, may hold, retain, possess and
dispose of such Equipment Notes in its own absolute right without further
accountability.
(2) Receipt of Trustee Shall Discharge Purchaser. The receipt of the
--------------------------------------------
Trustee or of the officer making such sale shall be a sufficient discharge
to any
30
purchaser for his purchase money, and, after paying such purchase money and
receiving such receipt, such purchaser or its personal representative or
assigns shall not be obliged to see to the application of such purchase
money, or be in any way answerable for any loss, misapplication or non-
application thereof.
(3) Application of Moneys Received upon Sale. Any moneys collected by
----------------------------------------
the Trustee upon any sale made either under the power of sale given by this
Agreement or otherwise for the enforcement of this Agreement shall be
applied as provided in Section 4.02.
Section 6.03. Judicial Proceedings Instituted by Trustee; Trustee May
-------------------------------------------------------
Bring Suit. If there shall be a failure to make payment of the principal of,
- ----------
premium, if any, or interest on any Equipment Note, or if there shall be any
failure to pay Rent (as defined in the relevant Lease) under any Lease when due
and payable, then the Trustee, in its own name, and as trustee of an express
trust, as holder of such Equipment Notes, to the extent permitted by and in
accordance with the terms of the Note Documents, shall be entitled and empowered
to institute any suits, actions or proceedings at law, in equity or otherwise,
for the collection of the sums so due and unpaid on such Equipment Notes or
under such Lease and may prosecute any such claim or proceeding to judgment or
final decree with respect to the whole amount of any such sums so due and
unpaid.
Section 6.04. Control by Certificateholders. Subject to Section
-----------------------------
6.03, the Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than a majority in interest in the
related Trust shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee with respect
to such Trust, or exercising any trust or power conferred on the Trustee under
this Agreement, including any right of the Trustee as holder of the Equipment
Notes, provided that
--------
(1) such direction shall not be in conflict with any rule of law or
with this Agreement and would not involve the Trustee in personal liability
or expense,
(2) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to the Certificateholders of such series not taking
part in such direction,
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(4) if an Indenture Default under a related Indenture shall have
occurred and be continuing, such direction shall not obligate the Trustee
to vote more than a corresponding majority of the related Equipment Notes
held by the Trust in favor of
31
directing any action by the related Loan Trustee with respect to such
Indenture Default.
Section 6.05. Waiver of Past Defaults. The Certificateholders
-----------------------
holding Certificates of a Series evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the related Trust may on
behalf of all of the Certificateholders of such series waive any past Event of
Default hereunder or under the related Trust Supplement with respect to such
series and its consequences or may instruct the Trustee to waive any past
default under the related Indenture or this Agreement or the related Trust
Supplement with respect to such series and its consequences, except a default:
(1) in the deposit of any Scheduled Payment or Special Payment under
Section 4.01 or in the distribution of any payment under Section 4.02 on
the Certificates of such series, or
(2) in the payment of the principal of (premium, if any) or interest
on the Equipment Notes, or
(3) in respect of a covenant or provision hereof which under Article
IX hereof cannot be modified or amended without the consent of each
Certificateholder holding an Outstanding Certificate of such series
affected.
Upon any such waiver, such default shall cease to exist with respect
to the Certificates of such series and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose in respect of such series
and any direction given by the Trustee on behalf of the Certificateholders of
such series to the relevant Loan Trustee shall be annulled with respect thereto;
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Upon any such waiver, the
Trustee shall vote the Equipment Notes issued under the relevant Indenture to
waive the corresponding Indenture Default.
Section 6.06. Right of Certificateholders to Receive Payments Not to
------------------------------------------------------
Be Impaired. Anything in this Agreement to the contrary notwithstanding,
- -----------
including, without limitation, Section 6.07 hereof, the right of any
Certificateholder to receive distributions of payments required pursuant to
Section 4.02 hereof on the applicable Certificates when due, or to institute
suit for the enforcement of any such payment on or after the applicable Regular
Distribution Date or Special Distribution Date, shall not be impaired or
affected without the consent of such Certificateholder.
Section 6.07. Certificateholders May Not Bring Suit Except Under
--------------------------------------------------
Certain Conditions. A Certificateholder of any series shall not have the right
- ------------------
to institute any suit, action or proceeding at law or in equity or otherwise
with respect to this Agreement, for the
32
appointment of a receiver or for the enforcement of any other remedy under this
Agreement, unless:
(1) such Certificateholder previously shall have given written notice
to the Trustee of a continuing Event of Default;
(2) the Certificateholders holding Certificates of such series
evidencing Fractional Undivided Interests aggregating not less than 25% of
the related Trust shall have requested the Trustee in writing to institute
such action, suit or proceeding and shall have offered to the Trustee
indemnity as provided in Section 7.02(e);
(3) the Trustee shall have refused or neglected to institute an such
action, suit or proceeding for 60 days after receipt of such notice,
request and offer of indemnity; and
(4) no direction inconsistent with such written request shall have
been given to the Trustee during such 60-day period by the
Certificateholders holding Certificates of such series evidencing
Fractional Undivided Interests aggregating not less than a majority in
interest in the related Trust.
It is understood and intended that no one or more of the
Certificateholders of any series shall have any right in any manner whatsoever
hereunder or under the related Trust Supplement or under the Certificates of
such series to (i) surrender, impair, waive, affect, disturb or prejudice any
property in the Trust Property of the related Trust or the lien of any related
Indenture on any property subject thereto, or the rights of the
Certificateholders of such series or the holders of the related Equipment Notes,
(ii) obtain or seek to obtain priority over or preference with respect to any
other such Certificateholder of such series or (iii) enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all the Certificateholders of such series subject to the
provisions of this Agreement.
Section 6.08. Remedies Cumulative. Every remedy given hereunder to
-------------------
the Trustee or to any of the Certificateholders of any series shall not be
exclusive of any other remedy or remedies, and every such remedy shall be
cumulative and in addition to every other remedy given hereunder or now or
hereafter given by statute, law, equity or otherwise.
33
ARTICLE VII
THE TRUSTEE
Section 7.01. Notice of Defaults. As promptly as practicable after,
------------------
and in any event within 90 days after, the occurrence of any default (as such
term is defined below) hereunder, the Trustee shall transmit by mail to the
Company, any related Owner Trustees, the related Loan Trustees and the
Certificateholders holding Certificates of the related series in accordance with
Section 313(c) of the Trust Indenture Act, notice of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default on the payment of the
- -------- -------
principal of (premium, if any) or interest on any Equipment Note, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the Certificateholders of the related
series. For the purpose of this Section in respect of any Trust, the term
"default" means any event that is, or after notice or lapse of time or both
would become, an Event of Default in respect of that Trust.
Section 7.02. Certain Rights of Trustee. Subject to the provisions
-------------------------
of Section 315 of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting in reliance upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Request;
(c) whenever in the administration of this Agreement the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate of the Company, any
related Owner Trustee or any related Loan Trustee;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in
34
respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement at the request or direction
of any of the Certificateholders pursuant to this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the cost, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document;
(g) the Trustee may execute any of the trusts or powers under this
Agreement or perform any duties under this Agreement either directly or by
or through agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it under this Agreement;
(h) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Certificateholders holding Certificates of any series evidencing
Fractional Undivided Interests aggregating not less than a majority in
interest in the related Trust relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement; and
(i) the Trustee shall not be required to expend or risk its own funds
in the performance of any of its duties under this Agreement, 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 is not reasonably assured to it.
Section 7.03. Not Responsible for Recitals or Issuance of
-------------------------------------------
Certificates. The recitals contained herein and in the Certificates of each
- ------------
series, except the certificates of authentication, shall not be taken as the
statements of the Trustee, and the Trustee assumes no responsibility for their
correctness. Subject to Section 7.14, the Trustee makes no representations as
to the validity or sufficiency of this Basic Agreement or any Trust Supplement,
any Note Documents, any Note Purchase Agreement, any Equipment Notes or the
Certificates of any series, except that the Trustee hereby represents and
warrants that this Basic Agreement has been, and each Trust Supplement and each
Certificate of each series to
35
which such Trustee is a party will be, executed and delivered by one of its
officers who is duly authorized to execute and deliver such document on its
behalf.
Section 7.04. May Hold Certificates. The Trustee, any Paying Agent,
---------------------
Registrar or any of their Affiliates or any other agent in their respective
individual or any other capacity, may become the owner or pledgee of
Certificates and, subject to Sections 310(b) and 311 of the Trust Indenture Act,
may otherwise deal with the Company, any Owner Trustees or the Loan Trustees
with the same rights it would have if it were not Trustee, Paying Agent,
Registrar or such other agent.
Section 7.05. Money Held in Trust. Money held by the Trustee or the
-------------------
Paying Agent in trust hereunder or under any Trust Supplement need not be
segregated from other funds except to the extent required herein or by law and
neither the Trustee nor the Paying Agent shall have any liability for interest
upon any such moneys except as provided for herein.
Section 7.06. Compensation and Reimbursement. The Company agrees:
------------------------------
(1) to pay, or cause to be paid, to the Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust); and
(2) except as otherwise expressly provided herein or in any Trust
Supplement, to reimburse, or cause to be reimbursed, the Trustee upon its
request for all reasonable out-of-pocket expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Basic Agreement or any Trust Supplement (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to
its negligence, willful misconduct or bad faith or as may be incurred due
to the Trustee's breach of its representations and warranties set forth in
Section 7.14.
The Trustee shall be entitled to reimbursement from, and shall have a
lien prior to the Certificates of each series upon, all property and funds held
or collected by the Trustee in its capacity as Trustee with respect to such
series or the related Trust for any tax incurred without negligence, bad faith
or willful misconduct, on its part, arising out of or in connection with the
acceptance or administration of such Trust (other than any tax attributable to
the Trustee's compensation for serving as such), including any costs and
expenses incurred in contesting the imposition of any such tax. If the Trustee
reimburses itself from the Trust Property of such Trust for any such tax it,
will within 30 days mail a
36
brief report setting forth the circumstances thereof to all Certificateholders
of such series as their names and addresses appear in the Register.
As security for the performance of the obligations of the Company
under this Section with respect to each Trust the Trustee shall have a lien
prior to the Certificates of the related series upon all property and funds held
or collected by the Trustee in its capacity as Trustee with respect to such
Certificates and the related Trust.
Section 7.07. Corporate Trustee Required; Eligibility. Each Trust
---------------------------------------
shall at all times have a Trustee which shall be eligible to act as a trustee
under Section 310(a) of the Trust Indenture Act and shall have a combined
capital and surplus of at least $75,000,000 (or having a combined capital and
surplus in excess of $5,000,000 (or, in respect of State Street Bank and Trust
Company of Connecticut, National Association as Trustee, $3,000,000) 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). 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 7.07, 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 Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.07 to act as Trustee of any
Trust, the Trustee shall resign immediately as Trustee of such Trust in the
manner and with the effect specified in Section 7.08.
Section 7.08. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a successor
Trustee of any Trust pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 7.09.
(b) The Trustee may resign at any time as trustee of any or all Trusts
by giving written notice thereof to the Company, the Authorized Agents, the
related Owner Trustees and the related Loan Trustees. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Company,
the related Owner Trustees and the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time as trustee of any Trust by
Act of the Certificateholders of the related series holding Certificates of such
series evidencing
37
Fractional Undivided Interests aggregating not less than a majority in interest
in such Trust delivered to the Trustee and to the Company, the related Owner
Trustees and the related Loan Trustees.
(d) If at any time in respect of any Trust:
(1) the Trustee shall fail to comply with Section 310 of the Trust
Indenture Act after written request therefor by the Company or by any
Certificateholder of the related series who has been a bona fide
Certificateholder for at least six months; or
(2) the Trustee shall cease to be eligible under Section 7.07 and
shall fail to resign after written request therefor by the Company or by
any such Certificateholder; or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any case, (i) the Company may remove the Trustee or (ii) any
Certificateholder of the related series who has been a bona fide
Certificateholder for at least six months may, on behalf of itself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee of such Trust.
(e) If a Responsible Officer of the Trustee shall obtain actual
knowledge of an Avoidable Tax (as hereinafter defined) in respect of any Trust
which has been or is likely to be asserted, the Trustee shall promptly notify
the Company and shall, within 30 days of such notification, resign as Trustee of
such Trust hereunder unless within such 30-day period the Trustee shall have
received notice that the Company has agreed to pay such tax. The Company shall
promptly appoint a successor Trustee of such Trust in a jurisdiction where there
are no Avoidable Taxes. As used herein, an "Avoidable Tax" in respect of such
Trust means a state or local tax: (i) upon (w) such Trust, (x) such Trust
Property, (y) Certificateholders of such Trust or (z) the Trustee for which the
Trustee is entitled to seek reimbursement from the Trust Property of such Trust,
and (ii) which would be avoided if the Trustee were located in another state, or
jurisdiction within a state, within the United States. A tax shall not be an
Avoidable Tax in respect of any Trust if the Company or any Owner Trustee shall
agree to pay, and shall pay, such tax.
(f) If the Trustee shall resign, be removed or become incapable of
acting as trustee of any Trust, or if a vacancy shall occur in the office of the
Trustee of any Trust for any cause, the Company shall promptly appoint a
successor Trustee of such Trust. If, within one year after such resignation,
removal or incapability, or other occurrence of such
38
vacancy, a successor Trustee of such Trust shall be appointed by Act of the
Certificateholders of the related series holding Certificates of such series
evidencing Fractional Undivided Interests aggregating not less than a majority
in interest in such Trust delivered to the Company, the related owner Trustees,
the related Loan Trustee and the retiring Trustee, then the successor Trustee so
appointed shall, with the approval of the Company, which approval shall not be
unreasonably withheld, forthwith upon its acceptance of such appointment, become
the successor Trustee of such Trust and supersede the successor Trustee of such
Trust appointed as provided above. If no successor Trustee shall have been so
appointed as provided above and accepted appointment in the manner hereinafter
provided, any Certificateholder who has been a bona fide Certificateholder of
the related series for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee of such Trust.
(g) The successor Trustee of a Trust shall give notice of the
resignation and removal of the Trustee and appointment of the successor Trustee
by mailing written notice of such event by first-class mail, postage prepaid, to
the Certificateholders of the related series as their names and addresses appear
in the Register. Each notice shall include the name of such successor Trustee
and the address of its Corporate Trust Office.
Section 7.09. Acceptance of Appointment by Successor. Every
--------------------------------------
successor Trustee appointed hereunder shall execute and deliver to the Company
and to the retiring Trustee with respect to any or all Trusts an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee with respect to such Trusts shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on request of the Company or the successor Trustee, such retiring Trustee
shall execute and deliver an instrument transferring to such successor Trustee
all such rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee in respect of such Trusts hereunder, subject
nevertheless to its lien, if any, provided for in Section 7.06. Upon request of
any such successor Trustee, the Company, the retiring Trustee and such successor
Trustee shall execute and deliver any and all instruments containing such
provisions as shall be necessary or desirable to transfer and confirm to, and
for more fully and certainly vesting in, such successor Trustee all such rights,
powers and trusts.
If a successor Trustee is appointed with respect to one or more (but
not all) Trusts, the Company, the predecessor Trustee and each successor Trustee
with respect to any Trust shall execute and deliver a supplemental agreement
hereto which shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
predecessor Trustee with respect to the Trusts as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor Trustee,
and
39
shall add to or change any of the provisions of this Basic Agreement and the
applicable Trust Supplements as shall be necessary to provide for or facilitate
the administration of the Trusts hereunder by more than one Trustee.
It is understood that nothing herein or in any supplemental agreement
or Trust Supplement shall constitute any Trustee a co-Trustee of the same Trust
and that each Trustee shall be the Trustee of one or more separate Trusts.
No institution shall accept its appointment as a Trustee hereunder
unless at the time of such acceptance such institution shall be qualified and
eligible under this Article.
Section 7.10. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any corporation into which the Trustee may be merged or converted or
- --------
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
- --------
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Certificates shall have been
executed or authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such execution or authentication and deliver the Certificates so
executed or authenticated with the same effect as if such successor Trustee had
itself executed or authenticated such Certificates.
Section 7.11. Maintenance of Agencies. (a) With respect to each
-----------------------
series of Certificates, there shall at all times be maintained an office or
agency in the location set forth in Section 12.03 hereof; (provided that such
office or agency shall, as to State Street Bank and Trust Company of
Connecticut, National Association, be at State Street Bank and Trust Company,
National Association, 61 Broadway, New York, New York 10006) where Certificates
of such series may be presented or surrendered for registration of transfer or
for exchange, and for payment thereof and where notices and demands to or upon
the Trustee in respect of such certificates or of the related Trust Supplement
may be served; provided, however, that, if it shall be necessary that the
-------- -------
Trustee maintain an office or agency in another location (e.g., the Certificates
shall be represented by definitive certificates and shall be listed on a
national securities exchange), the Trustee will make all reasonable efforts to
establish such an office. Written notice of the location of each such other
office or agency and of any change of location thereof shall be given by the
Trustee to the Company, any Owner Trustees, the Loan Trustees and the
Certificateholders of such series. In the event that no such office or agency
shall be maintained or no such notice of location or of change of location shall
be given, presentations and demands may be made and notices may be served at the
Corporate Trust Office of the Trustee.
40
(b) There shall at all times be a Registrar and a Paying Agent
hereunder with respect to the Certificates of each series. Each such Authorized
Agent shall be a bank or trust company, shall be a corporation organized and
doing business under the laws of the United States or any state, with a combined
capital and surplus of at least $75,000,000, or, if the Trustee shall be acting
as the Registrar or Paying Agent hereunder, a corporation the obligations of
which are guaranteed by a corporation organized and doing business under the
laws of the United States or any state, with a combined capital and surplus of
at least $75,000,000 (or having a combined capital and surplus in excess of
$5,000,000 (or, in respect of State Street Bank and Trust Company of
Connecticut, National Association as Trustee, $3,000,000)), and shall be
authorized under such laws to exercise corporate trust powers, subject to
supervision by Federal or state authorities. The Trustee shall initially be the
Paying Agent and, as provided in Section 3.04, Registrar hereunder with respect
to the Certificates of each series. Each Registrar shall furnish to the
Trustee, at stated intervals of not more than six months, and at such other
times as the Trustee may request in writing, a copy of the Register maintained
by such Registrar.
(c) Any corporation into which any Authorized Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authorized Agent shall
be a party, or any corporation succeeding to the corporate trust business of any
Authorized Agent, shall be the successor of such Authorized Agent hereunder, if
such successor corporation is otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the parties
hereto or such Authorized Agent or such successor corporation.
(d) Any Authorized Agent may at any time resign by giving written
notice of resignation to the Trustee, the Company, any related Owner Trustees
and the related Loan Trustees. The Company may, and at the request of the
Trustee shall, at any time terminate the agency of any Authorized Agent by
giving written notice of termination to such Authorized Agent and to the
Trustee. Upon the resignation or termination of an Authorized Agent or in case
at any time any such Authorized Agent shall cease to be eligible under this
Section (when, in either case, no other Authorized Agent performing the
functions of such Authorized Agent shall have been appointed), the Company shall
promptly appoint one or more Qualified successor Authorized Agents, reasonably
satisfactory to the Trustee, to perform the functions of the Authorized Agent
which has resigned or whose agency has been terminated or who shall have ceased
to be eligible under this Section. The Company shall give written notice of any
such appointment made by it to the Trustee, any related Owner Trustees and the
related Loan Trustees; and in each case the Trustee shall mail notice of such
appointment to all Certificateholders of the related series as their names and
addresses appear on the Register for such series.
41
(e) The Company agrees to pay, or cause to be paid, from time to time
to each Authorized Agent reasonable compensation for its services and to
reimburse it for its reasonable expenses.
Section 7.12. Money for Certificate Payments to Be Held in Trust.
--------------------------------------------------
All moneys deposited with any Paying Agent for the purpose of any payment on
Certificates shall be deposited and held in trust for the benefit of the
Certificateholders entitled to such payment, subject to the provisions of this
Section. Moneys so deposited and held in trust shall constitute a separate
trust fund for the benefit of the Certificateholders with respect to which such
money was deposited.
The Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Agreement or for any other purpose, direct
any Paying Agent to pay to the Trustee all sums held in trust by such Paying
Agent, such sums to be held by the Trustee upon the same trusts as those upon
which such sums were held by such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Section 7.13. Registration of Equipment Notes in Trustee's Name. The
-------------------------------------------------
Trustee agrees that all Equipment Notes, and Permitted Investments, if any,
shall be issued in the name of the Trustee as trustee for the applicable Trust
or its nominee and held by the Trustee, or, if not so held, the Trustee or its
nominee shall be reflected as the owner of such Equipment Notes or Permitted
Investments as the case may be, in the register of the issuer of such Equipment
Notes or Permitted Investments. In no event shall the Trustee invest in, or
hold, Equipment Notes or Permitted Investments in a manner that would cause the
Trustee not to have the ownership interest in such Equipment Notes or Permitted
Investments under the applicable provisions of the Uniform Commercial Code in
effect where the Trustee holds such Equipment Notes or Permitted Investments or
other applicable law then in effect.
Section 7.14. Representations and Warranties of Trustee. The Trustee
-----------------------------------------
hereby represents and warrants that:
(i) the Trustee is a national banking association or a bank or trust
company organized or chartered under the law of a state of the United
States and duly organized, validly existing and in good standing under the
laws of the United States or such state, as the case may be;
(ii) the Trustee has full power, authority and legal right to execute,
deliver, and perform this Basic Agreement and has taken all necessary
action to authorize the execution, delivery, and performance by it of this
Basic Agreement;
42
(iii) the execution delivery and performance by the Trustee of this
Basic Agreement (a) will not violate any provision of United States federal
law or the law of the state of the United States where it is located
governing the banking and trust powers of the Trustee or any order, writ,
judgment, or decree of any court, arbitrator or governmental authority
applicable to the Trustee or any of its assets, (b) will not violate any
provision of the articles of association or by-laws of the Trustee, or (c)
will not violate any provision of, or constitute, with or without notice or
lapse of time, a default under, or result in the creation or imposition of
any lien on any properties included in the Trust Property of any Trust
pursuant to the provisions of any mortgage, indenture, contract, agreement
or other undertaking to which it is a party, which violation, default or
lien could reasonably be expected to have an adverse effect on the
Trustee's performance or ability to perform its duties hereunder or
thereunder or on the transactions contemplated herein or therein;
(iv) the execution, delivery and performance by the Trustee of this
Basic Agreement will not require the authorization, consent, or approval
of, the giving of notice to, the filing or registration with, or the taking
of any other action in respect of, any governmental authority or agency of
the United States or the State of the United States where it is located
regulating the banking and corporate trust activities of the Trustee; and
(v) this Basic Agreement has been duly executed and delivered by the
Trustee and constitutes the legal, valid, and binding agreement of the
Trustee, enforceable against it in accordance with its terms, provided that
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and (ii) general principles of equity.
Section 7.15. Withholding Taxes; Information Reporting. As to the
----------------------------------------
Certificates of any series, the Trustee, as trustee of the related grantor trust
created by this Agreement, shall exclude and withhold from each distribution of
principal, premium, if any, and interest and other amounts due under this
Agreement or under the Certificates of such series any and all withholding taxes
applicable thereto as required by law. The Trustee agrees 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 Certificates of such series, to withhold such amounts
and timely pay the same to the appropriate authority in the name of and on
behalf of the Certificateholders of such series, that it will file any necessary
withholding tax returns or statements when due, and that, as promptly as
possible after the payment thereof, it will deliver to each such
Certificateholder appropriate documentation showing the payment thereof,
together with such additional documentary evidence as such Certificateholders of
such series may reasonably
43
request from time to time. The Trustee agrees to file any other information
reports as it may be required to file under United States law.
Section 7.16. Trustee's Liens. The Trustee in its individual
---------------
capacity agrees that it will, in respect of each Trust created by this Agreement
at its own cost and expense promptly take any action as may be necessary to duly
discharge and satisfy in full any mortgage, pledge, lien, charge, encumbrance,
security interest or claim ("Trustee's Liens") on or with respect to the Trust
Property of such Trust which is attributable to the Trustee either (i) in its
individual capacity and which is unrelated to the transactions contemplated by
this Agreement, the related Note Purchase Agreements or the related Note
Documents, or (ii) as Trustee hereunder or in its individual capacity and which
arises out of acts or omissions which are not contemplated by this Agreement.
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 8.01. The Company to Furnish Trustee with Names and Addresses
-------------------------------------------------------
of Certificateholders. The Company will furnish to the Trustee within 15 days
- ---------------------
after each Record Date with respect to a Scheduled Payment, and at such other
times as the Trustee may request in writing, within 30 days after receipt by the
Company of any such request, a list, in such form as the Trustee may reasonably
require, of all information in the possession or control of the Company as to
the names and addresses of the Certificateholders of such series, in each case
as of a date not more than 15 days prior to the time such list is furnished;
provided, however, that so long as the Trustee is the sole Registrar for such
- -------- -------
series, no such list need be furnished; and provided further, however, that no
-------- ------- -------
such list need be furnished for so long as a copy of the Register is being
furnished to the Trustee pursuant to Section 7.11.
Section 8.02. Preservation of Information; Communications to
----------------------------------------------
Certificateholders. The Trustee shall preserve, in as current a form as is
- ------------------
reasonably practicable, the names and addresses of Certificateholders of each
series contained in the most recent list furnished to the Trustee as provided in
Section 7.11 or Section 8.01, as the case may be, and the names and addresses of
Certificateholders of each series received by the Trustee in its capacity as
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 7.11 or Section 8.01, as the case may be, upon receipt of a
new list so furnished.
Section 8.03. Reports by Trustee. Within 60 days after May 15 of
------------------
each year commencing with the first full year following the issuance of any
series of Certificates, the Trustee shall transmit to the Certificateholders of
each series, as provided in Section 313(c)
44
of the Trust Indenture Act, a brief report dated as of such May 15, if required
by Section 313(a) of the Trust Indenture Act.
Section 8.04. Reports by the Company. The Company shall:
----------------------
(a) file with the Trustee, within 30 days after the Company is
required to file the same with the SEC, copies of the annual reports and of
the information, documents and other reports (or copies of such portions of
any of the foregoing as the SEC may from time to time by rules and
regulations prescribe) which the Company is required to file with the SEC
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934, as amended; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with
the Trustee and the SEC, in accordance with rules and regulations
prescribed by the SEC, such of the supplementary and periodic information,
documents and reports which may be required pursuant to section 13 of the
Securities Exchange Act of 1934, as amended, in respect of a security
listed and registered on a national securities exchange as may be
prescribed in such rules and regulations;
(b) file with the Trustee and the SEC, in accordance with the rules
and regulations prescribed by the SEC, such additional information,
documents and reports with respect to compliance by the Company with the
conditions and covenants provided for in this Agreement, as may be required
by such rules and regulations, including, in the case of annual reports, if
required by such rules and regulations, certificates or opinions of
independent public accountants;
(c) transmit to all Certificateholders, in the manner and to the
extent provided in Section 313(c) of the Trust Indenture Act such summaries
of any information, documents and reports required to be filed by the
Company pursuant to subsections (a) and (b) of this Section 8.04 as may be
required by rules and regulations prescribed by the SEC; and
(d) furnish to the Trustee, not less often than annually, a brief
certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this Agreement
(it being understood that for purposes of this paragraph (d), such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Agreement).
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
45
Section 9.01. Supplemental Agreements Without Consent of
------------------------------------------
Certificateholders. Without the consent of the Certificateholders of any
------------------
series, the Company may, and the Trustee (subject to Section 9.03) shall,
at any time and from time to time, enter into one or more agreements
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to provide for the formation of a Trust, the issuance of a series
of Certificates and the other matters contemplated by Section 2.01(b); or
(2) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company
herein contained; or
(3) to add to the covenants of the Company for the benefit of the
Certificateholders of any series, or to surrender any right or power in
this Agreement conferred upon the Company; or
(4) to correct or supplement any provision in this Agreement which may
be defective or inconsistent with any other provision herein or in any
Trust Supplement or to modify any other provision with respect to matters
or questions arising under this Agreement, provided that any such action
--------
shall not adversely affect the interests of the Certificateholders of any
series; or to cure any ambiguity or correct any mistake; or
(5) to modify, eliminate or add to the provisions of this Agreement to
such extent as shall be necessary to continue the qualification of this
Agreement (including any supplemental agreement) under the Trust Indenture
Act or under any similar Federal statute hereafter enacted, and to add to
this Agreement such other provisions as may be expressly permitted by the
Trust Indenture Act, excluding, however, the provisions referred to in
Section 316(a)(2) of the Trust Indenture Act as in effect at the date as of
which this instrument was executed or any corresponding provision in any
similar Federal statute hereafter enacted; or
(6) to evidence and provide for the acceptance of appointment under
this Agreement by the Trustee or a successor Trustee with respect to one or
more Trusts and to add to or change any of the provisions of this Agreement
as shall be necessary to provide for or facilitate the administration of
the Trusts hereunder and thereunder by more than one Trustee, pursuant to
the requirements of Section 7.09; or
(7) to provide the information required under Section 7.11 and Section
12.03 as to the Trustee; or
46
(8) to make any other amendments or modifications hereto, provided
--------
such amendments or modifications shall only apply to Certificates of one or more
series to be thereafter issued.
Section 9.02. Supplemental Agreements with Consent of
---------------------------------------
Certificateholders. With respect to each separate Trust and the series of
- ------------------
Certificates relating thereto, with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in such Trust, by Act of said
Certificateholders delivered to the Company and the Trustee, the Company may
(with the consent of the Owner Trustee, if any, relating to such Certificates,
which consent shall not be unreasonably withheld), and the Trustee (subject to
Section 9.03) shall, enter into an agreement or agreements supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement to the extent applicable to
such Certificateholders or of modifying in any manner the rights and obligations
of such Certificateholders under this Agreement; provided, however, that no such
-------- -------
supplemental agreement shall, without the consent of the Certificateholder of
each Outstanding Certificate affected thereby:
(1) reduce in any manner the amount of, or delay the timing of, any
receipt by the Trustee of payments on the Equipment Notes held in such
Trust or distributions that are required to be made herein on any
Certificate of such series, or change any date of payment on any
Certificate of such series, or change the place of payment where, or the
coin or currency in which, any Certificate of such series is payable, or
impair the right to institute suit for the enforcement of any such payment
or distribution on or after the Regular Distribution Date or Special
Distribution Date applicable thereto; or
(2) permit the disposition of any Equipment Note in the Trust Property
of such Trust except as permitted by this Agreement, or otherwise deprive
such Certificateholder of the benefit of the ownership of the Equipment
Notes in such Trust; or
(3) reduce the percentage of the aggregate Fractional Undivided
Interests of such Trust which is required for any such supplemental
agreement, or reduce such percentage required for any waiver (of compliance
with certain provisions of this Agreement or certain defaults hereunder and
their consequences) provided for in this Agreement; or
(4) modify any of the provisions of this Section or Section 6.05,
except to increase any such percentage or to provide that certain other
provisions of this Agreement cannot be modified or waived without the
consent of the Certificateholder of each Certificate of such series
affected thereby.
47
It shall not be necessary for any Act of such Certificateholders under
this Section to approve the particular form of any proposed supplemental
agreement, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 9.03. Documents Affecting Immunity or Indemnity. If in the
-----------------------------------------
opinion of the Trustee any document required to be executed by it pursuant to
the terms of Section 9.01 or 9.02 affects any interest, right, duty, immunity or
indemnity in favor of the Trustee under this Basic Agreement or any Trust
Supplement, the Trustee may in its discretion decline to execute such document.
Section 9.04. Execution of Supplemental Agreements. In executing, or
------------------------------------
accepting the additional trusts created by, any supplemental agreement permitted
by this Article or the modifications thereby of the trusts created by this
Agreement, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental agreement is authorized or permitted by this Agreement.
Section 9.05. Effect of Supplemental Agreements. Upon the execution
---------------------------------
of any supplemental agreement under this Article, this Basic Agreement shall be
modified in accordance therewith, and such supplemental agreement shall form a
part of this Basic Agreement for all purposes; and every Certificateholder of
each series theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby to the extent applicable to such series.
Section 9.06. Conformity with Trust Indenture Act. Every
-----------------------------------
supplemental agreement executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
Section 9.07. Reference in Certificates to Supplemental Agreements.
----------------------------------------------------
Certificates of each series authenticated and delivered after the execution of
any supplemental agreement applicable to such series pursuant to this Article
may bear a notation in form approved by the Trustee as to any matter provided
for in such supplemental agreement; and, in such case, suitable notation may be
made upon Outstanding Certificates of such series after proper presentation and
demand.
48
ARTICLE X
AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS
Section 10.01. Amendments and Supplements to Indenture and Other Note
------------------------------------------------------
Documents. In the event that the Trustee, as holder of any Equipment Notes in
- ---------
trust for the benefit of the Certificateholders of any series, receives a
request for a consent to any amendment, modification, waiver or supplement under
any related Indenture or other related Note Document or any related Note
Purchase Agreement, the Trustee shall forthwith send a notice of such proposed
amendment, modification, waiver or supplement to each Certificateholder of such
series registered on the Register as of such date. The Trustee shall request
from the Certificateholders of such series a direction as to (i) whether or not
to direct the Trustee to take or refrain from taking any action which a holder
of such Equipment Note has the option to direct, (ii) whether or not to give or
execute any waivers, consents, amendments, modifications or supplements as a
holder of such Equipment Note and (iii) how to vote the Equipment Notes if a
vote has been called for with respect thereto. Provided such a request for
Certificateholder Direction shall have been made, in directing any action or
casting any vote or giving any consent as the holder of any such Equipment
Notes, the Trustee shall vote or consent with respect to such Equipment Note in
the same proportion as the Certificates of such series were actually voted by
Acts of Certificateholders delivered to the Trustee prior to two Business Days
before the Trustee directs such action or casts such vote or gives such consent.
Notwithstanding the foregoing, but subject to Section 6.04, in the case that an
Event of Default hereunder with respect to such series shall have occurred and
be continuing, the Trustee may, in its own discretion and at its own direction,
consent and notify the relevant Loan Trustee of such consent to any amendment,
modification, waiver or supplement under the relevant Indenture or any other
related Note Document.
ARTICLE XI
TERMINATION OF TRUSTS
Section 11.01. Termination of the Trusts. In respect of each Trust
-------------------------
created by the Basic Agreement as supplemented by a related Trust Supplement,
the respective obligations and responsibilities of the Company and the Trustee
created under this Agreement and the Trust created hereby and such Trust shall
terminate upon the distribution to all Holders of the Certificates of the series
of such Trust and the Trustee of all amounts required to be distributed to them
pursuant to this Agreement and the disposition of all property held as part of
the Trust Property of the related series of such Trust; provided, however, that
-------- -------
in no event shall such Trust continue beyond the final expiration date
determined as provided in this Agreement.
49
Notice of any termination of a Trust, specifying the applicable
Regular Distribution Date (or applicable Special Distribution Date, as the case
may be) upon which the Certificateholders of any series may surrender their
Certificates to the Trustee for payment of the final distribution and
cancellation, shall be mailed promptly by the Trustee to Certificateholders of
such series not earlier than the minimum number of days and not more than the
maximum number of days specified therefor in the related Trust Supplement
preceding such final distribution specifying (A) the Regular Distribution Date
(or Special Distribution Date, as the case may be) upon which the proposed final
payment of the Certificates of such series will be made upon presentation and
surrender of Certificates of such series at the office or agency of the Trustee
therein specified (B) the amount of any such proposed final payment, and (C)
that the Record Date otherwise applicable to such Regular Distribution Date (or
Special Distribution Date, as the case may be) is not applicable, payments being
made only upon presentation and surrender of the Certificates of such series at
the office or agency of the Trustee therein specified. The Trustee shall give
such notice to the Registrar at the time such notice is given to
Certificateholders of such series. Upon presentation and surrender of the
Certificates of such series, the Trustee shall cause to be distributed to
Certificateholders of such series amounts distributable on such Regular
Distribution Date (or Special Distribution Date, as the case may be) pursuant to
Section 4.02.
In the event that all of the Certificateholders of such series shall
not surrender their Certificates for cancellation within six months after the
date specified in the above-mentioned written notice, the Trustee shall give a
second written notice to the remaining Certificateholders of such series to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. In the event that any money held by the Trustee for the
payment of distributions on the Certificates of such series shall remain
unclaimed for two years (or such lesser time as the Trustee shall be satisfied,
after sixty days' notice from the Company, is one month prior to the escheat
period provided under applicable law) after the final distribution date with
respect thereto, the Trustee shall pay to each Loan Trustee the appropriate
amount of money relating to such Loan Trustee and shall give written notice
thereof to the related Owner Trustees and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Limitation on Rights of Certificateholders. The death
------------------------------------------
or incapacity of any Certificateholder of any series shall not operate to
terminate this Agreement or the related Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a partition
50
or winding up of the Trust, nor otherwise affect the rights, obligations, and
liabilities of the parties hereto or any of them.
Section 12.02. Certificates Nonassessable and Fully Paid.
-----------------------------------------
Certificateholders of each series shall not be personally liable for obligations
of the related Trust, the Fractional Undivided Interests represented by the
Certificates of such series shall be nonassessable for any losses or expenses of
such Trust or for any reason whatsoever, and Certificates of such series upon
authentication thereof by the Trustee pursuant to Section 3.02 are and shall be
deemed fully paid. No Certificateholder of such series shall have any right
(except as expressly provided herein) to vote or in any manner otherwise
control the operation and management of the related Trust Property, the related
Trust, or the obligations of the parties hereto, nor shall anything set forth
herein, or contained in the terms of the Certificates of such series, be
construed so as to constitute the Certificateholders of such series from time to
time as partners or members of an association.
Section 12.03. Notices. (a) Unless otherwise specifically provided
-------
herein or the applicable Trust Supplement with respect to any Trust, all notices
required under the terms and provisions of this Basic Agreement or such Trust
supplement with respect to such Trust shall be in English and in writing, and
any such notice may be given by United States mail, courier service or telecopy,
and any such notice shall be effective when delivered or received or, if mailed,
three days after deposit in the United States mail with proper postage for
ordinary mail prepaid,
if to the Company, to:
United Air Lines, Inc.
P.O. Box 66100
Chicago, Illinois 60666
Attention: Vice President and Treasurer
Facsimile: (708) 952-7117
or if by overnight courier, to:
United Air Lines, Inc.
1200 East Algonquin Road
Elk Grove Township, Illinois 60007
Attention: Vice President and Treasurer
if to State Street Bank and Trust Company of Connecticut, National
Association, as Trustee, to:
51
c/o State Street Bank and Trust Company of Connecticut,
National Association
225 Franklin Street IP-4
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Facsimile: (203) 244-1899
Telephone: (203) 244-1800
as to any series of Certificates, as specified in the Trust Supplement
related thereto.
(b) The Company or the Trustee as to any series of Certificates, by
notice to the other, may designate additional or different addresses for
subsequent notices or communications.
(c) Any notice or communication to Certificateholders of any series
shall be mailed by first-class mail to the addresses for Certificateholders of
such series shown on the Register kept by the Registrar and to addresses filed
with the Trustee for Certificate Owners of such series. Failure so to mail a
notice or communication or any defect in such notice or communication shall not
affect its sufficiency with respect to other Certificateholders of such series.
(d) If a notice or communication is mailed in the manner provided
above within the time prescribed, it is conclusively presumed to have been duly
given, whether or not the addressee receives it.
(e) If the Company mails a notice or communication to the
Certificateholders of such series, it shall mail a copy to the Trustee and to
each Paying Agent for such series at the same time.
(f) Notwithstanding the foregoing, all communications or notices to
the Trustee shall be deemed to be given only when received by a Responsible
Officer of the Trustee.
(g) The Trustee shall promptly furnish the Company with a copy of any
demand, notice or written communication received by the Trustee hereunder from
any Certificateholder, Owner Trustee or Loan Trustee.
Section 12.04. Governing Law. THIS BASIC AGREEMENT HAS BEEN
-------------
DELIVERED IN THE STATE OF NEW YORK AND THE CERTIFICATES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
52
AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.05. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or any Trust, or of the
Certificates of any series or the rights of the Certificateholders thereof.
Section 12.06. Trust Indenture Act Controls. This Agreement is
----------------------------
subject to the provisions of the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions.
Section 12.07. Effect of Headings and Table of Contents. The Article
----------------------------------------
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 12.08. Successors and Assigns. All covenants, agreements,
----------------------
representations and warranties in this Agreement by the Trustee and the Company
shall bind and, to the extent permitted hereby, shall inure to the benefit of
and be enforceable by their respective successors and assigns, whether so
expressed or not.
Section 12.09. Benefits of Agreement. Nothing in this Agreement or
---------------------
in the Certificates of any series, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, and the
Certificateholders of each series, any benefit or any legal or equitable right,
remedy or claim under this Agreement.
Section 12.10. Legal Holidays. In any case where any Regular
--------------
Distribution Date or Special Distribution Date relating to any Certificate of
any series shall not be a Business Day with respect to such series, then
(notwithstanding any other provision of this Agreement) payment need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on such Regular Distribution Date or Special
Distribution Date, and no interest shall accrue during the intervening period.
Section 12.12. Counterparts. For the purpose of facilitating the
------------
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
53
IN WITNESS WHEREOF, the parties have caused this amended and restated
Basic Agreement to be duly executed by their respective officers.
UNITED AIR LINES, INC.
By ___________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, as
Trustee
By
___________________________
Name:
Title:
EXHIBIT A
FORM OF CERTIFICATE
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York Corporation ("DTC") to Issuer
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch the
registered owner hereof, Cede & Co., has an est herein.
UNITED AIR LINES _______ PASS THROUGH TRUST
Pass Through
Certificate, Series _______
Final Distribution Date: __________, ____
evidencing a fractional undivided interest in a trust, the property of which
includes certain equipment notes each secured by an Aircraft owned by or leased
to United Air Lines, Inc.
Certificate
No. _______ $____________ Fractional Undivided Interest
representing .________% of the Trust per $1,000 face amount
THIS CERTIFIES THAT ______________________, for value received, is the
registered owner of a $____________ (________________ dollars) Fractional
Undivided Interest in the United Air Lines _______ Pass Through Trust (the
"Trust") created pursuant to a Pass Through Trust Agreement, dated as of
February 1, 1992, as amended and restated as of May 1, 1995 (the "Basic
Agreement"), as supplemented by Trust Supplement No. ___________________
thereto, dated ________, 199_ (collectively, the "Agreement"), between
___________ (the "Trustee") and United Air Lines, Inc., a corporation
incorporated under Delaware law (the "Company"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement. This Certificate is one of the duly authorized
Certificates designated as "Pass Through Certificates, Series _______" (herein
called the _______________________.
* This legend to appear on Book-Entry Certificates to be deposited with
the Depository Trust Company. One Certificate may be issued in a
denomination of less than $1,000 which shall not have this legend.
A-2
"Certificates"). This Certificate is issued under and is subject to the terms,
provisions, and conditions of the Agreement, to which Agreement the
Certificateholder of this Certificate by virtue of the acceptance hereof assents
and by which such Certificateholder is bound. The property of the Trust
includes certain Equipment Notes (the "Trust Property"). Each issue of the
Equipment Notes is secured by a security interest in an aircraft leased to or
owned by the Company.
The Certificates represent fractional undivided interests in the Trust
and the Trust Property, and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement, from
funds then available to the Trustee, there will be distributed on each ________
and ____________ (a "Regular Distribution Date"), commencing on ________, 199_,
to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Regular Distribution Date, an amount in
respect of the Scheduled Payments on the Equipment Notes due on such Regular
Distribution Date, the receipt of which has been confirmed by the Trustee, equal
to the product of the percentage interest in the Trust evidenced by this
Certificate and an amount equal to the sum of such Scheduled Payments. Subject
to and in accordance with the terms of the Agreement, in the event that Special
Payments on the Equipment Notes are received by the Trustee, from funds then
available to the Trustee, there shall be distributed on the applicable Special
Distribution Date, to the Person in whose name this Certificate is registered at
the close of business on the 15th day preceding the Special Distribution Date,
an amount in respect of such Special Payments on the Equipment Notes, the
receipt of which has been confirmed by the Trustee, equal to the product of the
percentage interest in the Trust evidenced by this Certificate and an amount
equal to the sum of such Special Payments so received. If a Regular
Distribution Date or Special Distribution Date is not a Business Day,
distribution shall be made on the immediately following Business Day with the
same force and effect as if made on such Regular Distribution Date or Special
Distribution Date and no interest shall accrue during the intervening period.
The Special Distribution Date, shall be the _____________ day of the month
determined as provided in the Agreement. The Trustee shall mail notice of each
Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without the presentation or surrender of
this Certificate or the making of any notation hereon. Except as otherwise
provided in the Agreement and notwithstanding the above, the final distribution
on this Certificate will be made after notice mailed by the Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency of the Trustee specified in such notice.
A-3
THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PROVISIONS OF THE STATE OF NEW YORK.
Reference is hereby made to the further provisions of this Certificate
set forth in the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
UNITED AIR LINES
PASS THROUGH TRUST
By: _______________________, as
Trustee
By: _______________________
Title:
Dated:
A-4
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
___________________________, as
Trustee
By: _______________________
Authorized Officer
[Reverse of Certificate]
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right or payment, all as
more specifically set forth on the face hereof and in the Agreement. All
payments or distributions made to Certificateholders under the Agreement shall
be made only from the Trust Property and only to the extent that the Trustee
shall have sufficient income or proceeds from the Trust Property to make such
payments in accordance with the terms of the Agreement. Each Certificateholder
of this Certificate, by its acceptance hereof, agrees that it will look solely
to the income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee in its capacity as Registrar, or
by any successor Registrar, in the Borough of Manhattan, the City of New York,
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Registrar duly executed by the
Certificateholder hereof or such Certificateholder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate Fractional Undivided Interest in the Trust will be
issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 Fractional Undivided Interest and
integral multiples thereof except that one Certificate may be in a denomination
of less than $1,000. As
2
provided in the Agreement and subject to certain limitations therein set forth,
the Certificates are exchangeable for new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust, as requested by the Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
S&S FINAL DRAFT
TRUST SUPPLEMENT NO. 1995-A1
DATED AS OF MAY 1, 1995
TO
PASS THROUGH TRUST
AGREEMENT
DATED AS OF FEBRUARY 1, 1992
AS AMENDED AND RESTATED
AS OF MAY 1, 1995
===============================================
UNITED AIR LINES, INC.
AND
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION,
AS TRUSTEE
===============================================
$
% UNITED AIRLINES 1995-A1 Pass Through Trust
PASS THROUGH CERTIFICATES, SERIES 1995-A1
TRUST SUPPLEMENT NO. 1995-A1
DATED AS OF MAY 1, 1995
Series 1995-A1 Pass Through Certificates
==========================
Table of Contents
==========================
Page
----
ARTICLE I
THE CERTIFICATES
Section 1.01. The Certificates.......................... 2
ARTICLE II
DEFINITIONS
Section 2.01. Definitions............................... 5
ARTICLE III
THE TRUSTEE
Section 3.01. The Trustee............................... 6
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.01. Acceptance of Appointment Under and
Assumption and Ratification
of Basic Agreement........................ 6
Section 4.02. Governing Law............................. 6
Section 4.03. Execution in Counterparts................. 7
This Trust Supplement No. 1995-A1, dated as of May 1, 1995 (herein
called the "Trust Supplement"), between United Air Lines Inc., a Delaware
corporation (the "Company"), and First Security Bank of Utah, National
Association (the "Trustee"), to the Pass Through Trust Agreement, dated as of
February 1, 1992, as amended and restated as of May 1, 1995, between the Company
and State Street Bank and Trust Company of Connecticut, National Association
(the "Basic Agreement").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified
heretofore in the Basic Agreement) which may be issued thereunder has heretofore
been executed and delivered;
WHEREAS, the Owner Trustee, acting on behalf of an Owner Participant,
will issue, on a non-recourse basis, Equipment Notes, among other things, to
refinance the outstanding debt portion of the purchase price of the aircraft
purchased by such Owner Trustee and leased to the Company pursuant to the
related Lease;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the "Agreement"), the Trustee shall
purchase such Equipment Notes issued by such Owner Trustee of the same tenor as
the Certificates issued hereunder and shall hold such Equipment Notes in trust
for the benefit of the Certificateholders;
WHEREAS, the Trustee hereby declares the creation of this Trust (the
"1995-A1 Trust") for the benefit of the Certificateholders, and the initial
Certificateholders as the grantors of the 1995-A1 Trust, by their respective
acceptances of the Certificates, join in the creation of this 1995-A1 Trust with
the Trustee;
WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and delivery of this
Trust Supplement in the form and with the terms hereof have been in all respects
duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
2
ARTICLE I
THE CERTIFICATES
Section 1.01. The Certificates. There is hereby created a series of
----------------
Certificates to be issued under the Agreement to be distinguished and known as
"Pass Through Certificates, Series 1995-A1" (hereinafter defined as the "Series
1995-A1 Certificates"). Each Certificate represents a Fractional Undivided
Interest in the 1995-A1 Trust created hereby. The terms and conditions
applicable to the Series 1995-A1 Certificates are as follows:
1. The aggregate principal amount of the Series 1995-A1 Certificates
that shall be authenticated under the Agreement (except for Series 1995-A1
Certificates authenticated and delivered pursuant to Section 3.03, 3.04 and
3.05 of the Basic Agreement) upon their initial issuance is $ .
2. The Cut-off Date is June 30, 1995.
3. The Regular Distribution Dates with respect to any payment of
Scheduled Payments means each October 19 and April 19, commencing October
19, 1995 until payment of all of the Scheduled Payments to be made under
the Equipment Notes has been made.
4. The Scheduled Payments shall be as set forth in Exhibit C hereto.
5. The Special Distribution Dates are as follows: (i) when used with
respect to the redemption or purchase of any Equipment Notes, the day
(which shall be a Business Day) on which such redemption or purchase is
scheduled to occur pursuant to the terms of the applicable Indenture and
(ii) when used with respect to a Special Payment other than as described in
clause (i) above, 20 days after the last date on which the Trustee must
give notice pursuant to Section 4.02(c) of the Basic Agreement (or the next
Business Day after such 20th day if such date is not a Business Day).
6. The Series 1995-A1 Certificates shall be in the form attached
hereto as Exhibit A. The Series 1995-A1 Certificates shall be Book-Entry
Certificates and shall be subject to the conditions set forth in the Letter
of Representations between the Company and the Clearing Agency attached
hereto as Exhibit B.
7. The proceeds of the Series 1995-A1 Certificates shall be used to
purchase the Equipment Notes in the principal amount specified below:
3
Principal
Equipment Note Amount Maturity
- -------------- --------- --------
Series 1995 777 A-1 $________ _________ __, ____
Series 1995 777 B-1 $________ _________ __, ____
Series 1993 747 A-1 $________ _________ __, ____
8. The Owner Trustee, acting on behalf of an Owner Participant, will
issue on a non-recourse basis, the Equipment Notes, the proceeds of which
shall be used, among other things, to refinance the outstanding debt
portion of the purchase price of the following Aircraft:
U.S.
Registration Manufacturer's
Aircraft Number Serial Number
-------- ------------ --------------
1 Boeing 777-200 N777UA 26916
1 Boeing 777-200 N766UA 26917
1 Boeing 747-422 N189UA 26878
9. The related Note Documents are as follows:
(a) Trust Indenture and Mortgage (1995 777 A), dated as of May 1,
1995;
(b) Lease Agreement (1995 777 A), dated as of May 1, 1995;
(c) Owner Trustee's Purchase Agreement and Assignment (1995 777 A),
dated as of May 1, 1995;
(d) Participation Agreement (1995 777 A), dated as of May 1, 1995;
(e) Trust Agreement (1995 777 A), dated as of May 1, 1995;
(f) Lease Supplement (1995 777 A), dated the relevant Transfer Date;
(g) Trust Supplement (1995 777 A), dated the relevant Transfer Date;
(h) Trust Indenture and Mortgage (1995 777 B), dated as of May 1,
1995;
(i) Lease Agreement (1995 777 B), dated as of May 1, 1995;
4
(j) Owner Trustee's Purchase Agreement Assignment (1995 777 B), dated
as of May 1, 1995;
(k) Participation Agreement (1995 777 B), dated as of May 1, 1995;
(l) Trust Agreement (1995 777 B), dated as of May 1, 1995;
(m) Lease Supplement (1995 777 B), dated the relevant Transfer Date;
(n) Trust Supplement (1995 777 B), dated the relevant Transfer Date;
(o) Trust Indenture and Mortgage (1993 747 A) dated as of April 1,
1993, as supplemented, and as amended and restated by the First
Amended and Restated Trust Indenture and Mortgage (1993 747 A)
dated as of April 1, 1993, and as further amended and restated by
the Second Amended and Restated Trust Indenture and Mortgage
(1993 747 A), dated as of July 1, 1994, as amended by the First
Amendment to Second Amended and Restated Trust Indenture and
Mortgage (1993 747 A) dated September 27, 1994 and as further
amended and restated by the Third Amended and Restated Trust
Indenture and Mortgage (1993 747A), dated as of as of May 1, 1995
and effective as of the Effective Date;
(p) Lease Agreement (1993 747 A) dated as of April 1, 1993, as
supplemented, and as amended and restated by the First Amended
and Restated Lease Agreement (1993 747 A) dated as of April 1,
1993, as amended by the First Amendment to First Amended and
Restated Lease Agreement (1993 747 A), dated April 19, 1994,
Second Amendment to First Amended and Restated Lease Agreement
(1993 747 A) dated as of July 1, 1994, and the Third Amendment to
First Amended and Restated Lease Agreement (1993 747 A) dated
July 22, 1994 and as amended and restated by the Second Amended
and Restated Lease Agreement (1993 747 A) dated as of May 1, 1995
and effective as of the Effective Date;
(q) Owner Trustee's Purchase Agreement and Assignment (1993 747 A),
dated as of April 1, 1993;
(r) Participation Agreement (1993 747 A), dated as of April 1, 1993,
as amended by the First Amendment to Participation Agreement
(1993 747 A), dated as of December 1, 1993, Second Amendment to
Participation Agreement (1993 47 A) dated as of July 1, 1994, and
as
5
amended and restated by the First Amended and Restated
Participation Agreement (1993 747 A), dated as of May 1, 1995 and
effective as of the Effective Date;
(s) Trust Agreement (1993 747 A), dated as of April 1, 1993, as
amended and restated by the First Amended and Restated Trust
Agreement (1993 747 A) dated as of May 1, 1995 and effective as
of the Effective Date;
(t) Lease Supplement (1993 747 A), dated April 20, 1993;
(u) Trust Supplement (1993 747 A), dated April 20, 1993; and
(v) Redemption and Refinancing Agreement (1993 747 A), dated as of
May 1, 1995 and effective as of the Effective Date.
ARTICLE II
DEFINITIONS
Section 2.01. Definitions. For all purposes of the Basic Agreement
-----------
as supplemented by this Trust Supplement, the following capitalized term has the
following meaning:
Effective Date: shall have the meaning specified therefor in the
--------------
lease.
Specified Investments: With respect to any Trust, means (i)
---------------------
obligations of, or guaranteed by, the United States Government or agencies
thereof, (ii) open market commercial paper of any corporation incorporated
under the laws of the United States of America or any State thereof rated
at least P-2 (or P-1, in the case of Escrowed Funds) or its equivalent by
Moody's Investors Service, Inc. or at least A-2 (or A-1, in the case of
Escrowed Funds) or its equivalent by Standard & Poor's Corporation, (iii)
certificates of deposit issued by commercial banks organized under the laws
of the United States or of any political subdivision thereof having a
combined capital and surplus in excess of $500,000,000 which banks or their
holding companies have a rating of A or its equivalent by Moody's
Investment Service, Inc. or Standard & Poor's Corporation; provided,
--------
however, that the aggregate amount at any one time so invested in
-------
certificates of deposit issued by any one bank shall not exceed 5% of such
bank's capital and surplus, (iv) U.S. dollar denominated offshore
certificates of deposit issued by, or offshore time deposits with, any
commercial bank described in (iii) or any subsidiary thereof and (v)
repurchase agreements with any financial institution having combined
capital and surplus of at least $500,000,000 with any of the obligations
described in clauses (i) through (iv) as collateral; provided further that
-------- -------
6
if all of the above investments are unavailable, the entire amounts to be
invested may be used to purchase Federal Funds from an entity described in
clause (iii) above; and provided further that no investment shall be
-------- -------
eligible as a "Specified Investment" unless the final maturity or date of
return of such investment is on or before the Special Distribution Date
next following the Cut-Off Date for such Trust by more than 20 days.
ARTICLE III
THE TRUSTEE
Section 3.01. The Trustee. The Trustee shall not be responsible in
-----------
any manner whatsoever for or in respect of the validity or sufficiency of this
Trust Supplement or the due execution hereof by the Company, or for or in
respect of the recitals and statements contained herein, all of which recitals
and statements are made solely by the Company.
Except as herein otherwise provided, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed by the Trustee by
reason of this Trust Supplement other than as set forth in the Basic Agreement,
and this Trust Supplement is executed and accepted on behalf of the Trustee,
subject to all the terms and conditions set forth in the Basic Agreement, upon
the effectiveness thereof, as fully to all intents as if the same were herein
set forth at length.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.01. Basic Agreement Ratified. Except and so far as herein
------------------------
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
Section 4.02. GOVERNING LAW. THIS TRUST SUPPLEMENT AND THE SERIES
-------------
1995-A1 CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
Section 4.03. Execution in Counterparts. This Trust Supplement may
-------------------------
be executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
UNITED AIR LINES, INC.
By:
----------------------------------
Name:
Title:
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, as Trustee
By:
---------------------------------
Name:
Title:
EXHIBIT A
---------
FORM OF CERTIFICATE
[Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York Corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch the registered owner hereof,
Cede & Co., has an interest herein.]/*/
UNITED AIRLINES 1995-A1 PASS THROUGH TRUST
Pass Through
Certificate, Series 1995-A1
Issuance Date: ____________
Final Distribution Date: ____________
Evidencing A Fractional Undivided Interest In the 1995-A1 Trust, The
Property Of Which Includes Certain Equipment Notes Each Secured By An
Aircraft Leased To United Air Lines, Inc.
Certificate
No. _______ $ ____________ Fractional Undivided Interest representing 0.___%
of the Trust per $1,000 of Reference Principal Amount
THIS CERTIFIES THAT ______________________, for value received, is the
registered owner of a Fractional Undivided Interest in the amount of $__________
(the "Reference Principal Amount") in the United Airlines 1995-A1 Pass Through
Trust (the
- --------------
/*/ Not necessarily applicable in respect of one Certificate in a denomination
of less than $1,000.
2
"Trust") created by First Security Bank of Utah, National Association, as
trustee (the "Trustee"), pursuant to a Pass Through Trust Agreement, dated as of
February 1, 1992, as amended and restated as of May 1, 1995, (the "Basic
Agreement"), between State Street Bank and Trust Company of Connecticut,
National Association and United Air Lines, Inc., as supplemented by Trust
Supplement No. 1995-A1 thereto, dated as of May 1, 1995 (collectively, the
"Agreement"), between the Trustee and United Air Lines, Inc., a corporation
incorporated under Delaware law (the "Company"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement. This Certificate is one of the duly authorized
Certificates designated as "Pass Through Certificates, Series 1995-A1" (herein
called the "Certificates"). This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Certificateholder of this Certificate by virtue of the acceptance hereof assents
and by which such Certificateholder is bound. The property of the Trust includes
certain Equipment Notes (the "Trust Property"). Each issue of the Equipment
Notes is secured by a security interest in an aircraft leased to the Company.
Each of the Certificates represents a Fractional Undivided Interest in
the Trust and the Trust Property and has no rights, benefits or interest in
respect of any other separate trust established pursuant to the terms of the
Basic Agreement for any other series of certificates issued pursuant thereto.
The undivided percentage interest in the Trust represented by each of this
Certificate (as specified above) and the other Pass Through Certificates, Series
1995-A1, was determined on the basis of (x) the aggregate of the Reference
Principal Amount of this Certificate (as specified above) and of the other Pass
Through Certificates, Series 1995-A1 and (y) the aggregate original principal
amounts of the Equipment Notes constituting the Trust Property.
Subject to and in accordance with the terms of the Agreement, from
funds then available to the Trustee, there will be distributed on each October
19 and April 19 (a "Regular Distribution Date"), commencing on October 19, 1995,
to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Regular Distribution Date, an amount in
respect of the Scheduled Payments on the Equipment Notes due on such Regular
Distribution Date, the receipt of which has been confirmed by the Trustee, equal
to the product of the percentage interest in the Trust evidenced by this
Certificate and an amount equal to the sum of such Scheduled Payments. Subject
to and in accordance with the terms of the Agreement, in the event that Special
Payments on the Equipment Notes are received by the Trustee, from funds then
available to the Trustee, there shall be distributed on the applicable Special
Distribution Date, to the Person in whose name this Certificate is registered at
the close of business on the 15th day preceding the Special Distribution Date,
an amount in respect of such Special Payments on the Equipment Notes, the
receipt of which has been confirmed by the Trustee, equal to the product of the
percentage interest in the Trust evidenced by this Certificate and an amount
3
equal to the sum of such Special Payments so received. If a Regular
Distribution Date or Special Distribution Date is not a Business Day,
distribution shall be made on the immediately following Business Day with the
same force and effect as if made on such Regular Distribution Date or Special
Distribution Date and no interest shall accrue during the intervening period.
The Trustee shall mail notice of each Special Payment and the Special
Distribution Date therefor to the Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without the presentation or surrender of
this Certificate or the making of any notation hereon. Except as otherwise
provided in the Agreement and notwithstanding the above, the final distribution
on this Certificate will be made after notice mailed by the Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency of the Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right or payment, all as
more specifically set forth herein and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
4
As provided in the Agreement and subject to certain limitations set
forth, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
The Certificates (except one Certificate having a denomination of less
than $1,000) are issuable only as registered Certificates without coupons in
minimum denominations of $1,000 Fractional Undivided Interests and integral
multiples thereof. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS
PROVISIONS OF THE STATE OF NEW YORK.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
UNITED AIRLINES
1995-A1 PASS THROUGH TRUST
By: FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, as Trustee
By:
---------------------------------
Title:
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, as Trustee
By:
-------------------------------
Authorized Officer
EXHIBIT B
---------
[FORM OF LETTER OF REPRESENTATIONS]
[TO COME]
EXHIBIT C
---------
Regular Distribution Date Scheduled Payment
------------------------- -----------------
S&S FINAL DRAFT
TRUST SUPPLEMENT NO. 1995-A2
DATED AS OF MAY 1, 1995
TO
PASS THROUGH TRUST
AGREEMENT
DATED AS OF FEBRUARY 1, 1992
AS AMENDED AND RESTATED
AS OF MAY 1, 1995
-----------------------------------------------
UNITED AIR LINES, INC.
AND
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION,
AS TRUSTEE
-----------------------------------------------
$
% UNITED AIRLINES 1995-A2 Pass Through Trust
PASS THROUGH CERTIFICATES, SERIES 1995-A2
TRUST SUPPLEMENT NO. 1995-A2
DATED AS OF MAY 1, 1995
Series 1995-A2 Pass Through Certificates
--------------------------
Table of Contents
--------------------------
Page
----
ARTICLE I
THE CERTIFICATES
Section 1.01. The Certificates.................................... 2
ARTICLE II
DEFINITIONS
Section 2.01. Definitions......................................... 5
ARTICLE III
THE TRUSTEE
Section 3.01. The Trustee......................................... 6
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.01. Acceptance of Appointment Under and Assumption
and Ratification of Basic Agreement................ 6
Section 4.02. Governing Law....................................... 6
Section 4.03. Execution in Counterparts........................... 7
This Trust Supplement No. 1995-A2, dated as of May 1, 1995 (herein
called the "Trust Supplement"), between United Air Lines Inc., a Delaware
corporation (the "Company"), and First Security Bank of Utah, National
Association (the "Trustee"), to the Pass Through Trust Agreement, dated as of
February 1, 1992, as amended and restated as of May 1, 1995, between the Company
and State Street Bank and Trust Company of Connecticut, National Association
(the "Basic Agreement").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Basic Agreement, unlimited as to the aggregate principal
amount of Certificates (unless otherwise specified herein, capitalized terms
used herein without definition having the respective meanings specified
heretofore in the Basic Agreement) which may be issued thereunder has heretofore
been executed and delivered;
WHEREAS, the Owner Trustee, acting on behalf of an Owner Participant,
will issue, on a non-recourse basis, Equipment Notes, among other things, to
refinance the outstanding debt portion of the purchase price of the aircraft
purchased by such Owner Trustee and leased to the Company pursuant to the
related Lease;
WHEREAS, pursuant to the terms and conditions of the Basic Agreement
as supplemented by this Trust Supplement (the "Agreement"), the Trustee shall
purchase such Equipment Notes issued by such Owner Trustee of the same tenor as
the Certificates issued hereunder and shall hold such Equipment Notes in trust
for the benefit of the Certificateholders;
WHEREAS, the Trustee hereby declares the creation of this Trust (the
"1995-A2 Trust") for the benefit of the Certificateholders, and the initial
Certificateholders as the grantors of the 1995-A2 Trust, by their respective
acceptances of the Certificates, join in the creation of this 1995-A2 Trust with
the Trustee;
WHEREAS, all of the conditions and requirements necessary to make this
Trust Supplement, when duly executed and delivered, a valid, binding and legal
instrument in accordance with its terms and for the purposes herein expressed,
have been done, performed and fulfilled, and the execution and delivery of this
Trust Supplement in the form and with the terms hereof have been in all respects
duly authorized;
WHEREAS, this Trust Supplement is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions;
NOW THEREFORE, in consideration of the premises herein, it is agreed
between the Company and the Trustee as follows:
2
ARTICLE I
THE CERTIFICATES
Section 1.01. The Certificates. There is hereby created a series of
----------------
Certificates to be issued under the Agreement to be distinguished and known as
"Pass Through Certificates, Series 1995-A2" (hereinafter defined as the "Series
1995-A2 Certificates"). Each Certificate represents a Fractional Undivided
Interest in the 1995-A2 Trust created hereby. The terms and conditions
applicable to the Series 1995-A2 Certificates are as follows:
1. The aggregate principal amount of the Series 1995-A2 Certificates
that shall be authenticated under the Agreement (except for Series 1995-A2
Certificates authenticated and delivered pursuant to Section 3.03, 3.04 and
3.05 of the Basic Agreement) upon their initial issuance is $ .
2. The Cut-off Date is June 30, 1995.
3. The Regular Distribution Dates with respect to any payment of
Scheduled Payments means each October 19 and April 19, commencing October
19, 1995 until payment of all of the Scheduled Payments to be made under
the Equipment Notes has been made.
4. The Scheduled Payments shall be as set forth in Exhibit C hereto.
5. The Special Distribution Dates are as follows: (i) when used with
respect to the redemption or purchase of any Equipment Notes, the day
(which shall be a Business Day) on which such redemption or purchase is
scheduled to occur pursuant to the terms of the applicable Indenture and
(ii) when used with respect to a Special Payment other than as described in
clause (i) above, 20 days after the last date on which the Trustee must
give notice pursuant to Section 4.02(c) of the Basic Agreement (or the next
Business Day after such 20th day if such date is not a Business Day).
6. The Series 1995-A2 Certificates shall be in the form attached
hereto as Exhibit A. The Series 1995-A2 Certificates shall be Book-Entry
Certificates and shall be subject to the conditions set forth in the Letter
of Representations between the Company and the Clearing Agency attached
hereto as Exhibit B.
7. The proceeds of the Series 1995-A2 Certificates shall be used to
purchase the Equipment Notes in the principal amount specified below:
3
Principal
Equipment Note Amount Maturity
- -------------- --------- --------
Series 1995 777 A-1 $________ _________ __, ____
Series 1995 777 B-1 $________ _________ __, ____
Series 1993 747 A-1 $________ _________ __, ____
8. The Owner Trustee, acting on behalf of an Owner Participant, will
issue on a non-recourse basis, the Equipment Notes, the proceeds of which
shall be used, among other things, to refinance the outstanding debt
portion of the purchase price of the following Aircraft:
U.S.
Registration Manufacturer's
Aircraft Number Serial Number
-------- ------------ --------------
1 Boeing 777-200 N777UA 26916
1 Boeing 777-200 N766UA 26917
1 Boeing 747-422 N189UA 26878
9. The related Note Documents are as follows:
(a) Trust Indenture and Mortgage (1995 777 A), dated as of May 1,
1995;
(b) Lease Agreement (1995 777 A), dated as of May 1, 1995;
(c) Owner Trustee's Purchase Agreement and Assignment (1995 777 A),
dated as of May 1, 1995;
(d) Participation Agreement (1995 777 A), dated as of May 1, 1995;
(e) Trust Agreement (1995 777 A), dated as of May 1, 1995;
(f) Lease Supplement (1995 777 A), dated the relevant Transfer Date;
(g) Trust Supplement (1995 777 A), dated the relevant Transfer Date;
(h) Trust Indenture and Mortgage (1995 777 B), dated as of May 1,
1995;
(i) Lease Agreement (1995 777 B), dated as of May 1, 1995;
4
(j) Owner Trustee's Purchase Agreement Assignment (1995 777 B), dated
as of May 1, 1995;
(k) Participation Agreement (1995 777 B), dated as of May 1, 1995;
(l) Trust Agreement (1995 777 B), dated as of May 1, 1995;
(m) Lease Supplement (1995 777 B), dated the relevant Transfer Date;
(n) Trust Supplement (1995 777 B), dated the relevant Transfer Date;
(o) Trust Indenture and Mortgage (1993 747 A) dated as of April 1,
1993, as supplemented, and as amended and restated by the First
Amended and Restated Trust Indenture and Mortgage (1993 747 A)
dated as of April 1, 1993, and as further amended and restated by
the Second Amended and Restated Trust Indenture and Mortgage
(1993 747 A), dated as of July 1, 1994, as amended by the First
Amendment to Second Amended and Restated Trust Indenture and
Mortgage (1993 747 A) dated September 27, 1994 and as further
amended and restated by the Third Amended and Restated Trust
Indenture and Mortgage (1993 747A), dated as of as of May 1, 1995
and effective as of the Effective Date;
(p) Lease Agreement (1993 747 A) dated as of April 1, 1993, as
supplemented, and as amended and restated by the First Amended
and Restated Lease Agreement (1993 747 A) dated as of April 1,
1993, as amended by the First Amendment to First Amended and
Restated Lease Agreement (1993 747 A), dated April 19, 1994,
Second Amendment to First Amended and Restated Lease Agreement
(1993 747 A) dated as of July 1, 1994, and the Third Amendment to
First Amended and Restated Lease Agreement (1993 747 A) dated
July 22, 1994 and as amended and restated by the Second Amended
and Restated Lease Agreement (1993 747 A) dated as of May 1, 1995
and effective as of the Effective Date;
(q) Owner Trustee's Purchase Agreement and Assignment (1993 747 A),
dated as of April 1, 1993;
(r) Participation Agreement (1993 747 A), dated as of April 1, 1993,
as amended by the First Amendment to Participation Agreement
(1993 747 A), dated as of December 1, 1993, Second Amendment to
Participation Agreement (1993 47 A) dated as of July 1, 1994, and
as amended and restated by the First Amended and Restated
Participation Agreement (1993 747 A), dated as of May 1, 1995 and
effective as of the Effective Date;
5
(s) Trust Agreement (1993 747 A), dated as of April 1, 1993, as
amended and restated by the First Amended and Restated Trust
Agreement (1993 747 A) dated as of May 1, 1995 and effective as
of the Effective Date;
(t) Lease Supplement (1993 747 A), dated April 20, 1993;
(u) Trust Supplement (1993 747 A), dated April 20, 1993; and
(v) Redemption and Refinancing Agreement (1993 747 A), dated as of
May 1, 1995 and effective as of the Effective Date.
ARTICLE II
DEFINITIONS
Section 2.01. Definitions. For all purposes of the Basic Agreement
-----------
as supplemented by this Trust Supplement, the following capitalized term has the
following meaning:
Effective Date: shall have the meaning specified therefor in the
--------------
lease.
Specified Investments: With respect to any Trust, means (i)
---------------------
obligations of, or guaranteed by, the United States Government or agencies
thereof, (ii) open market commercial paper of any corporation incorporated
under the laws of the United States of America or any State thereof rated
at least P-2 (or P-1, in the case of Escrowed Funds) or its equivalent by
Moody's Investors Service, Inc. or at least A-2 (or A-1, in the case of
Escrowed Funds) or its equivalent by Standard & Poor's Corporation, (iii)
certificates of deposit issued by commercial banks organized under the laws
of the United States or of any political subdivision thereof having a
combined capital and surplus in excess of $500,000,000 which banks or their
holding companies have a rating of A or its equivalent by Moody's
Investment Service, Inc. or Standard & Poor's Corporation; provided,
--------
however, that the aggregate amount at any one time so invested in
-------
certificates of deposit issued by any one bank shall not exceed 5% of such
bank's capital and surplus, (iv) U.S. dollar denominated offshore
certificates of deposit issued by, or offshore time deposits with, any
commercial bank described in (iii) or any subsidiary thereof and (v)
repurchase agreements with any financial institution having combined
capital and surplus of at least $500,000,000 with any of the obligations
described in clauses (i) through (iv) as collateral; provided further that
-------- -------
6
if all of the above investments are unavailable, the entire amounts to be
invested may be used to purchase Federal Funds from an entity described in
clause (iii) above; and provided further that no investment shall be
-------- -------
eligible as a "Specified Investment" unless the final maturity or date of
return of such investment is on or before the Special Distribution Date
next following the Cut-Off Date for such Trust by more than 20 days.
ARTICLE III
THE TRUSTEE
Section 3.01. The Trustee. The Trustee shall not be responsible in
-----------
any manner whatsoever for or in respect of the validity or sufficiency of this
Trust Supplement or the due execution hereof by the Company, or for or in
respect of the recitals and statements contained herein, all of which recitals
and statements are made solely by the Company.
Except as herein otherwise provided, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed by the Trustee by
reason of this Trust Supplement other than as set forth in the Basic Agreement,
and this Trust Supplement is executed and accepted on behalf of the Trustee,
subject to all the terms and conditions set forth in the Basic Agreement, upon
the effectiveness thereof, as fully to all intents as if the same were herein
set forth at length.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.01. Basic Agreement Ratified. Except and so far as herein
------------------------
expressly provided, all of the provisions, terms and conditions of the Basic
Agreement are in all respects ratified and confirmed; and the Basic Agreement
and this Trust Supplement shall be taken, read and construed as one and the same
instrument.
Section 4.02. GOVERNING LAW. THIS TRUST SUPPLEMENT AND THE SERIES
-------------
1995-A2 CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
Section 4.03. Execution in Counterparts. This Trust Supplement may
-------------------------
be executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Trust
Supplement to be duly executed by their respective officers thereto duly
authorized, as of the day and year first written above.
UNITED AIR LINES, INC.
By:
--------------------------------
Name:
Title:
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, as Trustee
By:
--------------------------------
Name:
Title:
EXHIBIT A
---------
FORM OF CERTIFICATE
[Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York Corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch the registered owner hereof,
Cede & Co., has an interest herein.]*
UNITED AIRLINES 1995-A2 PASS THROUGH TRUST
Pass Through
Certificate, Series 1995-A2
Issuance Date: ____________
Final Distribution Date: ____________
Evidencing A Fractional Undivided Interest In the 1995-A2 Trust, The
Property Of Which Includes Certain Equipment Notes Each Secured By An
Aircraft Leased To United Air Lines, Inc.
Certificate
No. _______ $ ____________ Fractional Undivided Interest representing 0.___%
of the Trust per $1,000 of Reference Principal Amount
THIS CERTIFIES THAT ______________________, for value received, is the
registered owner of a Fractional Undivided Interest in the amount of $__________
(the "Reference Principal Amount") in the United Airlines 1995-A2 Pass Through
Trust (the
- ------------
* Not necessarily applicable in respect of one Certificate in a denomination of
less than $1,000.
2
"Trust") created by First Security Bank of Utah, National Association, as
trustee (the "Trustee"), pursuant to a Pass Through Trust Agreement, dated as of
February 1, 1992, as amended and restated as of May 1, 1995, (the "Basic
Agreement"), between State Street Bank and Trust Company of Connecticut,
National Association and United Air Lines, Inc., as supplemented by Trust
Supplement No. 1995-A2 thereto, dated as of May 1, 1995 (collectively, the
"Agreement"), between the Trustee and United Air Lines, Inc., a corporation
incorporated under Delaware law (the "Company"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement. This Certificate is one of the duly authorized
Certificates designated as "Pass Through Certificates, Series 1995-A2" (herein
called the "Certificates"). This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Certificateholder of this Certificate by virtue of the acceptance hereof assents
and by which such Certificateholder is bound. The property of the Trust includes
certain Equipment Notes (the "Trust Property"). Each issue of the Equipment
Notes is secured by a security interest in an aircraft leased to the Company.
Each of the Certificates represents a Fractional Undivided Interest in
the Trust and the Trust Property and has no rights, benefits or interest in
respect of any other separate trust established pursuant to the terms of the
Basic Agreement for any other series of certificates issued pursuant thereto.
The undivided percentage interest in the Trust represented by each of this
Certificate (as specified above) and the other Pass Through Certificates, Series
1995-A2, was determined on the basis of (x) the aggregate of the Reference
Principal Amount of this Certificate (as specified above) and of the other Pass
Through Certificates, Series 1995-A2 and (y) the aggregate original principal
amounts of the Equipment Notes constituting the Trust Property.
Subject to and in accordance with the terms of the Agreement, from
funds then available to the Trustee, there will be distributed on each October
19 and April 19 (a "Regular Distribution Date"), commencing on October 19, 1995,
to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Regular Distribution Date, an amount in
respect of the Scheduled Payments on the Equipment Notes due on such Regular
Distribution Date, the receipt of which has been confirmed by the Trustee, equal
to the product of the percentage interest in the Trust evidenced by this
Certificate and an amount equal to the sum of such Scheduled Payments. Subject
to and in accordance with the terms of the Agreement, in the event that Special
Payments on the Equipment Notes are received by the Trustee, from funds then
available to the Trustee, there shall be distributed on the applicable Special
Distribution Date, to the Person in whose name this Certificate is registered at
the close of business on the 15th day preceding the Special Distribution Date,
an amount in respect of such Special Payments on the Equipment Notes, the
receipt of which has been confirmed by the Trustee, equal to the product of the
percentage interest in the Trust evidenced by this Certificate and an amount
3
equal to the sum of such Special Payments so received. If a Regular Distribution
Date or Special Distribution Date is not a Business Day, distribution shall be
made on the immediately following Business Day with the same force and effect as
if made on such Regular Distribution Date or Special Distribution Date and no
interest shall accrue during the intervening period. The Trustee shall mail
notice of each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Trustee by check
mailed to the Person entitled thereto, without the presentation or surrender of
this Certificate or the making of any notation hereon. Except as otherwise
provided in the Agreement and notwithstanding the above, the final distribution
on this Certificate will be made after notice mailed by the Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the office or agency of the Trustee specified in such notice.
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right or payment, all as
more specifically set forth herein and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only
from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement may
be examined during normal business hours at the principal office of the Trustee,
and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.
4
As provided in the Agreement and subject to certain limitations set
forth, the transfer of this Certificate is registrable in the Register upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.
The Certificates (except one Certificate having a denomination of less
than $1,000) are issuable only as registered Certificates without coupons in
minimum denominations of $1,000 Fractional Undivided Interests and integral
multiples thereof. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.
THE AGREEMENT AND THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PROVISIONS OF THE STATE OF NEW YORK.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
UNITED AIRLINES
1995-A2 PASS THROUGH TRUST
By: FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, as Trustee
By:
-------------------------------
Title:
[FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Certificates referred
to in the within-mentioned Agreement.
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, as Trustee
By:
------------------------------
Authorized Officer
EXHIBIT B
---------
[FORM OF LETTER OF REPRESENTATIONS]
[TO COME]
EXHIBIT C
---------
Regular Distribution Date Scheduled Payment
------------------------- -----------------
EXHIBIT 4.1
_______________________________________________
-----------------------------------------------
TRUST INDENTURE AND MORTGAGE
(1995 777 A)
Dated as of May 1, 1995
between
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity except as expressly set forth herein,
but solely as Owner Trustee,
and
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
as Indenture Trustee
One Boeing 777-222 Aircraft N777UA
United Air Lines, Inc.
Series 1995 777 A Certificates
_______________________________________________
-----------------------------------------------
TABLE OF CONTENTS
-----------------
Page
----
RECITALS................................................................... 1
GRANTING CLAUSE............................................................ 2
HABENDUM CLAUSE............................................................ 5
ARTICLE 1 DEFINITIONS..................................................... 7
1.01. Definitions................................................... 7
ARTICLE 2 THE CERTIFICATES................................................ 19
2.01. Certificates; Title and Terms................................. 19
2.02. Execution and Authentication.................................. 20
2.03. Registrar and Paying Agent.................................... 20
2.04. Transfer and Exchange......................................... 21
2.05. Holder Lists; Ownership of Certificates....................... 21
2.06. Mutilated, Destroyed, Lost or Stolen Certificates............. 22
2.07. Cancellation.................................................. 22
2.08. Payment on Certificates; Defaulted Principal and Interest..... 22
2.09. Payment from Indenture Estate Only; Non-Recourse Obligations.. 24
2.10. Execution, Delivery and Dating of Certificates upon Original
Issuance..................................................... 25
ARTICLE 3 RECEIPT, DISTRIBUTION AND APPLICATION
OF FUNDS IN THE INDENTURE ESTATE......................... 25
3.01. [Reserved for Potential Future Use]........................... 25
3.02. Payment in Case of Redemption or Purchase of Certificates..... 25
3.03. Application of Rent When No Indenture Event of Default Is
Continuing................................................... 26
3.04. Application of Certain Payments in Case of Requisition or
Event of Loss................................................ 26
3.05. Payments During Continuance of Indenture Event of Default..... 27
3.06. Payments for Which Application Is Provided in Other Documents. 28
3.07. Payments for Which No Application Is Otherwise Provided....... 28
ARTICLE 4 COVENANTS OF OWNER TRUSTEE...................................... 29
4.01. Covenants of the Owner Trustee................................ 29
ii
ARTICLE 5 DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY
INCLUDED IN THE INDENTURE ESTATE DURING CONTINUATION OF
LEASE.................................................... 30
5.01. Disposition, Substitution and Release of Property Included in
the Indenture Estate During Continuation of Lease............ 30
ARTICLE 6 REDEMPTION OF CERTIFICATES...................................... 31
6.01. Redemption of Certificates upon Certain Events................ 31
6.02. Redemption or Purchase of Certificates upon Certain Indenture
Events of Default............................................ 33
6.03. Notice of Redemption to Holders............................... 34
6.04. Deposit of Redemption Price................................... 34
6.05. Certificates Payable on Redemption Date....................... 34
ARTICLE 7 MATTERS CONCERNING THE COMPANY.................................. 35
7.01. Repayment of Monies for Certificate Payments Held by the
Indenture Trustee............................................ 35
7.02. Change in Registration........................................ 35
7.03. Assumption of Obligations of Owner Trustee by the Company..... 36
ARTICLE 8 DEFAULTS AND REMEDIES........................................... 38
8.01. Indenture Events of Default................................... 38
8.02. Acceleration; Rescission and Annulment........................ 41
8.03. Other Remedies Available to Indenture Trustee................. 41
8.04. Waiver of Owner Trustee....................................... 49
8.05. Waiver of Existing Defaults................................... 49
8.06. Control by Majority........................................... 50
8.07. Limitation on Suits by Holders................................ 50
8.08. Rights of Holders to Receive Payment.......................... 51
8.09. Indenture Trustee May File Proofs of Claim.................... 51
ARTICLE 9 INDENTURE TRUSTEE............................................... 51
9.01. Duties of Indenture Trustee................................... 51
9.02. Rights of Indenture Trustee................................... 51
9.03. Individual Rights of Indenture Trustee........................ 52
9.04. Funds May Be Held by Indenture Trustee or Paying Agent;
Investments.................................................. 52
9.05. Notice of Defaults............................................ 53
9.06. Compensation and Indemnity.................................... 53
9.07. Replacement of Indenture Trustee.............................. 54
9.08. Successor Indenture Trustee, Agents by Merger, etc............ 55
iii
9.09. Eligibility; Disqualification................................. 55
9.10. Trustee's Liens............................................... 56
9.11. Withholding Taxes; Information Reporting...................... 56
9.12. Additional Collateral......................................... 56
ARTICLE 10 SATISFACTION AND DISCHARGE; DEFEASANCE;
TERMINATION OF OBLIGATIONS............................... 57
10.01. Satisfaction and Discharge of Agreement; Defeasance;
Termination of Obligations............................... 57
10.02. Survival of Certain Obligations.............................. 59
10.03. Monies to Be Held in Trust................................... 59
10.04. Monies to Be Returned to Owner Trustee....................... 59
ARTICLE 11 AMENDMENTS AND WAIVERS......................................... 60
11.01. Amendments to this Agreement Without Consent of Holders...... 60
11.02. Amendments to this Agreement with Consent of Holders......... 61
11.03. Revocation and Effect of Consents............................ 62
11.04. Notation on or Exchange of Certificates...................... 62
11.05. Indenture Trustee Protected.................................. 62
11.06. Amendments, Waivers, etc. of Other Operative Documents....... 62
ARTICLE 12 MISCELLANEOUS.................................................. 65
12.01. Notices...................................................... 65
12.02. [Reserved for Potential Future Use].......................... 67
12.03. [Reserved for Potential Future Use].......................... 67
12.04. Rules by Indenture Trustee and Agents........................ 67
12.05. Non-Business Days............................................ 67
12.06. GOVERNING LAW................................................ 68
12.07. No Recourse Against Others................................... 68
12.08. Execution in Counterparts.................................... 68
ARTICLE 13 ACTIONS TO BE TAKEN UPON TERMINATION OF LEASE.................. 68
13.01. Actions to Be Taken upon Termination of Lease................ 68
iv
SIGNATURES................................................................. 70
Exhibit A-1 Form of Series 1995 777 A Installment
Certificates
Exhibit A-2 Form of Series 1995 777 A Serial
Certificates
Exhibit B Maturity Dates, Original Issue Prices,
Principal Amounts and
Interest Rates of Series 1995 777 A
Certificates
Exhibit B-1 Installment Payment Dates and Installment
Payment Percentages
Exhibit B-2 Issuance of Series 1995 777 A
Certificates
Exhibit C Form of Trust Agreement and Trust Indenture
and Mortgage Supplement
TRUST INDENTURE AND MORTGAGE
This TRUST INDENTURE AND MORTGAGE (1995 777 A), dated as of May 1,
1995, between STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, not in its individual capacity except as otherwise expressly provided
herein, but solely as Owner Trustee under the Trust Agreement (capitalized terms
used herein having the respective meanings specified therefor in Article 1), and
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, a national banking
association, as Indenture Trustee hereunder.
W I T N E S S E T H:
-------------------
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 Certificates issued hereunder, and (ii) the Owner Trustee has
been authorized and directed pursuant to the Trust Agreement to execute and
deliver this Trust Indenture and Mortgage;
WHEREAS, all capitalized terms used herein shall have the respective
meanings set forth or referred to in Article 1 hereof;
WHEREAS, the parties desire by this Agreement, among other things, (i)
to provide for the issuance by the Owner Trustee of the Series 1995 777 A
Certificates evidencing the loans made by the Pass Through Trustees to finance
the Owner Trustee's payment of Lessor's Cost, as provided in the Participation
Agreement, and (ii) to provide for the assignment, mortgage and pledge by the
Owner Trustee to the Indenture 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 Indenture Trustee, for the ratable benefit and security of
the Holders;
WHEREAS, all things have been done to make the Certificates, when
executed by the Owner Trustee and authenticated and delivered by the Indenture
Trustee hereunder, the valid, binding and enforceable obligations of the Owner
Trustee; and
WHEREAS, all things necessary to make this Agreement the legal, valid
and binding obligation of the Owner Trustee and the Indenture Trustee, for the
uses and purposes
2
herein set forth, in accordance with its terms, have been done and performed and
have happened;
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND MORTGAGE WITNESSETH, that, to
secure the prompt payment of the principal of, premium, if any, and interest on,
and all other amounts due with respect to, all Certificates 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 Operative
Documents to which it is a party, for the benefit of the Holders, 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 Certificates by the Holders, and of other good and valuable
consideration the receipt and adequacy whereof are 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 Indenture Trustee, its
successors and assigns, for the security and benefit of the Holders from time to
time, a 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 Agreement by any instrument
supplemental hereto, but excluding the Excluded Payments, are herein called the
"Indenture Estate"):
(1) the Airframe and Engines (each such Engine having 750 or more
rated take-off horsepower or the equivalent thereof) and all replacements
thereof and substitutions therefor in which the Owner Trustee shall from
time to time acquire an interest in accordance with the Lease, as more
particularly described in the Trust Supplement and the Lease Supplement
executed and delivered with respect to the Aircraft or any such
replacements or substitutions therefor, as provided in this Agreement and
the Lease;
(2) the Lease and all Rent thereunder, including, without limitation,
all amounts of Basic Rent, Supplemental Rent, and payments of any kind
required to be made by the Company thereunder; all amounts payable to the
Owner Trustee under the Participation Agreement that do not constitute
Excluded Payments; the Purchase Agreement (to the extent assigned by the
Owner Trustee's Purchase Agreement), the Owner Trustee's Purchase
Agreement, the Owner Trustee's Bill of Sale, the Owner Trustee's FAA Bill
of Sale and any and all contracts relating to the Airframe and Engines or
any rights or interest therein to which the Owner Trustee is now or may
hereafter be a party; including, without limitation, all rights of the
Owner Trustee to receive any payments or other amounts or to exercise any
election or option or to
3
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 (other than the rights of the Owner Trustee provided for
hereunder);
(3) all rents, issues, profits, revenues and other income of the
property subjected or required to be subjected to the Lien of this
Agreement;
(4) all requisition proceeds with respect to the Aircraft or any part
thereof (to the extent of the Owner Trustee's interest therein pursuant to
the terms of the Lease) and all insurance proceeds with respect to the
Aircraft or any part thereof from insurance required to be maintained by
the Company under Section 11 of the Lease, but excluding any insurance
maintained by the Company 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 Indenture 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 Indenture Trustee
hereunder;
(6) all proceeds of the foregoing; and
(7) the Additional Collateral, if any.
Notwithstanding the foregoing provisions:
(a) there shall be excluded from the security interest granted by this
Agreement all Excluded Payments;
(b) (i) whether or not a Lease Event of Default or an Indenture 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
Indenture Trustee (a) to Excluded Payments and to commence an action at law
to obtain such Excluded Payments, (b) to adjust Basic Rent and the
percentages relating to Stipulated Loss Value and Termination Value, the
Special Termination Value Percentage and the EBO Percentages as provided in
Section 3(c) of the Lease and Section 18 of the Participation Agreement,
(c) to exercise any election or option to make any decision or
determination, or to give or receive any notice, consent, waiver or
approval, or to take any other action in respect of, but in each case only
to the extent relating to,
4
Excluded Payments, (d) to retain the rights of the "Lessor" with respect to
solicitations of bids, and the election to retain the Aircraft pursuant to
Section 9 of the Lease, (e) to exercise the right of "Lessor" to determine
the fair market rental value or fair market sales value pursuant to Section
19 of the Lease, (f) to exercise all rights with respect to insurance
maintained for its own account which Section 11(e) of the Lease
specifically confers on the "Lessor" and (g) to exercise, to the extent
necessary to enable it to exercise its rights under Section 8.03(e)(i)
hereof, the rights of the "Lessor" under Section 21 of the Lease;
(ii) whether or not a Lease Event of Default or Indenture Event of
Default shall occur and be continuing, the Owner Trustee and the Indenture
Trustee shall each have the right separately but not to the exclusion of
the other, (a) to receive from the Company all notices, certificates,
reports, filings, Opinions of Counsel, copies of all documents and all
information which the Company is permitted or required to give or furnish
to the "Lessor" pursuant to the Lease or to the Owner Trustee pursuant to
any other Operative Document, (b) to exercise inspection rights pursuant to
Section 12 of the Lease, (c) to maintain separate insurance pursuant to
Section 11(e) of the Lease and to retain all rights with respect to such
insurance maintained for its own account, (d) to give any notice of default
under Section 15 of the Lease and to declare the Lease in default in
respect thereof, (e) to cause the Company to take any action and execute
and deliver such documents and assurances as the "Lessor" may from time to
time reasonably request pursuant to Section 16 of the Lease; (f) to consent
(with the concurrent consent of the other such party to the extent such
consent is required) to changes to the list of countries on Exhibit F or G
to the Lease and (g) to purchase an engine pursuant to Section 5(e) of the
Lease;
(iii) so long as no Indenture Event of Default shall have occurred
and be continuing (but subject to the provisions of Section 11.06), the
Owner Trustee shall retain the right, to the exclusion of the Indenture
Trustee, to exercise the following rights of the "Lessor" under the Lease:
(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, (b) the right to
waive the opinion required pursuant to Section 8(e)(ii)(C) of the
Participation Agreement and (c) in connection with an Event of Loss
relating only to one or more Engines, the right to elect (or not to elect)
under Section 10(b) of the Lease to require the Company to pay the amounts
set forth in clauses (A) and (B) of Section 10(b);
(c) the leasehold interest granted to the Company by the Lease shall
not be subject to the security interest granted by this Agreement, and
nothing in this Agreement shall affect the rights of the Company under the
Lease so long as no Lease Event of Default has occurred and is continuing;
and
5
(d) as between the Owner Trustee and the Indenture Trustee, nothing
contained in this Granting Clause shall prevent the Owner Trustee, as the
"Lessor" under the Lease, from seeking specific performance of the
covenants of the Company under the Lease relating to the protection,
insurance, maintenance, possession and use of the Aircraft and from
maintaining separate insurance with respect to the Aircraft to the extent
permitted by Section 11 of the Lease.
None of the payments and rights described in the foregoing clauses (a)
through (d) shall be included in the Indenture Estate.
HABENDUM CLAUSE
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, in trust for the benefit and
security of the Indenture Trustee and the Holders from time to time, without any
priority of any one Certificate over any other, and for the uses and purposes
and subject to the terms and provisions set forth in this Agreement.
1. The Owner Trustee agrees that this Agreement creates and grants
and is intended to and shall create and grant a security interest in the
Aircraft to the Indenture Trustee, which security interest shall attach on the
Delivery Date. The security interest created by this Agreement and granted to
the Indenture Trustee hereunder in the Indenture Estate other than in the
Aircraft shall attach upon the delivery of this Agreement.
2. 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 its obligations
assumed by it thereunder, all in accordance with and pursuant to the terms and
provisions thereof, and the Indenture Trustee and the Holders 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 Indenture Trustee (except as to the Indenture Trustee, if the
Indenture Trustee shall have become the "Lessor" under the Lease) or the Holders
be required or obligated in any manner to perform or fulfill any obligations of
the Owner Trustee under any of the Operative Documents to which the Owner
Trustee is a party, or, except as herein expressly provided, to make any
payment, or to make any inquiry as to the nature or sufficiency of any payment
received by it, or present or file any claim, or take any action to collect or
enforce the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
3. The Owner Trustee does hereby constitute the Indenture Trustee
the true and lawful attorney of the Owner Trustee, irrevocably, with full power
(in the name of
6
the Owner Trustee or otherwise) subject to the terms and conditions of this
Indenture, 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 Excluded Payments) under or arising out of the Lease
(subject to Section 11.06(b)(1)), the Purchase Agreement and the Owner Trustee's
Purchase Agreement, 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 Indenture Trustee may deem to be necessary or advisable in
the premises. The Owner Trustee has directed the Company to make all payments
of Rent (other than Excluded Payments) payable to the Owner Trustee by the
Company and all other amounts which are required to be paid to or deposited with
the Owner Trustee pursuant to the Lease directly to the Indenture Trustee at
such address as the Indenture Trustee shall specify, for application as provided
in this Agreement. The Owner Trustee agrees that promptly on receipt thereof,
it will transfer to the Indenture Trustee any and all moneys from time to time
received by it constituting part of the Indenture Estate, for distribution by
the Indenture Trustee pursuant to this Agreement, except that the Owner Trustee
shall accept for distribution pursuant to the Trust Agreement any amounts
distributed to it by the Indenture Trustee as expressly provided in this
Agreement and any Excluded Payments.
4. The Owner Trustee agrees that at any time and from time to time,
upon the written request of the Indenture Trustee, the Owner Trustee will
promptly and duly execute and deliver or cause to be duly executed and delivered
any and all such further instruments and documents as the Indenture Trustee may
reasonably deem desirable in obtaining the full benefits of the assignment
hereunder and of the rights and powers herein granted; provided, however, that
-------- -------
the Owner Trustee shall have no obligation to execute and deliver or cause to be
executed or delivered to the Indenture Trustee any such instrument or document
if such execution and delivery would result in the imposition of additional
liabilities on the Owner Trustee or the Owner Participant and would result in a
burden on the Owner Participant's business activities, unless the Owner Trustee
or the Owner Participant, as the case may be, is indemnified to its reasonable
satisfaction against any losses, liabilities and expenses incurred in connection
with such execution and delivery pursuant to any Operative Document.
5. The Owner Trustee does hereby warrant and represent that it has
not assigned or pledged, and hereby covenants that it will not assign or pledge,
so long as the assignment hereunder shall remain in effect, any of its right,
title or interest hereby assigned, to any Person other than the Indenture
Trustee, and that it will not, except as provided in or permitted by this
Agreement, accept any payment from the Company, enter into an agreement amending
or supplementing any of the Operative Documents, execute any waiver or
modification of, or consent under the terms of any of the Operative Documents,
settle or compromise any claim (other than claims in respect of Excluded
Payments) against the Company arising under any of the Operative Documents, or
submit or consent to the
7
submission of any dispute, difference or other matter arising under or in
respect of any of the Operative Documents, to arbitration thereunder.
IT IS HEREBY FURTHER COVENANTED AND AGREED by and among the parties
hereto as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. (a) For all purposes of this Agreement,
-----------
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article 1 have the meanings assigned to
them in this Article 1, and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(4) all references in this Agreement to Articles, Sections and
Exhibits refer to Articles, Sections and Exhibits of this Agreement.
(b) For all purposes of this Agreement, the following capitalized
terms have the following respective meanings:
"Actual Knowledge" means, (i) as it applies to the Owner Trustee or
----------------
Indenture Trustee, as the case may be, actual knowledge of a responsible officer
in the Corporate Trust Department or the Corporate Trust Office, as the case may
be, and (ii) as it applies to the Owner Participant, actual knowledge of a Vice
President or more senior officer of the Owner Participant or other officer of
the Owner Participant in each case having responsibility for the transactions
contemplated by the Operative Documents; provided that each of the Owner
Trustee, the Indenture Trustee and the Owner Participant shall be deemed to have
"Actual Knowledge" of any matter as to which it has been given notice by any of
Lessee, the Owner Participant, any Holder, the Owner Trustee or the Indenture
Trustee, such notice having been given pursuant to and in accordance with
Section 12.01.
8
"Additional Collateral" means any property in addition to the
---------------------
collateral listed in clauses (1) through (5) of the Granting Clause which may be
added to the Indenture Estate from time to time by the Owner Participant in
accordance with Section 9.12 hereof for so long as such property is to be
included in the Indenture Estate in accordance with the grant made in said
Section 9.12.
"Affiliate" with respect to a specified Person, means any other Person
---------
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person. For the purposes of this definition, "control"
when used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Paying Agent or Registrar.
-----
"Aircraft" shall have the meaning specified therefor in the Lease.
--------
"Airframe" shall have the meaning specified therefor in the Lease.
--------
"Appraiser" means a Person engaged in the business of making
---------
appraisals and, in the case of the Aircraft, familiar with commercial aviation
equipment.
"Bankruptcy Code" shall have the meaning specified therefor in the
---------------
Lease
"Basic Rent" shall have the meaning specified therefor in the Lease.
----------
"Business Day" shall have the meaning specified therefor in the Lease.
------------
"Certificate" or "Certificates" means any Certificate issued under
----------- ------------
this Agreement, including the Series 1995 777 A Certificates issued hereunder
substantially in the form of Exhibits A-1 and A-2 hereto as such form may be
varied pursuant to the terms hereof and any and all Certificates issued in
replacement or exchange therein in accordance with the provisions hereof.
"Certificate Holder" shall have the meaning specified for the term
------------------
"Holder" hereunder.
"Citizen of the United States" shall have the meaning specified
----------------------------
therefor in the Lease.
"Commencement Date" shall have the meaning specified therefor in the
-----------------
Lease.
9
"Commencement Date Cash Interest" when used with respect to a
-------------------------------
Certificate, shall be such Certificate's pro rata portion of the aggregate
--- ----
commencement date cash interest as determined on the basis of the data included
in Exhibit B.
"Company" means United Air Lines, Inc., a Delaware corporation, and,
-------
subject to the provisions of the Participation Agreement, its permitted
successors and assigns.
"Company Request" means a written request of the Company executed on
---------------
its behalf by a Responsible Company Officer.
"Co-Registrar" shall have the meaning specified therefor in Section
------------
2.03.
"Debt" shall mean any liability for borrowed money, or any liability
----
for the payment of money in connection with any letter of credit transaction, or
other liabilities evidenced or to be evidenced by bonds, debentures, notes or
other similar instruments.
"Defaulted Installment" shall have the meaning specified therefor in
---------------------
Section 2.08.
"Defaulted Interest" shall have the meaning specified therefor in
------------------
Section 2.08.
"Delivery Date" shall have the meaning specified therefor in the
-------------
Lease.
"EBO Date" shall have the meaning specified therefor in the Lease.
--------
"Engine" shall have the meaning specified therefor in the Lease.
------
"Event of Loss" shall have the meaning specified therefor in the
-------------
Lease.
"Excess Amount" shall have the meaning specified therefor in the
-------------
Lease.
"Excluded Payments" means (i) any right, title or interest of the
-----------------
Owner Trustee in its individual capacity, the Owner Participant or their
respective Affiliates or of their respective successors, permitted assigns,
directors, officers, employees, servants and agents to any payment which by the
terms of Section 7(b) or 7(c) of the Participation Agreement, Section 5.03 or
7.01 of the Trust Agreement or any section of the Tax Indemnity Agreement or any
corresponding payment under Section 3(d) of the Lease is payable to such Person,
(ii) any insurance proceeds payable under insurance maintained by the Owner
Trustee in its individual capacity or the Owner Participant (whether directly or
through the Owner Trustee), or to their respective Affiliates, successors,
permitted assigns, directors, officers, employees, servants and agents, (iii)
any insurance proceeds (or proceeds of governmental indemnities in lieu thereof)
payable to the Owner Trustee in its individual
10
capacity or to the Owner Participant, or to their respective Affiliates,
successors, permitted assigns, directors, officers, employees, servants and
agents, under any liability insurance maintained by the Company pursuant to
Section 11 of the Lease or by any other Person (or proceeds of governmental
indemnities in lieu thereof), (iv) any rights of the Owner Participant or the
Owner Trustee to demand, collect, sue for, or otherwise receive and enforce
payment of the foregoing amounts (including interest thereon to the extent
provided in the applicable provisions of the Operative Documents) and the right
to declare an Event of Default under the Lease in respect of any of the
foregoing amounts, but not including the right to exercise any remedies under
the Lease except for those specifically provided for in this clause (iv), (v)
payments to the Owner Participant by the Owner Trustee pursuant to Section 2 of
the Participation Agreement and any funds held by the Owner Trustee or payable
to the Owner Participant pursuant to any funding letter entered into in lieu of
the provisions of Section 2 of the Participation Agreement, (vi) if the Lessee
has assumed the obligations of the Owner Trustee in respect of the Certificates
in accordance with Section 7.03 hereof and Section 8(r) of the Participation
Agreement, the amount payable as purchase price pursuant to Section 19(b) of the
Lease, (vii) Transaction Expenses or other amounts or expenses paid or payable
to, or for the benefit of, the Owner Participant pursuant to the Participation
Agreement, (viii) the respective rights of the Owner Trustee in its individual
capacity or the Owner Participant to the proceeds of the foregoing and (ix) any
right to demand, collect or otherwise receive and enforce the payment of any
amount described in clauses (i) through (viii) above.
"Federal Aviation Act" shall have the meaning specified therefor in
--------------------
the Lease.
"Federal Aviation Administration" and "FAA" shall have the meaning
------------------------------- ---
specified therefor in the Lease.
"Holder" means a person in whose name a Certificate is registered on
------
the Register including, so long as it holds any Certificate issued hereunder,
the respective Pass Through Trustee under each Pass Through Trust Agreement.
"Indenture Default" means any event which is, or after notice or
------------------
passage of time, or both, would be, an Indenture Event of Default.
"Indenture Estate" shall have the meaning specified therefor in the
----------------
Granting Clause hereof.
"Indenture Event of Default" shall have the meaning specified therefor
---------------------------
in Article 8.
11
"Indenture Trustee" means First Security Bank of Utah, National
-----------------
Association and each other Person which may from time to time be acting as
Indenture Trustee in accordance with the provisions of this Agreement.
"Independent" when used with respect to an engineer, Appraiser or
-----------
other expert, means an engineer, Appraiser or other expert who (i) is in fact
independent, (ii) does not have any direct financial interest or any material
indirect financial interest in the Company or any Affiliate of the Company, and
(iii) is not connected with the Company or any Affiliate of the Company as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
"Independent Investment Banker" shall mean an independent investment
-----------------------------
banking institution of national standing appointed by (i) the Company on behalf
of the Owner Trustee or (ii) in the case of a redemption or purchase of the
Certificates under Section 6.01(b) pursuant to Section 8.03(e)(ii), the Owner
Trustee; provided that, if the Indenture Trustee shall not have received written
--------
notice of such an appointment at least 10 days prior to the relevant Redemption
Date or if a Lease Event of Default shall have occurred and be
continuing,"Independent Investment Banker" shall mean such an institution
- -----------------------------------------
appointed by the Indenture Trustee.
"Installment Certificate" shall mean a Certificate substantially in
-----------------------
the form of Exhibit A-1, should any such Certificate be issued hereunder.
"Installment Payment Amount" means, with respect to each Installment
--------------------------
Certificate, the amount of the installment payment of principal due and payable
on each Installment Payment Date, which amount shall be equal to the product of
the original principal amount of such Certificate and the Installment Payment
Percentage for such Installment Payment Date.
"Installment Payment Date" means each date on which an installment
------------------------
payment of principal is due and payable on any Installment Certificate, as set
forth in Exhibit B-1.
"Installment Payment Percentage" means, with respect to each
------------------------------
Installment Payment Date, the percentage set forth opposite such Installment
Payment Date in Exhibit B-1;
provided that, after the occurrence of any partial redemption or redemptions
- --------
pursuant to clause (ii) of Section 6.01(a), the "Installment Payment Percentage"
------------------------------
for each Installment Payment Date subsequent to the applicable Redemption Date
shall be equal to the percentage obtained from the following calculation:
(p - n) x y
-----------
p x s
12
where, for Installment Certificates maturing on the same Maturity Date:
p = the sum of the original principal amounts of all Installment
Certificates maturing on such Maturity Date as reflected on
Exhibit B hereto;
n = the sum of the principal amounts paid to all holders of
Installment Certificates maturing on such Maturity Date as a
result of all such partial redemptions (excluding any Installment
Payment Amounts paid on a Redemption Date as a result of any such
Redemption Date occurring on an Installment Payment Date) and all
payments of principal paid on Installment Payment Dates on or
prior to the applicable Redemption Date;
y = the Installment Payment Percentage set forth in such Exhibit B-1
applicable to the Installment Payment Date for which this
calculation is being performed; and
s = the sum of the Installment Payment Percentages for Installment
Payment Dates related to such Installment Certificates maturing
on such Maturity Date and subsequent to the applicable Redemption
Date.
"Interest Payment Date" means each October 19 and April 19, commencing
----------------------
on the Commencement Date.
"Lease" means the Lease Agreement (1995 777 A), dated as of May 1,
------
1995, between the Owner Trustee, as lessor, and the Company, as lessee, as such
Lease Agreement may from time to time be further supplemented, amended or
modified in accordance with the terms thereof and this Agreement. The term
"Lease" shall also include each Lease Supplement entered into pursuant to the
- ------
terms of the Lease.
"Lease Event of Default" shall have the meaning specified for the term
----------------------
"Event of Default" in the Lease.
"Lease Loss Payment Date" shall have the meaning specified for the
-----------------------
term "Loss Payment Date" in the Lease.
"Lease Supplement" shall have the meaning specified therefor in the
----------------
Lease.
"Lease Termination Date" shall have the meaning specified for the term
-----------------------
"Termination Date" in the Lease.
13
"Lessor Liens" shall have the meaning specified therefor in the Lease.
------------
"Lien" means any mortgage, pledge, lien, charge, encumbrance, lease,
----
exercise of rights, security interest or claim.
"Loan Certificate" shall have the meaning specified for the term
-----------------
"Certificate" hereunder.
"Maturity Date" means each of the dates specified in Exhibit B as a
-------------
maturity date of one or more of the Certificates.
"Officers' Certificate" means a certificate signed, in the case of the
---------------------
Company, by (i) the Chairman of the Board of Directors, the President, or any
Senior Vice President of the Company, signing alone, or (ii) any Vice President
signing together with the Secretary, any Assistant Secretary, the Treasurer or
any Assistant Treasurer of the Company or, in the case of the Owner Trustee, a
Responsible Officer of the Owner Trustee.
"Operative Documents" means this Agreement, the Participation
-------------------
Agreement, the Lease, the Tax Indemnity Agreement, the Consent and Agreement,
the Owner Trustee's Bill of Sale, the Owner Trustee's FAA Bill of Sale, the
Acceptance Certificate, the Purchase Agreement (to the extent assigned by the
Owner Trustee's Purchase Agreement), the Owner Trustee's Purchase Agreement, the
Certificates, the Trust Agreement and the Trust Supplement.
"Opinion of Counsel" means a written opinion of legal counsel, who in
------------------
the case of counsel for the Company may be (i) the senior attorney employed by
the Company, (ii) Vedder, Price, Kaufman & Kammholz or (iii) other counsel
designated by the Company and who shall be reasonably satisfactory to the
Indenture Trustee or, in the case of legal counsel for the Owner Trustee, may be
(x) Bingham, Dana & Gould or (y) other counsel designated by the Owner Trustee
and who shall be reasonably satisfactory to the Indenture Trustee.
"Original Issue Price", when used with respect to a Certificate, shall
--------------------
be such Certificate's pro rata portion of the aggregate original issue price as
--- ----
determined on the basis of the data included in Exhibit B hereto.
"Outstanding", when used with respect to Certificates, means, as of
-----------
the date of determination, all Certificates theretofore executed and delivered
under this Agreement other than:
(i) Certificates theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation pursuant to Section
2.07 or otherwise;
14
(ii) Certificates for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Indenture Trustee
in trust for the Holders of such Certificates; provided that if such
--------
Certificates are to be redeemed, notice of such redemption has been duly
given pursuant to this Agreement or provision therefor satisfactory to the
Indenture Trustee has been made; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to this Agreement;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
aggregate principal amount of Certificates Outstanding have given any request,
demand, authorization, declaration, direction, notice, consent or waiver
hereunder, Certificates owned by or pledged to the Company or any Affiliate of
the Company or the Owner Trustee or the Owner Participant or any Affiliate
thereof, shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization, declaration, direction, notice, consent or
waiver, only Certificates which the Indenture Trustee knows to be so owned or so
pledged shall be disregarded. Certificates owned by the Company, or the Owner
Trustee or the Owner Participant, which have been pledged in good faith may be
regarded as Outstanding if the Company, or the Owner Trustee or the Owner
Participant, as the case may be, establishes to the satisfaction of the
Indenture Trustee the pledgee's right to act with respect to such Certificates
and that the pledgee is not the Company, or the Owner Trustee or the Owner
Participant or any Affiliate thereof.
"Owner Participant" shall be the party specified as the "Owner
-----------------
Participant" in the Participation Agreement, its successors and, to the extent
permitted by Article VIII of the Trust Agreement and Section 8(l) of the
Participation Agreement, its permitted successors and assigns.
"Owner Trustee" means State Street Bank and Trust Company, a
-------------
Massachusetts trust company, not in its individual capacity, but solely as
trustee under the Trust Agreement, and each other Person which may from time to
time be acting as Owner Trustee in accordance with the provisions of the
Operative Documents.
"Owner Trustee's Purchase Agreement" shall have the meaning specified
----------------------------------
therefor in the Lease.
"Participation Agreement" shall have the meaning specified therefor in
-----------------------
the Lease.
"Parts" shall have the meaning specified therefor in the Lease.
-----
15
"Pass Through Certificates" means any of the Pass Through Certificates
-------------------------
issued pursuant to any of the Pass Through Trust Agreements.
"Pass Through Trust" means each pass through trust created pursuant to
------------------
the related Pass Through Trust Agreement.
"Pass Through Trust Agreements" means the Pass Through Trust Agreement
-----------------------------
dated as of February 1, 1992, as amended and restated as of May 1, 1995, between
the Company and the Pass Through Trustee as supplemented by each of the two Pass
Through Trust Supplements Nos. 1995- A1 and 1995-A2, each dated as of May __,
1995, as the same may from time to time be further amended, supplemented or
otherwise modified.
"Pass Through Trust Supplement" shall have the meaning specified for
-----------------------------
the term "Trust Supplement" in the Pass Through Trust Agreement.
"Pass Through Trustee" means First Security Bank of Utah, National
--------------------
Association in its capacity as trustee under each Pass Through Trust Agreement,
and such other Person that may from time to time be acting as successor trustee
under any such Pass Through Trust Agreement.
"Paying Agent" means any person acting as Paying Agent hereunder
------------
pursuant to Section 2.03.
"Permitted Investment" means each of (i) obligations of, or guaranteed
--------------------
by, the United States Government or agencies thereof, (ii) open market
commercial paper of any corporation incorporated under the laws of the United
States of America or any State thereof rated at least P-2 or its equivalent by
Moody's Investors Service, Inc. or at least A-2 or its equivalent by Standard &
Poor's Corporation, (iii) certificates of deposit issued by commercial banks
organized under the laws of the United States or of any political subdivision
thereof having a combined capital and surplus in excess of $500,000,000 which
banks or their holding companies have a rating of A or its equivalent by Moody's
Investors Service or Standard & Poor's Corporation; provided, however, that the
-------- -------
aggregate amount at any one time so invested in certificates of deposit issued
by any one bank shall not exceed 5% of such bank's capital and surplus, (iv)
U.S. dollar denominated offshore certificates of deposit issued by, or offshore
time deposits with, any commercial bank described in clause (iii) or any
subsidiary thereof and (v) repurchase agreements with any financial institution
having combined capital and surplus of at least $500,000,000 with any of the
obligations described in clauses (i) through (iv) as collateral.
"Permitted Lien" shall have the meaning specified therefor in the
--------------
Lease.
16
"Person" means any individual, corporation, partnership, joint
------
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pre-Commencement Date Period" means, with respect to any Certificate,
----------------------------
the period commencing on the date of the original issuance of such Certificate
and ending on and including the day immediately preceding the Commencement Date.
"Premium" or "premium" shall have the meaning specified in Section
------- -------
6.01(b) hereto.
"Premium Termination Date" means, with respect to a Certificate, the
------------------------
date set forth below opposite the Maturity Date of such Certificate:
Premium
Certificates Maturity Date Termination Date
- ---------------- ------------- ----------------
Series 777A-1
Certificate [_________] [_________]
Series 777 A-2
Certificate [_________] [_________]
"Purchase Agreement" shall have the meaning specified therefor in the
------------------
Lease.
"Purchase Option Date" shall have the meaning specified therefor in
--------------------
the Lease.
"Record Date" for the interest or Installment Payment Amount payable
------------
on any Certificate on any Interest Payment Date or Installment Payment Date
(other than the Maturity Date) for such Certificate, as the case may be, means
the calendar day (whether or not a Business Day) which is 15 calendar days prior
to the related Interest Payment Date or the related Installment Payment Date.
"Redemption Date" means the date on which the Certificates are to be
---------------
redeemed or purchased pursuant to Section 6.01 or Section 6.02, as the case may
be, as specified in the notice delivered pursuant to Section 6.03 hereof.
"Redemption Price" means the price at which the Certificates are to be
----------------
redeemed or purchased, determined as of the applicable Redemption Date, pursuant
to Section 6.01 or Section 6.02, as the case may be; provided, however, that in
-------- -------
the case of a Certificate which is issued at a discount which shall become due
and payable (upon redemption, acceleration or otherwise) and shall be paid or
shall be purchased during the Pre-Commencement Date Period, the Redemption Price
or purchase price therefor shall be the amount payable upon such Certificate
becoming due and payable and being paid during the Pre-Commencement Date Period
as specified therein.
17
"Refinancing Date" shall mean the date designated by the Lessee as the
----------------
date for a refinancing of the Certificates in accordance with Section 17 of the
Participation Agreement.
"Register" shall have the meaning specified therefor in Section 2.03.
--------
"Registrar" means any person acting as Registrar hereunder pursuant to
---------
Section 2.03.
"Rent" shall have the meaning specified therefor in the Lease.
----
"Replacement Airframe" shall have the meaning specified therefor in
--------------------
the Lease.
"Replacement Engine" shall have the meaning specified therefor in the
------------------
Lease.
"Responsible Company Officer" means, with respect to the Company, its
---------------------------
Chairman of the Board, its President, any Senior Vice President, the Chief
Financial Officer, any Vice President, the Treasurer or any other management
employee (a) working under the direct supervision of such Chairman of the Board,
President, Senior Vice President, Chief Financial Officer, Vice President or
Treasurer and (b) whose responsibilities include the administration of the
transactions and agreements, including the Lease, contemplated by the
Participation Agreement.
"Responsible Officer", with respect to the Owner Trustee or the
-------------------
Indenture Trustee, shall mean any officer in its Corporate Trust Administration
Department or any officer of the Owner Trustee or the Indenture Trustee, as the
case may be, customarily performing functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with a particular subject.
"SEC" means the Securities and Exchange Commission.
---
"Series 1995 777 A Certificate" means any Certificate issued by the
-----------------------------
Owner Trustee under this Agreement substantially in the form of Exhibit A-1 or
A-2, and any and all of the Series 1995 777 A Certificates issued in replacement
or exchange thereof in accordance with the provisions hereof.
"Special Purchase Option Date" shall have the meaning specified
----------------------------
therefor in the Lease.
"Stipulated Loss Value" shall have the meaning specified therefor in
---------------------
the Lease.
"Supplemental Rent" shall have the meaning specified therefor in the
-----------------
Lease.
18
"Tax Indemnity Agreement" shall have the meaning specified therefor in
-----------------------
the Lease.
"Termination Value" shall have the meaning specified therefor in the
-----------------
Lease.
"Treasury Yield" means, with respect to each Certificate to be
--------------
redeemed or purchased, (x) in the case of a Certificate having a maturity less
than one year after the applicable redemption or purchase date, the average
yield to stated maturity on a government bond equivalent basis of the applicable
United States Treasury Bill due the week of the maturity of such Certificate or
(y) in the case of a Certificate having a maturity of one year or more after the
applicable redemption or purchase date, the average yield to stated maturity of
the most comparable United States Treasury Notes or Bonds as identified by an
independent investment banker, corresponding in maturity to the Remaining
Weighted Average Life (as defined below) of such Certificate (or, if there is no
maturity corresponding to such Remaining Weighted Average Life, an interpolation
of maturities by such independent investment banker), in each case under (x) and
(y) above determined by such independent investment banker based on the average
of the yields to stated maturity determined from the bid prices on the fourth
Business Day preceding the applicable redemption on purchase date. For purposes
hereof, "Remaining Weighted Average Life" means, for any Certificate, at the
redemption or purchase date of such Certificate, the number of years obtained by
dividing (a) the sum of the products obtained by multiplying (i) the amount of
each then remaining scheduled payment of principal, including the payment due on
the maturity date of such Certificate, by (ii) the number of years (calculated
to the nearest one-twelfth) which will elapse between the redemption or purchase
date and the regular distribution dates as of such scheduled payments of
principal; by (b) the then outstanding principal amount (including accretion of
discount) of such Certificate.
"Trust Agreement" shall have the meaning specified therefor in the
---------------
Lease.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended.
"Trust Indenture and Mortgage" or "this Agreement" means this Trust
---------------------------- --------------
Indenture and Mortgage (1995 777 A), as the same may from time to time be
supplemented, amended or modified.
"Trust Indenture Estate" shall have the meaning specified for the term
----------------------
"Indenture Estate" hereunder.
"Trust Office" shall mean the principal corporate trust office of the
------------
Owner Trustee located at 225 Franklin Street, Boston, Massachusetts 02110,
Attention: Corporate Trust Department, or at such other office at which the
Owner Trustee's corporate trust business shall be administered which the Owner
Trustee shall have specified by notice in writing to the Company, the Indenture
Trustee and each Holder.
19
"Trust Supplement" means a supplement to the Trust Agreement and this
----------------
Agreement in the form of Exhibit C hereto.
"Trustee's Liens" shall have the meaning specified therefor in Section
---------------
9.10.
"United States" or "U.S." means the United States of America.
------------- ----
"U.S. Government Obligations" means securities that are direct
---------------------------
obligations of the United States or agencies or instrumentalities thereof for
the payment of which the full faith and credit of the United States are pledged
which are not callable or redeemable, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account of
the holder of a depository receipt so long as such custodian is not authorized
to make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of interest on or principal of the
U.S. Government Obligation evidenced by such depository receipt.
ARTICLE 2
THE CERTIFICATES
Section 2.01. Certificates; Title and Terms. The Certificates issued
-----------------------------
hereunder shall be designated as Series 1995 777 A Certificates. The
Installment Certificates and the Serial Certificates shall be substantially in
the form set forth in Exhibit A-1 or A-2, respectively. The Certificates
originally issued hereunder shall be dated the date of issuance thereof and
shall be issued in the maturities and principal amounts and at the Original
Issue Prices, shall provide for Commencement Date Cash Interest, if any, and
shall bear interest during and after the Pre-Commencement Date Period at the
rates per annum, in each case as specified in or determined pursuant to Exhibit
B. The principal of each Certificate, other than Installment Certificates,
shall be payable in full on the Maturity Date for such Certificate. The
principal of each Installment Certificate shall be payable in installments, on
each Installment Payment Date, in amounts equal to the Installment Payment
Amount for such Installment Payment Date. Each Certificate shall be issued to
the Pass Through Trustee under each of the Pass Through Trust Agreements, as set
forth in Exhibit B-2.
The Certificates shall be issued in registered form only. The
Certificates shall be issued in denominations of $1,000 and integral multiples
thereof except that one Certificate of each maturity may be in an amount that is
not an integral multiple of $1,000.
20
The Certificates are not redeemable or subject to purchase prior to
maturity except as provided in this Agreement. Interest accrued on the
Certificates shall be calculated on the basis of a 360-day year consisting of
twelve 30-day months.
Section 2.02. Execution and Authentication. (a) Certificates shall
----------------------------
be executed on behalf of the Owner Trustee by the manual or facsimile signature
of its President, a senior vice president, a vice president, an assistant vice
president, its treasurer, its secretary, an assistant secretary or an assistant
treasurer.
(b) If any officer of the Owner Trustee executing the Certificates no
longer holds that office at the time the Certificate is executed on behalf of
the Owner Trustee, the Certificate shall be valid nevertheless.
(c) At any time and from time to time after the execution of the
Certificates, the Owner Trustee may deliver such Certificates to the Indenture
Trustee for authentication and, subject to the provisions of Section 2.10, the
Indenture Trustee shall authenticate the Certificates by manual signature upon
written orders of the Owner Trustee. Certificates shall be authenticated on
behalf of the Indenture Trustee by any authorized officer or signatory of the
Indenture Trustee.
(d) A Certificate shall not be valid or obligatory for any purpose or
entitled to any security or benefit hereunder until executed on behalf of the
Owner Trustee by the manual or facsimile signature of an officer of the Owner
Trustee as provided in Section 2.02(a) and until authenticated on behalf of the
Indenture Trustee by the manual signature of an authorized officer or signatory
of the Indenture Trustee as provided in Section 2.02(c). Such signatures shall
be conclusive evidence that such Certificate has been duly executed,
authenticated and issued under this Agreement.
Section 2.03. Registrar and Paying Agent. The Indenture Trustee
--------------------------
shall maintain an office or agency where the Certificates may be presented for
registration of transfer or for exchange (the "Registrar") and an office or
agency where (subject to Sections 2.04 and 2.08) the Certificates may be
presented for payment or for exchange (the "Paying Agent"). The Registrar shall
keep a register (the "Register") with respect to the Certificates and to their
transfer and exchange and the payments of Installment Payment Amounts thereon,
if any. The Indenture Trustee may appoint one or more co-registrars (the "Co-
Registrars") and one or more additional Paying Agents for the Certificates and
the Indenture Trustee may terminate the appointment of any Co-Registrar or
Paying Agent at any time upon written notice. The term "Registrar" includes any
Co-Registrar. The term "Paying Agent" includes any additional Paying Agent.
The Indenture Trustee shall initially act as Registrar and Paying
Agent.
21
Section 2.04. Transfer and Exchange. At the option of the Holder
---------------------
thereof, Certificates may be exchanged for an equal aggregate principal amount
of other Certificates of the same maturity and type and of any authorized
denominations or transferred upon surrender of the Certificates to be exchanged
or transferred at the principal corporate trust office of the Indenture Trustee,
or at any office or agency maintained for such purpose pursuant to Section 2.03.
Whenever any Certificates are so surrendered for exchange, the Owner Trustee
shall execute, and the Indenture Trustee shall authenticate and deliver, the
replacement Certificates, dated the same date as the Certificate or Certificates
being replaced which the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of Certificates shall be the valid obligations of the Owner Trustee, evidencing
the same obligations, and entitled to the same security and benefits under this
Agreement, as the Certificates surrendered upon such registration of transfer or
exchange.
Every Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in form satisfactory
to the Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Certificates, but the Registrar may, as a condition to
any transfer or exchange hereunder, require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Certificates.
The Registrar shall not be required to register the transfer of or to
exchange any Certificate called for redemption or purchase pursuant to such
Section 6.01 or 6.02.
Section 2.05. Holder Lists; Ownership of Certificates. (a) The
---------------------------------------
Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders, which list shall be available to the Owner Trustee or its
representative (which may be the Owner Participant) and the Company for
inspection. If the Indenture Trustee is not the Registrar, the Registrar shall
be required to furnish to the Indenture Trustee semi-annually on or before each
Interest Payment Date, and at such other times as the Indenture Trustee may
request in writing, a list, in such form and as of such date as the Indenture
Trustee may reasonably require, containing all the information in the possession
or control of the Registrar as to the names and addresses of the Holders.
(b) Ownership of the Certificates shall be proved by the Register kept
by the Registrar. Prior to due presentment for registration of transfer of any
Certificate, the
22
Owner Trustee, the Owner Participant, the Company, the Indenture Trustee, the
Paying Agent and the Registrar may deem and treat the Person in whose name any
Certificate is registered as the absolute owner of such Certificate for the
purpose of receiving payment of principal (including, subject to the provisions
herein regarding the applicable Record Dates, Installment Payment Amounts) of,
premium, if any, and interest on such Certificate and for all other purposes
whatsoever, whether or not such Certificate is overdue, and none of the Owner
Trustee, the Indenture Trustee, the Paying Agent or the Registrar shall be
affected by notice to the contrary.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
any Certificate shall become mutilated, destroyed, lost or stolen, the Owner
Trustee shall, upon the written request of the Holder of such Certificate, issue
and execute, and the Indenture Trustee shall authenticate and deliver, in
replacement thereof, as applicable, a new Certificate of the same type and
having the same maturity, payable to the same Holder in the same principal
amount and dated the same date as the Certificate so mutilated, destroyed, lost
or stolen. If the Certificate being replaced has become mutilated, such
Certificate shall be surrendered to the Indenture Trustee. If the Certificate
being replaced has been destroyed, lost or stolen, the Holder of such
Certificate shall furnish to the Owner Trustee and the Indenture Trustee such
security or indemnity as may be required by it to save the Owner Trustee and the
Indenture Trustee harmless and evidence satisfactory to the Owner Trustee and
the Indenture Trustee of the destruction, loss or theft of such Certificate and
of the ownership thereof.
Section 2.07. Cancellation. The Registrar and any Paying Agent shall
------------
forward to the Indenture Trustee all Certificates surrendered to them for
replacement, redemption, registration of transfer, exchange or payment. The
Indenture Trustee shall cancel all Certificates surrendered for replacement,
redemption, registration of transfer, exchange, payment or cancellation and
shall destroy cancelled Certificates.
Section 2.08. Payment on Certificates; Defaulted Principal and
------------------------------------------------
Interest. (a) The Indenture Trustee will arrange directly with any Paying Agent
- --------
for the payment, or the Indenture Trustee will make payment, all pursuant to
Section 2.09, of the principal of, premium, if any, and interest on the
Certificates at the principal corporate trust office of the Indenture Trustee or
at any office or agency maintained for such purpose to Section 2.03 hereof. All
payments in respect of the Certificates shall be made in such coin or currency
of the United States as at the time of payment in legal tender for payment of
public and private debts. Payments (other than on the Maturity Date therefor or
on the Redemption Date in respect of the redemption in whole thereof) on
Certificates shall be made to the Holder thereof at the close of business on the
relevant Record Date; provided, however, that the Paying Agent will, at the
-------- -------
request of the Indenture Trustee and may, at its option, pay such interest,
premium or principal by check mailed to such Holder's address as it appears on
the Register. Principal of Certificates and premium, if any, with respect
thereto, shall (except as
23
provided pursuant to the immediately preceding sentence) be payable only against
presentation and surrender thereof at the principal corporate trust office of
the Indenture Trustee or at the office of the Paying Agent maintained for such
purpose pursuant to Section 2.03.
A Holder shall have no further interest in, or other right with
respect to, the Indenture Estate when and if the principal amount of, premium,
if any, and interest on all Certificates held by such Holder and all other sums
payable to such Holder hereunder, under such Certificates and under the
Participation Agreement shall have been paid in full.
(b) Any Installment Payment Amount payable on an Installment Payment
Date (other than the Maturity Date with respect to a Certificate) or any
interest payable on an Interest Payment Date on any Certificate which is not
punctually paid on such Installment Payment Date or such Interest Payment Date,
as the case may be (herein called, respectively, a "Defaulted Installment" and
"Defaulted Interest"), shall forthwith cease to be payable to the Holder on the
relevant Record Date by virtue of his having been such Holder; and such
Defaulted Installment or Defaulted Interest may be paid by the Indenture
Trustee, at its election in each case, as provided in clause (1) or (2) below:
(1) The Indenture Trustee may elect to make payment of any Defaulted
Installment or Defaulted Interest, as the case may be, to the person in
whose name any Certificate is registered at the close of business on a
special record date for the payment of such Defaulted Installment or
Defaulted Interest, as the case may be, which shall be fixed in the
following manner. The Indenture Trustee shall notify the Paying Agent in
writing of the amount of Defaulted Installment or Defaulted Interest, as the
case may be, proposed to be paid on each such Certificate and the date of
the proposed payment, and at the same time the Indenture Trustee shall make
arrangements to set aside an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Installment or Defaulted
Interest, as the case may be, prior to the date of the proposed payment, to
be held in trust for the benefit of the Persons entitled to such Defaulted
Installment or Defaulted Interest, as the case may be, as this clause
provides and shall fix a special record date for the payment of such
Defaulted Installment or Defaulted Interest, as the case may be, which shall
be not more than 15 days and not less than 10 days prior to the date of the
proposed payment. The Indenture Trustee shall promptly notify the Owner
Trustee, the Company and the Registrar of such special record date and shall
cause notice of the proposed payment of such Defaulted Installment or
Defaulted Interest, as the case may be, and the special record date therefor
to be mailed, first class postage prepaid, to each Holder at its address as
it appears in the Register, not less than 10 days prior to such special
record date. Notice of the proposed payment of such Defaulted Installment
or Defaulted Interest, as the case may be, and the special record date
therefor having been mailed, as aforesaid, such Defaulted Installment or
Defaulted
24
Interest, as the case may be, shall be paid to the Persons in whose names
the applicable Certificates are registered on such special record date and
shall no longer be payable pursuant to the following clause (2).
(2) The Indenture Trustee may make, or cause to be made, payment of
any Defaulted Installment or Defaulted Interest, as the case may be, in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which Certificates may be listed, and upon such notice as may be
required by such exchange, if such payment shall be deemed practicable by
the Indenture Trustee.
(c) The Indenture Trustee shall require each Paying Agent to agree in
writing that such Paying Agent will hold in trust, for the benefit of the
Holders of the Certificates and the Indenture Trustee, all money held by the
Paying Agent for the payment of the principal of, premium, if any, or interest
and shall give to such Indenture Trustee notice of any default in the making of
any such payment upon the Certificates. The Indenture Trustee at any time may
require a Paying Agent to repay to the Indenture Trustee all money held by it.
Upon so doing the Paying Agent shall have no further liability for the money so
paid.
Section 2.09. Payment from Indenture Estate Only; Non-Recourse
------------------------------------------------
Obligations. All amounts payable by the Indenture Trustee and the Owner Trustee
- -----------
under the Certificates and this Agreement shall be made only from the income and
proceeds of the Indenture Estate. Each Holder of a Certificate, by its
acceptance of such Certificate, 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 Indenture Trustee is or shall be
personally liable to the Holder of any Certificate for any amount payable under
such Certificate or this Agreement or, except as expressly provided in this
Agreement in the case of the Owner Trustee and the Indenture Trustee, for any
liability thereunder.
State Street Bank and Trust Company is entering into this Agreement
solely as Owner Trustee under the Trust Agreement and not in its individual
capacity, and in no case whatsoever shall State Street Bank and Trust Company
(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 State Street Bank and Trust Company shall be liable hereunder in
- --------
its individual capacity, (i) for the performance of its agreements in its
individual capacity under Section 8 of the Participation Agreement, (ii) for its
own willful misconduct or gross negligence and (iii) for the failure to use
ordinary care in the disbursement of funds. 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
25
Owner Trustee and State Street Bank and Trust Company shall be released from all
further duties and obligations hereunder, without prejudice to any claims
against State Street Bank and Trust Company or such predecessor Owner Trustee
for any default by State Street Bank and Trust Company or such predecessor Owner
Trustee, respectively, in the performance of its obligations hereunder prior to
such appointment.
Section 2.10. Execution, Delivery and Dating of Certificates upon
---------------------------------------------------
Original Issuance. The Owner Trustee shall issue and execute, and the Indenture
- -----------------
Trustee shall authenticate and deliver, the Certificates for original issuance
upon payment to the Indenture Trustee of an amount equal to its Original Issue
Price. Each Certificate shall (except for those issued pursuant to Section 2.04
or Section 2.06) be dated the date of its issuance.
ARTICLE 3
RECEIPT, DISTRIBUTION AND APPLICATION
OF FUNDS IN THE INDENTURE ESTATE
Section 3.01. [Reserved for Potential Future Use]
Section 3.02. Payment in Case of Redemption or Purchase of
--------------------------------------------
Certificates. Except as otherwise provided in Section 3.05, in the event the
- ------------
Certificates are redeemed or purchased in accordance with the provisions of
Section 6.01 or 6.02, the Indenture Trustee will apply on the Redemption Date
any amounts then held by it in the Indenture Estate and received by it from or
on behalf of the Company or the Owner Trustee in the following order of
priority:
first, so much thereof as was received by the Indenture Trustee with
-----
respect to the amounts due to it pursuant to Section 9.06 shall be applied
to pay the Indenture Trustee such amounts;
second, so much thereof remaining as shall be required to pay an
------
amount equal to the Redemption Price on the Outstanding Certificates
pursuant to Section 6.01 or 6.02, as the case may be, on the Redemption Date
shall be applied to the redemption or purchase of the Certificates on the
Redemption Date; and
third, the balance, if any, thereof remaining thereafter shall be
-----
distributed to the Owner Trustee to be held or distributed to the Owner
Participant in accordance with the terms of the Trust Agreement.
Section 3.03. Application of Rent When No Indenture Event of Default
------------------------------------------------------
Is Continuing. Except as otherwise provided in Section 3.02, 3.04, 3.05 or
- -------------
3.06, each amount
26
of Excess Amount or Rent received by the Indenture Trustee from the Owner
Trustee or the Company, together with any amount received by the Indenture
Trustee pursuant to Section 8.03(e) shall be distributed by the Indenture
Trustee in the following order of priority:
first, so much of such aggregate amount as shall be required to pay in
-----
full the interest, principal of, premium (to the extent received by the
Indenture Trustee from the Company as Supplemental Rent), if any, then due
on, all Outstanding Certificates shall be distributed to the Persons
entitled thereto; and in case such payments or amounts shall be insufficient
to pay in full the whole amount so due and unpaid, then to the payment of
such interest, principal and premium, if any, without any preference or
priority of one Certificate over another, ratably according to the aggregate
amount so due for interest, principal and premium, if any, at the date fixed
by the Indenture Trustee for the distribution of such payments or amounts;
second, so much of such aggregate amount remaining as shall be
------
required to pay any amount due the Indenture Trustee pursuant to Section
9.06 shall be applied to pay the Indenture Trustee such amounts; and
third, the balance, if any, of such aggregate amount remaining
-----
thereafter shall be distributed to the Owner Trustee to be held or
distributed in accordance with the terms of the Lease, the Participation
Agreement and the Trust Agreement.
Section 3.04. Application of Certain Payments in Case of Requisition
------------------------------------------------------
or Event of Loss. Except as otherwise provided in Section 3.05, any amounts
- ----------------
received directly or otherwise pursuant to the Lease from any governmental
authority or other party pursuant to Section 10 of the Lease with respect to the
Airframe or the Airframe and the Engines or engines then installed on the
Airframe as the result of an Event of Loss, to the extent that such amounts are
not at the time required to be paid to the Company pursuant to said Section 10,
and any amounts of insurance proceeds for damage to the Indenture Estate
received directly or otherwise pursuant to the Lease from any insurer pursuant
to Section 11 of the Lease with respect thereto as the result of an Event of
Loss, to the extent such amounts are not at the time required to be paid to the
Company pursuant to said Section 11, shall, except as otherwise provided in the
next sentence, be applied by the Indenture Trustee on behalf of the Owner
Trustee in reduction of the Company's obligations to pay Stipulated Loss Value
and the other amounts payable by the Company pursuant to Section 10 of the Lease
and the remainder, if any, shall, except as provided in the next sentence, be
distributed to the Owner Trustee to be held or distributed in accordance with
the terms of the Lease. Any portion of any such amount referred to in the
preceding sentence which is not required to be so paid to the Company pursuant
to the Lease, solely because a Lease Event of Default shall have occurred and be
continuing, shall be held by the Indenture Trustee on behalf of the Owner
Trustee as security for the obligations of the Company under the Lease and at
27
such time as there shall not be continuing any Lease Event of Default or such
earlier time as shall be provided for in the Lease, such portion shall be paid
to the Owner Trustee to be held or distributed in accordance with the terms of
the Lease, unless the Indenture Trustee (as assignee from the Owner Trustee of
the Lease) shall have theretofore declared the Lease to be in default pursuant
to Section 15 thereof, in which event such portion shall be distributed
forthwith upon such declaration in accordance with the provisions of Section
3.05 hereof.
Section 3.05. Payments During Continuance of Indenture Event of
-------------------------------------------------
Default. All payments (except Excluded Payments) received and amounts held or
- -------
realized by the Indenture Trustee after an Indenture Event of Default shall have
occurred and be continuing (including any amounts realized by the Indenture
Trustee from the exercise of any remedies pursuant to Article 8), as well as all
payments or amounts then held or thereafter received by the Indenture Trustee as
part of the Indenture Estate while such Indenture Event of Default shall be
continuing, shall be distributed by the Indenture Trustee in the following order
of priority:
first, so much of such payments or amounts as shall be required to
-----
pay the Indenture Trustee all amounts then due it pursuant to Section 9.06
shall be applied to pay the Indenture Trustee such amounts;
second, so much of such payments or amounts remaining as shall be
------
required to pay the expenses incurred (including unbilled expenses in
respect of property delivered or contracted for or services rendered or
contracted for if the amount of such expenses is liquidated) in using,
operating, storing, leasing, controlling or managing the Indenture Estate,
and of all maintenance, insurance, repairs, replacements, alterations,
additions and improvements of and to the Indenture Estate and to make all
payments which the Indenture Trustee may be required or may elect to make,
if any, for taxes, assessments, insurance or other proper charges upon the
Indenture Estate or any part thereof (including the employment of engineers
and accountants to examine and make reports upon the properties, books and
records of the Owner Trustee and, to the extent permitted under the Lease,
the Company), all in accordance with Section 8.03(c), shall be applied for
such purposes;
third, so much of such payments or amounts remaining as shall be
-----
required to pay the principal of, premium, if any, to the extent payable by
the Owner Trustee pursuant to Section 6.0l(b)(ii) or to the extent received
by the Indenture Trustee from the Company as Supplemental Rent, and accrued
interest, on all Certificates Outstanding, whether by declaration of
acceleration pursuant to Section 8.02 or otherwise, shall be applied to the
payment of such interest, principal and premium, if any, and in case such
payments or amounts shall be insufficient to pay in full the whole amount so
due and unpaid, then to the payment of such interest principal and premium,
if any, without any preference or priority of one Certificate over another,
28
ratably according to the aggregate amount so due for interest, principal and
premium, if any, at the date fixed by the Indenture Trustee for the
distribution of such payments or amounts; and
fourth, the balance, if any, of such payments or amounts remaining
------
thereafter shall be held by the Indenture Trustee as collateral security for
the obligations secured hereby until such time as no Indenture Event of
Default shall be continuing hereunder or the Certificates have been
accelerated and all amounts due thereon have been paid, at which time such
payments or amounts shall be distributed to the Owner Trustee to be held or
distributed in accordance with the terms of the Lease, the Participation
Agreement and the Trust Agreement; provided that at such time as one or more
--------
Lease Events of Default shall have occurred and any such Lease Event of
Default shall have continued for a period of 180 days during which time the
Certificates could, but shall not, have been accelerated pursuant to Section
8.02, such amounts shall be distributed to the Owner Trustee to be held or
distributed in accordance with the terms of the Lease, the Participation
Agreement and the Trust Agreement so long as no Indenture Event of Default
exists other than by virtue of such Lease Event of Default.
Section 3.06. Payments for Which Application Is Provided in Other
---------------------------------------------------
Documents. Except as otherwise provided in this Agreement, any payment received
- ---------
by the Indenture Trustee for which provision as to the application thereof is
made in the Lease or any other Operative Document shall be distributed to the
Person for whose benefit such payments were made. The Indenture Trustee shall
be obligated to distribute any Excluded Payments received by the Indenture
Trustee promptly upon receipt thereof by the Indenture Trustee to the Person
entitled thereto.
Section 3.07. Payments for Which No Application Is Otherwise
----------------------------------------------
Provided. Except as otherwise provided in Section 3.05:
(a) any payment received by the Indenture Trustee for which no
provision as to the application thereof is made elsewhere in this Agreement,
and
(b) any payment received and amounts realized by the Indenture Trustee
with respect to the Aircraft to the extent received or realized at any time
after the conditions set forth in Article 10 for the satisfaction and
discharge of this Agreement or for the defeasance of the Certificates shall
have been satisfied, as well as any other amounts remaining as part of the
Indenture Estate after such satisfaction shall be distributed by the
Indenture Trustee in the following order of priority:
first, so much of such aggregate amount as shall be required to pay
-----
the Indenture Trustee all amounts then due it pursuant to Section 9.06 shall
be applied to pay the Indenture Trustee such amounts; and
29
second, the balance if any, of such aggregate amount remaining
------
thereafter shall be distributed to the Owner Trustee to be held or
distributed in accordance with the terms of the Trust Agreement.
ARTICLE 4
COVENANTS OF OWNER TRUSTEE
Section 4.01. Covenants of the Owner Trustee. The Owner Trustee
------------------------------
hereby covenants and agrees that:
(i) the Owner Trustee will duly and punctually pay the principal of,
premium, if any, and interest on and other amounts due under the
Certificates, provided it or the Indenture Trustee has funds in the Trust
Estate for this purpose;
(ii) the Owner Trustee will, in its individual capacity, not directly
or indirectly create, incur, assume or suffer to exist any Lessor Lien
attributable to it in its individual capacity with respect to any of the
properties or assets of the Indenture Estate;
(iii) in the event an officer in the Corporate Trust Department 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 of such Indenture Event of Default or Indenture Default or
Event of Loss to the Indenture Trustee, the Owner Participant and the
Company;
(iv) except as contemplated by the Operative Documents, the Owner
Trustee will not contract for, create, incur, assume or permit to exist any
Debt, and will not guarantee (directly or indirectly or by an instrument
having the effect of assuring 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
(v) the Owner Trustee will not enter into any business or other
activity other than owning the Aircraft, the leasing thereof to the Company
and the carrying out of the transactions contemplated hereby and by the
Participation Agreement, the Trust Agreement and the other Operative
Documents.
30
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 Agreement and be leased to
the Company under the Lease; provided that, to the extent permitted by and
--------
as provided in the Lease, the Company shall have the right, at any time and
from time to time, without any release from or consent by the Owner Trustee
or the Indenture Trustee, to remove, replace and pool Parts and to make
alterations, improvements and modifications in, and additions to, the
Aircraft. The Indenture Trustee agrees that, to the extent permitted by and
as provided in the Lease, title to any such Part shall vest in the Company.
The Indenture Trustee shall from time to time execute an appropriate written
instrument or instruments to confirm the release of the security interest of
the Indenture Trustee in any Part as provided in this Section 5.01, in each
case upon receipt by the Indenture Trustee of a Company Request stating that
said action was duly taken by the Company in conformity with this Section
5.01 and that the execution of such written instrument or instruments is
appropriate to evidence such release of a security interest under this
Section 5.01.
(b) Substitution Under the Lease upon an Event of Loss Occurring to
---------------------------------------------------------------
Airframe or Engines or upon Voluntary Termination of Lease with Respect to
--------------------------------------------------------------------------
Engines. Upon (i) the occurrence of an Event of Loss occurring to the
-------
Airframe or an Engine, or (ii) a voluntary termination of the Lease with
respect to an Engine, the Company, in accordance with the Lease, may, in the
case of an Event of Loss which has occurred to the Airframe, or shall,
except as provided in Section 10(b) of the Lease, in the case of an Event of
Loss which has occurred to or termination of the Lease with respect to an
Engine, substitute an airframe or engine, as the case may be, in which case,
upon satisfaction of all conditions to such substitution specified in
Section 10 of the Lease, the Indenture Trustee shall release all of its
right, interest and lien in and to the Airframe or such Engine in accordance
with the provisions of the following two sentences. The Indenture Trustee
shall execute and deliver to the Owner Trustee an instrument releasing its
lien in and to the Airframe or such Engine and shall execute for recording
in public offices, at the expense of the Owner Trustee (if requested by the
Owner Trustee) or the Company (if requested by the Company), such
instruments in writing as the Owner Trustee or the Company shall reasonably
31
request and as shall be reasonably acceptable to the Indenture Trustee in
order to make clear upon public records that such lien has been released
under the laws of the applicable jurisdiction.
Each of the Owner Trustee and the Company hereby waives and releases any and all
rights existing or that may be acquired to any penalties, forfeit or damages
from or against the Indenture 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 Indenture
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 Company.
ARTICLE 6
REDEMPTION OF CERTIFICATES
Section 6.01. Redemption of Certificates upon Certain Events. (a)
----------------------------------------------
(i) If there shall be an Event of Loss to the Aircraft and the Aircraft is not
replaced pursuant to Section 10(a)(ii) of the Lease, each Outstanding
Certificate shall be redeemed in whole at a Redemption Price equal to 100% of
the outstanding principal amount of such Certificate plus accrued and unpaid
interest thereon to but excluding the applicable Redemption Date.
(ii) If there shall be an Event of Loss to any Engine under
circumstances in which there has not occurred an Event of Loss with respect to
the Airframe and, as a result of such an Event of Loss, Lessor elects to receive
payment for such Engine from Lessee pursuant to Section 10(b) of the Lease and
Lessee shall not have elected to replace such Engine notwithstanding such
election by Lessor, a portion of the principal of each Outstanding Certificate
equal to the product obtained by multiplying the unpaid principal amount of such
Certificate on the Redemption Date applicable to such partial redemption
(assuming, only for the purposes of this calculation, that, if such Redemption
Date is coincident with a Maturity Date or an Installment Payment Date, the
scheduled principal payment due on such Redemption Date is paid prior to the
time the Redemption Price is calculated pursuant to this Section 6.0l(a)(ii) and
applied to principal in accordance with Section 3.03 hereof) by
_________________. The Redemption Price for each such Certificate shall be the
sum of such portion of principal being redeemed plus the amount of interest
accrued and unpaid to such Redemption Date on the principal amount of such
Certificate to be redeemed on such Redemption Date (assuming, only for the
purposes of this calculation, that, if, such Redemption Date is coincident with
an Interest Payment Date, the interest due on such Interest Payment Date is paid
prior to the time such Redemption Price is calculated pursuant to this Section
6.0l(a)(ii) and applied to interest in accordance with Section 3.03 hereof);
provided that each Certificate shall receive, as to the principal thereof,
- --------
32
the same portion of such Redemption Price as the principal value of such
Certificate at such Redemption Date represents of the total principal value of
all Certificates Outstanding at such Redemption Date. Upon the occurrence of
any partial redemption or redemptions pursuant to the preceding sentence the
principal amount of each Outstanding Certificate shall be adjusted to take
account of any such partial redemption or redemptions, and the Installment
Payment Percentages applicable to any Installment Certificates issued hereunder
shall be adjusted as provided for in the definition thereof. The Redemption Date
for Certificates to be redeemed pursuant to this Section 6.01(a) shall be the
Lease Loss Payment Date.
(b) If (i) the Lease shall be terminated by the Company at its option
pursuant to Section 9(b) of the Lease or upon the purchase of the Aircraft by
the Company at its option on a Special Purchase Option Date or the EBO Date
pursuant to Section 19(b) of the Lease (unless the Company shall have elected to
assume the rights and obligations of the Owner Trustee hereunder to the extent
and as provided for in Section 8(r) of the Participation Agreement) or (ii) the
Owner Trustee or the Owner Participant shall have given notice of redemption or
purchase to the Indenture Trustee pursuant to Section 8.03(e)(ii) at any time
after one or more Lease Events of Default shall have occurred and be continuing
for a period of 180 days or more but less than one year (or a period of less
than 180 days if any such Lease Event of Default shall be a Lease Event of
Default under Section 14(a) of the Lease) and the Certificates shall not have
been accelerated, each Outstanding Certificate shall be redeemed or purchased in
whole on the Redemption Date and at the Redemption Price determined below.
Prior to the Premium Termination Date applicable to such Certificate, the
Redemption Price applicable to a redemption or purchase pursuant to this Section
6.01(b) shall be equal to an amount which an Independent Investment Banker (or,
in the case of the deposit of estimated premium pursuant to Section 8.03(e)(ii),
the Owner Trustee) determines to be equal to the greater of (x) the unpaid
principal amount of such Certificate as at such Redemption Date together
(assuming, only for the purposes of this calculation, that, if such Redemption
Date is coincident with an Interest Payment Date, the interest due on such
Interest Payment Date is paid prior to the time such Redemption Price is
calculated pursuant to this Section 6.01(b) and applied to interest in
accordance with Section 3.03 hereof) with an amount equal to the interest
accrued thereon from the immediately preceding Interest Payment Date to such
Redemption Date and (y) the present value (computed in accordance with generally
accepted financial practices on a semiannual basis at a discount rate equal to
the Treasury Yield applicable to such Certificate as of such Redemption Date) as
at such Redemption Date of (A) the regularly scheduled future payments of
interest on such Certificate as required by the terms thereof and of this
Agreement and (B) the regularly scheduled future payments of principal payable
on such Certificate (the excess, if any, of the amount referred to in clause (y)
of this sentence over the amount referred to in clause (x) constituting a
"premium" or a "Premium"), plus, in either case, interest on the principal of
such Certificate accrued as at the immediately preceding Interest Payment Date
and unpaid as of such Redemption Date. On or after the Premium Termination Date
applicable to such Certificate, the Redemption Price applicable to a redemption
or purchase pursuant to this
33
Section 6.01(b) shall equal the unpaid principal amount of such Certificate as
at such Redemption Date together with an amount equal to the interest accrued
thereon from the immediately preceding Interest Payment Date to such Redemption
Date plus interest on the principal of such Certificate accrued as at the
immediately preceding Interest Payment Date and unpaid as of such Redemption
Date and, in the case of either of the two immediately preceding sentences (but
without duplication), if such Redemption Date is coincident with an Interest
Payment Date, the regularly scheduled interest payment due on such Interest
Payment Date. The Redemption Date for Certificates to be redeemed or purchased
(x) pursuant to clause (i) of this Section 6.01(b) shall be (A) in the case of a
termination of the Lease pursuant to Section 9(b) thereof, the third Business
Day following the Lease Termination Date, if any, or, in the case of purchase of
the Aircraft by the Company pursuant to Section 19(b) of the Lease, the
applicable Special Purchase Option Date or EBO Date and (y) pursuant to clause
(ii) of this Section 6.01(b), shall be the same date as if the redemption had
occurred pursuant to Section 6.02. If the Owner Trustee elects to purchase the
Certificates under Section 8.03(e)(ii), nothing herein, including use of the
terms "Redemption Date" and "Redemption Price" shall be deemed to result in a
redemption of the Certificates.
(c) Certificates may be redeemed if the Company shall have requested
the Owner Trustee and the Owner Participant to effect a redemption thereof
pursuant to Section 17 of the Participation Agreement as part of a refunding or
refinancing, and if all the conditions to such refunding or refinancing set
forth in such Section 17 of the Participation Agreement shall have been
satisfied. In such event, each Outstanding Certificate may be so redeemed at a
Redemption Price determined in accordance with the procedures described above in
Section 6.01(b); provided, however, that the applicable Redemption Date for
-------- -------
Certificates to be redeemed pursuant to this Section 6.01(c) shall be the
applicable Refinancing Date under Section 17 of the Participation Agreement.
Section 6.02. Redemption or Purchase of Certificates upon Certain
---------------------------------------------------
Indenture Events of Default. If the Owner Trustee or the Owner Participant
- ---------------------------
shall have given notice of redemption or purchase to the Indenture Trustee
pursuant to Section 8.03(e)(ii) at any time after the Certificates shall have
been accelerated pursuant to Section 8.02 or after one or more Lease Events of
Default shall have occurred and be continuing for a period of one year or more
(or a period of 180 days or more if any such Lease Event of Default shall be a
Lease Event of Default under Section 14(a) of the Lease) and the Certificates
shall not have been accelerated, each Outstanding Certificate shall be redeemed
or purchased in whole at a Redemption Price equal to 100% of its principal
amount plus accrued and unpaid interest thereon to but excluding the applicable
Redemption Date as determined below. The Redemption Date for Certificates to be
redeemed or purchased pursuant to this Section 6.02 shall be the date specified
in the notice given by the Owner Trustee to the Indenture Trustee pursuant to
Section 8.03(e)(ii). If the Owner Trustee elects to purchase the Certificates
34
under Section 8.03(e)(ii), nothing herein, including use of the terms
"Redemption Date" and "Redemption Price" shall be deemed to result in a
redemption of the Certificates.
Section 6.03. Notice of Redemption to Holders. Notice of redemption
-------------------------------
or purchase shall be given by first-class mail, postage prepaid, mailed not less
than 25 nor more than 60 days prior to the Redemption Date, to each Holder of
Certificates to be redeemed or purchased, at such Holder's address appearing in
the Register; provided that, in the case of a redemption pursuant to Section
--------
6.01(b)(1) related to Lessee's exercise of its option pursuant to Section 9(b)
of the Lease, such notice shall be revocable and shall be deemed revoked in the
event the Lease does not in fact terminate on the related Lease Termination
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 Certificate, and that interest on Certificates
shall cease to accrue on and after such Redemption Date, and
(4) the place or places where such Certificates are to be surrendered
for payment of the Redemption Price.
Notice of redemption or purchase of Certificates to be redeemed or purchased
shall be given by the Indenture Trustee.
Section 6.04. Deposit of Redemption Price. 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
Certificates to be redeemed or purchased on the Redemption Date shall not then
be held in the Indenture Estate, deposit or cause to be deposited with the
Indenture Trustee or the Paying Agent by 12:00 noon in immediately available
funds the Redemption Price of the Certificates to be redeemed or purchased on
the Redemption Date.
Section 6.05. Certificates Payable on Redemption Date. Notice of
---------------------------------------
redemption or purchase having been given as aforesaid (and not deemed revoked as
contemplated in the proviso to Section 6.03), the Certificates shall, on the
applicable Redemption Date, become due and payable at the principal corporate
trust office of the Indenture Trustee or at any office or agency maintained for
such purposes pursuant to Section 2.03, and from and after such Redemption Date
(unless there shall be a default in the payment of the Redemption Price) any
Certificates then Outstanding shall cease to bear interest. Upon surrender of
any
35
such Certificate for redemption or purchase in accordance with said notice such
Certificate shall be paid at the Redemption Price.
If any Certificate called for redemption or purchase shall not be so
paid upon surrender thereof for redemption or purchase, the principal amount
thereof shall, until paid, continue to bear interest from the applicable
Redemption Date at the interest rate applicable to such Certificate.
ARTICLE 7
MATTERS CONCERNING THE COMPANY
Section 7.01. Repayment of Monies for Certificate Payments Held by
----------------------------------------------------
the Indenture Trustee. Any money held by the Indenture Trustee or any Paying
- ---------------------
Agent in trust for any payment of the principal of, premium, if any, or interest
on any Certificate, including without limitation any money deposited pursuant to
Article 10 and remaining unclaimed for two years and eleven months after the due
date for such payment, shall be paid to the Owner Trustee; and the Holders of
any Outstanding Certificates shall thereafter, as unsecured general creditors,
look only to the Company on behalf of the Owner Trustee for payment thereof, and
all liability of the Indenture Trustee or any such Paying Agent with respect to
such trust money shall thereupon cease; provided that the Indenture Trustee or
--------
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be mailed to each such Holder 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 7.02. Change in Registration. The Indenture Trustee shall,
----------------------
upon the request of the Company, consent to the deregistration of the Aircraft
under the laws of the jurisdiction in which it is at the time registered and the
registration of the Aircraft under the laws of another jurisdiction (herein
called a "change in registration") provided that the following conditions are
met:
(a) such change in registration complies with the provisions of the
Participatioin Agreement or the Lease;
(b) no Lease Event of Default and no event which, with lapse of time
or notice, or both, would become a Lease Event of Default shall have
occurred and be continuing at the date of such request or at the effective
date of the change in registration, provided that it shall not be necessary
to comply with this condition (b) if the change in registration results in
the registration of the Aircraft under the laws of
36
the United States or if the Indenture Trustee in its discretion believes the
change in registration would be advantageous to the Holders; and
(c) the Indenture Trustee shall have received an opinion of counsel
reasonably satisfactory to the Indenture Trustee to the effect that:
(i) after giving effect to the change in registration, the Lien on
the Aircraft and the other property included in the Indenture Estate
shall continue as a fully perfected lien and that all filing,
recording or other action necessary to perfect and protect the lien of
this Indenture has been accomplished (or if such opinion cannot be
given at the time by which the Indenture Trustee has been requested to
consent to a change in registration, (x) the opinion shall detail what
filing, recording or other action is necessary and (y) the Indenture
Trustee shall have received a certificate from the Company that all
possible preparations to accomplish such filing, recording and other
action shall have been done, and such filing, recording and other
action shall be accomplished and a supplemental opinion to that effect
shall be delivered to the Indenture Trustee on or prior to the
effective date of the change in registration); and
(ii) the terms of the Lease and this Agreement (including the
governing law clauses) being legal, valid and binding and enforceable
in such jurisdiction, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally, and by general principles
of equity and except as limited by applicable laws which may affect
the remedies provided in the Lease and this Agreement, respectively,
which laws, however, do not in the opinion of such counsel make the
remedies provided in the Lease and this Agreement, respectively,
inadequate for the practical realization of the rights and benefits
provided thereby.
The Indenture Trustee shall execute such documents as the Company or the Owner
Trustee shall reasonably request in order to satisfy the above conditions and
upon satisfaction of such conditions to effect the change in registration.
Section 7.03. Assumption of Obligations of Owner Trustee by the
-------------------------------------------------
Company. In the event that the Company shall have elected to assume all of the
- -------
rights and obligations of the Owner Trustee under this Agreement in respect of
the Certificates in connection with the purchase by the Company of the Aircraft
pursuant to Section 8(r) of the Participation Agreement and, if on or prior to
the Purchase Option Date:
(a) the Company shall have delivered to the Indenture Trustee a
certificate, dated the Purchase Option Date, of a Responsible Company
Officer stating that the
37
Company has paid to the Owner Trustee all amounts required to be paid to the
Owner Trustee pursuant to Section 19(b) of the Lease in connection with such
purchase and assumption;
(b) no event which constitutes or, with the lapse of time or notice,
or both, would become, an Event of Default under this Agreement after giving
effect to the indenture supplement referred to below shall have occurred and
be continuing immediately subsequent to such purchase or assumption and the
Indenture Trustee shall have received a certificate, dated the Purchase
Option Date, of a Responsible Company Officer to such effect;
(c) the Indenture Trustee shall have received, on or prior to the
Purchase Option Date, evidence of all filings, recordings and other action
referred to in the Opinion or Opinions of Counsel referred to below;
(d) the Indenture Trustee shall have received an Opinion or opinions
of Counsel for the Company, dated the Purchase Option Date, which without
unusual qualification shall be to the effect that, after giving effect to
the indenture supplement referred to below:
(i) this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by
general principles of equity, and except as limited by applicable laws
which may affect the remedies provided for in this Agreement, which
laws, however, do not in the opinion of such counsel make the remedies
provided for in this Agreement inadequate for the practical
realization of the rights and benefits provided for in this Agreement;
(ii) the Aircraft is duly registered in compliance with applicable
law;
(iii) the Lien on the Aircraft constitutes a fully perfected Lien
and all filing, recording or other action (specifying the same)
necessary to perfect and protect the Lien of this Agreement has been
accomplished;
(iv) the Indenture Trustee would be entitled to the benefits of
Section 1110 of the Bankruptcy Code with respect to the Aircraft;
provided that such opinion may contain qualifications of the tenor
--------
contained in the opinion of special counsel for the Company delivered
pursuant to Section 4(a)(xi)(b) of the Participation Agreement on the
Delivery Date; and
38
(v) no Holder will be required to recognize gain or loss for tax
purposes in connection with such assumption; and
(e) an indenture supplement reasonably satisfactory to the Indenture
Trustee, dated the Purchase Option Date, shall have been executed by the
Indenture Trustee and any other parties necessary thereto and shall have
been delivered to the Indenture Trustee;
then, automatically and without the requirement of further action by any Person,
effective as of the Purchase Option Date, the Owner Trustee shall be released
from all of its obligations under the Agreement in respect of the Certificates
or otherwise (other than any obligations or liabilities of the Owner Trustee in
its individual capacity incurred on or prior to the Purchase Option Date or
arising out of or based upon events occurring on or prior to the Purchase Option
Date, which obligations and liabilities shall remain the sole responsibility of
the Owner Trustee).
If, concurrent with an assumption pursuant to this Section 7.03, the
Aircraft is being reregistered the Company must comply with the provisions of
Section 7.02 hereof.
ARTICLE 8
DEFAULTS AND REMEDIES
Section 8.01. Indenture Events of Default. The following events
---------------------------
shall constitute "Indenture Events of Default" under this Agreement (whether any
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 upon any Certificate or of principal of any
Certificate or of premium, if any, in respect of any Certificate shall not
be paid when due and payable (whether upon redemption or purchase, final
maturity, acceleration or otherwise) and such default in payment shall
continue for more than 10 days after such amount shall have become due and
payable; or
(b) any failure by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, to observe or perform in any material
respect any covenant or obligation required pursuant to Article 4 or clauses
1-5 under the Habendum Clause hereof or Section 8(b), 8(c), 8(g), 8(n) or 10
of the Participation Agreement or the failure by the Owner Participant to
observe or perform in any
39
material respect any covenant or obligation of it required pursuant to
Section 8(b), 8(g) or 10 of the Participation Agreement, or, to the extent
that the interest of the Indenture Trustee or any Holder of an Outstanding
Certificate is adversely affected by such failure, in Section 4.01(a) of the
Trust Agreement or the termination or revocation by the Owner Participant of
the trust created by the Trust Agreement without the Indenture Trustee's
prior written consent if, but only if, such failure or termination or
revocation is not remedied within a period of 30 days after there has been
given to the Owner Trustee and the Owner Participant by registered or
certified mail, a written notice specifying such failure and requiring it to
be remedied and stating that such notice is a "Notice of Default" hereunder,
by the Indenture Trustee or by the Holders of at least 25% in principal
amount of Outstanding Certificates; provided that no Indenture Event of
--------
Default shall arise under this Section 8.01(b) solely as a result of a
failure by the Owner Participant or the Owner Trustee to observe or perform
any covenant contained in Section 8(g) of the Participation Agreement if all
action necessary to discharge all Lessor Liens referred to in such Section
shall have been taken and the Indenture Trustee and the Indenture Estate
shall have been compensated for all claims, losses and expenses arising from
the failure of the Owner Trustee or the Owner Participant, as the case may
be, to observe and perform any such covenant; or
(c) any failure by the Owner Trustee, in its individual capacity or as
Owner Trustee, to observe or perform any other covenant or obligation of the
Owner Trustee contained in this Agreement or in the Participation Agreement
or any failure by the Owner Participant to observe or perform any other
covenant or obligation of the Owner Participant contained in the
Participation Agreement which failure, in any case and either individually
or together with other then existing failures, shall have a material adverse
effect on the rights and interests of the Holders and is not remedied within
a period of 30 days after there has been given to the Owner Trustee and the
Owner Participant by registered or certified mail, a written notice
specifying such failure and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder, by the Indenture Trustee or
by the Holders of at least 25% in principal amount of Outstanding
Certificates; provided, however, that, if the Owner Trustee, in its
-------- -------
individual capacity or as Owner Trustee, or the Owner Participant shall have
undertaken to cure any such failure and, notwithstanding the reasonable
diligence of any of them in attempting to cure such failure, such failure is
not cured within said 30 day period but is curable with future due
diligence, there shall exist no Indenture Event of Default as a consequence
of such failure so long as the Owner Trustee in its individual capacity or
as Owner Trustee or the Owner Participant is proceeding with due diligence
to cure such failure, there exists no adverse effect on the Lien of this
Agreement and such failure is in fact cured within a further period of 30
days; or
40
(d) any material representation or warranty made by the Owner Trustee,
in its individual capacity or as Owner Trustee, or by the Owner Participant
under the Participation Agreement, or by the Owner Trustee hereunder, or by
the Owner Trustee, in its individual capacity or as Owner Trustee, or by the
Owner Participant in any document or certificate furnished to the Indenture
Trustee in connection herewith or therewith or pursuant hereto or hereto,
shall prove at any time to have been incorrect in any material respect as of
the date made and such incorrectness shall remain material at the date of
the notice referred to below and such incorrectness shall continue
unremedied for a period of 30 days after there has been given to the Owner
Trustee and the Owner Participant by registered or certified mail, a written
notice specifying such incorrectness and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder, by the
Indenture Trustee or by the Holders of at least 25% in principal amount of
Outstanding Certificates; or
(e) there shall be a Lease Event of Default other than any such Lease
Event of Default arising by reason of nonpayment of any Excluded Payments
when due; provided that any Lease Event of Default shall be deemed to exist
--------
and continue so long as, but only so long as, it shall not be remedied; or
(f) either the Indenture Estate or the Owner Trustee with respect
thereto (and not in its individual capacity) or the Owner Participant, 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
appointment of a custodian, receiver, trustee or other officer with similar
powers of itself or any substantial part of its property; provided that an
-------- ----
event referred to in this Section 8.01(f) with respect to the Owner
Participant shall not constitute an Indenture Event of Default if (A) an
order, judgment or decree shall be entered in a proceeding by a court or a
trustee, custodian, receiver or liquidator which is either final and non-
appealable or has not been stayed pending any appeal, or (B) an opinion of
counsel satisfactory to the Indenture Trustee shall be provided by the Owner
Participant, in each case to the effect that no part of the Trust Estate
created by the Trust Agreement (except for the Owner Participant's
beneficial interest in such Trust Estate) and no right, title or interest
under the Indenture Estate shall be included in, or be subject to, any
declaration or adjudication of, or proceedings with respect to the
bankruptcy, insolvency or liquidation of the Owner Participant referred to
in this Section 8.01(f); or
(g) a court or governmental authority of competent jurisdiction shall
enter an order appointing, without consent by the Indenture Estate or the
Owner Trustee with respect thereto (and not in its individual capacity) or
the Owner Participant, as
41
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
Indenture Estate or the Owner Trustee with respect thereto (and not in its
individual capacity) or the Owner Participant, 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; provided that an event referred to in this Section 8.01(g) with
--------
respect to the Owner Participant shall not constitute an Indenture Event of
Default if (A) an order, judgment or decree shall be entered in a proceeding
by a court or a trustee, custodian, receiver or liquidator which is either
final and non-appealable or has not been stayed pending an appeal, or (B) an
opinion of counsel satisfactory to the Indenture Trustee shall be provided
by Owner Participant, in each case to the effect that no part of the Trust
Estate created by the Trust Agreement (except for the Owner Participant's
beneficial interest in such Trust Estate) and no right, title or interest
under the Indenture Estate shall be included in, or be subject to, any
declaration or adjudication of, or proceedings with respect to, the
bankruptcy, insolvency or liquidation of the Owner Participant referred to
in this Section 8.01(g).
Section 8.02. Acceleration; Rescission and Annulment. If an
--------------------------------------
Indenture Event of Default occurs and is continuing, either the Indenture
Trustee, by notice to the Company and the Owner Trustee, or the Holders of at
least 25% in aggregate principal amount of Outstanding Certificates, by notice
to the Company, the Indenture Trustee, the Owner Trustee and the Owner
Participant, may declare the principal of all the Certificates to be due and
payable. Upon such declaration, the principal of all Certificates 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 such
declaration and prior to the sale or disposition of the Indenture Estate, the
Holders of a majority in aggregate principal amount of all of the Outstanding
Certificates, by notice to the Indenture Trustee, the Company, the Owner Trustee
and the Owner Participant, may rescind such a declaration and thereby annul its
consequences if (i) an amount sufficient to pay all principal on any
Certificates which have become due otherwise than by such declaration and any
interest thereon and interest due or past due, if any, and all sums due and
payable to the Indenture Trustee have been deposited with the Indenture 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 Agreement
have been cured or waived except nonpayment of principal of, or interest on, the
Certificates that has become due solely because of such acceleration.
42
Section 8.03. Other Remedies Available to Indenture Trustee. (a)
---------------------------------------------
After an Indenture Event of Default shall have occurred and so long as such
Indenture Event of Default shall be continuing, then and in every such case the
Indenture Trustee, as trustee of an express trust and as assignee hereunder of
the Lease or as holder of a security interest in the Aircraft or Engines or
otherwise, may, and when required pursuant to the provisions of Article 9 shall,
exercise, subject to Sections 8.03(b), 8.03(e), 8.03(f) and 8.03(h), any or all
of the rights and powers and pursue any and all of the remedies accorded to the
Owner Trustee pursuant to Section 15 of the Lease and this Article 8, may
recover judgment in its own name as Indenture Trustee against the Indenture
Estate and may take possession of all or any part of the Indenture Estate and
may exclude the Owner Trustee and the Owner Participant and all persons claiming
under any of them wholly or partly therefrom.
(b) After an Indenture Event of Default shall have occurred and so
long as such Indenture Event of Default shall be continuing, subject to Sections
8.03(e), 8.03(f) and 8.03(h), the Indenture Trustee may, if at the time such
action may be lawful and always subject to compliance with any mandatory legal
requirements, either with or without taking possession, and either before or
after taking possession and without instituting any legal proceedings
whatsoever, and having first given notice of such sale by registered mail to the
Owner Trustee, the Owner Participant and the Company once at least 30 days prior
to the date of such sale, and any other notice which may be required by law,
sell and dispose of the Indenture Estate, or any part thereof, or interest
therein, at public auction to the highest bidder, in one lot as an entirety or
in separate lots, and either for cash or on credit and on such terms as the
Indenture Trustee may determine, and at any place (whether or not it be the
location of the Indenture Estate or any part thereof) and time designated in the
notice above referred to; provided, however, that, notwithstanding any provision
-------- -------
herein to the contrary, the Indenture Trustee may not provide the notice
provided for above of its intention to sell any of the Indenture Estate,
exercise remedies under the Lease or exercise other remedies against the
Indenture Estate seeking to deprive the Owner Trustee or the Owner Participant
of its rights therein unless a declaration of acceleration has been made
pursuant to Section 8.02 or the Certificates have otherwise theretofore become
due and payable through redemption or otherwise. Any such sale or sales may be
adjourned from time to time by announcement at the time and place appointed for
such sale or sales, or for any such adjourned sale or sales, without further
notice, and the Indenture Trustee and the Holder or Holders of any Certificates,
or any interest therein, may bid and become the purchaser at any such sale. No
such sale may be consummated if the Owner Trustee shall, prior to the
consummation thereof, have given notice pursuant to and made the deposit
required by Section 8.03(e)(ii). The Indenture Trustee may exercise such right
without possession or production of the Certificates or proof of ownership
thereof, and as representative of the Holders may exercise such right without
notice to the Holders or including the Holders as parties to any suit or
proceeding relating to foreclosure of any property in the Indenture Estate. The
Owner Trustee hereby irrevocably constitutes the Indenture Trustee the true and
lawful attorney-in-fact of the Owner Trustee (in the name of the Owner Trustee
or otherwise)
43
for the purpose of effectuating any sale, assignment, transfer or delivery for
enforcement of the lien created under this Agreement, whether pursuant to
foreclosure or power of sale or otherwise, to execute and deliver all such bills
of sale, assignments and other instruments as the Indenture Trustee may consider
necessary or appropriate, with full power of substitution, the Owner Trustee
hereby ratifying and confirming all that such attorney or any substitute shall
lawfully do by virtue hereof. Nevertheless, if so requested by the Indenture
Trustee or any purchaser, the Owner Trustee shall ratify and confirm any such
sale, assignment, transfer or delivery, by executing and delivering to the
Indenture Trustee or such purchaser all bills of sale, assignments, releases and
other proper instruments to effect such ratification and confirmation as may be
designated in any such request.
(c) Subject to Sections 8.03(e) and 8.03(f), if an Indenture Event of
Default has occurred and is continuing, the Owner Trustee shall, at the request
of the Indenture Trustee, promptly execute and deliver to the Indenture Trustee
such instruments of title or other documents as the Indenture Trustee may deem
necessary or advisable to enable the Indenture Trustee or an agent or
representative designated by the Indenture Trustee, at such time or times and
place or places as the Indenture Trustee may specify, to obtain possession of
all or any part of the Indenture Estate. If the Owner Trustee shall for any
reason fail to execute and deliver such instruments and documents after such
request by the Indenture Trustee, the Indenture Trustee shall be entitled, in a
proceeding to which the Owner Trustee will be a necessary party, to a judgment
for specific performance of the covenants contained in the foregoing sentence,
conferring upon the Indenture Trustee the right to immediate possession and
requiring the Owner Trustee to execute and deliver such instruments and
documents to the Indenture Trustee. The Indenture Trustee shall also be
entitled to pursue all or any part of the Indenture Estate wherever it may be
found and may enter any of the premises of the Owner Trustee or any other Person
wherever the Indenture Estate may be or be supposed to be and search for the
Indenture Estate and take possession of any item of the Indenture Estate
pursuant to this Section 8.03(c). The Indenture 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 Indenture Estate, as it may deem proper. In each
such case, the Indenture Trustee shall have the right to use, operate, store,
lease, control or manage the Indenture Estate, and to exercise all rights and
powers of the Owner Trustee relating to the Indenture Estate as the Indenture
Trustee shall deem appropriate, including the right to enter into any and all
such agreements with respect to the use, operation, storage, leasing, control or
management of the Indenture Estate or any part thereof; and the Indenture
Trustee shall be entitled to collect and receive directly all tolls, rents
(including Rent), issues, profits, products, pursuant to this Section 8.03(c).
The Indenture 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 Indenture
Estate, as it may deem proper. In each such case, the Indenture Trustee shall
have the right to use, operate, store, lease, control or manage the Indenture
Estate, and to exercise all rights and
44
powers of the Owner Trustee relating to the Indenture Estate as the Indenture
Trustee shall deem appropriate, including the right to enter into any and all
such agreements with respect to the use, operation, storage, leasing, control or
management of the Indenture Estate or any part thereof; and the Indenture
Trustee shall be entitled to collect and receive directly all tolls, rents
(including Rent), issues, profits, products, revenues and other income of the
Indenture Estate and every part thereof, without prejudice, however, to the
right of the Indenture Trustee under any provision of this Agreement to collect
and receive all cash held by, or required to be deposited with, the Indenture
Trustee hereunder. In accordance with the terms of this Section 8.03(c), such
tolls, rents (including Rent), issues, profits, products, revenues and other
income shall be applied to pay the expenses of using, operating, storing,
leasing, controlling or managing the Indenture Estate, and of all maintenance,
insurance, repairs, replacements, alterations, additions and improvements, and
to make all payments which the Indenture Trustee may be required or may elect to
make, if any, for taxes, assessments, insurance or other proper charges upon the
Indenture Estate or any part thereof (including the employment of engineers and
accountants to examine, inspect and make reports upon the properties and books
and records of the Owner Trustee and, to the extent permitted by the Lease, the
Company), and all other payments which the Indenture Trustee may be required or
authorized to make under any provision of this Agreement, including this Section
8.03(c), as well as just and reasonable compensation for the services of the
Indenture Trustee, and of all persons properly engaged and employed by the
Indenture Trustee.
If an Indenture Event of Default occurs and is continuing and the
Indenture Trustee shall have obtained possession of or title to the Aircraft,
the Indenture Trustee shall not be obligated to use or operate the Aircraft or
cause the Aircraft to be used or operated directly or indirectly by itself or
through agents or other representatives or to lease, license or otherwise permit
or provide for the use or operation of the Aircraft by any other Person unless
(i) the Indenture Trustee shall have been able to obtain insurance in kinds, at
rates and in amounts satisfactory to it in its discretion to protect the
Indenture Estate and the Indenture Trustee, as trustee and individually, against
any and all liability for loss or damage to the Aircraft and for public
liability and property damage resulting from use or operation of the Aircraft
and (ii) funds are available in the Indenture Estate to pay for all such
insurance or, in lieu of such insurance, the Indenture Trustee is furnished with
indemnification from the Holders or any other Person upon terms and in amounts
satisfactory to the Indenture Trustee in its discretion to protect the Indenture
Estate and the Indenture Trustee, as trustee and individually, against any and
all such liabilities.
(d) Subject to Sections 8.03(b), 8.03(e) and 8.03(f), the Indenture
Trustee may proceed to protect and enforce this Agreement and the Certificates
by suit or suits or proceedings in equity, at law or in bankruptcy, and whether
for the specific performance of any covenant or agreement herein contained or in
execution or aid of any power herein granted; or for foreclosure hereunder, or
for the appointment of a receiver or receivers for the Indenture Estate or any
part thereof, or for the recovery of judgment for the indebtedness
45
secured by the Lien created under this Agreement or for the enforcement of any
other proper, legal or equitable remedy available under applicable law.
(e) (i) If the Company shall fail to make any payment of Basic Rent
under the Lease when the same shall become due, and if such failure of the
Company to make such payment of Basic Rent shall not constitute the fourth
consecutive such failure or the seventh or subsequent cumulative such failure,
then as long as no Indenture Event of Default (other than arising from a Lease
Event of Default not involving any failure to make any payments to which the
Indenture Trustee or any Holder is entitled hereunder when due) shall have
occurred and be continuing, the Owner Participant or the Owner Trustee may (but
need not) pay to the Indenture Trustee, at any time prior to the day which is
the later of (x) the 11th day subsequent to notice of such failure by the
Indenture Trustee to the Owner Trustee or the Owner Participant and (y) the
sixth day subsequent to the expiration of the grace period provided for in
Section 14(a) of the Lease with respect to the payment of Basic Rent (and the
Indenture Trustee shall not (without the prior written consent of the Owner
Trustee) declare the Lease in default pursuant to Section 15 thereof or exercise
any of the rights, powers or remedies pursuant to such Section 15 or this
Section 8 prior to the occurrence of such later date), an amount equal to the
full amount of such payment of Basic Rent, together with any interest due
thereon on account of the delayed payment thereof to the date of such payment,
and such payment by the Owner Participant or the Owner Trustee shall be deemed
to cure as of the date of such payment any Indenture Event of Default which
arose from such failure of the Company (including any Lease Event of Default
arising from the Lessee's failure to pay interest in respect of such overdue
Basic Rent for the period commencing on the date of such payment), but such cure
shall not relieve the Company of any of its obligations. If the Company shall
fail to perform or observe any covenant, condition or agreement to be performed
or observed by it under the Lease, and if (but only if) the performance or
observance thereof can be effected by the payment of money alone (it being
understood that actions such as the obtaining of insurance and the procurement
of maintenance services can be so effected), then as long as no other Indenture
Event of Default (other than those arising from a Lease Event of Default) shall
have occurred and be continuing, the Owner Participant or the Owner Trustee may
(but need not) pay to the Indenture Trustee (or to such other person as may be
entitled to receive the same), at any time prior to the day which is the later
of (x) the 11th day subsequent to notice of such failure by the Indenture
Trustee to the Owner Trustee or the Owner Participant and (y) the sixth day
subsequent to the expiration of the grace period, if any, provided with respect
to such failure on the part of the Company in Section 14 of the Lease (and the
Indenture Trustee shall not (without the prior written consent of the Owner
Trustee) declare the Lease in default pursuant to Section 15 thereof or exercise
any of the rights, powers or remedies pursuant to such Section 15 or this
Section 8 prior to the occurrence of such later date), all sums necessary to
effect the performance or observance of such covenant or agreement of the
Company, together with any interest due thereon on account of the delayed
payment thereof to the date of such payments and such payment by the Owner
Participant or the Owner Trustee shall be deemed to cure as of the
46
date of such payment any Indenture Event of Default which arose from such
failure of the Company (including any Lease Event of Default arising from the
Lessee's failure to pay interest in respect of such overdue payment for the
period commencing on the date of such payment), but such cure shall not relieve
the Company of any of its obligations. Upon any payment of Basic Rent by the
Owner Participant or the Owner Trustee in accordance with the first sentence of
this Section 8.03(e)(i), or upon any payment of any other sums by the Owner
Participant or the Owner Trustee in accordance with the second sentence of this
Section 8.03(e)(i), the Owner Participant or the Owner Trustee shall, to the
extent of their respective payments, be subrogated, in the case of any such
payment in accordance with such first sentence, to the rights of the Indenture
Trustee, as assignee hereunder of the Owner Trustee, or, in the case of any such
payment in accordance with such second sentence, to the rights of the Indenture
Trustee or such other person as the case may be, which actually received such
payment, to receive such payment of Basic Rent or such other payment, as the
case may be (and any interest due thereon on account of the delayed payment
thereof), and shall be entitled to receive such payment upon its receipt by the
Indenture Trustee or such other person, as aforesaid (but in each case only if
all amounts of principal of, and interest at the time due and payable on, the
Certificates together with interest due thereon on account of the delayed
payment thereof shall have been paid in full); provided that neither the Owner
--------
Participant nor the Owner Trustee shall attempt to recover any such amount paid
by it on behalf of the Company pursuant to this Section 8.03(e)(i) except by
demanding of the Company payment of such amount or by proceeding by appropriate
court action against the Company to enforce the payment of such amount pursuant
to Section 15(f), but only said Section 15(f), of the Lease.
(ii) In the event that (A) at any time one or more Lease Events of
Default shall have occurred and be continuing for a period of 180 days or more
but less than one year (or a period of less than 180 days if any such Lease
Event of Default shall be a Lease Event of Default under Section 14(a) of the
Lease) and the Certificates shall not have been accelerated or (B) the
Certificates shall have been accelerated pursuant to Section 8.02 or after one
or more Lease Events of Default shall have occurred and be continuing for a
period of one year or more (or a period of 180 days or more, if such Lease Event
of Default shall be a Lease Event of Default under Section 14(a) of the Lease),
the Owner Trustee or the Owner Participant may, at its option, give at least 30
days' prior irrevocable notice to the Indenture Trustee that the Owner Trustee
or the Owner Participant will redeem or purchase all Certificates then
outstanding on the Business Day specified in such notice and, concurrently with
such notice, the Owner Trustee or the Owner Participant will deposit with the
Indenture Trustee an amount sufficient to redeem or purchase at the applicable
Redemption Price determined consistently with the applicable provisions of
Article 6 all Certificates then outstanding (including, if Section 6.01(b) is
applicable, an estimate of the premium to be paid on the Redemption Date
computed using the Treasury Yield determined as if the Redemption Date were the
date of such notice) and to pay the Indenture Trustee all amounts then due it
hereunder, which funds shall be held by the Indenture Trustee as
47
provided in Section 9.04. Upon the giving of such notice and the receipt by the
Indenture Trustee of such deposit, the Indenture Trustee shall deem all
instructions received from the Owner Trustee as having been given by the Holders
of 100% of the outstanding principal amount of Certificates for all purposes of
this Indenture. If such notice is given, the Owner Trustee further agrees that
it will deposit or cause to be deposited with the Indenture Trustee, on or prior
to the Business Day preceding the applicable Redemption Date, whether or not an
Indenture Event of Default is then continuing, funds sufficient, when added to
the funds already held by the Indenture Trustee for such purpose, to redeem or
purchase at the applicable Redemption Price (including the premium actually
payable in respect thereof) on such Redemption Date all Certificates then
outstanding and to pay the Indenture Trustee all amounts then due it hereunder.
(iii) Anything in this Agreement to the contrary notwithstanding the
Indenture Trustee shall not be entitled to exercise any remedy hereunder as a
result of an Indenture Event of Default which arises solely by reason of one or
more events or circumstances which constitute a Lease Event of Default unless
the Indenture Trustee as security assignee of the Owner Trustee shall have
exercised or concurrently be exercising one or more of the remedies provided for
in Section 15(a)-(f) of the Lease with respect to the Aircraft; provided,
--------
however, that such requirement to exercise one or more of such remedies under
- -------
the Lease shall not apply in circumstances where the Indenture 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(a)(l)(A) 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, however, 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 (A) 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)(1)(A) of
the Bankruptcy Code and continues to perform as required by Section
1110(a)(1)(A-B) of the Bankruptcy Code or (B) is an extension of the Section
1110 Period with the consent of the Indenture Trustee pursuant to Section
1110(b) of the Bankruptcy Code or (C) results from the Company's assumption
during the Section 1110 period with the approval of the relevant court of the
Lease pursuant to Section 365 of the Bankruptcy Code or (D) is the consequence
of the Indenture Trustee's own failure to give any requisite notice to any
person or (E) is pursuant to a judicial stay pending the resolution of
litigation with respect to the applicability of Section 1110 of the Bankruptcy
Code and there is either no Lease Event of Default other than one arising solely
from the Company's bankruptcy or any such other Lease Event of Default has been
cured; provided, further, however, that the requirement to exercise one or more
-------- ------- --------
of such remedies under the Lease during a Continuous Stay Period subsequent to
the expiration of the Section 1110 period
48
based upon a judicial stay as provided for in this clause (E) shall in any event
cease to be applicable subsequent to the 120th day of such Continuous Stay
Period. If the limitation upon cures of the Lessee's failure to pay Basic Rent
as provided in Section 8.03(e)(i) would otherwise prohibit the Owner Participant
or the Owner Trustee from making a payment to cure a Lease Event of Default for
purposes of clause (E) above, the Owner Participant or the Owner Trustee shall
nonetheless be entitled to make such payment. If the Indenture Trustee shall
acquire title to the Aircraft through foreclosure during a Continuous Stay
period without having exercised one or more of such remedies under the Lease by
virtue of the Continuous Stay Period having continued beyond its 120th day as
provided above in clause (E) and the Indenture Trustee shall have received prior
to the 183rd day subsequent to its acquisition of title to the Aircraft, the
proceeds from its sale of the Aircraft, the Indenture Trustee shall,
notwithstanding any other provision of this Indenture, distribute to the Owner
Trustee the amount, if any, by which such proceeds (net of the Indenture
Trustee's costs and expenses (including the fees and expenses of counsel and
other experts and agents retained by it), commissions and other costs and
expenses with respect to such foreclosure, the maintenance and preservation of
the Aircraft and such sale (including amounts in respect of any thereof paid by
others to whom the Indenture Trustee has a reimbursement obligation) and any
other amounts to which the Indenture Trustee is entitled pursuant to Section
9.06 or otherwise) exceed an amount equal to the aggregate of the principal
amount of the Certificates outstanding on the date of such foreclosure, together
with interest accrued thereon to such foreclosure date and an amount equal to
the amount of interest that would have accrued (at the rate per annum applicable
under the Certificates) on such principal amount from the date of such
foreclosure to the date of the distribution by the Indenture Trustee of such
proceeds for the benefit of the Holders if such principal amount had remained
outstanding. References in this subsection (iii) to particular sections of the
Bankruptcy Code as in effect on the date of the amendment and restatement of
this Indenture shall include any substantially similar successor provisions.
(f) Notwithstanding any provision of this Agreement to the contrary,
including, without limitation, Sections 8.03(b), 8.03(c) and 8.03(d), as long as
no Lease Event of Default shall have occurred and be continuing, neither the
Indenture Trustee nor the Owner Trustee shall take any action in violation of
the Company's rights under the Lease, including, without limitation, (x) the
right to receive all monies due and payable to it in accordance with the
provisions of the Lease and (y) the Company's rights to possession and use of,
and of quiet enjoyment of, the Aircraft.
(g) Each and every right, power and remedy herein given to the
Indenture Trustee specifically or otherwise in this Agreement 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 in
such order as may be deemed expedient by the Indenture Trustee, and the exercise
49
or the beginning of the exercise of any power or remedy shall not be construed
to be a waiver of the right to exercise at the same time or thereafter any other
right, power or remedy. No delay or omission by the Indenture Trustee in the
exercise of any right, remedy or power or in pursuing 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 Company or to be an acquiescence therein.
(h) Notwithstanding anything contained herein to the contrary, so long
as the Pass Through Trustee is a Holder, the Indenture Trustee is not authorized
or empowered to acquire title to the Indenture Estate, or to take any action
with respect to any of the Indenture Estate so acquired by it, if such
acquisition or action would cause any Pass Through Trust to fail to qualify as a
"grantor trust" for federal income tax purposes.
Section 8.04. Waiver of Owner Trustee. To the extent now or at any
-----------------------
time hereafter enforceable under applicable law, the Owner Trustee covenants
that it will not at any time insist upon or plead, or in any manner whatsoever
claim or take any benefit or advantage of or from any law now or hereafter in
force providing for the valuation or appraisal of the Indenture Estate or any
part thereof, prior to any sale or sales thereof to be made pursuant to any
provision herein contained, or prior to any applicable decree, judgment or order
of any court of competent jurisdiction; nor, after such sale or sales, claim or
exercise any right under any statute now or hereafter made or enacted by any
state or otherwise to redeem the property so sold or any part thereof, and
hereby expressly waives for itself and on behalf of each and every Person,
except decree or judgment creditors of the Owner Trustee acquiring any interest
in or title to the Indenture Estate or any part thereof subsequent to the date
of this Agreement, all benefit and advantage of any such law or laws, and
covenants that it will not invoke or utilize any such law or laws, but will
suffer and permit the execution of every such power as though no such law or
laws had been made or enacted. Nothing in this Section 8.04 shall be deemed to
be a waiver by the Owner Trustee of its rights under Section 8.03(e).
The Indenture Trustee may maintain such a pleading, or, in any manner
whatsoever, claim or take any benefit or advantage of or from any law now or
hereafter in force even if it does not possess any of the Certificates or does
not produce any of them in the proceeding. A delay or omission by the Indenture
Trustee or any Holder in exercising any right or remedy accruing upon an
Indenture Event of Default under this Agreement shall not impair the right or
remedy or constitute a waiver of or acquiescence in such Indenture Event of
Default.
Section 8.05. Waiver of Existing Defaults. The Holders of a majority
---------------------------
in the aggregate principal amount of the Outstanding Certificates by notice to
the Indenture Trustee may waive on behalf of the Holders an existing Indenture
Default or Indenture Event of Default and its consequences except (i) an
Indenture Default or Indenture Event of Default in
50
the payment of the principal of or interest on any Certificate or (ii) in
respect of a covenant or provision hereof which pursuant to Section 11.02 cannot
be amended or modified without the consent of the Holder affected.
Section 8.06. Control by Majority. (a) The Holders of a majority in
-------------------
aggregate principal amount of the Outstanding Certificates may direct the time,
method and place of conducting any proceeding for any remedy available to the
Indenture Trustee or exercising any trust or power conferred on it by this
Agreement. However, the Indenture Trustee may refuse to follow any direction
that conflicts with law or this Agreement, that is unduly prejudicial to the
rights of the Holders so affected, or that would subject the Indenture Trustee
to personal liability.
(b) The Owner Trustee may pursuant to the direction and instruction of
the Owner Participant by delivery of written notice to the Indenture Trustee set
a record date to determine the Holders 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 Holders 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 Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders holding the requisite proportion of certificates
have authorized or agreed or consented to such consent, request, demand,
authorization, direction, notice, waiver or other act, and for that purpose the
Outstanding Certificates shall be computed as of such record date; provided that
no such consent, request, demand, authorization, direction, notice, waiver or
other act by the Holders on such record date shall be deemed effective unless it
shall become effective pursuant to the provisions of this Agreement not later
than one year after the record date.
Section 8.07. Limitation on Suits by Holders. A Holder may pursue a
------------------------------
remedy under this Agreement or thereunder only if:
(1) the Holder gives to the Indenture Trustee written notice of a
continuing Indenture Event of Default under this Agreement;
(2) the Holders of at least 25% in aggregate principal amount of the
Outstanding Certificates make a written request to the Indenture Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Indenture Trustee indemnity
satisfactory to the Indenture Trustee against any loss, liability or expense
to be, or which may be, incurred by the Indenture Trustee in pursuing the
remedy;
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(4) the Indenture Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in aggregate
principal amount of the Outstanding Certificates do not give the Indenture
Trustee a direction inconsistent with the request.
A Holder may not use this Agreement to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
Section 8.08. Rights of Holders to Receive Payment. Notwithstanding
------------------------------------
any other provision of this Agreement the right of any Holder to receive payment
of principal of, premium, if any, and interest on such Certificate on or after
the respective due dates expressed in such Certificate, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 8.09. Indenture Trustee May File Proofs of Claim. The
------------------------------------------
Indenture Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee and of the Holders allowed in any judicial proceedings relating to any
obligor on the Certificates, its creditors, or its property.
ARTICLE 9
INDENTURE TRUSTEE
Section 9.01. Duties of Indenture Trustee. (a) The Indenture
---------------------------
Trustee may refuse to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it against any loss, liability or expense.
(b) Subject to the provisions of Section 9.04, the Indenture Trustee
shall not be liable for interest on any money received except as otherwise
provided in any other Operative Document. Money held in trust by the Indenture
Trustee need not be segregated from other funds except to the extent required by
law.
Section 9.02. Rights of Indenture Trustee. (a) The Indenture
---------------------------
Trustee may rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. The Indenture Trustee need not
investigate any fact or matter stated in the document.
52
(b) Before the Indenture Trustee acts or refrains from acting, it may
consult with counsel or require an Officer's Certificate or an Opinion of
Counsel from the Company or the Owner Trustee after which it will take such
action or refrain from acting as it deems appropriate. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith and
in accordance herewith in reliance on a resolution of the Board of Directors of
the Company, the written advice of counsel acceptable to the Owner Trustee, the
Company and the Indenture Trustee, officer's certificates or opinions of counsel
provided by the Company or the Owner Trustee.
(c) The Indenture Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any such agent appointed with
due care; provided that, so long as no Lease Event of Default shall have
--------
occurred and be continuing no such agents shall be appointed by the Indenture
Trustee without the consent of the Company and the Owner Trustee, which consent
shall, in each case, not be unreasonably withheld.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers.
(e) If an Indenture Event of Default under this Agreement has occurred
and is continuing, the Indenture Trustee shall exercise its rights and powers
under this Agreement, and shall use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
Section 9.03. Individual Rights of Indenture Trustee. The Indenture
--------------------------------------
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates and may otherwise deal with the Owner Trustee, the Company or an
Affiliate of the Owner Trustee or the Company or a subsidiary of the Owner
Trustee or the Company with the same rights it would have if it were not the
Indenture Trustee. Any Agent may do the same with like rights.
Section 9.04. Funds May Be Held by Indenture Trustee or Paying Agent;
-------------------------------------------------------
Investments. Any monies (including without limitation for purpose of this
- -----------
Section 9.04 Permitted Investments constituting the proceeds of the maturity,
sale or other disposition of any Permitted Investment) held by the Indenture
Trustee or the Paying Agent hereunder as part of the Indenture Estate, until
paid out by the Indenture Trustee or the Paying Agent as herein provided, (i)
subject to clause (ii) below, may be carried by the Indenture Trustee or the
Paying Agent on deposit with itself or on deposit to its account with any bank,
trust company or national banking association incorporated or doing business
under the laws of the United States of America or one of the States thereof
having combined capital and surplus and retained earnings of at least
$100,000,000, and neither the Indenture Trustee nor the Paying Agent shall have
any liability for interest upon any such monies except as otherwise agreed in
writing or (ii) at any time and from time to time, so long as no Lease Event of
53
Default shall have occurred and be continuing, at the request (given directly by
the Company to the Indenture Trustee) of the Company 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 Indenture Trustee in trust as part of the Indenture Estate
until so sold; provided that the Company pursuant to Section 22 of the Lease, on
--------
behalf of the Owner Trustee, as agent of the Owner Trustee, shall upon demand
pay to the Indenture 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 Indenture Trustee, and the Indenture Trustee shall promptly pay to the
Company, on behalf of the Owner Trustee, any profit, income, interest, dividend
or gain realized upon maturity, sale or other disposition of any 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 shall be held as
part of the Indenture Estate and shall be applied by the Indenture 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. The
Indenture 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 9.04.
Section 9.05. Notice of Defaults. If an Indenture Event of Default
------------------
under this Agreement occurs and is continuing and the Indenture Trustee has
Actual Knowledge of same, the Indenture Trustee shall (i) promptly send written
notice thereof by telecopier to the Company, the Owner Trustee and the Owner
Participant and (ii) within 90 days after it occurs, mail to each Holder notice
of all uncured Indenture Events of Default under this Agreement. Except in the
case of a default in the payment of the principal of, premium, if any, or
interest on any Certificate, the Indenture Trustee shall be protected in
withholding the notice required under clause (ii) above if and so long as the
executive committee or trust committee of directors of the Indenture Trustee
and/or Responsible Officers thereof in good faith determines that withholding
such notice is in the interest of the Holders. In addition, if an Indenture
Default under this Agreement occurs and is continuing and if the Indenture
Trustee has Actual Knowledge of same, the Indenture Trustee shall promptly send
written notice thereof by telecopier to the Company, the Owner Trustee and the
Owner Participant.
Section 9.06. Compensation and Indemnity. (a) The Owner Trustee
--------------------------
shall pay to the Indenture Trustee from time to time (i) reasonable compensation
for its services, which compensation shall not be limited by any law on
compensation of a trustee of an express trust, (ii) reimbursement for all
reasonable out-of-pocket expenses incurred by the Indenture Trustee in
connection with the performance of its duties under this Agreement (including
the
54
reasonable compensation and expenses of the Indenture Trustee's counsel and any
agent appointed in accordance with Section 9.02(c)), and (iii) indemnification
against any loss or liability incurred by it arising out of or in connection
with its acceptance or administration of the trust or trusts hereunder except
(A) as such expenses or loss or liability might result from the negligence or
willful misconduct of the Indenture Trustee or the inaccuracy of any
representation or warranty of the Indenture Trustee in its individual capacity
in Section 8 of the Participation Agreement, (B) as otherwise provided in
Section 9.10 hereof and (C) as otherwise excluded by the terms of Sections 7(b)
and 7(c) of the Participation Agreement from the Company's indemnities under
said Sections; provided that the Indenture Trustee shall not make any claim
--------
under this Section 9.06(a) for any claim or expense indemnified against by the
Company under the Participation Agreement without first making demand on the
Company for payment of such claim or expense. The Indenture Trustee shall
notify the Owner Trustee and the Company promptly of any claim for which it is
entitled to be indemnified hereunder. Subject to the conditions and procedures
equivalent to those set forth in Sections 7(b) and 7(c) of the Participation
Agreement, the Owner Trustee shall defend the claim and the Indenture Trustee
shall cooperate in the defense. The Indenture Trustee may have separate counsel
and the Owner Trustee shall pay the reasonable fees and expenses of such
counsel. The Owner Trustee need not pay for any settlement made without its and
the Company's consent.
(b) To secure the payment obligations of the Owner Trustee pursuant to
this Section 9.06, the Indenture Trustee shall have a lien prior to that of the
Holders of the Certificates on all money or property held or collected by the
Indenture Trustee, except that held in trust to pay the principal of and
interest and premium, if any, on the Certificates.
Section 9.07. Replacement of Indenture Trustee. (a) The resignation
--------------------------------
or removal of the Indenture Trustee and the appointment of a successor Indenture
Trustee shall become effective only upon the successor Indenture Trustee's
acceptance of appointment as provided in this Section.
(b) The Indenture Trustee may resign by giving at least 30 days' prior
written notice to the Company and the Owner Trustee. The Holders of a majority
in aggregate principal amount of the Outstanding Certificates may remove the
Indenture Trustee by giving at least 30 days' prior written notice to the
Indenture Trustee, the Owner Trustee and the Company and may appoint a successor
Indenture Trustee for such Certificates with the Owner Trustee's and (so long as
no Lease Event of Default is continuing) the Company's consent. The Owner
Trustee may remove the Indenture Trustee if:
(1) the Indenture Trustee fails to comply with Section 9.09;
(2) the Indenture Trustee is adjudged a bankrupt or an insolvent;
55
(3) a receiver or public officer takes charge of the Indenture Trustee
or its property; or
(4) the Indenture Trustee becomes incapable of acting.
(c) If the Indenture Trustee resigns or is removed, or if a vacancy
exists in the office of Indenture Trustee for any reason, the Owner Trustee
shall promptly appoint a successor Indenture Trustee which will (so long as no
Lease Event of Default is continuing) be approved by the Company.
(d) If a successor Indenture Trustee does not take office within 30
days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Company, the Owner Trustee or the Holders of a majority
in aggregate principal amount of the Outstanding Certificates may petition any
court of competent jurisdiction for the appointment of a successor Indenture
Trustee.
(e) If the Indenture Trustee fails to comply with Section 9.09, any
Holder may petition any court of competent jurisdiction for the removal of such
Indenture Trustee and the appointment of a successor Indenture Trustee.
(f) A successor Indenture Trustee shall deliver a written acceptance
of its appointment to the retiring Indenture Trustee, to the Company and to the
Owner Trustee. Thereupon, the resignation or removal of the retiring Indenture
Trustee shall become effective, and the successor Indenture Trustee shall have
all the rights, powers and duties of the retiring Indenture Trustee for which
the successor Indenture Trustee is to be acting as Indenture Trustee under this
Agreement. The retiring Indenture Trustee shall promptly transfer all property
and all books and records relating to the administration of the Indenture Estate
held by it as Indenture Trustee to the successor Indenture Trustee subject to
the lien provided for in Section 9.06. The Company shall give notice of each
appointment of a successor Indenture Trustee if there are Certificates
outstanding, by mailing written notice of such event by first-class mail to the
Holders.
(g) All provisions of this Section 9.07 except subparagraphs (b)(l)
and (e) and the words "subject to the lien provided for in Section 9.06" in
subparagraph (f) shall apply also to any Paying Agent.
Section 9.08. Successor Indenture Trustee, Agents by Merger, etc. If
--------------------------------------------------
the Indenture Trustee or any Agent 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 Indenture Trustee or Agent, as the case may be.
56
Section 9.09. Eligibility; Disqualification. This Agreement shall at
-----------------------------
all times have an Indenture Trustee which (i) shall have a combined capital and
surplus of at least $75,000,000 or (ii) shall have 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, and which, in any case,
shall be a Citizen of the United States. 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 9.09, 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 Indenture Trustee shall cease to be eligible
in accordance with the provisions of this Section 9.09, the Indenture Trustee
shall resign immediately in the manner and with the effect specified in Section
9.07.
Section 9.10. Trustee's Liens. The Indenture 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 Indenture Trustee in its individual capacity and which are
unrelated to the transactions contemplated by the Operative Documents, or (ii)
which are attributable to the Indenture Trustee as trustee hereunder or in its
individual capacity and which arise out of acts or omissions which are not
expressly contemplated by this Agreement.
Section 9.11. Withholding Taxes; Information Reporting. The
----------------------------------------
Indenture Trustee shall exclude and withhold from each distribution of
principal, premium, if any, and interest and other amounts due hereunder or
under the Certificates any and all withholding taxes applicable thereto as
required by law. The Indenture Trustee agrees to act as such withholding agent
and, in connection therewith, whenever any present or future taxes or similar
charges are required to be withheld with respect to any amounts payable in
respect to the Certificates, to withhold such amounts and timely pay the same to
the appropriate authority in the name of and on behalf of the Holders, that it
will file any necessary withholding tax returns or statements when due, and
that, as promptly as possible after the payment thereof, it will deliver to each
Holder appropriate documentation showing the payment thereof, together with such
additional documentary evidence as such Holders may reasonably request from time
to time. The Indenture Trustee agrees to file any other information reports as
it may be required to file under United States law. Such withholding by the
Indenture Trustee shall in no event give rise to an Indenture Event of Default.
57
Section 9.12. Additional Collateral. (a) From time to time the
---------------------
Owner Participant may pledge Additional Collateral to the Indenture Trustee as
part of the Indenture Estate and in connection with such Additional Collateral
shall deliver to the Indenture Trustee evidence of such filings and recordings
necessary to establish and perfect the Lien of this Indenture in such Additional
Collateral. Such Additional Collateral shall be held in trust by the Indenture
Trustee as part of the Indenture Estate until released by the Indenture Trustee
pursuant to clause (b) below or otherwise in accordance with the applicable
security agreement.
(b) Provided that all payments of principal and interest on the
Certificates due and payable on the tenth Interest Payment Date have been made,
on such Interest Payment Date, the Indenture Trustee shall, unless otherwise
directed by the Owner Trustee or the Owner Participant, release any Additional
Collateral from the Lien of this Indenture, provided, however, that the Owner
-------- -------
Trustee or the Owner Participant shall be responsible for the preparation and
recording of all filings and recordings necessary to release such Additional
Collateral from the Lien of this Indenture.
ARTICLE 10
SATISFACTION AND DISCHARGE; DEFEASANCE;
TERMINATION OF OBLIGATIONS
Section 10.01. Satisfaction and Discharge of Agreement; Defeasance;
----------------------------------------------------
Termination of Obligations. Subject to Section 10.02, this Agreement shall
- --------------------------
cease to be of further effect, and the Owner Trustee and the Indenture Trustee
shall, except as herein provided, be deemed to have been discharged from their
respective obligations with respect to the Certificates (and the Indenture
Trustee, on demand and at the expense of the Owner Trustee, shall execute proper
instruments acknowledging satisfaction and discharge of this Agreement in
respect of the Certificates), when
(a) (i) all Certificates theretofore executed and delivered (other
than (A) Certificates which have been mutilated, destroyed, lost or stolen
and which have been replaced or exchanged as provided in Section 2.06 and
(B) Certificates for the payment of which money held in trust hereunder has
been paid and discharged from such trust, as provided in Section 7.01) have
been delivered to the Indenture Trustee for cancellation; or
(ii) all Certificates not theretofore delivered to the Indenture
Trustee for cancellation
58
(A) have become due and payable (whether upon stated maturity or
as a result of redemption), or
(B) will become due and payable (including as a result of
redemption in respect of which irrevocable notice has been given to
the Indenture Trustee on or prior to the date of such deposit and such
redemption either is a redemption without possibility of premium or,
as of the date of such deposit, any premium which may be payable in
connection therewith has been actually determined) at maturity or on a
Redemption Date within one year,
and there has been deposited with the Indenture Trustee in trust for the purpose
of paying and discharging the entire indebtedness on the Certificates not
theretofore cancelled by the Indenture Trustee or delivered to the Indenture
Trustee for cancellation, an amount sufficient to discharge such indebtedness,
including the principal of, the actual premium, if any, and interest on the
Certificates to the date of such deposit (in the case of Certificates which have
become due and payable), or to the maturity thereof or to the Redemption Date
thereof, as the case may be; or
(iii) (A) the Owner Trustee, subsequent to the Commencement Date, has
deposited or caused to be deposited irrevocably (except as provided in
Section 10.04) with the Indenture Trustee as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the benefit
of the Holders, (1) money in an amount, or (2) U.S. Government Obligations
which, through the payment of interest and principal in respect thereof in
accordance with their terms, will provide (not later than one Business Day
before the due date of any payment referred to below in this paragraph)
money in an amount, or (3) a combination of money and U.S. Government
Obligations referred to in the foregoing clause (2), sufficient, in the
opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Indenture Trustee, to pay and discharge each installment of principal of and
interest on the Outstanding Certificates on the dates such payments of
principal or interest are due (including as a result of redemption without
the possibility of the payment of premium in respect of which irrevocable
notice has been given to the Indenture Trustee on or prior to the date of
such deposit), and no Lease Event of Default under either Section 14(f) or
14(g) of the Lease shall have occurred and be continuing on the date of such
deposit or at any time during the period ending on the 91st day after such
date; provided, however, that, upon the making of the deposit referred to
-------- -------
above in this clause (A), the right of the Owner Trustee or the Company to
cause the redemption of Certificates (except a redemption in respect of
which irrevocable notice has theretofore been given) shall terminate;
59
(B) such deposit will not result in a breach or violation of, or
constitute an Indenture Default or Indenture Event of Default under, this
Agreement or a default or event of default under any other agreement or
instrument to which the Owner Trustee or the Company is a party or by which
it is bound; and
(C) the Company on behalf of the Owner Trustee has delivered to the
Indenture Trustee an Officer's Certificate and an Opinion of Counsel to the
effect that there has been published by the Internal Revenue Service a
ruling to the effect that Holders will not recognize income, gain or loss
for Federal income tax purposes as a result of the exercise by the Owner
Trustee of its option under this Section 10.01(a)(iii) and will be subject
to Federal income tax on the same amount and in the same manner and at the
same times, as would have been the case if such option had not been
exercised;
(b) all other amounts then due and payable hereunder have been paid
and no notice of a redemption of the Certificates with the possibility of the
payment of premium has been delivered by the Indenture Trustee; and
(c) the Company on behalf of the Owner Trustee has delivered to the
Indenture Trustee an Officer's Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for relating to the satisfaction
and discharge of this Agreement contemplated by this Section 10.01, have been
complied with.
Section 10.02. Survival of Certain Obligations. Notwithstanding the
-------------------------------
provisions of Section 10.01, the obligations of the Indenture Trustee contained
in Sections 2.01 through 2.08, Section 7.01, Section 9.11, Section 10.03 and
Section 10.04, the rights, duties, immunities and privileges hereunder of the
Indenture Trustee shall survive.
Section 10.03. Monies to Be Held in Trust. All moneys and U.S.
--------------------------
Government Obligations deposited with the Indenture Trustee pursuant to Section
10.01 shall be held in trust and applied by it, in accordance with the
provisions of the Certificates and this Agreement, to the payment either
directly or through any Paying Agent, as the Indenture Trustee may determine, to
the Holders, of all sums due and to become due thereon for principal, premium,
if any, and interest, but such money need not be segregated from other funds
except to the extent required by law.
Section 10.04. Monies to Be Returned to Owner Trustee. The Indenture
--------------------------------------
Trustee and any Paying Agent shall promptly pay or return to the Owner Trustee
upon request of the Owner Trustee any money or U.S. Government Obligations held
by them at any time that are not required for the payment of the amounts
described above in Section 10.03 on the Certificates for which money or U.S.
Government Obligations have been deposited pursuant to Section 10.01.
60
ARTICLE 11
AMENDMENTS AND WAIVERS
Section 11.01. Amendments to this Agreement Without Consent of
-----------------------------------------------
Holders. The Owner Trustee and the Indenture Trustee may enter into one or more
- -------
agreements supplemental hereto without the consent of any Holder for any of the
following purposes:
(1) to correct any mistake or cure any ambiguity, defect or inconsistency
herein or in the Certificates or to make any change not inconsistent with
the provisions hereof; provided that such change does not adversely affect
--------
the interests of any Holder;
(2) 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;
(3) to convey, transfer, assign, mortgage or pledge any property to or
with the Indenture Trustee or to make any other provisions with respect to
matters or questions arising hereunder so long as such action shall not
adversely affect the interests of the Holders;
(4) to correct or amplify the description of any property at any time
subject to the lien of this Agreement or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subject to the lien of this Agreement or to subject to the lien of this
Agreement the Airframe or Engines or airframe or engines substituted for the
Airframe or Engines in accordance herewith or with the Lease; provided that
--------
Trust Supplements entered into for the purpose of subjecting to the lien of
this Agreement the Airframe or Engines in accordance with the Lease need
only be executed by the Owner Trustee and the Indenture Trustee;
(5) to add to the covenants of the Owner Trustee, for the benefit of the
Holders, or to surrender any rights or power herein conferred upon the Owner
Trustee or the Owner Participant;
(6) to add to the rights of the Holders;
61
(7) to provide for the assumption by the Company of the obligations of
the Owner Trustee hereunder in accordance with the terms and conditions
applicable thereto specified in Section 7.03; or
(8) to include on the Certificates any legend as may be required by
applicable law.
Section 11.02. Amendments to this Agreement with Consent of Holders.
----------------------------------------------------
(a) With the written consent of the Holders of a majority of the aggregate
principal amount of the Outstanding Certificates, the Owner Trustee and the
Indenture Trustee may enter into such supplemental agreements to add any
provisions to or to change or eliminate any provisions of this Agreement or of
any such supplemental agreements or to modify the rights of the Holders;
provided, however, that, an amendment under this Section 11.02 may not:
- -------- -------
(1) reduce the principal amount of, premium, if any, or any
installment of interest on, any Certificate; or
(2) change the date on which any principal amount of, any Installment
Payment Amount payable with respect to, premium, if any, or interest on any
Certificate, is due or payable; or
(3) create any Lien on the Indenture Estate prior to or pari passu
---- -----
with the Lien thereon under this Agreement except such as are permitted by
this Agreement, or deprive any Holder of the benefit of the Lien on the
Indenture Estate created by this Agreement; or
(4) reduce the percentage in principal amount of the Outstanding
Certificates, 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 Agreement or of
certain defaults hereunder or their consequences) provided for in this
Agreement; or
(5) make any change in Sections 8.05, 8.08 or Section 11.02(a).
(b) It is not necessary under this Section 11.02 for the Holders to
consent to the particular form of any proposed supplemental agreement, but it is
sufficient if they consent to the substance thereof.
(c) Promptly after the execution by the Owner Trustee and the
Indenture Trustee of any supplemental agreement pursuant to the provisions of
this Section 11.02, the Indenture Trustee shall transmit by first-class mail a
notice, setting forth in general terms the substance of such supplemental
agreement, to all Holders, as the names and addresses of
62
such Holders appear on the Register. Any failure of the Indenture Trustee to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental agreement.
Section 11.03. Revocation and Effect of Consents. Until an amendment
---------------------------------
or waiver becomes effective, a consent to it by a Holder is a continuing consent
by the Holder and every subsequent Holder, even if notation of the consent is
not made on any Certificate. However, any such Holder or subsequent Holder may
revoke the consent as to his Certificate if the Indenture Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
After an amendment or waiver becomes effective, it shall bind every Holder
affected by such amendment or waiver.
Section 11.04. Notation on or Exchange of Certificates. The
---------------------------------------
Indenture Trustee may place an appropriate notation about an amendment or waiver
on any Certificate thereafter executed. The Indenture Trustee in exchange for
such Certificates may execute new Certificates that reflect the amendment or
waiver.
Section 11.05. Indenture Trustee Protected. The Indenture Trustee
---------------------------
need not sign any supplemental agreement that adversely affects its rights.
Section 11.06. Amendments, Waivers, etc. of Other Operative
--------------------------------------------
Documents. (a) Subject to Section 11.01, without the consent of the Holders of
a majority in principal amount of Outstanding Certificates, the respective
parties to the Participation Agreement, the Lease and the Trust Agreement 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 of modifying in any manner the rights of the respective parties
thereunder; provided, however, that the actions specified in subsection (b) of
-------- -------
this Section 11.06 may be taken without the consent of the Indenture Trustee or
any Holder.
(b) Subject to the provisions of subsection (c) of this Section 11.06,
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
Indenture Trustee or of any Holder may:
(1) 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 11.06 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
63
thereunder, with respect to the following provisions of the Lease as
originally executed: 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 Maturity Date of the Certificates), Section 3(d) (except to
the extent such Section relates to amounts payable (whether directly or
pursuant to the Indenture) to Persons other than Holders and the Indenture
Trustee in its individual capacity), Section 3(e) (except insofar as it
relates to the address or account information of the Owner Trustee or the
Indenture Trustee) (other than as such Sections 3(a), 3(d) and 3(e) may be
amended pursuant to Section 3(c) of the Lease as originally executed),
Section 4, Section 6, Sections 9(b) through (d) (except that further
restrictions may be imposed on the Company), Section 10 (except that
additional requirements may be imposed on the Company), Section 11 (except
for Section 11(e) and except that additional insurance requirements may be
imposed on the Company), Section 12 (except in order to increase the
Company'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 Federal Aviation Act),
Section 14 (except to impose additional or more stringent Lease Events of
Default), Section 15 (except to impose additional remedies), Section 16
(except to impose additional requirements on the Company), Section 18,
Section 20, Section 22 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 Indenture 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 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(c), 4, 5, 6 (to the extent such action would
reduce the Company's obligations), 7, 8, 9, 10, 11, 12, 13, 14, 15, 16
(insofar as it relates to the Lessor), 18, 19 and 21 of the Lease, or any
other Section of the Lease to the extent such action shall affect the amount
or timing of any amounts payable by the Company 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, will be distributable to the Owner Trustee under Article
3; and provided further that the parties to the Lease may take any such
-------- -------
action without the consent of the Indenture Trustee or any Holder to the
extent such action relates to the payment of amounts constituting, or the
Owner Trustee's, the Owner Participant's or the Company's rights or
obligations with respect to, Excluded Payments;
64
(2) 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 Holders;
(3) modify, amend or supplement the Participation Agreement, or give
any consent, waiver, authorization or approval with respect thereto, except
that without compliance with subsection (a) of this Section 11.06 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 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 originally executed: Sections 1(b),
Section 7 (insofar as such Section 7 relates to the Indenture Trustee and
the Holders), Section 8, Section 11 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); and
(4) 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 Agreement which shall
not be inconsistent with the provisions of this Agreement, provided the
making of any such other provision shall not adversely affect the interests
of the Holders.
(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 11.06 and anything in such subsections or elsewhere in this
Agreement to the contrary notwithstanding, shall, without the consent of the
Holder of each Outstanding Certificate affected thereby,
(1) modify, amend or supplement the Lease in such a way as to extend
the time of payment of Basic Rent or stipulated Loss Value or any other
amounts payable to the Indenture Trustee for its own account or for the
account of the Holders (subject in any event to clause (iii) of Section 3(c)
of the Lease) upon the occurrence of an Event of Loss or Termination Value
and any other amounts payable to the Indenture Trustee for its own account
or for the account of the Holders (subject in any event to clause (iii) of
Section 3(c) of the Lease) upon termination of the Lease with respect to the
Aircraft, payable under, or as provided in, the Lease as originally
executed, or reduce the amount of any installment of Basic Rent or
Supplemental Rent so that the same is less than the payment of principal of,
premium, if any, and interest on the Certificates, as the case may be, to be
made from such installment of Basic Rent or
65
Supplemental Rent, or reduce the aggregate amount of Stipulated Loss Value,
EBO Percentage, Special Termination Value Percentages, or any other amounts
payable under, or as provided in, the Lease as originally executed upon the
occurrence of an Event of Loss so that the same is less than the accrued
interest on and the principal as of the Lease Loss Payment Date, and
premium, if any, of the Certificates at the time Outstanding or reduce the
amount of Termination Value and any other amounts payable under, or as
provided in, the Lease as originally executed 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 premium, if
any, of Certificates at the time Outstanding, or
(2) 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 Company from its
obligations in respect of payment of Basic Rent or Supplemental Rent, or
Stipulated Loss Value and any other amounts payable to the Indenture Trustee
for its own account or the account of the Holders (subject in any event to
clause (iii) of Section 3(c) of the Lease) upon the occurrence of an Event
of Loss, or Termination Value and any other amounts payable to the Indenture
Trustee for its own account or the account of the Holders (subject in any
event to clause (iii) of Section 3(c) of the Lease) of the Lease with
respect to the Aircraft, payable under, or as provided in, the Lease as
originally executed, except for any such assignment pursuant to Section 8(u)
of the Participation Agreement, and except as provided in the Lease as
originally executed.
For the purposes of this Article 11, during the Pre-Commencement Date
Period, the "principal amount" of Outstanding Certificates shall include the
amount equal to that portion of the difference between the Original Issue Price
and the Original Principal. Amount for any Certificate originally issued at a
discount which corresponds to the period from the date of issuance thereof to
and including the Commencement Date.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Notices. (a) Unless otherwise specifically provided
-------
for herein, all notices required under the terms and provisions of this
Agreement shall be in English and in writing, and any such notice may be given
by hand-delivery, overnight courier service, mail, telex or telecopier addressed
as indicated below and any such notice shall be effective, in the case of hand-
delivery, when delivered, in the case of overnight courier service, one Business
Day after delivery with charges paid to a courier service with instructions for
overnight delivery, in the case of mail, three Business Days after delivery to
66
the postal service with certified or registered mail charges paid, in the case
of telex, upon receipt of a telex answerback and, in the case of telecopier,
upon transmittal:
if to the Company, to:
United Air Lines, Inc.
P.O. Box 66100
Chicago, Illinois 60666
Attention: Vice President and Treasurer
Telecopier: (708) 952-5204
or if by overnight courier, to:
1200 East Algonquin Road
Elk Grove Township, Illinois 60007
Attn: Vice President and Treasurer
Telecopier: (708) 952-5204
if to the Indenture Trustee, to:
First Security Bank of Utah,
National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telecopier: (801) 246-5053
Telex No.: 3789450
if to the Owner Trustee, to:
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
or if by overnight courier, to:
Two International Place
Boston, Massachusetts 02110
Telecopier: (617) 664-5371
with a copy to the Owner Participant
67
if to the Owner Participant, to:
[________________]
(b) The Company, the Owner Trustee, the Indenture Trustee or the Owner
Participant by notice to the others may designate additional or different
addresses for subsequent notices or communications.
(c) Any notice or communication to Holders of the Certificates shall
be mailed by first-class mail to the addresses for Holders shown on the Register
kept by the Registrar and to addresses filed with the Indenture Trustee for
other Holders. Failure so to mail a notice or communication or any defect in
such notice or communication shall not affect its sufficiency with respect to
other Holders of such Certificates of that or any other Series entitled to
receive notice.
(d) If a notice or communication is mailed in the manner provided
above within the time prescribed, it is conclusively presumed to have been duly
given, whether or not the addressee receives it.
(e) If the Company mails a notice or communication to the Holders, it
shall mail a copy to the Indenture Trustee and to each Paying Agent at the same
time.
(f) Notwithstanding the foregoing, all communications or notices to
the Indenture Trustee shall be deemed to be given only when received by a
Responsible Officer of the Indenture Trustee.
Section 12.02. [Reserved for Potential Future Use]
Section 12.03. [Reserved for Potential Future Use]
Section 12.04. Rules by Indenture Trustee and Agents. The Indenture
-------------------------------------
Trustee may make reasonable rules for action by or a meeting of the Holders.
The Paying Agent or Registrar may make reasonable rules and set reasonable
requirements for its functions.
Section 12.05. Non-Business Days. If a payment date is not a
-----------------
Business Day at a place of payment, payment may be made at such place on the
next succeeding day that is a Business Day, and no interest shall accrue for the
intervening period.
Section 12.06. GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATES
-------------
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
68
WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAWS PROVISIONS OF THE STATE OF ILLINOIS.
Section 12.07. No Recourse Against Others. No director, officer,
--------------------------
employee or stockholder, as such, of the Company, the Owner Trustee or the Owner
Participant, as the case may be, shall have any liability for any obligations of
the Company, the Owner Trustee or the Owner Participant, as the case may be,
under this Agreement or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Holder by accepting a Certificate
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Certificates.
Section 12.08. Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts, each of which shall be an original but
such counterparts shall together constitute but one instrument.
ARTICLE 13
ACTIONS TO BE TAKEN UPON TERMINATION OF LEASE
Section 13.01. Actions to Be Taken upon Termination of Lease. Upon
---------------------------------------------
any of:
(a) the voluntary termination of the Lease by the Company pursuant to
Section 9(b) thereof on the Lease Termination Date, and upon payment to the
Indenture Trustee of an amount equal to the Redemption Price of all
Outstanding Certificates, or
(b) the purchase of the Aircraft by the Company at its option pursuant
to Section 19(b) of the Lease on a Special Purchase Option Date or the EBO
Date as the case may be (unless the Company shall have elected to assume all
of the rights and obligations of the Owner Trustee hereunder as provided for
in Section 8(r) of the Participation Agreement), and upon payment to the
Indenture Trustee of an amount equal to the Redemption Price as at the
applicable Redemption Date of all Outstanding Certificates, or
(c) the termination of the Lease, on the Lease Loss Payment Date,
following an Event of Loss suffered by the Airframe under circumstances
where the Company does not exercise its option to substitute a Replacement
Airframe therefor pursuant to Section 10(a)(ii) of the Lease, and upon
payment to the Indenture Trustee of an amount equal to the Redemption Price
as at the Redemption Date of all Outstanding Certificates, or
69
(d) the satisfaction, discharge, defeasance and termination of
obligations under this Agreement in accordance with Section 10.01, or
(e) the voluntary termination of the Lease with respect to an Engine
pursuant to Section 10(b) thereof, and upon the payment of Stipulated Loss
Value with respect to such Engine,
the Lien of this Agreement on the Indenture Estate, in the case of (a), (b), (c)
and (d) above, and on such Engine, in the case of (e) above shall terminate
(except for the Lien on funds held by the Indenture Trustee to pay the
Certificates and the Lien on amounts due from the Company under the Lease
necessary to pay the Certificates or the Indenture Trustee) and the Indenture
Trustee shall execute such instruments as may be requested by the Company or the
Owner Trustee to evidence such termination.
70
IN WITNESS WHEREOF, the Owner Trustee and the Indenture Trustee have
caused this Trust Indenture and Mortgage to be duly executed by their respective
officers thereunto duly authorized.
STATE STREET BANK AND TRUST
COMPANY
not in its individual capacity,
except as expressly provided herein,
but solely as Owner Trustee
By: ______________________________________
Name:
Title:
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
as Indenture Trustee
By: ______________________________________
Name:
Title:
Exhibit A-1 to
Trust Indenture and
Mortgage
Form of Series 1995 777 A Installment Certificates
--------------------------------------------------
$_______________ (Original Issue Price) No. _____
$_______________ (Original Principal Amount)
SERIES 1995 777 A CERTIFICATE
STATE STREET BANK AND TRUST COMPANY
Not in its Individual Capacity
but Solely as Owner Trustee Under the
Trust Agreement (1995 777 A)
Dated as of May 1, 1995
Issued in connection with Aircraft N777UA
Leased to
UNITED AIR LINES, INC.
Date of Issuance: _________, 1995 MATURITY DATE
-------------
_______ , 20__
INTEREST RATE PER ANNUM: __%
COMMENCEMENT DATE
CASH INTEREST: $
--------
State Street Bank and Trust Company, not in its individual
capacity, but solely as owner trustee (the "Owner Trustee") under that certain
Trust Agreement (1995 777 A), dated as of May 1, 1995, between the Owner
Trustee in its individual capacity and the institution referred to therein as
the "Owner Participant" (herein as such Trust Agreement may be amended or
supplemented from time to time called the "Trust Agreement") for value
received, hereby promises to pay to _________________ or registered assigns the
principal sum in Dollars equal to the Original Principal Amount specified above
in installments on each Installment Payment Date as provided for herein below
with the final installment due and payable on the Maturity Date specified above
(provided, however, that, if the obligations evidenced by this
-------
Certificate shall become due and payable (upon redemption or acceleration or
otherwise) and shall be paid during the Pre-Commencement Date Period, the
principal amount hereof to be paid shall be the Original Issue Price specified
above, together with the portion of the difference between such Original Issuer
Price and the Original Principal Amount specified above which corresponds to
the period from the date of issuance hereof to
2
the date of such payment) and to pay interest (x) in the amount of the
Commencement Date Cash Interest specified above, payable on the Commencement
Date, and (y) at the Interest Rate Per Annum specified above on the Original
Principal Amount specified above from time to time outstanding in respect of
the period commencing on and including the Commencement Date and ending on the
date when the principal amount hereof shall have been paid in full, payable on
each October 19 and April 19 in each year, commencing on October 19, 1995
(provided, however, that, if the obligations evidenced by this
-------- -------
Certificate shall become due and payable (upon redemption or acceleration or
otherwise) and shall be paid during the Pre-Commencement Date Period, the
amount thereof in respect of interest shall be an amount equal to the portion
of such Commencement Date Cash Interest which corresponds to the period from
the date of issuance hereof to the date of such payment). All amounts payable
by the Owner Trustee hereunder and under the Trust Indenture and Mortgage (1995
777 A), dated as of May 1, 1995 (as the same may hereafter be further amended
or supplemented from time to time, as the "Indenture", the defined terms
therein not otherwise defined herein being used herein with the same meanings),
by and among the Owner Trustee and First Security Bank of Utah, National
Association, as Indenture Trustee thereunder, shall be made only from the
income and proceeds of the Indenture Estate. Each Holder hereof, by its
acceptance of this Certificate, agrees that (a) it will look solely to the
income and proceeds of the Indenture Estate for payment of such amounts, to the
extent available for distribution to the Holder hereof as provided in the
Indenture and (b) none of the Owner Participant, the Owner Trustee or the
Indenture Trustee is or shall be personally liable to the Holder hereof for any
amount payable hereunder or under the Indenture or, except as provided in the
Indenture in the case of the Indenture Trustee and the Owner Trustee, for any
liability under the Indenture.
The interest or Installment Payment Amount (other than that payable
on the Maturity Date hereof) so payable, and punctually paid or duly provided
for, on the applicable Interest Payment Date or Installment Payment Date, as
the case may be, will, as provided in the Indenture, be paid to the Person in
whose name this Certificate (or one or more predecessor Certificates) is
registered at the close of business on the Record Date for payment of such
interest or Installment Payment Amount, which shall be the fifteenth day
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date or Installment Payment Date, as the case may be. Any
such interest or Installment Payment Amount not so punctually paid or duly
provided for shall forthwith cease to be payable to the registered Holder
hereof on the such Record Date (or to the Person in whose name this Certificate
is registered upon issuance) and may be paid to the Person in whose name this
Certificate (or one or more predecessor Certificates) is registered at the
close of business on a special record date for the payment of such Defaulted
Installment or Defaulted Interest to be fixed by the Indenture Trustee pursuant
to Section 2.08 of the Indenture, notice whereof shall be given to Holders of
Certificates entitled thereto not less than 10 days prior to such special
record date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Certificates may
3
be listed, and upon such notice as may be required by such exchange, all as
more fully provided in the Indenture.
Payment of the principal of, premiums if any, and interest on this
Certificate will be made at the principal corporate trust office of the
Indenture Trustee, or the office or agency maintained by the Indenture Trustee
for such purpose, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest and Installment Payment
- -------- -------
Amounts (other than that payable on the Maturity Date hereof) may be made at
the option of the Indenture Trustee or the Paying Agent by check mailed to the
address of the Holder entitled thereto as such address shall appear on the
Register.
This Certificate shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose unless this Certificate has
been executed on behalf of the Owner Trustee by the manual or facsimile
signature of an authorized officer of the Owner Trustee, and authenticated by
the Indenture Trustee by the manual signature of an authorized officer or
signatory of the Indenture Trustee, in each case as specified in Section 2.02
of the Indenture.
Reference is made to the Indenture and all supplements and
amendments thereto (a copy of which is on file with the Indenture Trustee at
its principal corporate trust office) for a more complete statement of the
terms and provisions thereof, including a statement of the properties thereby
conveyed, pledged and assigned, the nature and extent of the security, the
respective rights thereunder of the Owner Trustee, the Indenture Trustee and
the Holders of the Certificates, and the terms upon which the Certificates are,
and are to be, executed and delivered, as well as for a statement of the terms
and conditions of the trust created by the Indenture, to all of which terms and
conditions in the Indenture each Holder hereof agrees by its acceptance of this
Certificate.
As more fully provided in the Indenture, on each Installment
Payment Date, the Holder hereof will receive a payment of principal equal to
the Installment Payment Date, the Holder hereof will receive a payment of
principal equal to the Installment Payment Percentage for such Installment
Payment Date as specified on Exhibit B-1 hereto (provided that, after the
--------
occurrence of any partial redemption or redemption pursuant to clause (ii) of
Section 6.01(a) of the Indenture, the "Installment Payment Percentage" for each
Installment Payment Date subsequent to the applicable Redemption Date shall be
redetermined as provided for in the Indenture) multiplied by the Original
Principal Amount of this Certificate specified above.
As more fully provided in the Indenture, the Certificates are
subject to redemption or partial redemption on not less than 25 nor more than
60 days' notice by mail, under the circumstances set forth in the Indenture, at
a redemption price equal to the unpaid
4
principal amount thereof, premium if any, plus accrued interest thereon to the
Redemption Date.
If an Indenture Event of Default shall occur and be continuing, the
principal amount remaining unpaid of the Certificates may be declared due and
payable in the manner and with the effect provided in the Indenture. If, and
only if, such an event of default constitutes an event of default by the
Company under the Lease, the Indenture Trustee may declare the Lease to be in
default, and may, to the exclusion of the Owner Trustee, exercise one or more
of the remedies of the Owner Trustee provided in the Lease. Such remedies
include the right to repossess and use or operate the Aircraft, to sell or
relet the Aircraft free and clear of the Company's rights and retain the
proceeds and to require the Company to pay as liquidated damages (i) any unpaid
Basic Rent plus an amount equal to the excess of the Stipulated Loss Value of
the Aircraft over the aggregate fair market rental value thereof for the
remainder of the term for the Aircraft, (ii) any unpaid Basic Rent plus the
excess of the Stipulated Loss Value of the Aircraft over the fair market sales
value thereof or (iii) if the Aircraft has been sold, any unpaid Basic Rent
plus the excess of the Stipulated Loss Value thereof over the net sales
proceeds.
By acceptance of this Certificate, the Holder hereof agrees to be
bound by the provisions of the Participation Agreement applicable to Holders.
The Owner Trustee or the Owner Participant may, in their sole
discretion, in certain circumstances cure any default by the Company under the
Lease arising from the failure of the Company to make any payment of Basic Rent
under the Lease. The Owner Trustee or the Owner Participant may in their sole
discretion in certain circumstances cure any other default by the Company in
the performance of its Obligations under the Lease which can be cured by the
payment of money, by making such payment on behalf of the Company.
The right of the Holder of this Certificate to institute action for
any remedy under the Indenture, including the enforcement of payment of any
amount due hereon, is subject to certain restrictions specified in the
Indenture.
The Owner Trustee and the Indenture Trustee will be discharged from
their respective obligations in respect of the Certificates (except for certain
matters, including obligations to register the transfer or exchange of
Certificates, replace stolen, lost or mutilated Certificates, maintain paying
agencies and hold moneys for payment in trust), and the Indenture Trustee may
thereupon cause the release of the Indenture Estate from the lien of the
Indenture, if (a) the Owner Trustee deposits or causes to be deposited
irrevocably with the Indenture Trustee, in trust, money or U.S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay principal of, premiums, if any, and interest on
5
the Outstanding Certificates on the dates such payments are due in accordance
with the terms of such Certificates and (b) certain other conditions are
satisfied, including the publication by the United States Internal Revenue
Service of a ruling to the effect that the deposit and related defeasance would
not cause the Holders of the Certificates to recognize income, gain or loss for
Federal income tax purposes.
As provided in the Indenture, in certain circumstances this
Certificate is transferable, and upon surrender of this Certificate for
registration of transfer at the principal corporate trust office of the
Registrar, or at the office or agency maintained for such purpose, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by, the Holder or his attorney duly
authorized in writing, one or more new Certificates of the same maturity and
type and of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates. The
Certificates are issuable in denominations of $1,000 and integral multiples
thereof except that one Certificate of each maturity may be in an amount that
is not an integral multiple of $1,000. As provided in the Indenture and
subject to certain limitations therein set forth, Certificates are exchangeable
for a like aggregate principal amount of Certificates of the same maturity and
type and of authorized denominations, as requested by the Holder surrendering
the same, upon presentation thereof for such purpose at the principal corporate
trust office of the Registrar, or at an office or agency maintained for such
purpose.
No service charge shall be made for any such registration of
transfer or exchange, but the Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, the Paying Agent, the
Registrar and the Company may deem and treat the person in whose name this
Certificate is registered as the absolute owner hereof for the purpose of
receiving payment of the principal of and interest on this Certificate and for
all other purposes whatsoever whether or not this Certificate be overdue, and
neither the Owner Trustee, the Indenture Trustee, the Paying Agent, the
Registrar nor the Company shall be affected by notice to the contrary.
AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS CERTIFICATE
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS OF THE STATE
OF ILLINOIS.
6
IN WITNESS WHEREOF, the Owner Trustee has caused this instrument to
be duly executed.
STATE STREET BANK AND TRUST
COMPANY
not in its individual capacity,
but solely as Owner Trustee
By:
----------------------------------
Title:
7
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Indenture.
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
as Indenture Trustee
By:
----------------------------------
Authorized officer and signatory
Exhibit A-2 to
Trust Indenture and
Mortgage
Form of Series 1995 777 A Serial Certificates
---------------------------------------------
$________ (Original Issue Price) No. _____
$_________ (Original Principal Amount)
SERIES 1995 777 A CERTIFICATE
STATE STREET BANK AND TRUST COMPANY
Not in its Individual Capacity
but Solely as Owner Trustee Under the
Trust Agreement (1995 777 A)
Dated as of May 1, 1995
Issued in connection with Aircraft N777UA
Leased to
UNITED AIR LINES, INC.
Date of Issuance: _________, 1995 MATURITY DATE
-------------
_______ , 199__
INTEREST RATE PER ANNUM: ____%
COMMENCEMENT DATE
CASH INTEREST: $
--------
State Street Bank and Trust Company, not in its individual
capacity, but solely as owner trustee (the "Owner Trustee") under that certain
Trust Agreement (1995 777 A), dated as of May 1, 1995, between the Owner
Trustee in its individual capacity and the institution referred to therein as
the "Owner Participant" (herein as such Trust Agreement may be amended or
supplemented from time to time called the "Trust Agreement"), for value
received, hereby promises to pay to _________________ or registered assigns the
principal sum in dollars equal to the Original Principal Amount specified above
on the Maturity Date specified above (provided, however, that, if the
-------- -------
obligations evidenced by this Certificate shall become due and payable (upon
redemption or acceleration or otherwise) and shall be paid during the
Pre-Commencement Date Period, the principal amount hereof to be paid shall be
the Original Issue Price specified above, together with the portion of the
difference between such Original Issue Price and the Original Principal Amount
specified above which
2
corresponds to the period from the date of issuance hereof to the date of such
payment) and to pay interest (x) in the amount of the Commencement Date Cash
Interest specified above, payable on the Commencement Date, and (y) at the
Interest Rate Per Annum specified above on the Original Principal Amount
specified above from time to time outstanding in respect of the period
commencing on and including the Commencement Date and ending on the date when
the principal amount hereof shall have been paid in full, payable on each
October 19 and April 19 in each year, commencing on October 19, 1995
(provided, however, that, if the obligations evidenced by this
-------- -------
Certificate shall become due and payable (upon redemption or acceleration or
otherwise) and shall be paid during the Pre-Commencement Date Period, the
amount thereof in respect of interest shall be the amount equal to the portion
of such Commencement Date Cash Interest which corresponds to the period from
the date of issuance hereof to the date of such payment the accrual at the
Interest Rate Per Annum specified above of interest on the Original Issue Price
specified above from the date of issuance of this Certificate to the date of
such payment). All amounts payable by the Owner Trustee hereunder and under
the Trust Indenture and Mortgage (1995 777 A), dated as of May 1, 1995 (as the
same may hereafter be further amended or supplemented from time to time, as the
"Indenture", the defined terms therein not otherwise defined herein being used
herein with the same meanings), by and among the Owner Trustee and First
Security Bank of Utah, National Association, as Indenture Trustee thereunder,
shall be made only from the income and proceeds of the Indenture Estate. Each
Holder hereof, by its acceptance of this Certificate, agrees that (a) it will
look solely to the income and proceeds of the Indenture Estate for payment of
such amounts, to the extent available for distribution to the Holder hereof as
provided in the Indenture and (b) none of the Owner Participant, the Owner
Trustee or the Indenture Trustee is or shall be personally liable to the Holder
hereof for any amount payable hereunder or under the Indenture or, except as
provided in the Indenture in the case of the Indenture Trustee and the Owner
Trustee, for any liability under the Indenture.
The interest so payable and punctually paid or duly provided for,
on the applicable Interest Payment Date will, as provided in the Indenture, be
paid to the Person in whose name this Certificate (or one or more predecessor
Certificates) is registered at the close of business on the Record Date for
payment of such interest, which shall be the fifteenth day (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holder hereof on the such Record Date (or
to the Person in whose name this Certificate is registered upon issuance) and
may be paid to the Person in whose name this Certificate (or one or more
predecessor Certificates) is registered at the close of business on a special
record date for the payment of such Defaulted Interest to be fixed by the
Indenture Trustee pursuant to Section 2.08 of the Indenture, notice whereof
shall be given to Holders of Certificates entitled thereto not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Certificates may be listed, and
3
upon such notice as may be required by such exchange, all as more fully
provided in the Indenture.
Payment of the principal of, premium if any, and interest on this
Certificate will be made at the principal corporate trust office of the
Indenture Trustee, or the office or agency maintained by the Indenture Trustee
for such purpose in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option
- -------- -------
of the Indenture Trustee or the Paying Agent by check mailed to the address of
the Holder entitled thereto as such address shall appear on the Register.
This Certificate shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose unless this Certificate has
been executed on behalf of the Owner Trustee by the manual or facsimile
signature of an authorized officer of the Owner Trustee, and authenticated by
the Indenture Trustee by the manual signature of an authorized officer or
signatory of the Indenture Trustee, in each case as specified in Section 2.02
of the Indenture.
Reference is made to the Indenture and all supplements and
amendments thereto (a copy of which is on file with the Indenture Trustee at
its principal corporate trust office) for a more complete statement of the
terms and provisions thereof, including a statement of the properties thereby
conveyed, pledged and assigned, the nature and extent of the security, the
respective rights thereunder of the Owner Trustee, the Company, the Indenture
Trustee and the Holders of the Certificates, and the terms upon which the
Certificates are, and are to be, executed and delivered, as well as for a
statement of the terms and conditions of the trust created by the Indenture, to
all of which terms and conditions in the Indenture each Holder hereof agrees by
its acceptance of this Certificate.
As more fully provided in the Indenture, the Certificates are
subject to redemption or partial redemption, on not less than 25 nor more than
60 days' notice by mail, under the circumstances set forth in the Indenture, at
a redemption price equal to the unpaid principal amount thereof, premium, if
any, plus accrued interest thereon to the Redemption Date.
If an Indenture Event of Default shall occur and be continuing, the
principal of the Certificates may be declared due and payable in the manner and
with the effect provided in the Indenture. If, and only if, such an event of
default constitutes an event of default by the Company under the Lease, the
Indenture Trustee may declare the Lease to be in default, and may, to the
exclusion of the Owner Trustee, exercise one or more of the remedies of the
Owner Trustee provided in the Lease. Such remedies include the right to
repossess and use or operate the Aircraft, to sell or relet the Aircraft free
and clear of the Company's rights and retain the proceeds and to require the
Company to pay as liquidated damages (i) any
4
unpaid Basic Rent plus an amount equal to the excess of the Stipulated Loss
Value of the Aircraft over the aggregate fair market rental value thereof for
the remainder of the term for the Aircraft, (ii) any unpaid Basic Rent plus the
excess of the Stipulated Loss Value of the Aircraft over the fair market sales
value thereof or (iii) if the Aircraft has been sold, any unpaid Basic Rent
plus the excess of the Stipulated Loss Value thereof over the net sales
proceeds.
By acceptance of this Certificate, the Holder hereof agrees to be
bound by the provisions of the Participation Agreement applicable to Holders.
The Owner Trustee or the Owner Participant may, in their sole
discretion, in certain circumstances cure any default by the Company under the
Lease arising from the failure of the Company to make any payment of Basic Rent
under the Lease. The Owner Trustee or the Owner Participant may in their sole
discretion in certain circumstances cure any other default by the Company in
the performance of its obligations under the Lease which can be cured by the
payment of money, by making such payment on behalf of the Company.
The right of the Holder of this Certificate to institute action for
any remedy under the Indenture, including the enforcement of payment of any
amount due hereon, is subject to certain restrictions specified in the
Indenture.
The Owner Trustee and the Indenture Trustee will be discharged from
their respective obligations in respect of the Certificates (except for certain
matters, including obligations to register the transfer or exchange of
Certificates, replace stolen, lost or mutilated Certificates, maintain paying
agencies and hold moneys for payment in trust), and the Indenture Trustee may
thereupon cause the release of the Indenture Estate from the lien of the
Indenture, if (a) the Owner Trustee deposits or causes to be deposited
irrevocably with the Indenture Trustee, in trust, money or U.S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay principal of, premium, if any, and interest on the
Outstanding Certificates on the dates such payments are due in accordance with
the terms of such Certificates and (b) certain other conditions are satisfied,
including the publication by the United States Internal Revenue Service of a
ruling to the effect that the deposit and related defeasance would not cause
the Holders of the Certificates to recognize income, gain or loss for Federal
income tax purposes.
As provided in the Indenture, in certain circumstances this
Certificate is transferable, and upon surrender of this Certificate for
registration of transfer at the principal corporate trust office of the
Registrar, or at the office or agency maintained for such purpose, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by, the Holder or his attorney duly
authorized in
5
writing, one or more new Certificates of the same maturity and type and of
authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates. The
Certificates are issuable in denominations of $1,000 and integral multiples
thereof except that one Certificate of each maturity may be in an amount that
is not an integral multiple of $1,000. As provided in the Indenture and
subject to certain limitations therein set forth, Certificates are exchangeable
for a like aggregate principal amount of Certificates of the same maturity and
type and of authorized denominations, as requested by the Holder surrendering
the same, upon presentation thereof for such purpose at the principal corporate
trust office of the Registrar, or at an office or agency maintained for such
purpose.
No service charge shall be made for any such registration of
transfer or exchange, but the Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, the Paying Agent, the
Registrar and the Company may deem and treat the person in whose name this
Certificate is registered as the absolute owner hereof for the purpose of
receiving payment of the principal of and interest on this Certificate and for
all other purposes whatsoever whether or not this Certificate be overdue, and
neither the Owner Trustee, the Indenture Trustee, the Paying Agent, the
Registrar nor the Company shall be affected by notice to the contrary.
AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS CERTIFICATE
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS OF THE STATE
OF ILLINOIS.
IN WITNESS WHEREOF, the Owner Trustee has caused this instrument to
be duly executed.
STATE STREET BANK AND TRUST
COMPANY
not in its individual capacity,
but solely as Owner Trustee
By:
----------------------------------
Title:
6
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Indenture.
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
as Indenture Trustee
By
--------------------------------
Authorized Officer or signatory
Title:
Exhibit B to
Trust Indenture and
Mortgage
MATURITY DATES, PRINCIPAL AMOUNTS AND
-------------------------------------
INTEREST RATES OF SERIES 1995 777 A CERTIFICATES
------------------------------------------------
ORIGINAL COMMENCEMENT
PRINCIPAL ISSUE DATE CASH INTEREST RATE
MATURITY DATE AMOUNT PRICE INTEREST PER ANNUM
------------- --------- -------- ----------- -------------
Series 1995 777 A1 [________] $[_____] $[_____] $[________] $[_______]
Series 1995 777 A2 [________] $[_____] $[_____] $[________] $[_______]
Trust Indenture and
Mortgage
Installment Payment Dates and Installment Payment Percentages
-------------------------------------------------------------
Installment Certificates shall be those
Certificates with the following Maturity Dates:
Installment Certificate No. 1 - Maturity Date: [_________]
Corresponding
Installment Payment Installment Payment Aggregate Installment
Date Percentage Payment Amount
- ------------------- ------------------- ---------------------
[ ] [ ]% $[ ]
[ ] [ ]% [ ]
TOTAL 100.00000000% $[ ]
------------- -------------------
B-1-2
Installment Certificate No. 2 - Maturity Date: [_________]
Corresponding
-------------
Installment Payment Installment Payment Aggregate Installment
------------------- ------------------- ---------------------
Date Percentage Payment Amount
---- ---------- --------------
%
TOTAL 100.00000000% $
------------- -----------------
Exhibit B-2 to
Trust Indenture and
Mortgage
Issuance of Series 1995 777 A Certificates
------------------------------------------
The Series 1995 777 A Certificates issued hereunder shall be issued
to and shall be payable to each of the Pass Through Trustees under the Pass
Through Trust Agreements with respect to the grantor trusts created thereby, in
each case as set forth below:
1995-Al Trust:
[_____]% Certificate due [_________]
1995-A2 Trust:
[_____]% Certificate due [_________]
[Trust Indenture and Mortgage (1995 777 A)]
EXHIBIT C
---------
TRUST AGREEMENT AND TRUST INDENTURE AND MORTGAGE SUPPLEMENT
(1995 777 A)
This TRUST AGREEMENT AND TRUST INDENTURE AND MORTGAGE SUPPLEMENT
(1995 777 A), dated May __, 1995 (herein called the "Trust Supplement") of
STATE STREET BANK AND TRUST COMPANY, not in its individual capacity, but solely
as Owner Trustee (herein called the "Owner Trustee"), under the Trust Agreement
(1995 777 A), dated as of May 1, 1995 (herein called the "Trust Agreement") ,
between the Owner Trustee and the Owner Participant named therein.
WITNESSETH:
WHEREAS, the Trust Agreement provides for the execution and
delivery of one or more supplements thereto substantially in the form hereof,
which shall particularly describe the Aircraft (such term and other terms
defined in the Trust Indenture referred to below used herein as therein
defined) included in the property covered by the Trust Agreement;
WHEREAS, the Trust Indenture and Mortgage (1995 777 A), dated as of
May 1, 1995 (herein called the "Trust Indenture"), between the Owner Trustee
and FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, as Indenture Trustee
(herein called the "Indenture Trustee"), provides for the execution and
delivery of a supplement thereto substantially in the form hereof, which shall
particularly describe the Aircraft, and shall specifically mortgage such
Aircraft to the Indenture Trustee; and
WHEREAS, each of the Trust Agreement and Trust Indenture relates to
the Airframe and Engines described below, and a counterpart of the Trust
Indenture is attached hereto and made a part hereof and this Trust Supplement,
together with such counterpart of the Trust Indenture, is being filed for
recordation on the date hereof with the Federal Aviation Administration as one
document;
NOW, THEREFORE, this Trust Supplement Witnesseth, that the Owner
Trustee hereby confirms that the Lien of the Trust Indenture over the Trust
Indenture Estate includes the following described property:
C-2
[Trust Indenture and Mortgage (1995 777 A)]
AIRFRAME
One Airframe Identified as follows:
FAA
Registration Manufacturer's
Manufacturer Model Number Serial Number
------------ ----- ------------ --------------
The Boeing Company 777-222 N777UA 26916
together with all Parts which are from time to time incorporated or installed
in or attached thereto or which have been removed therefrom, but where title to
which remains vested in the Owner Trustee in accordance with the Lease.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated
take-off horsepower or the equivalent thereof, whether or not such engines
shall be installed in or attached to the Airframe or any other airframe,
identified as follows:
Manufacturer's
Manufacturer Model Serial Number
------------ ----- -------------
Pratt & Whitney PW4084 [ ]
Pratt & Whitney PW4084 [ ]
together with all Parts which are from time to time incorporated or installed
in or attached thereto or which have been removed therefrom, but where title to
which remains vested in the Owner Trustee in accordance with the Lease.
As further security for the obligations referred to above and
secured by the Trust Indenture and hereby, the Owner Trustee hereby confirms
that the Lien of the Trust Indenture over the Trust Indenture Estate includes
the Lease Supplement of even date herewith covering the property described
above.
Notwithstanding any provision hereof, no Excluded Payment shall
constitute security for any of the aforementioned obligations.
TO HAVE AND TO HOLD all and singular the aforesaid property unto
the Indenture Trustee, its successors and assigns, for the equal and
proportionate benefit and security of the and the holders from time to time of
the Certificates outstanding, without any
C-3
[Trust Indenture and Mortgage (1995 777 A)]
preference, distinction or priority of any one Certificate over any other by
reason of series, priority of time of issue, sale, negotiation, date of
maturity thereof or otherwise for any reason whatsoever, and for the uses and
purposes and subject to the terms and provisions set forth in the Trust
Indenture.
This Trust supplement shall be construed as Supplemental to the
Trust Indenture and to the Trust Agreement and shall form a part of each, and
the Trust Agreement and the Trust Indenture are each hereby incorporated by
reference herein and each is hereby ratified, approved and confirmed.
* * *
C-4
[Trust Indenture and Mortgage (1995 777 A)]
IN WITNESS WHEREOF, the Owner Trustee has caused this Trust
Supplement to be duly executed by one of its officers, thereunto duly
authorized, on the day and year first above written.
STATE STREET BANK AND TRUST
COMPANY
not in its individual capacity but
solely as Owner Trustee
By:__________________________
Title:
EXHIBIT 4.1
------------------------------------------------
TRUST INDENTURE AND MORTGAGE
(1995 777 B)
Dated as of May 1, 1995
between
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity except as expressly set forth herein,
but solely as Owner Trustee,
and
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
as Indenture Trustee
One Boeing 777-222 Aircraft N766UA
United Air Lines, Inc.
Series 1995 777 B Certificates
_______________________________________________
TABLE OF CONTENTS
-----------------
Page
----
RECITALS................................................................... 1
GRANTING CLAUSE............................................................ 2
HABENDUM CLAUSE............................................................ 5
ARTICLE 1 DEFINITIONS..................................................... 7
1.01. Definitions................................................... 7
ARTICLE 2 THE CERTIFICATES................................................ 19
2.01. Certificates; Title and Terms................................. 19
2.02. Execution and Authentication.................................. 20
2.03. Registrar and Paying Agent.................................... 20
2.04. Transfer and Exchange......................................... 21
2.05. Holder Lists; Ownership of Certificates....................... 21
2.06. Mutilated, Destroyed, Lost or Stolen Certificates............. 22
2.07. Cancellation.................................................. 22
2.08. Payment on Certificates; Defaulted Principal and Interest..... 22
2.09. Payment from Indenture Estate Only; Non-Recourse Obligations.. 24
2.10. Execution, Delivery and Dating of Certificates upon Original
Issuance..................................................... 25
ARTICLE 3 RECEIPT, DISTRIBUTION AND APPLICATION
OF FUNDS IN THE INDENTURE ESTATE......................... 25
3.01. [Reserved for Potential Future Use]........................... 25
3.02. Payment in Case of Redemption or Purchase of Certificates..... 25
3.03. Application of Rent When No Indenture Event of Default Is
Continuing................................................... 26
3.04. Application of Certain Payments in Case of Requisition or
Event of Loss................................................ 26
3.05. Payments During Continuance of Indenture Event of Default..... 27
3.06. Payments for Which Application Is Provided in Other Documents. 28
3.07. Payments for Which No Application Is Otherwise Provided....... 28
ARTICLE 4 COVENANTS OF OWNER TRUSTEE...................................... 29
4.01. Covenants of the Owner Trustee................................ 29
ii
ARTICLE 5 DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY
INCLUDED IN THE INDENTURE ESTATE DURING CONTINUATION OF
LEASE...................................................... 30
5.01. Disposition, Substitution and Release of Property Included
in the Indenture Estate During Continuation of Lease......... 30
ARTICLE 6 REDEMPTION OF CERTIFICATES...................................... 31
6.01. Redemption of Certificates upon Certain Events................ 31
6.02. Redemption or Purchase of Certificates upon Certain Indenture
Events of Default............................................ 33
6.03. Notice of Redemption to Holders............................... 34
6.04. Deposit of Redemption Price................................... 34
6.05. Certificates Payable on Redemption Date....................... 34
ARTICLE 7 MATTERS CONCERNING THE COMPANY.................................. 35
7.01. Repayment of Monies for Certificate Payments Held by the
Indenture Trustee............................................ 35
7.02. Change in Registration........................................ 35
7.03. Assumption of Obligations of Owner Trustee by the Company..... 36
ARTICLE 8 DEFAULTS AND REMEDIES........................................... 38
8.01. Indenture Events of Default................................... 38
8.02. Acceleration; Rescission and Annulment........................ 41
8.03. Other Remedies Available to Indenture Trustee................. 41
8.04. Waiver of Owner Trustee....................................... 49
8.05. Waiver of Existing Defaults................................... 49
8.06. Control by Majority........................................... 50
8.07. Limitation on Suits by Holders................................ 50
8.08. Rights of Holders to Receive Payment.......................... 51
8.09. Indenture Trustee May File Proofs of Claim.................... 51
ARTICLE 9 INDENTURE TRUSTEE............................................... 51
9.01. Duties of Indenture Trustee................................... 51
9.02. Rights of Indenture Trustee................................... 51
9.03. Individual Rights of Indenture Trustee........................ 52
9.04. Funds May Be Held by Indenture Trustee or Paying Agent;
Investments.................................................. 52
9.05. Notice of Defaults............................................ 53
9.06. Compensation and Indemnity.................................... 53
9.07. Replacement of Indenture Trustee.............................. 54
9.08. Successor Indenture Trustee, Agents by Merger, etc............ 55
iii
9.09. Eligibility; Disqualification................................. 55
9.10. Trustee's Liens............................................... 56
9.11. Withholding Taxes; Information Reporting...................... 56
9.12. Additional Collateral......................................... 56
ARTICLE 10 SATISFACTION AND DISCHARGE; DEFEASANCE;
TERMINATION OF OBLIGATIONS............................... 57
10.01. Satisfaction and Discharge of Agreement; Defeasance;
Termination of Obligations................................... 57
10.02. Survival of Certain Obligations............................... 59
10.03. Monies to Be Held in Trust.................................... 59
10.04. Monies to Be Returned to Owner Trustee........................ 59
ARTICLE 11 AMENDMENTS AND WAIVERS......................................... 60
11.01. Amendments to this Agreement Without Consent of Holders....... 60
11.02. Amendments to this Agreement with Consent of Holders.......... 61
11.03. Revocation and Effect of Consents............................. 62
11.04. Notation on or Exchange of Certificates....................... 62
11.05. Indenture Trustee Protected................................... 62
11.06. Amendments, Waivers, etc. of Other Operative Documents........ 62
ARTICLE 12 MISCELLANEOUS.................................................. 65
12.01. Notices....................................................... 65
12.02. [Reserved for Potential Future Use]........................... 67
12.03. [Reserved for Potential Future Use]........................... 67
12.04. Rules by Indenture Trustee and Agents......................... 67
12.05. Non-Business Days............................................. 67
12.06. GOVERNING LAW................................................. 68
12.07. No Recourse Against Others.................................... 68
12.08. Execution in Counterparts..................................... 68
ARTICLE 13 ACTIONS TO BE TAKEN UPON TERMINATION OF LEASE.................. 68
13.01. Actions to Be Taken upon Termination of Lease................. 68
iv
SIGNATURES................................................................. 70
Exhibit A-1 Form of Series 1995 777 B Installment
Certificates
Exhibit A-2 Form of Series 1995 777 B Serial
Certificates
Exhibit B Maturity Dates, Original Issue Prices,
Principal Amounts and
Interest Rates of Series 1995 777 B
Certificates
Exhibit B-1 Installment Payment Dates and Installment
Payment Percentages
Exhibit B-2 Issuance of Series 1995 777 B
Certificates
Exhibit C Form of Trust Agreement and Trust Indenture
and Mortgage Supplement
TRUST INDENTURE AND MORTGAGE
This TRUST INDENTURE AND MORTGAGE (1995 777 B), dated as of May 1,
1995, between STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, not in its individual capacity except as otherwise expressly provided
herein, but solely as Owner Trustee under the Trust Agreement (capitalized terms
used herein having the respective meanings specified therefor in Article 1), and
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, a national banking
association, as Indenture Trustee hereunder.
W I T N E S S E T H:
-------------------
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 Certificates issued hereunder, and (ii) the Owner Trustee has
been authorized and directed pursuant to the Trust Agreement to execute and
deliver this Trust Indenture and Mortgage;
WHEREAS, all capitalized terms used herein shall have the respective
meanings set forth or referred to in Article 1 hereof;
WHEREAS, the parties desire by this Agreement, among other things, (i)
to provide for the issuance by the Owner Trustee of the Series 1995 777 B
Certificates evidencing the loans made by the Pass Through Trustees to finance
the Owner Trustee's payment of Lessor's Cost, as provided in the Participation
Agreement, and (ii) to provide for the assignment, mortgage and pledge by the
Owner Trustee to the Indenture 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 Indenture Trustee, for the ratable benefit and security of
the Holders;
WHEREAS, all things have been done to make the Certificates, when
executed by the Owner Trustee and authenticated and delivered by the Indenture
Trustee hereunder, the valid, binding and enforceable obligations of the Owner
Trustee; and
WHEREAS, all things necessary to make this Agreement the legal, valid
and binding obligation of the Owner Trustee and the Indenture Trustee, for the
uses and purposes
2
herein set forth, in accordance with its terms, have been done and performed and
have happened;
GRANTING CLAUSE
NOW, THEREFORE, THIS TRUST INDENTURE AND MORTGAGE WITNESSETH, that, to
secure the prompt payment of the principal of, premium, if any, and interest on,
and all other amounts due with respect to, all Certificates 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 Operative
Documents to which it is a party, for the benefit of the Holders, 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 Certificates by the Holders, and of other good and valuable
consideration the receipt and adequacy whereof are 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 Indenture Trustee, its
successors and assigns, for the security and benefit of the Holders from time to
time, a 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 Agreement by any instrument
supplemental hereto, but excluding the Excluded Payments, are herein called the
"Indenture Estate"):
(1) the Airframe and Engines (each such Engine having 750 or more
rated take-off horsepower or the equivalent thereof) and all replacements
thereof and substitutions therefor in which the Owner Trustee shall from
time to time acquire an interest in accordance with the Lease, as more
particularly described in the Trust Supplement and the Lease Supplement
executed and delivered with respect to the Aircraft or any such
replacements or substitutions therefor, as provided in this Agreement and
the Lease;
(2) the Lease and all Rent thereunder, including, without limitation,
all amounts of Basic Rent, Supplemental Rent, and payments of any kind
required to be made by the Company thereunder; all amounts payable to the
Owner Trustee under the Participation Agreement that do not constitute
Excluded Payments; the Purchase Agreement (to the extent assigned by the
Owner Trustee's Purchase Agreement), the Owner Trustee's Purchase
Agreement, the Owner Trustee's Bill of Sale, the Owner Trustee's FAA Bill
of Sale and any and all contracts relating to the Airframe and Engines or
any rights or interest therein to which the Owner Trustee is now or may
hereafter be a party; including, without limitation, all rights of the
Owner Trustee to receive any payments or other amounts or to exercise any
election or option or to
3
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 (other than the rights of the Owner Trustee provided for
hereunder);
(3) all rents, issues, profits, revenues and other income of the
property subjected or required to be subjected to the Lien of this
Agreement;
(4) all requisition proceeds with respect to the Aircraft or any part
thereof (to the extent of the Owner Trustee's interest therein pursuant to
the terms of the Lease) and all insurance proceeds with respect to the
Aircraft or any part thereof from insurance required to be maintained by
the Company under Section 11 of the Lease, but excluding any insurance
maintained by the Company 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 Indenture 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 Indenture Trustee
hereunder;
(6) all proceeds of the foregoing; and
(7) the Additional Collateral, if any.
Notwithstanding the foregoing provisions:
(a) there shall be excluded from the security interest granted by this
Agreement all Excluded Payments;
(b) (i) whether or not a Lease Event of Default or an Indenture 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
Indenture Trustee (a) to Excluded Payments and to commence an action at law
to obtain such Excluded Payments, (b) to adjust Basic Rent and the
percentages relating to Stipulated Loss Value and Termination Value, the
Special Termination Value Percentage and the EBO Percentages as provided in
Section 3(c) of the Lease and Section 18 of the Participation Agreement,
(c) to exercise any election or option to make any decision or
determination, or to give or receive any notice, consent, waiver or
approval, or to take any other action in respect of, but in each case only
to the extent relating to,
4
Excluded Payments, (d) to retain the rights of the "Lessor" with respect to
solicitations of bids, and the election to retain the Aircraft pursuant to
Section 9 of the Lease, (e) to exercise the right of "Lessor" to determine
the fair market rental value or fair market sales value pursuant to Section
19 of the Lease, (f) to exercise all rights with respect to insurance
maintained for its own account which Section 11(e) of the Lease
specifically confers on the "Lessor" and (g) to exercise, to the extent
necessary to enable it to exercise its rights under Section 8.03(e)(i)
hereof, the rights of the "Lessor" under Section 21 of the Lease;
(ii) whether or not a Lease Event of Default or Indenture Event of
Default shall occur and be continuing, the Owner Trustee and the Indenture
Trustee shall each have the right separately but not to the exclusion of
the other, (a) to receive from the Company all notices, certificates,
reports, filings, Opinions of Counsel, copies of all documents and all
information which the Company is permitted or required to give or furnish
to the "Lessor" pursuant to the Lease or to the Owner Trustee pursuant to
any other Operative Document, (b) to exercise inspection rights pursuant to
Section 12 of the Lease, (c) to maintain separate insurance pursuant to
Section 11(e) of the Lease and to retain all rights with respect to such
insurance maintained for its own account, (d) to give any notice of default
under Section 15 of the Lease and to declare the Lease in default in
respect thereof, (e) to cause the Company to take any action and execute
and deliver such documents and assurances as the "Lessor" may from time to
time reasonably request pursuant to Section 16 of the Lease; (f) to consent
(with the concurrent consent of the other such party to the extent such
consent is required) to changes to the list of countries on Exhibit F or G
to the Lease and (g) to purchase an engine pursuant to Section 5(e) of the
Lease;
(iii) so long as no Indenture Event of Default shall have occurred
and be continuing (but subject to the provisions of Section 11.06), the
Owner Trustee shall retain the right, to the exclusion of the Indenture
Trustee, to exercise the following rights of the "Lessor" under the Lease:
(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, (b) the right to
waive the opinion required pursuant to Section 8(e)(ii)(C) of the
Participation Agreement and (c) in connection with an Event of Loss
relating only to one or more Engines, the right to elect (or not to elect)
under Section 10(b) of the Lease to require the Company to pay the amounts
set forth in clauses (A) and (B) of Section 10(b);
(c) the leasehold interest granted to the Company by the Lease shall
not be subject to the security interest granted by this Agreement, and
nothing in this Agreement shall affect the rights of the Company under the
Lease so long as no Lease Event of Default has occurred and is continuing;
and
5
(d) as between the Owner Trustee and the Indenture Trustee, nothing
contained in this Granting Clause shall prevent the Owner Trustee, as the
"Lessor" under the Lease, from seeking specific performance of the
covenants of the Company under the Lease relating to the protection,
insurance, maintenance, possession and use of the Aircraft and from
maintaining separate insurance with respect to the Aircraft to the extent
permitted by Section 11 of the Lease.
None of the payments and rights described in the foregoing clauses (a)
through (d) shall be included in the Indenture Estate.
HABENDUM CLAUSE
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, in trust for the benefit and
security of the Indenture Trustee and the Holders from time to time, without any
priority of any one Certificate over any other, and for the uses and purposes
and subject to the terms and provisions set forth in this Agreement.
1. The Owner Trustee agrees that this Agreement creates and grants
and is intended to and shall create and grant a security interest in the
Aircraft to the Indenture Trustee, which security interest shall attach on the
Delivery Date. The security interest created by this Agreement and granted to
the Indenture Trustee hereunder in the Indenture Estate other than in the
Aircraft shall attach upon the delivery of this Agreement.
2. 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 its obligations
assumed by it thereunder, all in accordance with and pursuant to the terms and
provisions thereof, and the Indenture Trustee and the Holders 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 Indenture Trustee (except as to the Indenture Trustee, if the
Indenture Trustee shall have become the "Lessor" under the Lease) or the Holders
be required or obligated in any manner to perform or fulfill any obligations of
the Owner Trustee under any of the Operative Documents to which the Owner
Trustee is a party, or, except as herein expressly provided, to make any
payment, or to make any inquiry as to the nature or sufficiency of any payment
received by it, or present or file any claim, or take any action to collect or
enforce the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
3. The Owner Trustee does hereby constitute the Indenture Trustee
the true and lawful attorney of the Owner Trustee, irrevocably, with full power
(in the name of
6
the Owner Trustee or otherwise) subject to the terms and conditions of this
Indenture, 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 Excluded Payments) under or arising out of the Lease
(subject to Section 11.06(b)(1)), the Purchase Agreement and the Owner Trustee's
Purchase Agreement, 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 Indenture Trustee may deem to be necessary or advisable in
the premises. The Owner Trustee has directed the Company to make all payments
of Rent (other than Excluded Payments) payable to the Owner Trustee by the
Company and all other amounts which are required to be paid to or deposited with
the Owner Trustee pursuant to the Lease directly to the Indenture Trustee at
such address as the Indenture Trustee shall specify, for application as provided
in this Agreement. The Owner Trustee agrees that promptly on receipt thereof,
it will transfer to the Indenture Trustee any and all moneys from time to time
received by it constituting part of the Indenture Estate, for distribution by
the Indenture Trustee pursuant to this Agreement, except that the Owner Trustee
shall accept for distribution pursuant to the Trust Agreement any amounts
distributed to it by the Indenture Trustee as expressly provided in this
Agreement and any Excluded Payments.
4. The Owner Trustee agrees that at any time and from time to time,
upon the written request of the Indenture Trustee, the Owner Trustee will
promptly and duly execute and deliver or cause to be duly executed and delivered
any and all such further instruments and documents as the Indenture Trustee may
reasonably deem desirable in obtaining the full benefits of the assignment
hereunder and of the rights and powers herein granted; provided, however, that
-------- -------
the Owner Trustee shall have no obligation to execute and deliver or cause to be
executed or delivered to the Indenture Trustee any such instrument or document
if such execution and delivery would result in the imposition of additional
liabilities on the Owner Trustee or the Owner Participant and would result in a
burden on the Owner Participant's business activities, unless the Owner Trustee
or the Owner Participant, as the case may be, is indemnified to its reasonable
satisfaction against any losses, liabilities and expenses incurred in connection
with such execution and delivery pursuant to any Operative Document.
5. The Owner Trustee does hereby warrant and represent that it has
not assigned or pledged, and hereby covenants that it will not assign or pledge,
so long as the assignment hereunder shall remain in effect, any of its right,
title or interest hereby assigned, to any Person other than the Indenture
Trustee, and that it will not, except as provided in or permitted by this
Agreement, accept any payment from the Company, enter into an agreement amending
or supplementing any of the Operative Documents, execute any waiver or
modification of, or consent under the terms of any of the Operative Documents,
settle or compromise any claim (other than claims in respect of Excluded
Payments) against the Company arising under any of the Operative Documents, or
submit or consent to the
7
submission of any dispute, difference or other matter arising under or in
respect of any of the Operative Documents, to arbitration thereunder.
IT IS HEREBY FURTHER COVENANTED AND AGREED by and among the parties
hereto as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. (a) For all purposes of this Agreement,
-----------
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article 1 have the meanings assigned to
them in this Article 1, and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(3) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(4) all references in this Agreement to Articles, Sections and
Exhibits refer to Articles, Sections and Exhibits of this Agreement.
(b) For all purposes of this Agreement, the following capitalized
terms have the following respective meanings:
"Actual Knowledge" means, (i) as it applies to the Owner Trustee or
----------------
Indenture Trustee, as the case may be, actual knowledge of a responsible officer
in the Corporate Trust Department or the Corporate Trust Office, as the case may
be, and (ii) as it applies to the Owner Participant, actual knowledge of a Vice
President or more senior officer of the Owner Participant or other officer of
the Owner Participant in each case having responsibility for the transactions
contemplated by the Operative Documents; provided that each of the Owner
Trustee, the Indenture Trustee and the Owner Participant shall be deemed to have
"Actual Knowledge" of any matter as to which it has been given notice by any of
Lessee, the Owner Participant, any Holder, the Owner Trustee or the Indenture
Trustee, such notice having been given pursuant to and in accordance with
Section 12.01.
8
"Additional Collateral" means any property in addition to the
---------------------
collateral listed in clauses (1) through (5) of the Granting Clause which may be
added to the Indenture Estate from time to time by the Owner Participant in
accordance with Section 9.12 hereof for so long as such property is to be
included in the Indenture Estate in accordance with the grant made in said
Section 9.12.
"Affiliate" with respect to a specified Person, means any other Person
---------
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person. For the purposes of this definition, "control"
when used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Paying Agent or Registrar.
-----
"Aircraft" shall have the meaning specified therefor in the Lease.
--------
"Airframe" shall have the meaning specified therefor in the Lease.
--------
"Appraiser" means a Person engaged in the business of making
---------
appraisals and, in the case of the Aircraft, familiar with commercial aviation
equipment.
"Bankruptcy Code" shall have the meaning specified therefor in the
---------------
Lease
"Basic Rent" shall have the meaning specified therefor in the Lease.
----------
"Business Day" shall have the meaning specified therefor in the Lease.
------------
"Certificate" or "Certificates" means any Certificate issued under
----------- ------------
this Agreement, including the Series 1995 777 B Certificates issued hereunder
substantially in the form of Exhibits A-1 and A-2 hereto as such form may be
varied pursuant to the terms hereof and any and all Certificates issued in
replacement or exchange therein in accordance with the provisions hereof.
"Certificate Holder" shall have the meaning specified for the term
------------------
"Holder" hereunder.
"Citizen of the United States" shall have the meaning specified
----------------------------
therefor in the Lease.
"Commencement Date" shall have the meaning specified therefor in the
-----------------
Lease.
9
"Commencement Date Cash Interest" when used with respect to a
-------------------------------
Certificate, shall be such Certificate's pro rata portion of the aggregate
--- ----
commencement date cash interest as determined on the basis of the data included
in Exhibit B.
"Company" means United Air Lines, Inc., a Delaware corporation, and,
-------
subject to the provisions of the Participation Agreement, its permitted
successors and assigns.
"Company Request" means a written request of the Company executed on
---------------
its behalf by a Responsible Company Officer.
"Co-Registrar" shall have the meaning specified therefor in Section
------------
2.03.
"Debt" shall mean any liability for borrowed money, or any liability
----
for the payment of money in connection with any letter of credit transaction, or
other liabilities evidenced or to be evidenced by bonds, debentures, notes or
other similar instruments.
"Defaulted Installment" shall have the meaning specified therefor in
---------------------
Section 2.08.
"Defaulted Interest" shall have the meaning specified therefor in
------------------
Section 2.08.
"Delivery Date" shall have the meaning specified therefor in the
-------------
Lease.
"EBO Date" shall have the meaning specified therefor in the Lease.
--------
"Engine" shall have the meaning specified therefor in the Lease.
------
"Event of Loss" shall have the meaning specified therefor in the
-------------
Lease.
"Excess Amount" shall have the meaning specified therefor in the
-------------
Lease.
"Excluded Payments" means (i) any right, title or interest of the
-----------------
Owner Trustee in its individual capacity, the Owner Participant or their
respective Affiliates or of their respective successors, permitted assigns,
directors, officers, employees, servants and agents to any payment which by the
terms of Section 7(b) or 7(c) of the Participation Agreement, Section 5.03 or
7.01 of the Trust Agreement or any section of the Tax Indemnity Agreement or any
corresponding payment under Section 3(d) of the Lease is payable to such Person,
(ii) any insurance proceeds payable under insurance maintained by the Owner
Trustee in its individual capacity or the Owner Participant (whether directly or
through the Owner Trustee), or to their respective Affiliates, successors,
permitted assigns, directors, officers, employees, servants and agents, (iii)
any insurance proceeds (or proceeds of governmental indemnities in lieu thereof)
payable to the Owner Trustee in its individual
10
capacity or to the Owner Participant, or to their respective Affiliates,
successors, permitted assigns, directors, officers, employees, servants and
agents, under any liability insurance maintained by the Company pursuant to
Section 11 of the Lease or by any other Person (or proceeds of governmental
indemnities in lieu thereof), (iv) any rights of the Owner Participant or the
Owner Trustee to demand, collect, sue for, or otherwise receive and enforce
payment of the foregoing amounts (including interest thereon to the extent
provided in the applicable provisions of the Operative Documents) and the right
to declare an Event of Default under the Lease in respect of any of the
foregoing amounts, but not including the right to exercise any remedies under
the Lease except for those specifically provided for in this clause (iv), (v)
payments to the Owner Participant by the Owner Trustee pursuant to Section 2 of
the Participation Agreement and any funds held by the Owner Trustee or payable
to the Owner Participant pursuant to any funding letter entered into in lieu of
the provisions of Section 2 of the Participation Agreement, (vi) if the Lessee
has assumed the obligations of the Owner Trustee in respect of the Certificates
in accordance with Section 7.03 hereof and Section 8(r) of the Participation
Agreement, the amount payable as purchase price pursuant to Section 19(b) of the
Lease, (vii) Transaction Expenses or other amounts or expenses paid or payable
to, or for the benefit of, the Owner Participant pursuant to the Participation
Agreement, (viii) the respective rights of the Owner Trustee in its individual
capacity or the Owner Participant to the proceeds of the foregoing and (ix) any
right to demand, collect or otherwise receive and enforce the payment of any
amount described in clauses (i) through (viii) above.
"Federal Aviation Act" shall have the meaning specified therefor in
--------------------
the Lease.
"Federal Aviation Administration" and "FAA" shall have the meaning
------------------------------- ---
specified therefor in the Lease.
"Holder" means a person in whose name a Certificate is registered on
------
the Register including, so long as it holds any Certificate issued hereunder,
the respective Pass Through Trustee under each Pass Through Trust Agreement.
"Indenture Default" means any event which is, or after notice or
------------------
passage of time, or both, would be, an Indenture Event of Default.
"Indenture Estate" shall have the meaning specified therefor in the
----------------
Granting Clause hereof.
"Indenture Event of Default" shall have the meaning specified therefor
---------------------------
in Article 8.
11
"Indenture Trustee" means First Security Bank of Utah, National
-----------------
Association and each other Person which may from time to time be acting as
Indenture Trustee in accordance with the provisions of this Agreement.
"Independent" when used with respect to an engineer, Appraiser or
-----------
other expert, means an engineer, Appraiser or other expert who (i) is in fact
independent, (ii) does not have any direct financial interest or any material
indirect financial interest in the Company or any Affiliate of the Company, and
(iii) is not connected with the Company or any Affiliate of the Company as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
"Independent Investment Banker" shall mean an independent investment
-----------------------------
banking institution of national standing appointed by (i) the Company on behalf
of the Owner Trustee or (ii) in the case of a redemption or purchase of the
Certificates under Section 6.01(b) pursuant to Section 8.03(e)(ii), the Owner
Trustee; provided that, if the Indenture Trustee shall not have received written
--------
notice of such an appointment at least 10 days prior to the relevant Redemption
Date or if a Lease Event of Default shall have occurred and be continuing,
"Independent Investment Banker" shall mean such an institution appointed by
- ------------------------------
the Indenture Trustee.
"Installment Certificate" shall mean a Certificate substantially in
-----------------------
the form of Exhibit A-1, should any such Certificate be issued hereunder.
"Installment Payment Amount" means, with respect to each Installment
--------------------------
Certificate, the amount of the installment payment of principal due and payable
on each Installment Payment Date, which amount shall be equal to the product of
the original principal amount of such Certificate and the Installment Payment
Percentage for such Installment Payment Date.
"Installment Payment Date" means each date on which an installment
------------------------
payment of principal is due and payable on any Installment Certificate, as set
forth in Exhibit B-1.
"Installment Payment Percentage" means, with respect to each
------------------------------
Installment Payment Date, the percentage set forth opposite such Installment
Payment Date in Exhibit B-1;
provided that, after the occurrence of any partial redemption or redemptions
- --------
pursuant to clause (ii) of Section 6.01(a), the "Installment Payment Percentage"
------------------------------
for each Installment Payment Date subsequent to the applicable Redemption Date
shall be equal to the percentage obtained from the following calculation:
(p - n) x y
-----------
p x s
12
where, for Installment Certificates maturing on the same Maturity Date:
p = the sum of the original principal amounts of all Installment
Certificates maturing on such Maturity Date as reflected on
Exhibit B hereto;
n = the sum of the principal amounts paid to all holders of
Installment Certificates maturing on such Maturity Date as a
result of all such partial redemptions (excluding any Installment
Payment Amounts paid on a Redemption Date as a result of any such
Redemption Date occurring on an Installment Payment Date) and all
payments of principal paid on Installment Payment Dates on or
prior to the applicable Redemption Date;
y = the Installment Payment Percentage set forth in such Exhibit B-1
applicable to the Installment Payment Date for which this
calculation is being performed; and
s = the sum of the Installment Payment Percentages for Installment
Payment Dates related to such Installment Certificates maturing
on such Maturity Date and subsequent to the applicable Redemption
Date.
"Interest Payment Date" means each October 19 and April 19, commencing
---------------------
on the Commencement Date.
"Lease" means the Lease Agreement (1995 777 B), dated as of May 1,
-----
1995, between the Owner Trustee, as lessor, and the Company, as lessee, as such
Lease Agreement may from time to time be further supplemented, amended or
modified in accordance with the terms thereof and this Agreement. The term
"Lease" shall also include each Lease Supplement entered into pursuant to the
-----
terms of the Lease.
"Lease Event of Default" shall have the meaning specified for the term
----------------------
"Event of Default" in the Lease.
"Lease Loss Payment Date" shall have the meaning specified for the
-----------------------
term "Loss Payment Date" in the Lease.
"Lease Supplement" shall have the meaning specified therefor in the
----------------
Lease.
"Lease Termination Date" shall have the meaning specified for the term
----------------------
"Termination Date" in the Lease.
13
"Lessor Liens" shall have the meaning specified therefor in the Lease.
------------
"Lien" means any mortgage, pledge, lien, charge, encumbrance, lease,
----
exercise of rights, security interest or claim.
"Loan Certificate" shall have the meaning specified for the term
-----------------
"Certificate" hereunder.
"Maturity Date" means each of the dates specified in Exhibit B as a
-------------
maturity date of one or more of the Certificates.
"Officers' Certificate" means a certificate signed, in the case of the
---------------------
Company, by (i) the Chairman of the Board of Directors, the President, or any
Senior Vice President of the Company, signing alone, or (ii) any Vice President
signing together with the Secretary, any Assistant Secretary, the Treasurer or
any Assistant Treasurer of the Company or, in the case of the Owner Trustee, a
Responsible Officer of the Owner Trustee.
"Operative Documents" means this Agreement, the Participation
-------------------
Agreement, the Lease, the Tax Indemnity Agreement, the Consent and Agreement,
the Owner Trustee's Bill of Sale, the Owner Trustee's FAA Bill of Sale, the
Acceptance Certificate, the Purchase Agreement (to the extent assigned by the
Owner Trustee's Purchase Agreement), the Owner Trustee's Purchase Agreement, the
Certificates, the Trust Agreement and the Trust Supplement.
"Opinion of Counsel" means a written opinion of legal counsel, who in
------------------
the case of counsel for the Company may be (i) the senior attorney employed by
the Company, (ii) Vedder, Price, Kaufman & Kammholz or (iii) other counsel
designated by the Company and who shall be reasonably satisfactory to the
Indenture Trustee or, in the case of legal counsel for the Owner Trustee, may be
(x) Bingham, Dana & Gould or (y) other counsel designated by the Owner Trustee
and who shall be reasonably satisfactory to the Indenture Trustee.
"Original Issue Price", when used with respect to a Certificate, shall
--------------------
be such Certificate's pro rata portion of the aggregate original issue price as
--- ----
determined on the basis of the data included in Exhibit B hereto.
"Outstanding", when used with respect to Certificates, means, as of
-----------
the date of determination, all Certificates theretofore executed and delivered
under this Agreement other than:
(i) Certificates theretofore cancelled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation pursuant to Section
2.07 or otherwise;
14
(ii) Certificates for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Indenture Trustee
in trust for the Holders of such Certificates; provided that if such
--------
Certificates are to be redeemed, notice of such redemption has been duly
given pursuant to this Agreement or provision therefor satisfactory to the
Indenture Trustee has been made; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to this Agreement;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
aggregate principal amount of Certificates Outstanding have given any request,
demand, authorization, declaration, direction, notice, consent or waiver
hereunder, Certificates owned by or pledged to the Company or any Affiliate of
the Company or the Owner Trustee or the Owner Participant or any Affiliate
thereof, shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization, declaration, direction, notice, consent or
waiver, only Certificates which the Indenture Trustee knows to be so owned or so
pledged shall be disregarded. Certificates owned by the Company, or the Owner
Trustee or the Owner Participant, which have been pledged in good faith may be
regarded as Outstanding if the Company, or the Owner Trustee or the Owner
Participant, as the case may be, establishes to the satisfaction of the
Indenture Trustee the pledgee's right to act with respect to such Certificates
and that the pledgee is not the Company, or the Owner Trustee or the Owner
Participant or any Affiliate thereof.
"Owner Participant" shall be the party specified as the "Owner
-----------------
Participant" in the Participation Agreement, its successors and, to the extent
permitted by Article VIII of the Trust Agreement and Section 8(l) of the
Participation Agreement, its permitted successors and assigns.
"Owner Trustee" means State Street Bank and Trust Company, a
-------------
Massachusetts trust company, not in its individual capacity, but solely as
trustee under the Trust Agreement, and each other Person which may from time to
time be acting as Owner Trustee in accordance with the provisions of the
Operative Documents.
"Owner Trustee's Purchase Agreement" shall have the meaning specified
----------------------------------
therefor in the Lease.
"Participation Agreement" shall have the meaning specified therefor in
-----------------------
the Lease.
"Parts" shall have the meaning specified therefor in the Lease.
-----
15
"Pass Through Certificates" means any of the Pass Through Certificates
-------------------------
issued pursuant to any of the Pass Through Trust Agreements.
"Pass Through Trust" means each pass through trust created pursuant to
------------------
the related Pass Through Trust Agreement.
"Pass Through Trust Agreements" means the Pass Through Trust Agreement
-----------------------------
dated as of February 1, 1992, as amended and restated as of May 1, 1995, between
the Company and the Pass Through Trustee as supplemented by each of the two Pass
Through Trust Supplements Nos. 1995- A1 and 1995-A2, each dated as of May __,
1995, as the same may from time to time be further amended, supplemented or
otherwise modified.
"Pass Through Trust Supplement" shall have the meaning specified for
-----------------------------
the term "Trust Supplement" in the Pass Through Trust Agreement.
"Pass Through Trustee" means First Security Bank of Utah, National
--------------------
Association in its capacity as trustee under each Pass Through Trust Agreement,
and such other Person that may from time to time be acting as successor trustee
under any such Pass Through Trust Agreement.
"Paying Agent" means any person acting as Paying Agent hereunder
------------
pursuant to Section 2.03.
"Permitted Investment" means each of (i) obligations of, or guaranteed
--------------------
by, the United States Government or agencies thereof, (ii) open market
commercial paper of any corporation incorporated under the laws of the United
States of America or any State thereof rated at least P-2 or its equivalent by
Moody's Investors Service, Inc. or at least A-2 or its equivalent by Standard &
Poor's Corporation, (iii) certificates of deposit issued by commercial banks
organized under the laws of the United States or of any political subdivision
thereof having a combined capital and surplus in excess of $500,000,000 which
banks or their holding companies have a rating of A or its equivalent by Moody's
Investors Service or Standard & Poor's Corporation; provided, however, that the
-------- -------
aggregate amount at any one time so invested in certificates of deposit issued
by any one bank shall not exceed 5% of such bank's capital and surplus, (iv)
U.S. dollar denominated offshore certificates of deposit issued by, or offshore
time deposits with, any commercial bank described in clause (iii) or any
subsidiary thereof and (v) repurchase agreements with any financial institution
having combined capital and surplus of at least $500,000,000 with any of the
obligations described in clauses (i) through (iv) as collateral.
"Permitted Lien" shall have the meaning specified therefor in the
--------------
Lease.
16
"Person" means any individual, corporation, partnership, joint
------
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pre-Commencement Date Period" means, with respect to any Certificate,
----------------------------
the period commencing on the date of the original issuance of such Certificate
and ending on and including the day immediately preceding the Commencement Date.
"Premium" or "premium" shall have the meaning specified in Section
------- -------
6.01(b) hereto.
"Premium Termination Date" means, with respect to a Certificate, the
------------------------
date set forth below opposite the Maturity Date of such Certificate:
Premium
Certificates Maturity Date Termination Date
---------------- ------------- ----------------
Series 777 B-1
Certificate [_________] [_________]
Series 777 B-2
Certificate [_________] [_________]
"Purchase Agreement" shall have the meaning specified therefor in the
------------------
Lease.
"Purchase Option Date" shall have the meaning specified therefor in
--------------------
the Lease.
"Record Date" for the interest or Installment Payment Amount payable
-----------
on any Certificate on any Interest Payment Date or Installment Payment Date
(other than the Maturity Date) for such Certificate, as the case may be, means
the calendar day (whether or not a Business Day) which is 15 calendar days prior
to the related Interest Payment Date or the related Installment Payment Date.
"Redemption Date" means the date on which the Certificates are to be
---------------
redeemed or purchased pursuant to Section 6.01 or Section 6.02, as the case may
be, as specified in the notice delivered pursuant to Section 6.03 hereof.
"Redemption Price" means the price at which the Certificates are to be
----------------
redeemed or purchased, determined as of the applicable Redemption Date, pursuant
to Section 6.01 or Section 6.02, as the case may be; provided, however, that in
-------- -------
the case of a Certificate which is issued at a discount which shall become due
and payable (upon redemption, acceleration or otherwise) and shall be paid or
shall be purchased during the Pre-Commencement Date Period, the Redemption Price
or purchase price therefor shall be the amount payable upon such Certificate
becoming due and payable and being paid during the Pre-Commencement Date Period
as specified therein.
17
"Refinancing Date" shall mean the date designated by the Lessee as the
----------------
date for a refinancing of the Certificates in accordance with Section 17 of the
Participation Agreement.
"Register" shall have the meaning specified therefor in Section 2.03.
--------
"Registrar" means any person acting as Registrar hereunder pursuant to
---------
Section 2.03.
"Rent" shall have the meaning specified therefor in the Lease.
----
"Replacement Airframe" shall have the meaning specified therefor in
--------------------
the Lease.
"Replacement Engine" shall have the meaning specified therefor in the
------------------
Lease.
"Responsible Company Officer" means, with respect to the Company, its
---------------------------
Chairman of the Board, its President, any Senior Vice President, the Chief
Financial Officer, any Vice President, the Treasurer or any other management
employee (a) working under the direct supervision of such Chairman of the Board,
President, Senior Vice President, Chief Financial Officer, Vice President or
Treasurer and (b) whose responsibilities include the administration of the
transactions and agreements, including the Lease, contemplated by the
Participation Agreement.
"Responsible Officer", with respect to the Owner Trustee or the
-------------------
Indenture Trustee, shall mean any officer in its Corporate Trust Administration
Department or any officer of the Owner Trustee or the Indenture Trustee, as the
case may be, customarily performing functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with a particular subject.
"SEC" means the Securities and Exchange Commission.
---
"Series 1995 777 B Certificate" means any Certificate issued by the
-----------------------------
Owner Trustee under this Agreement substantially in the form of Exhibit A-1 or
A-2, and any and all of the Series 1995 777 B Certificates issued in replacement
or exchange thereof in accordance with the provisions hereof.
"Special Purchase Option Date" shall have the meaning specified
----------------------------
therefor in the Lease.
"Stipulated Loss Value" shall have the meaning specified therefor in
---------------------
the Lease.
"Supplemental Rent" shall have the meaning specified therefor in the
-----------------
Lease.
18
"Tax Indemnity Agreement" shall have the meaning specified therefor in
-----------------------
the Lease.
"Termination Value" shall have the meaning specified therefor in the
-----------------
Lease.
"Treasury Yield" means, with respect to each Certificate to be
--------------
redeemed or purchased, (x) in the case of a Certificate having a maturity less
than one year after the applicable redemption or purchase date, the average
yield to stated maturity on a government bond equivalent basis of the applicable
United States Treasury Bill due the week of the maturity of such Certificate or
(y) in the case of a Certificate having a maturity of one year or more after the
applicable redemption or purchase date, the average yield to stated maturity of
the most comparable United States Treasury Notes or Bonds as identified by an
independent investment banker, corresponding in maturity to the Remaining
Weighted Average Life (as defined below) of such Certificate (or, if there is no
maturity corresponding to such Remaining Weighted Average Life, an interpolation
of maturities by such independent investment banker), in each case under (x) and
(y) above determined by such independent investment banker based on the average
of the yields to stated maturity determined from the bid prices on the fourth
Business Day preceding the applicable redemption on purchase date. For purposes
hereof, "Remaining Weighted Average Life" means, for any Certificate, at the
redemption or purchase date of such Certificate, the number of years obtained by
dividing (a) the sum of the products obtained by multiplying (i) the amount of
each then remaining scheduled payment of principal, including the payment due on
the maturity date of such Certificate, by (ii) the number of years (calculated
to the nearest one-twelfth) which will elapse between the redemption or purchase
date and the regular distribution dates as of such scheduled payments of
principal; by (b) the then outstanding principal amount (including accretion of
discount) of such Certificate.
"Trust Agreement" shall have the meaning specified therefor in the
---------------
Lease.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended.
"Trust Indenture and Mortgage" or "this Agreement" means this Trust
---------------------------- --------------
Indenture and Mortgage (1995 777 B), as the same may from time to time be
supplemented, amended or modified.
"Trust Indenture Estate" shall have the meaning specified for the term
----------------------
"Indenture Estate" hereunder.
"Trust Office" shall mean the principal corporate trust office of the
------------
Owner Trustee located at 225 Franklin Street, Boston, Massachusetts 02110,
Attention: Corporate Trust Department, or at such other office at which the
Owner Trustee's corporate trust business shall be administered which the Owner
Trustee shall have specified by notice in writing to the Company, the Indenture
Trustee and each Holder.
19
"Trust Supplement" means a supplement to the Trust Agreement and this
----------------
Agreement in the form of Exhibit C hereto.
"Trustee's Liens" shall have the meaning specified therefor in Section
---------------
9.10.
"United States" or "U.S." means the United States of America.
------------- ----
"U.S. Government Obligations" means securities that are direct
---------------------------
obligations of the United States or agencies or instrumentalities thereof for
the payment of which the full faith and credit of the United States are pledged
which are not callable or redeemable, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account of
the holder of a depository receipt so long as such custodian is not authorized
to make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of interest on or principal of the
U.S. Government Obligation evidenced by such depository receipt.
ARTICLE 2
THE CERTIFICATES
Section 2.01. Certificates; Title and Terms. The Certificates issued
-----------------------------
hereunder shall be designated as Series 1995 777 B Certificates. The
Installment Certificates and the Serial Certificates shall be substantially in
the form set forth in Exhibit A-1 or A-2, respectively. The Certificates
originally issued hereunder shall be dated the date of issuance thereof and
shall be issued in the maturities and principal amounts and at the Original
Issue Prices, shall provide for Commencement Date Cash Interest, if any, and
shall bear interest during and after the Pre-Commencement Date Period at the
rates per annum, in each case as specified in or determined pursuant to Exhibit
B. The principal of each Certificate, other than Installment Certificates,
shall be payable in full on the Maturity Date for such Certificate. The
principal of each Installment Certificate shall be payable in installments, on
each Installment Payment Date, in amounts equal to the Installment Payment
Amount for such Installment Payment Date. Each Certificate shall be issued to
the Pass Through Trustee under each of the Pass Through Trust Agreements, as set
forth in Exhibit B-2.
The Certificates shall be issued in registered form only. The
Certificates shall be issued in denominations of $1,000 and integral multiples
thereof except that one Certificate of each maturity may be in an amount that is
not an integral multiple of $1,000.
20
The Certificates are not redeemable or subject to purchase prior to
maturity except as provided in this Agreement. Interest accrued on the
Certificates shall be calculated on the basis of a 360-day year consisting of
twelve 30-day months.
Section 2.02. Execution and Authentication. (a) Certificates shall
----------------------------
be executed on behalf of the Owner Trustee by the manual or facsimile signature
of its President, a senior vice president, a vice president, an assistant vice
president, its treasurer, its secretary, an assistant secretary or an assistant
treasurer.
(b) If any officer of the Owner Trustee executing the Certificates no
longer holds that office at the time the Certificate is executed on behalf of
the Owner Trustee, the Certificate shall be valid nevertheless.
(c) At any time and from time to time after the execution of the
Certificates, the Owner Trustee may deliver such Certificates to the Indenture
Trustee for authentication and, subject to the provisions of Section 2.10, the
Indenture Trustee shall authenticate the Certificates by manual signature upon
written orders of the Owner Trustee. Certificates shall be authenticated on
behalf of the Indenture Trustee by any authorized officer or signatory of the
Indenture Trustee.
(d) A Certificate shall not be valid or obligatory for any purpose or
entitled to any security or benefit hereunder until executed on behalf of the
Owner Trustee by the manual or facsimile signature of an officer of the Owner
Trustee as provided in Section 2.02(a) and until authenticated on behalf of the
Indenture Trustee by the manual signature of an authorized officer or signatory
of the Indenture Trustee as provided in Section 2.02(c). Such signatures shall
be conclusive evidence that such Certificate has been duly executed,
authenticated and issued under this Agreement.
Section 2.03. Registrar and Paying Agent. The Indenture Trustee
--------------------------
shall maintain an office or agency where the Certificates may be presented for
registration of transfer or for exchange (the "Registrar") and an office or
agency where (subject to Sections 2.04 and 2.08) the Certificates may be
presented for payment or for exchange (the "Paying Agent"). The Registrar shall
keep a register (the "Register") with respect to the Certificates and to their
transfer and exchange and the payments of Installment Payment Amounts thereon,
if any. The Indenture Trustee may appoint one or more co-registrars (the "Co-
Registrars") and one or more additional Paying Agents for the Certificates and
the Indenture Trustee may terminate the appointment of any Co-Registrar or
Paying Agent at any time upon written notice. The term "Registrar" includes any
Co-Registrar. The term "Paying Agent" includes any additional Paying Agent.
The Indenture Trustee shall initially act as Registrar and Paying
Agent.
21
Section 2.04. Transfer and Exchange. At the option of the Holder
---------------------
thereof, Certificates may be exchanged for an equal aggregate principal amount
of other Certificates of the same maturity and type and of any authorized
denominations or transferred upon surrender of the Certificates to be exchanged
or transferred at the principal corporate trust office of the Indenture Trustee,
or at any office or agency maintained for such purpose pursuant to Section 2.03.
Whenever any Certificates are so surrendered for exchange, the Owner Trustee
shall execute, and the Indenture Trustee shall authenticate and deliver, the
replacement Certificates, dated the same date as the Certificate or Certificates
being replaced which the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of Certificates shall be the valid obligations of the Owner Trustee, evidencing
the same obligations, and entitled to the same security and benefits under this
Agreement, as the Certificates surrendered upon such registration of transfer or
exchange.
Every Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in form satisfactory
to the Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Certificates, but the Registrar may, as a condition to
any transfer or exchange hereunder, require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Certificates.
The Registrar shall not be required to register the transfer of or to
exchange any Certificate called for redemption or purchase pursuant to such
Section 6.01 or 6.02.
Section 2.05. Holder Lists; Ownership of Certificates. (a) The
---------------------------------------
Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders, which list shall be available to the Owner Trustee or its
representative (which may be the Owner Participant) and the Company for
inspection. If the Indenture Trustee is not the Registrar, the Registrar shall
be required to furnish to the Indenture Trustee semi-annually on or before each
Interest Payment Date, and at such other times as the Indenture Trustee may
request in writing, a list, in such form and as of such date as the Indenture
Trustee may reasonably require, containing all the information in the possession
or control of the Registrar as to the names and addresses of the Holders.
(b) Ownership of the Certificates shall be proved by the Register kept
by the Registrar. Prior to due presentment for registration of transfer of any
Certificate, the
22
Owner Trustee, the Owner Participant, the Company, the Indenture Trustee, the
Paying Agent and the Registrar may deem and treat the Person in whose name any
Certificate is registered as the absolute owner of such Certificate for the
purpose of receiving payment of principal (including, subject to the provisions
herein regarding the applicable Record Dates, Installment Payment Amounts) of,
premium, if any, and interest on such Certificate and for all other purposes
whatsoever, whether or not such Certificate is overdue, and none of the Owner
Trustee, the Indenture Trustee, the Paying Agent or the Registrar shall be
affected by notice to the contrary.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
any Certificate shall become mutilated, destroyed, lost or stolen, the Owner
Trustee shall, upon the written request of the Holder of such Certificate, issue
and execute, and the Indenture Trustee shall authenticate and deliver, in
replacement thereof, as applicable, a new Certificate of the same type and
having the same maturity, payable to the same Holder in the same principal
amount and dated the same date as the Certificate so mutilated, destroyed, lost
or stolen. If the Certificate being replaced has become mutilated, such
Certificate shall be surrendered to the Indenture Trustee. If the Certificate
being replaced has been destroyed, lost or stolen, the Holder of such
Certificate shall furnish to the Owner Trustee and the Indenture Trustee such
security or indemnity as may be required by it to save the Owner Trustee and the
Indenture Trustee harmless and evidence satisfactory to the Owner Trustee and
the Indenture Trustee of the destruction, loss or theft of such Certificate and
of the ownership thereof.
Section 2.07. Cancellation. The Registrar and any Paying Agent shall
------------
forward to the Indenture Trustee all Certificates surrendered to them for
replacement, redemption, registration of transfer, exchange or payment. The
Indenture Trustee shall cancel all Certificates surrendered for replacement,
redemption, registration of transfer, exchange, payment or cancellation and
shall destroy cancelled Certificates.
Section 2.08. Payment on Certificates; Defaulted Principal and
------------------------------------------------
Interest. (a) The Indenture Trustee will arrange directly with any Paying Agent
- --------
for the payment, or the Indenture Trustee will make payment, all pursuant to
Section 2.09, of the principal of, premium, if any, and interest on the
Certificates at the principal corporate trust office of the Indenture Trustee or
at any office or agency maintained for such purpose to Section 2.03 hereof. All
payments in respect of the Certificates shall be made in such coin or currency
of the United States as at the time of payment in legal tender for payment of
public and private debts. Payments (other than on the Maturity Date therefor or
on the Redemption Date in respect of the redemption in whole thereof) on
Certificates shall be made to the Holder thereof at the close of business on the
relevant Record Date; provided, however, that the Paying Agent will, at the
-------- -------
request of the Indenture Trustee and may, at its option, pay such interest,
premium or principal by check mailed to such Holder's address as it appears on
the Register. Principal of Certificates and premium, if any, with respect
thereto, shall (except as
23
provided pursuant to the immediately preceding sentence) be payable only against
presentation and surrender thereof at the principal corporate trust office of
the Indenture Trustee or at the office of the Paying Agent maintained for such
purpose pursuant to Section 2.03.
A Holder shall have no further interest in, or other right with
respect to, the Indenture Estate when and if the principal amount of, premium,
if any, and interest on all Certificates held by such Holder and all other sums
payable to such Holder hereunder, under such Certificates and under the
Participation Agreement shall have been paid in full.
(b) Any Installment Payment Amount payable on an Installment Payment
Date (other than the Maturity Date with respect to a Certificate) or any
interest payable on an Interest Payment Date on any Certificate which is not
punctually paid on such Installment Payment Date or such Interest Payment Date,
as the case may be (herein called, respectively, a "Defaulted Installment" and
"Defaulted Interest"), shall forthwith cease to be payable to the Holder on the
relevant Record Date by virtue of his having been such Holder; and such
Defaulted Installment or Defaulted Interest may be paid by the Indenture
Trustee, at its election in each case, as provided in clause (1) or (2) below:
(1) The Indenture Trustee may elect to make payment of any Defaulted
Installment or Defaulted Interest, as the case may be, to the person in
whose name any Certificate is registered at the close of business on a
special record date for the payment of such Defaulted Installment or
Defaulted Interest, as the case may be, which shall be fixed in the
following manner. The Indenture Trustee shall notify the Paying Agent in
writing of the amount of Defaulted Installment or Defaulted Interest, as the
case may be, proposed to be paid on each such Certificate and the date of
the proposed payment, and at the same time the Indenture Trustee shall make
arrangements to set aside an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Installment or Defaulted
Interest, as the case may be, prior to the date of the proposed payment, to
be held in trust for the benefit of the Persons entitled to such Defaulted
Installment or Defaulted Interest, as the case may be, as this clause
provides and shall fix a special record date for the payment of such
Defaulted Installment or Defaulted Interest, as the case may be, which shall
be not more than 15 days and not less than 10 days prior to the date of the
proposed payment. The Indenture Trustee shall promptly notify the Owner
Trustee, the Company and the Registrar of such special record date and shall
cause notice of the proposed payment of such Defaulted Installment or
Defaulted Interest, as the case may be, and the special record date therefor
to be mailed, first class postage prepaid, to each Holder at its address as
it appears in the Register, not less than 10 days prior to such special
record date. Notice of the proposed payment of such Defaulted Installment
or Defaulted Interest, as the case may be, and the special record date
therefor having been mailed, as aforesaid, such Defaulted Installment or
Defaulted
24
Interest, as the case may be, shall be paid to the Persons in whose names
the applicable Certificates are registered on such special record date and
shall no longer be payable pursuant to the following clause (2).
(2) The Indenture Trustee may make, or cause to be made, payment of
any Defaulted Installment or Defaulted Interest, as the case may be, in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which Certificates may be listed, and upon such notice as may be
required by such exchange, if such payment shall be deemed practicable by
the Indenture Trustee.
(c) The Indenture Trustee shall require each Paying Agent to agree in
writing that such Paying Agent will hold in trust, for the benefit of the
Holders of the Certificates and the Indenture Trustee, all money held by the
Paying Agent for the payment of the principal of, premium, if any, or interest
and shall give to such Indenture Trustee notice of any default in the making of
any such payment upon the Certificates. The Indenture Trustee at any time may
require a Paying Agent to repay to the Indenture Trustee all money held by it.
Upon so doing the Paying Agent shall have no further liability for the money so
paid.
Section 2.09. Payment from Indenture Estate Only; Non-Recourse
------------------------------------------------
Obligations. All amounts payable by the Indenture Trustee and the Owner Trustee
- -----------
under the Certificates and this Agreement shall be made only from the income and
proceeds of the Indenture Estate. Each Holder of a Certificate, by its
acceptance of such Certificate, 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 Indenture Trustee is or shall be
personally liable to the Holder of any Certificate for any amount payable under
such Certificate or this Agreement or, except as expressly provided in this
Agreement in the case of the Owner Trustee and the Indenture Trustee, for any
liability thereunder.
State Street Bank and Trust Company is entering into this Agreement
solely as Owner Trustee under the Trust Agreement and not in its individual
capacity, and in no case whatsoever shall State Street Bank and Trust Company
(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 State Street Bank and Trust Company shall be liable hereunder in
- --------
its individual capacity, (i) for the performance of its agreements in its
individual capacity under Section 8 of the Participation Agreement, (ii) for its
own willful misconduct or gross negligence and (iii) for the failure to use
ordinary care in the disbursement of funds. 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
25
Owner Trustee and State Street Bank and Trust Company shall be released from all
further duties and obligations hereunder, without prejudice to any claims
against State Street Bank and Trust Company or such predecessor Owner Trustee
for any default by State Street Bank and Trust Company or such predecessor Owner
Trustee, respectively, in the performance of its obligations hereunder prior to
such appointment.
Section 2.10. Execution, Delivery and Dating of Certificates upon
---------------------------------------------------
Original Issuance. The Owner Trustee shall issue and execute, and the Indenture
- -----------------
Trustee shall authenticate and deliver, the Certificates for original issuance
upon payment to the Indenture Trustee of an amount equal to its Original Issue
Price. Each Certificate shall (except for those issued pursuant to Section 2.04
or Section 2.06) be dated the date of its issuance.
ARTICLE 3
RECEIPT, DISTRIBUTION AND APPLICATION
OF FUNDS IN THE INDENTURE ESTATE
Section 3.01. [Reserved for Potential Future Use]
Section 3.02. Payment in Case of Redemption or Purchase of
--------------------------------------------
Certificates. Except as otherwise provided in Section 3.05, in the event the
- ------------
Certificates are redeemed or purchased in accordance with the provisions of
Section 6.01 or 6.02, the Indenture Trustee will apply on the Redemption Date
any amounts then held by it in the Indenture Estate and received by it from or
on behalf of the Company or the Owner Trustee in the following order of
priority:
first, so much thereof as was received by the Indenture Trustee with
-----
respect to the amounts due to it pursuant to Section 9.06 shall be applied
to pay the Indenture Trustee such amounts;
second, so much thereof remaining as shall be required to pay an
------
amount equal to the Redemption Price on the Outstanding Certificates
pursuant to Section 6.01 or 6.02, as the case may be, on the Redemption Date
shall be applied to the redemption or purchase of the Certificates on the
Redemption Date; and
third, the balance, if any, thereof remaining thereafter shall be
-----
distributed to the Owner Trustee to be held or distributed to the Owner
Participant in accordance with the terms of the Trust Agreement.
Section 3.03. Application of Rent When No Indenture Event of Default
------------------------------------------------------
Is Continuing. Except as otherwise provided in Section 3.02, 3.04, 3.05 or
- -------------
3.06, each amount
26
of Excess Amount or Rent received by the Indenture Trustee from the Owner
Trustee or the Company, together with any amount received by the Indenture
Trustee pursuant to Section 8.03(e) shall be distributed by the Indenture
Trustee in the following order of priority:
first, so much of such aggregate amount as shall be required to pay in
-----
full the interest, principal of, premium (to the extent received by the
Indenture Trustee from the Company as Supplemental Rent), if any, then due
on, all Outstanding Certificates shall be distributed to the Persons
entitled thereto; and in case such payments or amounts shall be insufficient
to pay in full the whole amount so due and unpaid, then to the payment of
such interest, principal and premium, if any, without any preference or
priority of one Certificate over another, ratably according to the aggregate
amount so due for interest, principal and premium, if any, at the date fixed
by the Indenture Trustee for the distribution of such payments or amounts;
second, so much of such aggregate amount remaining as shall be
------
required to pay any amount due the Indenture Trustee pursuant to Section
9.06 shall be applied to pay the Indenture Trustee such amounts; and
third, the balance, if any, of such aggregate amount remaining
-----
thereafter shall be distributed to the Owner Trustee to be held or
distributed in accordance with the terms of the Lease, the Participation
Agreement and the Trust Agreement.
Section 3.04. Application of Certain Payments in Case of Requisition
------------------------------------------------------
or Event of Loss. Except as otherwise provided in Section 3.05, any amounts
- ----------------
received directly or otherwise pursuant to the Lease from any governmental
authority or other party pursuant to Section 10 of the Lease with respect to the
Airframe or the Airframe and the Engines or engines then installed on the
Airframe as the result of an Event of Loss, to the extent that such amounts are
not at the time required to be paid to the Company pursuant to said Section 10,
and any amounts of insurance proceeds for damage to the Indenture Estate
received directly or otherwise pursuant to the Lease from any insurer pursuant
to Section 11 of the Lease with respect thereto as the result of an Event of
Loss, to the extent such amounts are not at the time required to be paid to the
Company pursuant to said Section 11, shall, except as otherwise provided in the
next sentence, be applied by the Indenture Trustee on behalf of the Owner
Trustee in reduction of the Company's obligations to pay Stipulated Loss Value
and the other amounts payable by the Company pursuant to Section 10 of the Lease
and the remainder, if any, shall, except as provided in the next sentence, be
distributed to the Owner Trustee to be held or distributed in accordance with
the terms of the Lease. Any portion of any such amount referred to in the
preceding sentence which is not required to be so paid to the Company pursuant
to the Lease, solely because a Lease Event of Default shall have occurred and be
continuing, shall be held by the Indenture Trustee on behalf of the Owner
Trustee as security for the obligations of the Company under the Lease and at
27
such time as there shall not be continuing any Lease Event of Default or such
earlier time as shall be provided for in the Lease, such portion shall be paid
to the Owner Trustee to be held or distributed in accordance with the terms of
the Lease, unless the Indenture Trustee (as assignee from the Owner Trustee of
the Lease) shall have theretofore declared the Lease to be in default pursuant
to Section 15 thereof, in which event such portion shall be distributed
forthwith upon such declaration in accordance with the provisions of Section
3.05 hereof.
Section 3.05. Payments During Continuance of Indenture Event of
-------------------------------------------------
Default. All payments (except Excluded Payments) received and amounts held or
- -------
realized by the Indenture Trustee after an Indenture Event of Default shall have
occurred and be continuing (including any amounts realized by the Indenture
Trustee from the exercise of any remedies pursuant to Article 8), as well as all
payments or amounts then held or thereafter received by the Indenture Trustee as
part of the Indenture Estate while such Indenture Event of Default shall be
continuing, shall be distributed by the Indenture Trustee in the following order
of priority:
first, so much of such payments or amounts as shall be required to
-----
pay the Indenture Trustee all amounts then due it pursuant to Section 9.06
shall be applied to pay the Indenture Trustee such amounts;
second, so much of such payments or amounts remaining as shall be
------
required to pay the expenses incurred (including unbilled expenses in
respect of property delivered or contracted for or services rendered or
contracted for if the amount of such expenses is liquidated) in using,
operating, storing, leasing, controlling or managing the Indenture Estate,
and of all maintenance, insurance, repairs, replacements, alterations,
additions and improvements of and to the Indenture Estate and to make all
payments which the Indenture Trustee may be required or may elect to make,
if any, for taxes, assessments, insurance or other proper charges upon the
Indenture Estate or any part thereof (including the employment of engineers
and accountants to examine and make reports upon the properties, books and
records of the Owner Trustee and, to the extent permitted under the Lease,
the Company), all in accordance with Section 8.03(c), shall be applied for
such purposes;
third, so much of such payments or amounts remaining as shall be
-----
required to pay the principal of, premium, if any, to the extent payable by
the Owner Trustee pursuant to Section 6.0l(b)(ii) or to the extent received
by the Indenture Trustee from the Company as Supplemental Rent, and accrued
interest, on all Certificates Outstanding, whether by declaration of
acceleration pursuant to Section 8.02 or otherwise, shall be applied to the
payment of such interest, principal and premium, if any, and in case such
payments or amounts shall be insufficient to pay in full the whole amount so
due and unpaid, then to the payment of such interest principal and premium,
if any, without any preference or priority of one Certificate over another,
28
ratably according to the aggregate amount so due for interest, principal and
premium, if any, at the date fixed by the Indenture Trustee for the
distribution of such payments or amounts; and
fourth, the balance, if any, of such payments or amounts remaining
------
thereafter shall be held by the Indenture Trustee as collateral security for
the obligations secured hereby until such time as no Indenture Event of
Default shall be continuing hereunder or the Certificates have been
accelerated and all amounts due thereon have been paid, at which time such
payments or amounts shall be distributed to the Owner Trustee to be held or
distributed in accordance with the terms of the Lease, the Participation
Agreement and the Trust Agreement; provided that at such time as one or more
--------
Lease Events of Default shall have occurred and any such Lease Event of
Default shall have continued for a period of 180 days during which time the
Certificates could, but shall not, have been accelerated pursuant to Section
8.02, such amounts shall be distributed to the Owner Trustee to be held or
distributed in accordance with the terms of the Lease, the Participation
Agreement and the Trust Agreement so long as no Indenture Event of Default
exists other than by virtue of such Lease Event of Default.
Section 3.06. Payments for Which Application Is Provided in Other
---------------------------------------------------
Documents. Except as otherwise provided in this Agreement, any payment received
- ---------
by the Indenture Trustee for which provision as to the application thereof is
made in the Lease or any other Operative Document shall be distributed to the
Person for whose benefit such payments were made. The Indenture Trustee shall
be obligated to distribute any Excluded Payments received by the Indenture
Trustee promptly upon receipt thereof by the Indenture Trustee to the Person
entitled thereto.
Section 3.07. Payments for Which No Application Is Otherwise
----------------------------------------------
Provided. Except as otherwise provided in Section 3.05:
- --------
(a) any payment received by the Indenture Trustee for which no
provision as to the application thereof is made elsewhere in this Agreement,
and
(b) any payment received and amounts realized by the Indenture Trustee
with respect to the Aircraft to the extent received or realized at any time
after the conditions set forth in Article 10 for the satisfaction and
discharge of this Agreement or for the defeasance of the Certificates shall
have been satisfied, as well as any other amounts remaining as part of the
Indenture Estate after such satisfaction shall be distributed by the
Indenture Trustee in the following order of priority:
first, so much of such aggregate amount as shall be required to pay
-----
the Indenture Trustee all amounts then due it pursuant to Section 9.06 shall
be applied to pay the Indenture Trustee such amounts; and
29
second, the balance if any, of such aggregate amount remaining
------
thereafter shall be distributed to the Owner Trustee to be held or
distributed in accordance with the terms of the Trust Agreement.
ARTICLE 4
COVENANTS OF OWNER TRUSTEE
Section 4.01. Covenants of the Owner Trustee. The Owner Trustee
------------------------------
hereby covenants and agrees that:
(i) the Owner Trustee will duly and punctually pay the principal of,
premium, if any, and interest on and other amounts due under the
Certificates, provided it or the Indenture Trustee has funds in the Trust
Estate for this purpose;
(ii) the Owner Trustee will, in its individual capacity, not directly
or indirectly create, incur, assume or suffer to exist any Lessor Lien
attributable to it in its individual capacity with respect to any of the
properties or assets of the Indenture Estate;
(iii) in the event an officer in the Corporate Trust Department 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 of such Indenture Event of Default or Indenture Default or
Event of Loss to the Indenture Trustee, the Owner Participant and the
Company;
(iv) except as contemplated by the Operative Documents, the Owner
Trustee will not contract for, create, incur, assume or permit to exist any
Debt, and will not guarantee (directly or indirectly or by an instrument
having the effect of assuring 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
(v) the Owner Trustee will not enter into any business or other
activity other than owning the Aircraft, the leasing thereof to the Company
and the carrying out of the transactions contemplated hereby and by the
Participation Agreement, the Trust Agreement and the other Operative
Documents.
30
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 Agreement and be leased to
the Company under the Lease; provided that, to the extent permitted by and
--------
as provided in the Lease, the Company shall have the right, at any time and
from time to time, without any release from or consent by the Owner Trustee
or the Indenture Trustee, to remove, replace and pool Parts and to make
alterations, improvements and modifications in, and additions to, the
Aircraft. The Indenture Trustee agrees that, to the extent permitted by and
as provided in the Lease, title to any such Part shall vest in the Company.
The Indenture Trustee shall from time to time execute an appropriate written
instrument or instruments to confirm the release of the security interest of
the Indenture Trustee in any Part as provided in this Section 5.01, in each
case upon receipt by the Indenture Trustee of a Company Request stating that
said action was duly taken by the Company in conformity with this Section
5.01 and that the execution of such written instrument or instruments is
appropriate to evidence such release of a security interest under this
Section 5.01.
(b) Substitution Under the Lease upon an Event of Loss Occurring to
---------------------------------------------------------------
Airframe or Engines or upon Voluntary Termination of Lease with Respect to
--------------------------------------------------------------------------
Engines. Upon (i) the occurrence of an Event of Loss occurring to the
-------
Airframe or an Engine, or (ii) a voluntary termination of the Lease with
respect to an Engine, the Company, in accordance with the Lease, may, in the
case of an Event of Loss which has occurred to the Airframe, or shall,
except as provided in Section 10(b) of the Lease, in the case of an Event of
Loss which has occurred to or termination of the Lease with respect to an
Engine, substitute an airframe or engine, as the case may be, in which case,
upon satisfaction of all conditions to such substitution specified in
Section 10 of the Lease, the Indenture Trustee shall release all of its
right, interest and lien in and to the Airframe or such Engine in accordance
with the provisions of the following two sentences. The Indenture Trustee
shall execute and deliver to the Owner Trustee an instrument releasing its
lien in and to the Airframe or such Engine and shall execute for recording
in public offices, at the expense of the Owner Trustee (if requested by the
Owner Trustee) or the Company (if requested by the Company), such
instruments in writing as the Owner Trustee or the Company shall reasonably
31
request and as shall be reasonably acceptable to the Indenture Trustee in
order to make clear upon public records that such lien has been released
under the laws of the applicable jurisdiction.
Each of the Owner Trustee and the Company hereby waives and releases any and all
rights existing or that may be acquired to any penalties, forfeit or damages
from or against the Indenture 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 Indenture
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 Company.
ARTICLE 6
REDEMPTION OF CERTIFICATES
Section 6.01. Redemption of Certificates upon Certain Events. (a)
----------------------------------------------
(i) If there shall be an Event of Loss to the Aircraft and the Aircraft is not
replaced pursuant to Section 10(a)(ii) of the Lease, each Outstanding
Certificate shall be redeemed in whole at a Redemption Price equal to 100% of
the outstanding principal amount of such Certificate plus accrued and unpaid
interest thereon to but excluding the applicable Redemption Date.
(ii) If there shall be an Event of Loss to any Engine under
circumstances in which there has not occurred an Event of Loss with respect to
the Airframe and, as a result of such an Event of Loss, Lessor elects to receive
payment for such Engine from Lessee pursuant to Section 10(b) of the Lease and
Lessee shall not have elected to replace such Engine notwithstanding such
election by Lessor, a portion of the principal of each Outstanding Certificate
equal to the product obtained by multiplying the unpaid principal amount of such
Certificate on the Redemption Date applicable to such partial redemption
(assuming, only for the purposes of this calculation, that, if such Redemption
Date is coincident with a Maturity Date or an Installment Payment Date, the
scheduled principal payment due on such Redemption Date is paid prior to the
time the Redemption Price is calculated pursuant to this Section 6.0l(a)(ii) and
applied to principal in accordance with Section 3.03 hereof) by
_________________. The Redemption Price for each such Certificate shall be the
sum of such portion of principal being redeemed plus the amount of interest
accrued and unpaid to such Redemption Date on the principal amount of such
Certificate to be redeemed on such Redemption Date (assuming, only for the
purposes of this calculation, that, if, such Redemption Date is coincident with
an Interest Payment Date, the interest due on such Interest Payment Date is paid
prior to the time such Redemption Price is calculated pursuant to this Section
6.0l(a)(ii) and applied to interest in accordance with Section 3.03 hereof);
provided that each Certificate shall receive, as to the principal thereof,
- --------
32
the same portion of such Redemption Price as the principal value of such
Certificate at such Redemption Date represents of the total principal value of
all Certificates Outstanding at such Redemption Date. Upon the occurrence of
any partial redemption or redemptions pursuant to the preceding sentence the
principal amount of each Outstanding Certificate shall be adjusted to take
account of any such partial redemption or redemptions, and the Installment
Payment Percentages applicable to any Installment Certificates issued hereunder
shall be adjusted as provided for in the definition thereof. The Redemption Date
for Certificates to be redeemed pursuant to this Section 6.01(a) shall be the
Lease Loss Payment Date.
(b) If (i) the Lease shall be terminated by the Company at its option
pursuant to Section 9(b) of the Lease or upon the purchase of the Aircraft by
the Company at its option on a Special Purchase Option Date or the EBO Date
pursuant to Section 19(b) of the Lease (unless the Company shall have elected to
assume the rights and obligations of the Owner Trustee hereunder to the extent
and as provided for in Section 8(r) of the Participation Agreement) or (ii) the
Owner Trustee or the Owner Participant shall have given notice of redemption or
purchase to the Indenture Trustee pursuant to Section 8.03(e)(ii) at any time
after one or more Lease Events of Default shall have occurred and be continuing
for a period of 180 days or more but less than one year (or a period of less
than 180 days if any such Lease Event of Default shall be a Lease Event of
Default under Section 14(a) of the Lease) and the Certificates shall not have
been accelerated, each Outstanding Certificate shall be redeemed or purchased in
whole on the Redemption Date and at the Redemption Price determined below.
Prior to the Premium Termination Date applicable to such Certificate, the
Redemption Price applicable to a redemption or purchase pursuant to this Section
6.01(b) shall be equal to an amount which an Independent Investment Banker (or,
in the case of the deposit of estimated premium pursuant to Section 8.03(e)(ii),
the Owner Trustee) determines to be equal to the greater of (x) the unpaid
principal amount of such Certificate as at such Redemption Date together
(assuming, only for the purposes of this calculation, that, if such Redemption
Date is coincident with an Interest Payment Date, the interest due on such
Interest Payment Date is paid prior to the time such Redemption Price is
calculated pursuant to this Section 6.01(b) and applied to interest in
accordance with Section 3.03 hereof) with an amount equal to the interest
accrued thereon from the immediately preceding Interest Payment Date to such
Redemption Date and (y) the present value (computed in accordance with generally
accepted financial practices on a semiannual basis at a discount rate equal to
the Treasury Yield applicable to such Certificate as of such Redemption Date) as
at such Redemption Date of (A) the regularly scheduled future payments of
interest on such Certificate as required by the terms thereof and of this
Agreement and (B) the regularly scheduled future payments of principal payable
on such Certificate (the excess, if any, of the amount referred to in clause (y)
of this sentence over the amount referred to in clause (x) constituting a
"premium" or a "Premium"), plus, in either case, interest on the principal of
such Certificate accrued as at the immediately preceding Interest Payment Date
and unpaid as of such Redemption Date. On or after the Premium Termination Date
applicable to such Certificate, the Redemption Price applicable to a redemption
or purchase pursuant to this
33
Section 6.01(b) shall equal the unpaid principal amount of such Certificate as
at such Redemption Date together with an amount equal to the interest accrued
thereon from the immediately preceding Interest Payment Date to such Redemption
Date plus interest on the principal of such Certificate accrued as at the
immediately preceding Interest Payment Date and unpaid as of such Redemption
Date and, in the case of either of the two immediately preceding sentences (but
without duplication), if such Redemption Date is coincident with an Interest
Payment Date, the regularly scheduled interest payment due on such Interest
Payment Date. The Redemption Date for Certificates to be redeemed or purchased
(x) pursuant to clause (i) of this Section 6.01(b) shall be (A) in the case of a
termination of the Lease pursuant to Section 9(b) thereof, the third Business
Day following the Lease Termination Date, if any, or, in the case of purchase of
the Aircraft by the Company pursuant to Section 19(b) of the Lease, the
applicable Special Purchase Option Date or EBO Date and (y) pursuant to clause
(ii) of this Section 6.01(b), shall be the same date as if the redemption had
occurred pursuant to Section 6.02. If the Owner Trustee elects to purchase the
Certificates under Section 8.03(e)(ii), nothing herein, including use of the
terms "Redemption Date" and "Redemption Price" shall be deemed to result in a
redemption of the Certificates.
(c) Certificates may be redeemed if the Company shall have requested
the Owner Trustee and the Owner Participant to effect a redemption thereof
pursuant to Section 17 of the Participation Agreement as part of a refunding or
refinancing, and if all the conditions to such refunding or refinancing set
forth in such Section 17 of the Participation Agreement shall have been
satisfied. In such event, each Outstanding Certificate may be so redeemed at a
Redemption Price determined in accordance with the procedures described above in
Section 6.01(b); provided, however, that the applicable Redemption Date for
-------- -------
Certificates to be redeemed pursuant to this Section 6.01(c) shall be the
applicable Refinancing Date under Section 17 of the Participation Agreement.
Section 6.02. Redemption or Purchase of Certificates upon Certain
---------------------------------------------------
Indenture Events of Default. If the Owner Trustee or the Owner Participant
- ---------------------------
shall have given notice of redemption or purchase to the Indenture Trustee
pursuant to Section 8.03(e)(ii) at any time after the Certificates shall have
been accelerated pursuant to Section 8.02 or after one or more Lease Events of
Default shall have occurred and be continuing for a period of one year or more
(or a period of 180 days or more if any such Lease Event of Default shall be a
Lease Event of Default under Section 14(a) of the Lease) and the Certificates
shall not have been accelerated, each Outstanding Certificate shall be redeemed
or purchased in whole at a Redemption Price equal to 100% of its principal
amount plus accrued and unpaid interest thereon to but excluding the applicable
Redemption Date as determined below. The Redemption Date for Certificates to be
redeemed or purchased pursuant to this Section 6.02 shall be the date specified
in the notice given by the Owner Trustee to the Indenture Trustee pursuant to
Section 8.03(e)(ii). If the Owner Trustee elects to purchase the Certificates
34
under Section 8.03(e)(ii), nothing herein, including use of the terms
"Redemption Date" and "Redemption Price" shall be deemed to result in a
redemption of the Certificates.
Section 6.03. Notice of Redemption to Holders. Notice of redemption
-------------------------------
or purchase shall be given by first-class mail, postage prepaid, mailed not less
than 25 nor more than 60 days prior to the Redemption Date, to each Holder of
Certificates to be redeemed or purchased, at such Holder's address appearing in
the Register; provided that, in the case of a redemption pursuant to Section
--------
6.01(b)(1) related to Lessee's exercise of its option pursuant to Section 9(b)
of the Lease, such notice shall be revocable and shall be deemed revoked in the
event the Lease does not in fact terminate on the related Lease Termination
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 Certificate, and that interest on Certificates
shall cease to accrue on and after such Redemption Date, and
(4) the place or places where such Certificates are to be surrendered
for payment of the Redemption Price.
Notice of redemption or purchase of Certificates to be redeemed or purchased
shall be given by the Indenture Trustee.
Section 6.04. Deposit of Redemption Price. 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
Certificates to be redeemed or purchased on the Redemption Date shall not then
be held in the Indenture Estate, deposit or cause to be deposited with the
Indenture Trustee or the Paying Agent by 12:00 noon in immediately available
funds the Redemption Price of the Certificates to be redeemed or purchased on
the Redemption Date.
Section 6.05. Certificates Payable on Redemption Date. Notice of
---------------------------------------
redemption or purchase having been given as aforesaid (and not deemed revoked as
contemplated in the proviso to Section 6.03), the Certificates shall, on the
applicable Redemption Date, become due and payable at the principal corporate
trust office of the Indenture Trustee or at any office or agency maintained for
such purposes pursuant to Section 2.03, and from and after such Redemption Date
(unless there shall be a default in the payment of the Redemption Price) any
Certificates then Outstanding shall cease to bear interest. Upon surrender of
any
35
such Certificate for redemption or purchase in accordance with said notice such
Certificate shall be paid at the Redemption Price.
If any Certificate called for redemption or purchase shall not be so
paid upon surrender thereof for redemption or purchase, the principal amount
thereof shall, until paid, continue to bear interest from the applicable
Redemption Date at the interest rate applicable to such Certificate.
ARTICLE 7
MATTERS CONCERNING THE COMPANY
Section 7.01. Repayment of Monies for Certificate Payments Held by
----------------------------------------------------
the Indenture Trustee. Any money held by the Indenture Trustee or any Paying
- ---------------------
Agent in trust for any payment of the principal of, premium, if any, or interest
on any Certificate, including without limitation any money deposited pursuant to
Article 10 and remaining unclaimed for two years and eleven months after the due
date for such payment, shall be paid to the Owner Trustee; and the Holders of
any Outstanding Certificates shall thereafter, as unsecured general creditors,
look only to the Company on behalf of the Owner Trustee for payment thereof, and
all liability of the Indenture Trustee or any such Paying Agent with respect to
such trust money shall thereupon cease; provided that the Indenture Trustee or
--------
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be mailed to each such Holder 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 7.02. Change in Registration. The Indenture Trustee shall,
----------------------
upon the request of the Company, consent to the deregistration of the Aircraft
under the laws of the jurisdiction in which it is at the time registered and the
registration of the Aircraft under the laws of another jurisdiction (herein
called a "change in registration") provided that the following conditions are
met:
(a) such change in registration complies with the provisions of the
Participatioin Agreement or the Lease;
(b) no Lease Event of Default and no event which, with lapse of time
or notice, or both, would become a Lease Event of Default shall have
occurred and be continuing at the date of such request or at the effective
date of the change in registration, provided that it shall not be necessary
to comply with this condition (b) if the change in registration results in
the registration of the Aircraft under the laws of
36
the United States or if the Indenture Trustee in its discretion believes the
change in registration would be advantageous to the Holders; and
(c) the Indenture Trustee shall have received an opinion of counsel
reasonably satisfactory to the Indenture Trustee to the effect that:
(i) after giving effect to the change in registration, the Lien on
the Aircraft and the other property included in the Indenture Estate
shall continue as a fully perfected lien and that all filing,
recording or other action necessary to perfect and protect the lien of
this Indenture has been accomplished (or if such opinion cannot be
given at the time by which the Indenture Trustee has been requested to
consent to a change in registration, (x) the opinion shall detail what
filing, recording or other action is necessary and (y) the Indenture
Trustee shall have received a certificate from the Company that all
possible preparations to accomplish such filing, recording and other
action shall have been done, and such filing, recording and other
action shall be accomplished and a supplemental opinion to that effect
shall be delivered to the Indenture Trustee on or prior to the
effective date of the change in registration); and
(ii) the terms of the Lease and this Agreement (including the
governing law clauses) being legal, valid and binding and enforceable
in such jurisdiction, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally, and by general principles
of equity and except as limited by applicable laws which may affect
the remedies provided in the Lease and this Agreement, respectively,
which laws, however, do not in the opinion of such counsel make the
remedies provided in the Lease and this Agreement, respectively,
inadequate for the practical realization of the rights and benefits
provided thereby.
The Indenture Trustee shall execute such documents as the Company or the Owner
Trustee shall reasonably request in order to satisfy the above conditions and
upon satisfaction of such conditions to effect the change in registration.
Section 7.03. Assumption of Obligations of Owner Trustee by the
-------------------------------------------------
Company. In the event that the Company shall have elected to assume all of the
- -------
rights and obligations of the Owner Trustee under this Agreement in respect of
the Certificates in connection with the purchase by the Company of the Aircraft
pursuant to Section 8(r) of the Participation Agreement and, if on or prior to
the Purchase Option Date:
(a) the Company shall have delivered to the Indenture Trustee a
certificate, dated the Purchase Option Date, of a Responsible Company
Officer stating that the
37
Company has paid to the Owner Trustee all amounts required to be paid to the
Owner Trustee pursuant to Section 19(b) of the Lease in connection with such
purchase and assumption;
(b) no event which constitutes or, with the lapse of time or notice,
or both, would become, an Event of Default under this Agreement after giving
effect to the indenture supplement referred to below shall have occurred and
be continuing immediately subsequent to such purchase or assumption and the
Indenture Trustee shall have received a certificate, dated the Purchase
Option Date, of a Responsible Company Officer to such effect;
(c) the Indenture Trustee shall have received, on or prior to the
Purchase Option Date, evidence of all filings, recordings and other action
referred to in the Opinion or Opinions of Counsel referred to below;
(d) the Indenture Trustee shall have received an Opinion or opinions
of Counsel for the Company, dated the Purchase Option Date, which without
unusual qualification shall be to the effect that, after giving effect to
the indenture supplement referred to below:
(i) this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by
general principles of equity, and except as limited by applicable laws
which may affect the remedies provided for in this Agreement, which
laws, however, do not in the opinion of such counsel make the remedies
provided for in this Agreement inadequate for the practical
realization of the rights and benefits provided for in this Agreement;
(ii) the Aircraft is duly registered in compliance with applicable
law;
(iii) the Lien on the Aircraft constitutes a fully perfected Lien
and all filing, recording or other action (specifying the same)
necessary to perfect and protect the Lien of this Agreement has been
accomplished;
(iv) the Indenture Trustee would be entitled to the benefits of
Section 1110 of the Bankruptcy Code with respect to the Aircraft;
provided that such opinion may contain qualifications of the tenor
--------
contained in the opinion of special counsel for the Company delivered
pursuant to Section 4(a)(xi)(b) of the Participation Agreement on the
Delivery Date; and
38
(v) no Holder will be required to recognize gain or loss for tax
purposes in connection with such assumption; and
(e) an indenture supplement reasonably satisfactory to the Indenture
Trustee, dated the Purchase Option Date, shall have been executed by the
Indenture Trustee and any other parties necessary thereto and shall have
been delivered to the Indenture Trustee;
then, automatically and without the requirement of further action by any Person,
effective as of the Purchase Option Date, the Owner Trustee shall be released
from all of its obligations under the Agreement in respect of the Certificates
or otherwise (other than any obligations or liabilities of the Owner Trustee in
its individual capacity incurred on or prior to the Purchase Option Date or
arising out of or based upon events occurring on or prior to the Purchase Option
Date, which obligations and liabilities shall remain the sole responsibility of
the Owner Trustee).
If, concurrent with an assumption pursuant to this Section 7.03, the
Aircraft is being reregistered the Company must comply with the provisions of
Section 7.02 hereof.
ARTICLE 8
DEFAULTS AND REMEDIES
Section 8.01. Indenture Events of Default. The following events
---------------------------
shall constitute "Indenture Events of Default" under this Agreement (whether any
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 upon any Certificate or of principal of any
Certificate or of premium, if any, in respect of any Certificate shall not
be paid when due and payable (whether upon redemption or purchase, final
maturity, acceleration or otherwise) and such default in payment shall
continue for more than 10 days after such amount shall have become due and
payable; or
(b) any failure by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, to observe or perform in any material
respect any covenant or obligation required pursuant to Article 4 or clauses
1-5 under the Habendum Clause hereof or Section 8(b), 8(c), 8(g), 8(n) or 10
of the Participation Agreement or the failure by the Owner Participant to
observe or perform in any
39
material respect any covenant or obligation of it required pursuant to
Section 8(b), 8(g) or 10 of the Participation Agreement, or, to the extent
that the interest of the Indenture Trustee or any Holder of an Outstanding
Certificate is adversely affected by such failure, in Section 4.01(a) of the
Trust Agreement or the termination or revocation by the Owner Participant of
the trust created by the Trust Agreement without the Indenture Trustee's
prior written consent if, but only if, such failure or termination or
revocation is not remedied within a period of 30 days after there has been
given to the Owner Trustee and the Owner Participant by registered or
certified mail, a written notice specifying such failure and requiring it to
be remedied and stating that such notice is a "Notice of Default" hereunder,
by the Indenture Trustee or by the Holders of at least 25% in principal
amount of Outstanding Certificates; provided that no Indenture Event of
--------
Default shall arise under this Section 8.01(b) solely as a result of a
failure by the Owner Participant or the Owner Trustee to observe or perform
any covenant contained in Section 8(g) of the Participation Agreement if all
action necessary to discharge all Lessor Liens referred to in such Section
shall have been taken and the Indenture Trustee and the Indenture Estate
shall have been compensated for all claims, losses and expenses arising from
the failure of the Owner Trustee or the Owner Participant, as the case may
be, to observe and perform any such covenant; or
(c) any failure by the Owner Trustee, in its individual capacity or as
Owner Trustee, to observe or perform any other covenant or obligation of the
Owner Trustee contained in this Agreement or in the Participation Agreement
or any failure by the Owner Participant to observe or perform any other
covenant or obligation of the Owner Participant contained in the
Participation Agreement which failure, in any case and either individually
or together with other then existing failures, shall have a material adverse
effect on the rights and interests of the Holders and is not remedied within
a period of 30 days after there has been given to the Owner Trustee and the
Owner Participant by registered or certified mail, a written notice
specifying such failure and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder, by the Indenture Trustee or
by the Holders of at least 25% in principal amount of Outstanding
Certificates; provided, however, that, if the Owner Trustee, in its
-------- -------
individual capacity or as Owner Trustee, or the Owner Participant shall have
undertaken to cure any such failure and, notwithstanding the reasonable
diligence of any of them in attempting to cure such failure, such failure is
not cured within said 30 day period but is curable with future due
diligence, there shall exist no Indenture Event of Default as a consequence
of such failure so long as the Owner Trustee in its individual capacity or
as Owner Trustee or the Owner Participant is proceeding with due diligence
to cure such failure, there exists no adverse effect on the Lien of this
Agreement and such failure is in fact cured within a further period of 30
days; or
40
(d) any material representation or warranty made by the Owner Trustee,
in its individual capacity or as Owner Trustee, or by the Owner Participant
under the Participation Agreement, or by the Owner Trustee hereunder, or by
the Owner Trustee, in its individual capacity or as Owner Trustee, or by the
Owner Participant in any document or certificate furnished to the Indenture
Trustee in connection herewith or therewith or pursuant hereto or hereto,
shall prove at any time to have been incorrect in any material respect as of
the date made and such incorrectness shall remain material at the date of
the notice referred to below and such incorrectness shall continue
unremedied for a period of 30 days after there has been given to the Owner
Trustee and the Owner Participant by registered or certified mail, a written
notice specifying such incorrectness and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder, by the
Indenture Trustee or by the Holders of at least 25% in principal amount of
Outstanding Certificates; or
(e) there shall be a Lease Event of Default other than any such Lease
Event of Default arising by reason of nonpayment of any Excluded Payments
when due; provided that any Lease Event of Default shall be deemed to exist
--------
and continue so long as, but only so long as, it shall not be remedied; or
(f) either the Indenture Estate or the Owner Trustee with respect
thereto (and not in its individual capacity) or the Owner Participant, 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
appointment of a custodian, receiver, trustee or other officer with similar
powers of itself or any substantial part of its property; provided that an
-------- ----
event referred to in this Section 8.01(f) with respect to the Owner
Participant shall not constitute an Indenture Event of Default if (A) an
order, judgment or decree shall be entered in a proceeding by a court or a
trustee, custodian, receiver or liquidator which is either final and non-
appealable or has not been stayed pending any appeal, or (B) an opinion of
counsel satisfactory to the Indenture Trustee shall be provided by the Owner
Participant, in each case to the effect that no part of the Trust Estate
created by the Trust Agreement (except for the Owner Participant's
beneficial interest in such Trust Estate) and no right, title or interest
under the Indenture Estate shall be included in, or be subject to, any
declaration or adjudication of, or proceedings with respect to the
bankruptcy, insolvency or liquidation of the Owner Participant referred to
in this Section 8.01(f); or
(g) a court or governmental authority of competent jurisdiction shall
enter an order appointing, without consent by the Indenture Estate or the
Owner Trustee with respect thereto (and not in its individual capacity) or
the Owner Participant, as
41
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
Indenture Estate or the Owner Trustee with respect thereto (and not in its
individual capacity) or the Owner Participant, 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; provided that an event referred to in this Section 8.01(g) with
--------
respect to the Owner Participant shall not constitute an Indenture Event of
Default if (A) an order, judgment or decree shall be entered in a proceeding
by a court or a trustee, custodian, receiver or liquidator which is either
final and non-appealable or has not been stayed pending an appeal, or (B) an
opinion of counsel satisfactory to the Indenture Trustee shall be provided
by Owner Participant, in each case to the effect that no part of the Trust
Estate created by the Trust Agreement (except for the Owner Participant's
beneficial interest in such Trust Estate) and no right, title or interest
under the Indenture Estate shall be included in, or be subject to, any
declaration or adjudication of, or proceedings with respect to, the
bankruptcy, insolvency or liquidation of the Owner Participant referred to
in this Section 8.01(g).
Section 8.02. Acceleration; Rescission and Annulment. If an
--------------------------------------
Indenture Event of Default occurs and is continuing, either the Indenture
Trustee, by notice to the Company and the Owner Trustee, or the Holders of at
least 25% in aggregate principal amount of Outstanding Certificates, by notice
to the Company, the Indenture Trustee, the Owner Trustee and the Owner
Participant, may declare the principal of all the Certificates to be due and
payable. Upon such declaration, the principal of all Certificates 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 such
declaration and prior to the sale or disposition of the Indenture Estate, the
Holders of a majority in aggregate principal amount of all of the Outstanding
Certificates, by notice to the Indenture Trustee, the Company, the Owner Trustee
and the Owner Participant, may rescind such a declaration and thereby annul its
consequences if (i) an amount sufficient to pay all principal on any
Certificates which have become due otherwise than by such declaration and any
interest thereon and interest due or past due, if any, and all sums due and
payable to the Indenture Trustee have been deposited with the Indenture 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 Agreement
have been cured or waived except nonpayment of principal of, or interest on, the
Certificates that has become due solely because of such acceleration.
42
Section 8.03. Other Remedies Available to Indenture Trustee. (a)
---------------------------------------------
After an Indenture Event of Default shall have occurred and so long as such
Indenture Event of Default shall be continuing, then and in every such case the
Indenture Trustee, as trustee of an express trust and as assignee hereunder of
the Lease or as holder of a security interest in the Aircraft or Engines or
otherwise, may, and when required pursuant to the provisions of Article 9 shall,
exercise, subject to Sections 8.03(b), 8.03(e), 8.03(f) and 8.03(h), any or all
of the rights and powers and pursue any and all of the remedies accorded to the
Owner Trustee pursuant to Section 15 of the Lease and this Article 8, may
recover judgment in its own name as Indenture Trustee against the Indenture
Estate and may take possession of all or any part of the Indenture Estate and
may exclude the Owner Trustee and the Owner Participant and all persons claiming
under any of them wholly or partly therefrom.
(b) After an Indenture Event of Default shall have occurred and so
long as such Indenture Event of Default shall be continuing, subject to Sections
8.03(e), 8.03(f) and 8.03(h), the Indenture Trustee may, if at the time such
action may be lawful and always subject to compliance with any mandatory legal
requirements, either with or without taking possession, and either before or
after taking possession and without instituting any legal proceedings
whatsoever, and having first given notice of such sale by registered mail to the
Owner Trustee, the Owner Participant and the Company once at least 30 days prior
to the date of such sale, and any other notice which may be required by law,
sell and dispose of the Indenture Estate, or any part thereof, or interest
therein, at public auction to the highest bidder, in one lot as an entirety or
in separate lots, and either for cash or on credit and on such terms as the
Indenture Trustee may determine, and at any place (whether or not it be the
location of the Indenture Estate or any part thereof) and time designated in the
notice above referred to; provided, however, that, notwithstanding any provision
-------- -------
herein to the contrary, the Indenture Trustee may not provide the notice
provided for above of its intention to sell any of the Indenture Estate,
exercise remedies under the Lease or exercise other remedies against the
Indenture Estate seeking to deprive the Owner Trustee or the Owner Participant
of its rights therein unless a declaration of acceleration has been made
pursuant to Section 8.02 or the Certificates have otherwise theretofore become
due and payable through redemption or otherwise. Any such sale or sales may be
adjourned from time to time by announcement at the time and place appointed for
such sale or sales, or for any such adjourned sale or sales, without further
notice, and the Indenture Trustee and the Holder or Holders of any Certificates,
or any interest therein, may bid and become the purchaser at any such sale. No
such sale may be consummated if the Owner Trustee shall, prior to the
consummation thereof, have given notice pursuant to and made the deposit
required by Section 8.03(e)(ii). The Indenture Trustee may exercise such right
without possession or production of the Certificates or proof of ownership
thereof, and as representative of the Holders may exercise such right without
notice to the Holders or including the Holders as parties to any suit or
proceeding relating to foreclosure of any property in the Indenture Estate. The
Owner Trustee hereby irrevocably constitutes the Indenture Trustee the true and
lawful attorney-in-fact of the Owner Trustee (in the name of the Owner Trustee
or otherwise)
43
for the purpose of effectuating any sale, assignment, transfer or delivery for
enforcement of the lien created under this Agreement, whether pursuant to
foreclosure or power of sale or otherwise, to execute and deliver all such bills
of sale, assignments and other instruments as the Indenture Trustee may consider
necessary or appropriate, with full power of substitution, the Owner Trustee
hereby ratifying and confirming all that such attorney or any substitute shall
lawfully do by virtue hereof. Nevertheless, if so requested by the Indenture
Trustee or any purchaser, the Owner Trustee shall ratify and confirm any such
sale, assignment, transfer or delivery, by executing and delivering to the
Indenture Trustee or such purchaser all bills of sale, assignments, releases and
other proper instruments to effect such ratification and confirmation as may be
designated in any such request.
(c) Subject to Sections 8.03(e) and 8.03(f), if an Indenture Event of
Default has occurred and is continuing, the Owner Trustee shall, at the request
of the Indenture Trustee, promptly execute and deliver to the Indenture Trustee
such instruments of title or other documents as the Indenture Trustee may deem
necessary or advisable to enable the Indenture Trustee or an agent or
representative designated by the Indenture Trustee, at such time or times and
place or places as the Indenture Trustee may specify, to obtain possession of
all or any part of the Indenture Estate. If the Owner Trustee shall for any
reason fail to execute and deliver such instruments and documents after such
request by the Indenture Trustee, the Indenture Trustee shall be entitled, in a
proceeding to which the Owner Trustee will be a necessary party, to a judgment
for specific performance of the covenants contained in the foregoing sentence,
conferring upon the Indenture Trustee the right to immediate possession and
requiring the Owner Trustee to execute and deliver such instruments and
documents to the Indenture Trustee. The Indenture Trustee shall also be
entitled to pursue all or any part of the Indenture Estate wherever it may be
found and may enter any of the premises of the Owner Trustee or any other Person
wherever the Indenture Estate may be or be supposed to be and search for the
Indenture Estate and take possession of any item of the Indenture Estate
pursuant to this Section 8.03(c). The Indenture 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 Indenture Estate, as it may deem proper. In each
such case, the Indenture Trustee shall have the right to use, operate, store,
lease, control or manage the Indenture Estate, and to exercise all rights and
powers of the Owner Trustee relating to the Indenture Estate as the Indenture
Trustee shall deem appropriate, including the right to enter into any and all
such agreements with respect to the use, operation, storage, leasing, control or
management of the Indenture Estate or any part thereof; and the Indenture
Trustee shall be entitled to collect and receive directly all tolls, rents
(including Rent), issues, profits, products, pursuant to this Section 8.03(c).
The Indenture 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 Indenture
Estate, as it may deem proper. In each such case, the Indenture Trustee shall
have the right to use, operate, store, lease, control or manage the Indenture
Estate, and to exercise all rights and
44
powers of the Owner Trustee relating to the Indenture Estate as the Indenture
Trustee shall deem appropriate, including the right to enter into any and all
such agreements with respect to the use, operation, storage, leasing, control or
management of the Indenture Estate or any part thereof; and the Indenture
Trustee shall be entitled to collect and receive directly all tolls, rents
(including Rent), issues, profits, products, revenues and other income of the
Indenture Estate and every part thereof, without prejudice, however, to the
right of the Indenture Trustee under any provision of this Agreement to collect
and receive all cash held by, or required to be deposited with, the Indenture
Trustee hereunder. In accordance with the terms of this Section 8.03(c), such
tolls, rents (including Rent), issues, profits, products, revenues and other
income shall be applied to pay the expenses of using, operating, storing,
leasing, controlling or managing the Indenture Estate, and of all maintenance,
insurance, repairs, replacements, alterations, additions and improvements, and
to make all payments which the Indenture Trustee may be required or may elect to
make, if any, for taxes, assessments, insurance or other proper charges upon the
Indenture Estate or any part thereof (including the employment of engineers and
accountants to examine, inspect and make reports upon the properties and books
and records of the Owner Trustee and, to the extent permitted by the Lease, the
Company), and all other payments which the Indenture Trustee may be required or
authorized to make under any provision of this Agreement, including this Section
8.03(c), as well as just and reasonable compensation for the services of the
Indenture Trustee, and of all persons properly engaged and employed by the
Indenture Trustee.
If an Indenture Event of Default occurs and is continuing and the
Indenture Trustee shall have obtained possession of or title to the Aircraft,
the Indenture Trustee shall not be obligated to use or operate the Aircraft or
cause the Aircraft to be used or operated directly or indirectly by itself or
through agents or other representatives or to lease, license or otherwise permit
or provide for the use or operation of the Aircraft by any other Person unless
(i) the Indenture Trustee shall have been able to obtain insurance in kinds, at
rates and in amounts satisfactory to it in its discretion to protect the
Indenture Estate and the Indenture Trustee, as trustee and individually, against
any and all liability for loss or damage to the Aircraft and for public
liability and property damage resulting from use or operation of the Aircraft
and (ii) funds are available in the Indenture Estate to pay for all such
insurance or, in lieu of such insurance, the Indenture Trustee is furnished with
indemnification from the Holders or any other Person upon terms and in amounts
satisfactory to the Indenture Trustee in its discretion to protect the Indenture
Estate and the Indenture Trustee, as trustee and individually, against any and
all such liabilities.
(d) Subject to Sections 8.03(b), 8.03(e) and 8.03(f), the Indenture
Trustee may proceed to protect and enforce this Agreement and the Certificates
by suit or suits or proceedings in equity, at law or in bankruptcy, and whether
for the specific performance of any covenant or agreement herein contained or in
execution or aid of any power herein granted; or for foreclosure hereunder, or
for the appointment of a receiver or receivers for the Indenture Estate or any
part thereof, or for the recovery of judgment for the indebtedness
45
secured by the Lien created under this Agreement or for the enforcement of any
other proper, legal or equitable remedy available under applicable law.
(e) (i) If the Company shall fail to make any payment of Basic Rent
under the Lease when the same shall become due, and if such failure of the
Company to make such payment of Basic Rent shall not constitute the fourth
consecutive such failure or the seventh or subsequent cumulative such failure,
then as long as no Indenture Event of Default (other than arising from a Lease
Event of Default not involving any failure to make any payments to which the
Indenture Trustee or any Holder is entitled hereunder when due) shall have
occurred and be continuing, the Owner Participant or the Owner Trustee may (but
need not) pay to the Indenture Trustee, at any time prior to the day which is
the later of (x) the 11th day subsequent to notice of such failure by the
Indenture Trustee to the Owner Trustee or the Owner Participant and (y) the
sixth day subsequent to the expiration of the grace period provided for in
Section 14(a) of the Lease with respect to the payment of Basic Rent (and the
Indenture Trustee shall not (without the prior written consent of the Owner
Trustee) declare the Lease in default pursuant to Section 15 thereof or exercise
any of the rights, powers or remedies pursuant to such Section 15 or this
Section 8 prior to the occurrence of such later date), an amount equal to the
full amount of such payment of Basic Rent, together with any interest due
thereon on account of the delayed payment thereof to the date of such payment,
and such payment by the Owner Participant or the Owner Trustee shall be deemed
to cure as of the date of such payment any Indenture Event of Default which
arose from such failure of the Company (including any Lease Event of Default
arising from the Lessee's failure to pay interest in respect of such overdue
Basic Rent for the period commencing on the date of such payment), but such cure
shall not relieve the Company of any of its obligations. If the Company shall
fail to perform or observe any covenant, condition or agreement to be performed
or observed by it under the Lease, and if (but only if) the performance or
observance thereof can be effected by the payment of money alone (it being
understood that actions such as the obtaining of insurance and the procurement
of maintenance services can be so effected), then as long as no other Indenture
Event of Default (other than those arising from a Lease Event of Default) shall
have occurred and be continuing, the Owner Participant or the Owner Trustee may
(but need not) pay to the Indenture Trustee (or to such other person as may be
entitled to receive the same), at any time prior to the day which is the later
of (x) the 11th day subsequent to notice of such failure by the Indenture
Trustee to the Owner Trustee or the Owner Participant and (y) the sixth day
subsequent to the expiration of the grace period, if any, provided with respect
to such failure on the part of the Company in Section 14 of the Lease (and the
Indenture Trustee shall not (without the prior written consent of the Owner
Trustee) declare the Lease in default pursuant to Section 15 thereof or exercise
any of the rights, powers or remedies pursuant to such Section 15 or this
Section 8 prior to the occurrence of such later date), all sums necessary to
effect the performance or observance of such covenant or agreement of the
Company, together with any interest due thereon on account of the delayed
payment thereof to the date of such payments and such payment by the Owner
Participant or the Owner Trustee shall be deemed to cure as of the
46
date of such payment any Indenture Event of Default which arose from such
failure of the Company (including any Lease Event of Default arising from the
Lessee's failure to pay interest in respect of such overdue payment for the
period commencing on the date of such payment), but such cure shall not relieve
the Company of any of its obligations. Upon any payment of Basic Rent by the
Owner Participant or the Owner Trustee in accordance with the first sentence of
this Section 8.03(e)(i), or upon any payment of any other sums by the Owner
Participant or the Owner Trustee in accordance with the second sentence of this
Section 8.03(e)(i), the Owner Participant or the Owner Trustee shall, to the
extent of their respective payments, be subrogated, in the case of any such
payment in accordance with such first sentence, to the rights of the Indenture
Trustee, as assignee hereunder of the Owner Trustee, or, in the case of any such
payment in accordance with such second sentence, to the rights of the Indenture
Trustee or such other person as the case may be, which actually received such
payment, to receive such payment of Basic Rent or such other payment, as the
case may be (and any interest due thereon on account of the delayed payment
thereof), and shall be entitled to receive such payment upon its receipt by the
Indenture Trustee or such other person, as aforesaid (but in each case only if
all amounts of principal of, and interest at the time due and payable on, the
Certificates together with interest due thereon on account of the delayed
payment thereof shall have been paid in full); provided that neither the Owner
--------
Participant nor the Owner Trustee shall attempt to recover any such amount paid
by it on behalf of the Company pursuant to this Section 8.03(e)(i) except by
demanding of the Company payment of such amount or by proceeding by appropriate
court action against the Company to enforce the payment of such amount pursuant
to Section 15(f), but only said Section 15(f), of the Lease.
(ii) In the event that (A) at any time one or more Lease Events of
Default shall have occurred and be continuing for a period of 180 days or more
but less than one year (or a period of less than 180 days if any such Lease
Event of Default shall be a Lease Event of Default under Section 14(a) of the
Lease) and the Certificates shall not have been accelerated or (B) the
Certificates shall have been accelerated pursuant to Section 8.02 or after one
or more Lease Events of Default shall have occurred and be continuing for a
period of one year or more (or a period of 180 days or more, if such Lease Event
of Default shall be a Lease Event of Default under Section 14(a) of the Lease),
the Owner Trustee or the Owner Participant may, at its option, give at least 30
days' prior irrevocable notice to the Indenture Trustee that the Owner Trustee
or the Owner Participant will redeem or purchase all Certificates then
outstanding on the Business Day specified in such notice and, concurrently with
such notice, the Owner Trustee or the Owner Participant will deposit with the
Indenture Trustee an amount sufficient to redeem or purchase at the applicable
Redemption Price determined consistently with the applicable provisions of
Article 6 all Certificates then outstanding (including, if Section 6.01(b) is
applicable, an estimate of the premium to be paid on the Redemption Date
computed using the Treasury Yield determined as if the Redemption Date were the
date of such notice) and to pay the Indenture Trustee all amounts then due it
hereunder, which funds shall be held by the Indenture Trustee as
47
provided in Section 9.04. Upon the giving of such notice and the receipt by the
Indenture Trustee of such deposit, the Indenture Trustee shall deem all
instructions received from the Owner Trustee as having been given by the Holders
of 100% of the outstanding principal amount of Certificates for all purposes of
this Indenture. If such notice is given, the Owner Trustee further agrees that
it will deposit or cause to be deposited with the Indenture Trustee, on or prior
to the Business Day preceding the applicable Redemption Date, whether or not an
Indenture Event of Default is then continuing, funds sufficient, when added to
the funds already held by the Indenture Trustee for such purpose, to redeem or
purchase at the applicable Redemption Price (including the premium actually
payable in respect thereof) on such Redemption Date all Certificates then
outstanding and to pay the Indenture Trustee all amounts then due it hereunder.
(iii) Anything in this Agreement to the contrary notwithstanding the
Indenture Trustee shall not be entitled to exercise any remedy hereunder as a
result of an Indenture Event of Default which arises solely by reason of one or
more events or circumstances which constitute a Lease Event of Default unless
the Indenture Trustee as security assignee of the Owner Trustee shall have
exercised or concurrently be exercising one or more of the remedies provided for
in Section 15(a)-(f) of the Lease with respect to the Aircraft; provided,
--------
however, that such requirement to exercise one or more of such remedies under
- -------
the Lease shall not apply in circumstances where the Indenture 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(a)(l)(A) 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, however, 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 (A) 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)(1)(A) of
the Bankruptcy Code and continues to perform as required by Section
1110(a)(1)(A-B) of the Bankruptcy Code or (B) is an extension of the Section
1110 Period with the consent of the Indenture Trustee pursuant to Section
1110(b) of the Bankruptcy Code or (C) results from the Company's assumption
during the Section 1110 period with the approval of the relevant court of the
Lease pursuant to Section 365 of the Bankruptcy Code or (D) is the consequence
of the Indenture Trustee's own failure to give any requisite notice to any
person or (E) is pursuant to a judicial stay pending the resolution of
litigation with respect to the applicability of Section 1110 of the Bankruptcy
Code and there is either no Lease Event of Default other than one arising solely
from the Company's bankruptcy or any such other Lease Event of Default has been
cured; provided, further, however, that the requirement to exercise one or more
-------- ------- --------
of such remedies under the Lease during a Continuous Stay Period subsequent to
the expiration of the Section 1110 period
48
based upon a judicial stay as provided for in this clause (E) shall in any event
cease to be applicable subsequent to the 120th day of such Continuous Stay
Period. If the limitation upon cures of the Lessee's failure to pay Basic Rent
as provided in Section 8.03(e)(i) would otherwise prohibit the Owner Participant
or the Owner Trustee from making a payment to cure a Lease Event of Default for
purposes of clause (E) above, the Owner Participant or the Owner Trustee shall
nonetheless be entitled to make such payment. If the Indenture Trustee shall
acquire title to the Aircraft through foreclosure during a Continuous Stay
period without having exercised one or more of such remedies under the Lease by
virtue of the Continuous Stay Period having continued beyond its 120th day as
provided above in clause (E) and the Indenture Trustee shall have received prior
to the 183rd day subsequent to its acquisition of title to the Aircraft, the
proceeds from its sale of the Aircraft, the Indenture Trustee shall,
notwithstanding any other provision of this Indenture, distribute to the Owner
Trustee the amount, if any, by which such proceeds (net of the Indenture
Trustee's costs and expenses (including the fees and expenses of counsel and
other experts and agents retained by it), commissions and other costs and
expenses with respect to such foreclosure, the maintenance and preservation of
the Aircraft and such sale (including amounts in respect of any thereof paid by
others to whom the Indenture Trustee has a reimbursement obligation) and any
other amounts to which the Indenture Trustee is entitled pursuant to Section
9.06 or otherwise) exceed an amount equal to the aggregate of the principal
amount of the Certificates outstanding on the date of such foreclosure, together
with interest accrued thereon to such foreclosure date and an amount equal to
the amount of interest that would have accrued (at the rate per annum applicable
under the Certificates) on such principal amount from the date of such
foreclosure to the date of the distribution by the Indenture Trustee of such
proceeds for the benefit of the Holders if such principal amount had remained
outstanding. References in this subsection (iii) to particular sections of the
Bankruptcy Code as in effect on the date of the amendment and restatement of
this Indenture shall include any substantially similar successor provisions.
(f) Notwithstanding any provision of this Agreement to the contrary,
including, without limitation, Sections 8.03(b), 8.03(c) and 8.03(d), as long as
no Lease Event of Default shall have occurred and be continuing, neither the
Indenture Trustee nor the Owner Trustee shall take any action in violation of
the Company's rights under the Lease, including, without limitation, (x) the
right to receive all monies due and payable to it in accordance with the
provisions of the Lease and (y) the Company's rights to possession and use of,
and of quiet enjoyment of, the Aircraft.
(g) Each and every right, power and remedy herein given to the
Indenture Trustee specifically or otherwise in this Agreement 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 in
such order as may be deemed expedient by the Indenture Trustee, and the exercise
49
or the beginning of the exercise of any power or remedy shall not be construed
to be a waiver of the right to exercise at the same time or thereafter any other
right, power or remedy. No delay or omission by the Indenture Trustee in the
exercise of any right, remedy or power or in pursuing 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 Company or to be an acquiescence therein.
(h) Notwithstanding anything contained herein to the contrary, so long
as the Pass Through Trustee is a Holder, the Indenture Trustee is not authorized
or empowered to acquire title to the Indenture Estate, or to take any action
with respect to any of the Indenture Estate so acquired by it, if such
acquisition or action would cause any Pass Through Trust to fail to qualify as a
"grantor trust" for federal income tax purposes.
Section 8.04. Waiver of Owner Trustee. To the extent now or at any
-----------------------
time hereafter enforceable under applicable law, the Owner Trustee covenants
that it will not at any time insist upon or plead, or in any manner whatsoever
claim or take any benefit or advantage of or from any law now or hereafter in
force providing for the valuation or appraisal of the Indenture Estate or any
part thereof, prior to any sale or sales thereof to be made pursuant to any
provision herein contained, or prior to any applicable decree, judgment or order
of any court of competent jurisdiction; nor, after such sale or sales, claim or
exercise any right under any statute now or hereafter made or enacted by any
state or otherwise to redeem the property so sold or any part thereof, and
hereby expressly waives for itself and on behalf of each and every Person,
except decree or judgment creditors of the Owner Trustee acquiring any interest
in or title to the Indenture Estate or any part thereof subsequent to the date
of this Agreement, all benefit and advantage of any such law or laws, and
covenants that it will not invoke or utilize any such law or laws, but will
suffer and permit the execution of every such power as though no such law or
laws had been made or enacted. Nothing in this Section 8.04 shall be deemed to
be a waiver by the Owner Trustee of its rights under Section 8.03(e).
The Indenture Trustee may maintain such a pleading, or, in any manner
whatsoever, claim or take any benefit or advantage of or from any law now or
hereafter in force even if it does not possess any of the Certificates or does
not produce any of them in the proceeding. A delay or omission by the Indenture
Trustee or any Holder in exercising any right or remedy accruing upon an
Indenture Event of Default under this Agreement shall not impair the right or
remedy or constitute a waiver of or acquiescence in such Indenture Event of
Default.
Section 8.05. Waiver of Existing Defaults. The Holders of a majority
---------------------------
in the aggregate principal amount of the Outstanding Certificates by notice to
the Indenture Trustee may waive on behalf of the Holders an existing Indenture
Default or Indenture Event of Default and its consequences except (i) an
Indenture Default or Indenture Event of Default in
50
the payment of the principal of or interest on any Certificate or (ii) in
respect of a covenant or provision hereof which pursuant to Section 11.02 cannot
be amended or modified without the consent of the Holder affected.
Section 8.06. Control by Majority. (a) The Holders of a majority in
-------------------
aggregate principal amount of the Outstanding Certificates may direct the time,
method and place of conducting any proceeding for any remedy available to the
Indenture Trustee or exercising any trust or power conferred on it by this
Agreement. However, the Indenture Trustee may refuse to follow any direction
that conflicts with law or this Agreement, that is unduly prejudicial to the
rights of the Holders so affected, or that would subject the Indenture Trustee
to personal liability.
(b) The Owner Trustee may pursuant to the direction and instruction of
the Owner Participant by delivery of written notice to the Indenture Trustee set
a record date to determine the Holders 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 Holders 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 Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders holding the requisite proportion of certificates
have authorized or agreed or consented to such consent, request, demand,
authorization, direction, notice, waiver or other act, and for that purpose the
Outstanding Certificates shall be computed as of such record date; provided that
no such consent, request, demand, authorization, direction, notice, waiver or
other act by the Holders on such record date shall be deemed effective unless it
shall become effective pursuant to the provisions of this Agreement not later
than one year after the record date.
Section 8.07. Limitation on Suits by Holders. A Holder may pursue a
------------------------------
remedy under this Agreement or thereunder only if:
(1) the Holder gives to the Indenture Trustee written notice of a
continuing Indenture Event of Default under this Agreement;
(2) the Holders of at least 25% in aggregate principal amount of the
Outstanding Certificates make a written request to the Indenture Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Indenture Trustee indemnity
satisfactory to the Indenture Trustee against any loss, liability or expense
to be, or which may be, incurred by the Indenture Trustee in pursuing the
remedy;
51
(4) the Indenture Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in aggregate
principal amount of the Outstanding Certificates do not give the Indenture
Trustee a direction inconsistent with the request.
A Holder may not use this Agreement to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
Section 8.08. Rights of Holders to Receive Payment. Notwithstanding
------------------------------------
any other provision of this Agreement the right of any Holder to receive payment
of principal of, premium, if any, and interest on such Certificate on or after
the respective due dates expressed in such Certificate, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 8.09. Indenture Trustee May File Proofs of Claim. The
------------------------------------------
Indenture Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee and of the Holders allowed in any judicial proceedings relating to any
obligor on the Certificates, its creditors, or its property.
ARTICLE 9
INDENTURE TRUSTEE
Section 9.01. Duties of Indenture Trustee. (a) The Indenture
---------------------------
Trustee may refuse to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it against any loss, liability or expense.
(b) Subject to the provisions of Section 9.04, the Indenture Trustee
shall not be liable for interest on any money received except as otherwise
provided in any other Operative Document. Money held in trust by the Indenture
Trustee need not be segregated from other funds except to the extent required by
law.
Section 9.02. Rights of Indenture Trustee. (a) The Indenture
---------------------------
Trustee may rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. The Indenture Trustee need not
investigate any fact or matter stated in the document.
52
(b) Before the Indenture Trustee acts or refrains from acting, it may
consult with counsel or require an Officer's Certificate or an Opinion of
Counsel from the Company or the Owner Trustee after which it will take such
action or refrain from acting as it deems appropriate. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith and
in accordance herewith in reliance on a resolution of the Board of Directors of
the Company, the written advice of counsel acceptable to the Owner Trustee, the
Company and the Indenture Trustee, officer's certificates or opinions of counsel
provided by the Company or the Owner Trustee.
(c) The Indenture Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any such agent appointed with
due care; provided that, so long as no Lease Event of Default shall have
--------
occurred and be continuing no such agents shall be appointed by the Indenture
Trustee without the consent of the Company and the Owner Trustee, which consent
shall, in each case, not be unreasonably withheld.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers.
(e) If an Indenture Event of Default under this Agreement has occurred
and is continuing, the Indenture Trustee shall exercise its rights and powers
under this Agreement, and shall use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
Section 9.03. Individual Rights of Indenture Trustee. The Indenture
--------------------------------------
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates and may otherwise deal with the Owner Trustee, the Company or an
Affiliate of the Owner Trustee or the Company or a subsidiary of the Owner
Trustee or the Company with the same rights it would have if it were not the
Indenture Trustee. Any Agent may do the same with like rights.
Section 9.04. Funds May Be Held by Indenture Trustee or Paying Agent;
-------------------------------------------------------
Investments. Any monies (including without limitation for purpose of this
- -----------
Section 9.04 Permitted Investments constituting the proceeds of the maturity,
sale or other disposition of any Permitted Investment) held by the Indenture
Trustee or the Paying Agent hereunder as part of the Indenture Estate, until
paid out by the Indenture Trustee or the Paying Agent as herein provided, (i)
subject to clause (ii) below, may be carried by the Indenture Trustee or the
Paying Agent on deposit with itself or on deposit to its account with any bank,
trust company or national banking association incorporated or doing business
under the laws of the United States of America or one of the States thereof
having combined capital and surplus and retained earnings of at least
$100,000,000, and neither the Indenture Trustee nor the Paying Agent shall have
any liability for interest upon any such monies except as otherwise agreed in
writing or (ii) at any time and from time to time, so long as no Lease Event of
53
Default shall have occurred and be continuing, at the request (given directly by
the Company to the Indenture Trustee) of the Company 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 Indenture Trustee in trust as part of the Indenture Estate
until so sold; provided that the Company pursuant to Section 22 of the Lease, on
--------
behalf of the Owner Trustee, as agent of the Owner Trustee, shall upon demand
pay to the Indenture 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 Indenture Trustee, and the Indenture Trustee shall promptly pay to the
Company, on behalf of the Owner Trustee, any profit, income, interest, dividend
or gain realized upon maturity, sale or other disposition of any 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 shall be held as
part of the Indenture Estate and shall be applied by the Indenture 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. The
Indenture 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 9.04.
Section 9.05. Notice of Defaults. If an Indenture Event of Default
------------------
under this Agreement occurs and is continuing and the Indenture Trustee has
Actual Knowledge of same, the Indenture Trustee shall (i) promptly send written
notice thereof by telecopier to the Company, the Owner Trustee and the Owner
Participant and (ii) within 90 days after it occurs, mail to each Holder notice
of all uncured Indenture Events of Default under this Agreement. Except in the
case of a default in the payment of the principal of, premium, if any, or
interest on any Certificate, the Indenture Trustee shall be protected in
withholding the notice required under clause (ii) above if and so long as the
executive committee or trust committee of directors of the Indenture Trustee
and/or Responsible Officers thereof in good faith determines that withholding
such notice is in the interest of the Holders. In addition, if an Indenture
Default under this Agreement occurs and is continuing and if the Indenture
Trustee has Actual Knowledge of same, the Indenture Trustee shall promptly send
written notice thereof by telecopier to the Company, the Owner Trustee and the
Owner Participant.
Section 9.06. Compensation and Indemnity. (a) The Owner Trustee
--------------------------
shall pay to the Indenture Trustee from time to time (i) reasonable compensation
for its services, which compensation shall not be limited by any law on
compensation of a trustee of an express trust, (ii) reimbursement for all
reasonable out-of-pocket expenses incurred by the Indenture Trustee in
connection with the performance of its duties under this Agreement (including
the
54
reasonable compensation and expenses of the Indenture Trustee's counsel and any
agent appointed in accordance with Section 9.02(c)), and (iii) indemnification
against any loss or liability incurred by it arising out of or in connection
with its acceptance or administration of the trust or trusts hereunder except
(A) as such expenses or loss or liability might result from the negligence or
willful misconduct of the Indenture Trustee or the inaccuracy of any
representation or warranty of the Indenture Trustee in its individual capacity
in Section 8 of the Participation Agreement, (B) as otherwise provided in
Section 9.10 hereof and (C) as otherwise excluded by the terms of Sections 7(b)
and 7(c) of the Participation Agreement from the Company's indemnities under
said Sections; provided that the Indenture Trustee shall not make any claim
--------
under this Section 9.06(a) for any claim or expense indemnified against by the
Company under the Participation Agreement without first making demand on the
Company for payment of such claim or expense. The Indenture Trustee shall
notify the Owner Trustee and the Company promptly of any claim for which it is
entitled to be indemnified hereunder. Subject to the conditions and procedures
equivalent to those set forth in Sections 7(b) and 7(c) of the Participation
Agreement, the Owner Trustee shall defend the claim and the Indenture Trustee
shall cooperate in the defense. The Indenture Trustee may have separate counsel
and the Owner Trustee shall pay the reasonable fees and expenses of such
counsel. The Owner Trustee need not pay for any settlement made without its and
the Company's consent.
(b) To secure the payment obligations of the Owner Trustee pursuant to
this Section 9.06, the Indenture Trustee shall have a lien prior to that of the
Holders of the Certificates on all money or property held or collected by the
Indenture Trustee, except that held in trust to pay the principal of and
interest and premium, if any, on the Certificates.
Section 9.07. Replacement of Indenture Trustee. (a) The resignation
--------------------------------
or removal of the Indenture Trustee and the appointment of a successor Indenture
Trustee shall become effective only upon the successor Indenture Trustee's
acceptance of appointment as provided in this Section.
(b) The Indenture Trustee may resign by giving at least 30 days' prior
written notice to the Company and the Owner Trustee. The Holders of a majority
in aggregate principal amount of the Outstanding Certificates may remove the
Indenture Trustee by giving at least 30 days' prior written notice to the
Indenture Trustee, the Owner Trustee and the Company and may appoint a successor
Indenture Trustee for such Certificates with the Owner Trustee's and (so long as
no Lease Event of Default is continuing) the Company's consent. The Owner
Trustee may remove the Indenture Trustee if:
(1) the Indenture Trustee fails to comply with Section 9.09;
(2) the Indenture Trustee is adjudged a bankrupt or an insolvent;
55
(3) a receiver or public officer takes charge of the Indenture Trustee
or its property; or
(4) the Indenture Trustee becomes incapable of acting.
(c) If the Indenture Trustee resigns or is removed, or if a vacancy
exists in the office of Indenture Trustee for any reason, the Owner Trustee
shall promptly appoint a successor Indenture Trustee which will (so long as no
Lease Event of Default is continuing) be approved by the Company.
(d) If a successor Indenture Trustee does not take office within 30
days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Company, the Owner Trustee or the Holders of a majority
in aggregate principal amount of the Outstanding Certificates may petition any
court of competent jurisdiction for the appointment of a successor Indenture
Trustee.
(e) If the Indenture Trustee fails to comply with Section 9.09, any
Holder may petition any court of competent jurisdiction for the removal of such
Indenture Trustee and the appointment of a successor Indenture Trustee.
(f) A successor Indenture Trustee shall deliver a written acceptance
of its appointment to the retiring Indenture Trustee, to the Company and to the
Owner Trustee. Thereupon, the resignation or removal of the retiring Indenture
Trustee shall become effective, and the successor Indenture Trustee shall have
all the rights, powers and duties of the retiring Indenture Trustee for which
the successor Indenture Trustee is to be acting as Indenture Trustee under this
Agreement. The retiring Indenture Trustee shall promptly transfer all property
and all books and records relating to the administration of the Indenture Estate
held by it as Indenture Trustee to the successor Indenture Trustee subject to
the lien provided for in Section 9.06. The Company shall give notice of each
appointment of a successor Indenture Trustee if there are Certificates
outstanding, by mailing written notice of such event by first-class mail to the
Holders.
(g) All provisions of this Section 9.07 except subparagraphs (b)(l)
and (e) and the words "subject to the lien provided for in Section 9.06" in
subparagraph (f) shall apply also to any Paying Agent.
Section 9.08. Successor Indenture Trustee, Agents by Merger, etc. If
--------------------------------------------------
the Indenture Trustee or any Agent 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 Indenture Trustee or Agent, as the case may be.
56
Section 9.09. Eligibility; Disqualification. This Agreement shall at
-----------------------------
all times have an Indenture Trustee which (i) shall have a combined capital and
surplus of at least $75,000,000 or (ii) shall have 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, and which, in any case,
shall be a Citizen of the United States. 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 9.09, 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 Indenture Trustee shall cease to be eligible
in accordance with the provisions of this Section 9.09, the Indenture Trustee
shall resign immediately in the manner and with the effect specified in Section
9.07.
Section 9.10. Trustee's Liens. The Indenture 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 Indenture Trustee in its individual capacity and which are
unrelated to the transactions contemplated by the Operative Documents, or (ii)
which are attributable to the Indenture Trustee as trustee hereunder or in its
individual capacity and which arise out of acts or omissions which are not
expressly contemplated by this Agreement.
Section 9.11. Withholding Taxes; Information Reporting. The
----------------------------------------
Indenture Trustee shall exclude and withhold from each distribution of
principal, premium, if any, and interest and other amounts due hereunder or
under the Certificates any and all withholding taxes applicable thereto as
required by law. The Indenture Trustee agrees to act as such withholding agent
and, in connection therewith, whenever any present or future taxes or similar
charges are required to be withheld with respect to any amounts payable in
respect to the Certificates, to withhold such amounts and timely pay the same to
the appropriate authority in the name of and on behalf of the Holders, that it
will file any necessary withholding tax returns or statements when due, and
that, as promptly as possible after the payment thereof, it will deliver to each
Holder appropriate documentation showing the payment thereof, together with such
additional documentary evidence as such Holders may reasonably request from time
to time. The Indenture Trustee agrees to file any other information reports as
it may be required to file under United States law. Such withholding by the
Indenture Trustee shall in no event give rise to an Indenture Event of Default.
57
Section 9.12. Additional Collateral. (a) From time to time the
---------------------
Owner Participant may pledge Additional Collateral to the Indenture Trustee as
part of the Indenture Estate and in connection with such Additional Collateral
shall deliver to the Indenture Trustee evidence of such filings and recordings
necessary to establish and perfect the Lien of this Indenture in such Additional
Collateral. Such Additional Collateral shall be held in trust by the Indenture
Trustee as part of the Indenture Estate until released by the Indenture Trustee
pursuant to clause (b) below or otherwise in accordance with the applicable
security agreement.
(b) Provided that all payments of principal and interest on the
Certificates due and payable on the tenth Interest Payment Date have been made,
on such Interest Payment Date, the Indenture Trustee shall, unless otherwise
directed by the Owner Trustee or the Owner Participant, release any Additional
Collateral from the Lien of this Indenture, provided, however, that the Owner
-------- -------
Trustee or the Owner Participant shall be responsible for the preparation and
recording of all filings and recordings necessary to release such Additional
Collateral from the Lien of this Indenture.
ARTICLE 10
SATISFACTION AND DISCHARGE; DEFEASANCE;
TERMINATION OF OBLIGATIONS
Section 10.01. Satisfaction and Discharge of Agreement; Defeasance;
----------------------------------------------------
Termination of Obligations. Subject to Section 10.02, this Agreement shall
- --------------------------
cease to be of further effect, and the Owner Trustee and the Indenture Trustee
shall, except as herein provided, be deemed to have been discharged from their
respective obligations with respect to the Certificates (and the Indenture
Trustee, on demand and at the expense of the Owner Trustee, shall execute proper
instruments acknowledging satisfaction and discharge of this Agreement in
respect of the Certificates), when
(a) (i) all Certificates theretofore executed and delivered (other
than (A) Certificates which have been mutilated, destroyed, lost or stolen
and which have been replaced or exchanged as provided in Section 2.06 and
(B) Certificates for the payment of which money held in trust hereunder has
been paid and discharged from such trust, as provided in Section 7.01) have
been delivered to the Indenture Trustee for cancellation; or
(ii) all Certificates not theretofore delivered to the Indenture
Trustee for cancellation
58
(A) have become due and payable (whether upon stated maturity or
as a result of redemption), or
(B) will become due and payable (including as a result of
redemption in respect of which irrevocable notice has been given to
the Indenture Trustee on or prior to the date of such deposit and such
redemption either is a redemption without possibility of premium or,
as of the date of such deposit, any premium which may be payable in
connection therewith has been actually determined) at maturity or on a
Redemption Date within one year,
and there has been deposited with the Indenture Trustee in trust for the purpose
of paying and discharging the entire indebtedness on the Certificates not
theretofore cancelled by the Indenture Trustee or delivered to the Indenture
Trustee for cancellation, an amount sufficient to discharge such indebtedness,
including the principal of, the actual premium, if any, and interest on the
Certificates to the date of such deposit (in the case of Certificates which have
become due and payable), or to the maturity thereof or to the Redemption Date
thereof, as the case may be; or
(iii) (A) the Owner Trustee, subsequent to the Commencement Date, has
deposited or caused to be deposited irrevocably (except as provided in
Section 10.04) with the Indenture Trustee as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the benefit
of the Holders, (1) money in an amount, or (2) U.S. Government Obligations
which, through the payment of interest and principal in respect thereof in
accordance with their terms, will provide (not later than one Business Day
before the due date of any payment referred to below in this paragraph)
money in an amount, or (3) a combination of money and U.S. Government
Obligations referred to in the foregoing clause (2), sufficient, in the
opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the
Indenture Trustee, to pay and discharge each installment of principal of and
interest on the Outstanding Certificates on the dates such payments of
principal or interest are due (including as a result of redemption without
the possibility of the payment of premium in respect of which irrevocable
notice has been given to the Indenture Trustee on or prior to the date of
such deposit), and no Lease Event of Default under either Section 14(f) or
14(g) of the Lease shall have occurred and be continuing on the date of such
deposit or at any time during the period ending on the 91st day after such
date; provided, however, that, upon the making of the deposit referred to
-------- -------
above in this clause (A), the right of the Owner Trustee or the Company to
cause the redemption of Certificates (except a redemption in respect of
which irrevocable notice has theretofore been given) shall terminate;
59
(B) such deposit will not result in a breach or violation of, or
constitute an Indenture Default or Indenture Event of Default under, this
Agreement or a default or event of default under any other agreement or
instrument to which the Owner Trustee or the Company is a party or by which
it is bound; and
(C) the Company on behalf of the Owner Trustee has delivered to the
Indenture Trustee an Officer's Certificate and an Opinion of Counsel to the
effect that there has been published by the Internal Revenue Service a
ruling to the effect that Holders will not recognize income, gain or loss
for Federal income tax purposes as a result of the exercise by the Owner
Trustee of its option under this Section 10.01(a)(iii) and will be subject
to Federal income tax on the same amount and in the same manner and at the
same times, as would have been the case if such option had not been
exercised;
(b) all other amounts then due and payable hereunder have been paid
and no notice of a redemption of the Certificates with the possibility of the
payment of premium has been delivered by the Indenture Trustee; and
(c) the Company on behalf of the Owner Trustee has delivered to the
Indenture Trustee an Officer's Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for relating to the satisfaction
and discharge of this Agreement contemplated by this Section 10.01, have been
complied with.
Section 10.02. Survival of Certain Obligations. Notwithstanding the
-------------------------------
provisions of Section 10.01, the obligations of the Indenture Trustee contained
in Sections 2.01 through 2.08, Section 7.01, Section 9.11, Section 10.03 and
Section 10.04, the rights, duties, immunities and privileges hereunder of the
Indenture Trustee shall survive.
Section 10.03. Monies to Be Held in Trust. All moneys and U.S.
--------------------------
Government Obligations deposited with the Indenture Trustee pursuant to Section
10.01 shall be held in trust and applied by it, in accordance with the
provisions of the Certificates and this Agreement, to the payment either
directly or through any Paying Agent, as the Indenture Trustee may determine, to
the Holders, of all sums due and to become due thereon for principal, premium,
if any, and interest, but such money need not be segregated from other funds
except to the extent required by law.
Section 10.04. Monies to Be Returned to Owner Trustee. The Indenture
--------------------------------------
Trustee and any Paying Agent shall promptly pay or return to the Owner Trustee
upon request of the Owner Trustee any money or U.S. Government Obligations held
by them at any time that are not required for the payment of the amounts
described above in Section 10.03 on the Certificates for which money or U.S.
Government Obligations have been deposited pursuant to Section 10.01.
60
ARTICLE 11
AMENDMENTS AND WAIVERS
Section 11.01. Amendments to this Agreement Without Consent of
-----------------------------------------------
Holders. The Owner Trustee and the Indenture Trustee may enter into one or more
- -------
agreements supplemental hereto without the consent of any Holder for any of the
following purposes:
(1) to correct any mistake or cure any ambiguity, defect or
inconsistency herein or in the Certificates or to make any change not
inconsistent with the provisions hereof; provided that such change does not
--------
adversely affect the interests of any Holder;
(2) 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;
(3) to convey, transfer, assign, mortgage or pledge any property to or
with the Indenture Trustee or to make any other provisions with respect to
matters or questions arising hereunder so long as such action shall not
adversely affect the interests of the Holders;
(4) to correct or amplify the description of any property at any time
subject to the lien of this Agreement or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subject to the lien of this Agreement or to subject to the lien of this
Agreement the Airframe or Engines or airframe or engines substituted for the
Airframe or Engines in accordance herewith or with the Lease; provided that
--------
Trust Supplements entered into for the purpose of subjecting to the lien of
this Agreement the Airframe or Engines in accordance with the Lease need
only be executed by the Owner Trustee and the Indenture Trustee;
(5) to add to the covenants of the Owner Trustee, for the benefit of
the Holders, or to surrender any rights or power herein conferred upon the
Owner Trustee or the Owner Participant;
(6) to add to the rights of the Holders;
61
(7) to provide for the assumption by the Company of the obligations of
the Owner Trustee hereunder in accordance with the terms and conditions
applicable thereto specified in Section 7.03; or
(8) to include on the Certificates any legend as may be required by
applicable law.
Section 11.02. Amendments to this Agreement with Consent of Holders.
----------------------------------------------------
(a) With the written consent of the Holders of a majority of the aggregate
principal amount of the Outstanding Certificates, the Owner Trustee and the
Indenture Trustee may enter into such supplemental agreements to add any
provisions to or to change or eliminate any provisions of this Agreement or of
any such supplemental agreements or to modify the rights of the Holders;
provided, however, that, an amendment under this Section 11.02 may not:
- -------- -------
(1) reduce the principal amount of, premium, if any, or any
installment of interest on, any Certificate; or
(2) change the date on which any principal amount of, any Installment
Payment Amount payable with respect to, premium, if any, or interest on any
Certificate, is due or payable; or
(3) create any Lien on the Indenture Estate prior to or pari passu
---- -----
with the Lien thereon under this Agreement except such as are permitted by
this Agreement, or deprive any Holder of the benefit of the Lien on the
Indenture Estate created by this Agreement; or
(4) reduce the percentage in principal amount of the Outstanding
Certificates, 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 Agreement or of
certain defaults hereunder or their consequences) provided for in this
Agreement; or
(5) make any change in Sections 8.05, 8.08 or Section 11.02(a).
(b) It is not necessary under this Section 11.02 for the Holders to
consent to the particular form of any proposed supplemental agreement, but it is
sufficient if they consent to the substance thereof.
(c) Promptly after the execution by the Owner Trustee and the
Indenture Trustee of any supplemental agreement pursuant to the provisions of
this Section 11.02, the Indenture Trustee shall transmit by first-class mail a
notice, setting forth in general terms the substance of such supplemental
agreement, to all Holders, as the names and addresses of
62
such Holders appear on the Register. Any failure of the Indenture Trustee to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental agreement.
Section 11.03. Revocation and Effect of Consents. Until an amendment
---------------------------------
or waiver becomes effective, a consent to it by a Holder is a continuing consent
by the Holder and every subsequent Holder, even if notation of the consent is
not made on any Certificate. However, any such Holder or subsequent Holder may
revoke the consent as to his Certificate if the Indenture Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
After an amendment or waiver becomes effective, it shall bind every Holder
affected by such amendment or waiver.
Section 11.04. Notation on or Exchange of Certificates. The
---------------------------------------
Indenture Trustee may place an appropriate notation about an amendment or waiver
on any Certificate thereafter executed. The Indenture Trustee in exchange for
such Certificates may execute new Certificates that reflect the amendment or
waiver.
Section 11.05. Indenture Trustee Protected. The Indenture Trustee
---------------------------
need not sign any supplemental agreement that adversely affects its rights.
Section 11.06. Amendments, Waivers, etc. of Other Operative
--------------------------------------------
Documents. (a) Subject to Section 11.01, without the consent of the Holders of
- ---------
a majority in principal amount of Outstanding Certificates, the respective
parties to the Participation Agreement, the Lease and the Trust Agreement 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 of modifying in any manner the rights of the respective parties
thereunder; provided, however, that the actions specified in subsection (b) of
-------- -------
this Section 11.06 may be taken without the consent of the Indenture Trustee or
any Holder.
(b) Subject to the provisions of subsection (c) of this Section 11.06,
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
Indenture Trustee or of any Holder may:
(1) 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 11.06 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
63
thereunder, with respect to the following provisions of the Lease as
originally executed: 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 Maturity Date of the Certificates), Section 3(d) (except to
the extent such Section relates to amounts payable (whether directly or
pursuant to the Indenture) to Persons other than Holders and the Indenture
Trustee in its individual capacity), Section 3(e) (except insofar as it
relates to the address or account information of the Owner Trustee or the
Indenture Trustee) (other than as such Sections 3(a), 3(d) and 3(e) may be
amended pursuant to Section 3(c) of the Lease as originally executed),
Section 4, Section 6, Sections 9(b) through (d) (except that further
restrictions may be imposed on the Company), Section 10 (except that
additional requirements may be imposed on the Company), Section 11 (except
for Section 11(e) and except that additional insurance requirements may be
imposed on the Company), Section 12 (except in order to increase the
Company'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 Federal Aviation Act),
Section 14 (except to impose additional or more stringent Lease Events of
Default), Section 15 (except to impose additional remedies), Section 16
(except to impose additional requirements on the Company), Section 18,
Section 20, Section 22 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 Indenture 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 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(c), 4, 5, 6 (to the extent such action would
reduce the Company's obligations), 7, 8, 9, 10, 11, 12, 13, 14, 15, 16
(insofar as it relates to the Lessor), 18, 19 and 21 of the Lease, or any
other Section of the Lease to the extent such action shall affect the amount
or timing of any amounts payable by the Company 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, will be distributable to the Owner Trustee under Article
3; and provided further that the parties to the Lease may take any such
-------- -------
action without the consent of the Indenture Trustee or any Holder to the
extent such action relates to the payment of amounts constituting, or the
Owner Trustee's, the Owner Participant's or the Company's rights or
obligations with respect to, Excluded Payments;
64
(2) 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 Holders;
(3) modify, amend or supplement the Participation Agreement, or give
any consent, waiver, authorization or approval with respect thereto, except
that without compliance with subsection (a) of this Section 11.06 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 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 originally executed: Sections 1(b),
Section 7 (insofar as such Section 7 relates to the Indenture Trustee and
the Holders), Section 8, Section 11 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); and
(4) 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 Agreement which shall
not be inconsistent with the provisions of this Agreement, provided the
making of any such other provision shall not adversely affect the interests
of the Holders.
(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 11.06 and anything in such subsections or elsewhere in this
Agreement to the contrary notwithstanding, shall, without the consent of the
Holder of each Outstanding Certificate affected thereby,
(1) modify, amend or supplement the Lease in such a way as to extend
the time of payment of Basic Rent or stipulated Loss Value or any other
amounts payable to the Indenture Trustee for its own account or for the
account of the Holders (subject in any event to clause (iii) of Section 3(c)
of the Lease) upon the occurrence of an Event of Loss or Termination Value
and any other amounts payable to the Indenture Trustee for its own account
or for the account of the Holders (subject in any event to clause (iii) of
Section 3(c) of the Lease) upon termination of the Lease with respect to the
Aircraft, payable under, or as provided in, the Lease as originally
executed, or reduce the amount of any installment of Basic Rent or
Supplemental Rent so that the same is less than the payment of principal of,
premium, if any, and interest on the Certificates, as the case may be, to be
made from such installment of Basic Rent or
65
Supplemental Rent, or reduce the aggregate amount of Stipulated Loss Value,
EBO Percentage, Special Termination Value Percentages, or any other amounts
payable under, or as provided in, the Lease as originally executed upon the
occurrence of an Event of Loss so that the same is less than the accrued
interest on and the principal as of the Lease Loss Payment Date, and
premium, if any, of the Certificates at the time Outstanding or reduce the
amount of Termination Value and any other amounts payable under, or as
provided in, the Lease as originally executed 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 premium, if
any, of Certificates at the time Outstanding, or
(2) 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 Company from its
obligations in respect of payment of Basic Rent or Supplemental Rent, or
Stipulated Loss Value and any other amounts payable to the Indenture Trustee
for its own account or the account of the Holders (subject in any event to
clause (iii) of Section 3(c) of the Lease) upon the occurrence of an Event
of Loss, or Termination Value and any other amounts payable to the Indenture
Trustee for its own account or the account of the Holders (subject in any
event to clause (iii) of Section 3(c) of the Lease) of the Lease with
respect to the Aircraft, payable under, or as provided in, the Lease as
originally executed, except for any such assignment pursuant to Section 8(u)
of the Participation Agreement, and except as provided in the Lease as
originally executed.
For the purposes of this Article 11, during the Pre-Commencement Date
Period, the "principal amount" of Outstanding Certificates shall include the
amount equal to that portion of the difference between the Original Issue Price
and the Original Principal. Amount for any Certificate originally issued at a
discount which corresponds to the period from the date of issuance thereof to
and including the Commencement Date.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Notices. (a) Unless otherwise specifically provided
-------
for herein, all notices required under the terms and provisions of this
Agreement shall be in English and in writing, and any such notice may be given
by hand-delivery, overnight courier service, mail, telex or telecopier addressed
as indicated below and any such notice shall be effective, in the case of hand-
delivery, when delivered, in the case of overnight courier service, one Business
Day after delivery with charges paid to a courier service with instructions for
overnight delivery, in the case of mail, three Business Days after delivery to
66
the postal service with certified or registered mail charges paid, in the case
of telex, upon receipt of a telex answerback and, in the case of telecopier,
upon transmittal:
if to the Company, to:
United Air Lines, Inc.
P.O. Box 66100
Chicago, Illinois 60666
Attention: Vice President and Treasurer
Telecopier: (708) 952-5204
or if by overnight courier, to:
1200 East Algonquin Road
Elk Grove Township, Illinois 60007
Attn: Vice President and Treasurer
Telecopier: (708) 952-5204
if to the Indenture Trustee, to:
First Security Bank of Utah,
National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Telecopier: (801) 246-5053
Telex No.: 3789450
if to the Owner Trustee, to:
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
or if by overnight courier, to:
Two International Place
Boston, Massachusetts 02110
Telecopier: (617) 664-5371
with a copy to the Owner Participant
67
if to the Owner Participant, to:
[____________]
(b) The Company, the Owner Trustee, the Indenture Trustee or the Owner
Participant by notice to the others may designate additional or different
addresses for subsequent notices or communications.
(c) Any notice or communication to Holders of the Certificates shall
be mailed by first-class mail to the addresses for Holders shown on the Register
kept by the Registrar and to addresses filed with the Indenture Trustee for
other Holders. Failure so to mail a notice or communication or any defect in
such notice or communication shall not affect its sufficiency with respect to
other Holders of such Certificates of that or any other Series entitled to
receive notice.
(d) If a notice or communication is mailed in the manner provided
above within the time prescribed, it is conclusively presumed to have been duly
given, whether or not the addressee receives it.
(e) If the Company mails a notice or communication to the Holders, it
shall mail a copy to the Indenture Trustee and to each Paying Agent at the same
time.
(f) Notwithstanding the foregoing, all communications or notices to
the Indenture Trustee shall be deemed to be given only when received by a
Responsible Officer of the Indenture Trustee.
Section 12.02. [Reserved for Potential Future Use]
Section 12.03. [Reserved for Potential Future Use]
Section 12.04. Rules by Indenture Trustee and Agents. The Indenture
-------------------------------------
Trustee may make reasonable rules for action by or a meeting of the Holders.
The Paying Agent or Registrar may make reasonable rules and set reasonable
requirements for its functions.
Section 12.05. Non-Business Days. If a payment date is not a
-----------------
Business Day at a place of payment, payment may be made at such place on the
next succeeding day that is a Business Day, and no interest shall accrue for the
intervening period.
Section 12.06. GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATES
-------------
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
68
WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAWS PROVISIONS OF THE STATE OF ILLINOIS.
Section 12.07. No Recourse Against Others. No director, officer,
--------------------------
employee or stockholder, as such, of the Company, the Owner Trustee or the Owner
Participant, as the case may be, shall have any liability for any obligations of
the Company, the Owner Trustee or the Owner Participant, as the case may be,
under this Agreement or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Holder by accepting a Certificate
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Certificates.
Section 12.08. Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts, each of which shall be an original but
such counterparts shall together constitute but one instrument.
ARTICLE 13
ACTIONS TO BE TAKEN UPON TERMINATION OF LEASE
Section 13.01. Actions to Be Taken upon Termination of Lease. Upon
---------------------------------------------
any of:
(a) the voluntary termination of the Lease by the Company pursuant to
Section 9(b) thereof on the Lease Termination Date, and upon payment to the
Indenture Trustee of an amount equal to the Redemption Price of all
Outstanding Certificates, or
(b) the purchase of the Aircraft by the Company at its option pursuant
to Section 19(b) of the Lease on a Special Purchase Option Date or the EBO
Date as the case may be (unless the Company shall have elected to assume all
of the rights and obligations of the Owner Trustee hereunder as provided for
in Section 8(r) of the Participation Agreement), and upon payment to the
Indenture Trustee of an amount equal to the Redemption Price as at the
applicable Redemption Date of all Outstanding Certificates, or
(c) the termination of the Lease, on the Lease Loss Payment Date,
following an Event of Loss suffered by the Airframe under circumstances
where the Company does not exercise its option to substitute a Replacement
Airframe therefor pursuant to Section 10(a)(ii) of the Lease, and upon
payment to the Indenture Trustee of an amount equal to the Redemption Price
as at the Redemption Date of all Outstanding Certificates, or
69
(d) the satisfaction, discharge, defeasance and termination of
obligations under this Agreement in accordance with Section 10.01, or
(e) the voluntary termination of the Lease with respect to an Engine
pursuant to Section 10(b) thereof, and upon the payment of Stipulated Loss
Value with respect to such Engine,
the Lien of this Agreement on the Indenture Estate, in the case of (a), (b), (c)
and (d) above, and on such Engine, in the case of (e) above shall terminate
(except for the Lien on funds held by the Indenture Trustee to pay the
Certificates and the Lien on amounts due from the Company under the Lease
necessary to pay the Certificates or the Indenture Trustee) and the Indenture
Trustee shall execute such instruments as may be requested by the Company or the
Owner Trustee to evidence such termination.
70
IN WITNESS WHEREOF, the Owner Trustee and the Indenture Trustee have
caused this Trust Indenture and Mortgage to be duly executed by their respective
officers thereunto duly authorized.
STATE STREET BANK AND TRUST
COMPANY
not in its individual capacity,
except as expressly provided herein,
but solely as Owner Trustee
By: _________________________________
Name:
Title:
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
as Indenture Trustee
By: _________________________________
Name:
Title:
Exhibit A-1 to
Trust Indenture and
Mortgage
Form of Series 1995 777 B Installment Certificates
--------------------------------------------------
$_______________ (Original Issue Price) No. _____
$_______________ (Original Principal Amount)
SERIES 1995 777 B CERTIFICATE
STATE STREET BANK AND TRUST COMPANY
Not in its Individual Capacity
but Solely as Owner Trustee Under the
Trust Agreement (1995 777 B)
Dated as of May 1, 1995
Issued in connection with Aircraft N766UA
Leased to
UNITED AIR LINES, INC.
Date of Issuance: _________, 1995 MATURITY DATE
-------------
_______ , 20__
INTEREST RATE PER ANNUM: __%
COMMENCEMENT DATE
CASH INTEREST: $_________
State Street Bank and Trust Company, not in its individual capacity,
but solely as owner trustee (the "Owner Trustee") under that certain Trust
Agreement (1995 777 B), dated as of May 1, 1995, between the Owner Trustee in
its individual capacity and the institution referred to therein as the "Owner
Participant" (herein as such Trust Agreement may be amended or supplemented from
time to time called the "Trust Agreement") for value received, hereby promises
to pay to _________________ or registered assigns the principal sum in Dollars
equal to the Original Principal Amount specified above in installments on each
Installment Payment Date as provided for herein below with the final installment
due and payable on the Maturity Date specified above (provided, however, that,
-------- -------
if the obligations evidenced by this Certificate shall become due and payable
(upon redemption or acceleration or otherwise) and shall be paid during the Pre-
Commencement Date Period, the principal amount hereof to be paid shall be the
Original Issue Price specified above, together with the portion of the
difference between such Original Issuer Price and the Original Principal Amount
specified above which corresponds to the period from the date of issuance hereof
to
2
the date of such payment) and to pay interest (x) in the amount of the
Commencement Date Cash Interest specified above, payable on the Commencement
Date, and (y) at the Interest Rate Per Annum specified above on the Original
Principal Amount specified above from time to time outstanding in respect of the
period commencing on and including the Commencement Date and ending on the date
when the principal amount hereof shall have been paid in full, payable on each
October 19 and April 19 in each year, commencing on October 19, 1995 (provided,
--------
however, that, if the obligations evidenced by this Certificate shall become due
- -------
and payable (upon redemption or acceleration or otherwise) and shall be paid
during the Pre-Commencement Date Period, the amount thereof in respect of
interest shall be an amount equal to the portion of such Commencement Date Cash
Interest which corresponds to the period from the date of issuance hereof to the
date of such payment). All amounts payable by the Owner Trustee hereunder and
under the Trust Indenture and Mortgage (1995 777 B), dated as of May 1, 1995 (as
the same may hereafter be further amended or supplemented from time to time, as
the "Indenture", the defined terms therein not otherwise defined herein being
used herein with the same meanings), by and among the Owner Trustee and First
Security Bank of Utah, National Association, as Indenture Trustee thereunder,
shall be made only from the income and proceeds of the Indenture Estate. Each
Holder hereof, by its acceptance of this Certificate, agrees that (a) it will
look solely to the income and proceeds of the Indenture Estate for payment of
such amounts, to the extent available for distribution to the Holder hereof as
provided in the Indenture and (b) none of the Owner Participant, the Owner
Trustee or the Indenture Trustee is or shall be personally liable to the Holder
hereof for any amount payable hereunder or under the Indenture or, except as
provided in the Indenture in the case of the Indenture Trustee and the Owner
Trustee, for any liability under the Indenture.
The interest or Installment Payment Amount (other than that payable on
the Maturity Date hereof) so payable, and punctually paid or duly provided for,
on the applicable Interest Payment Date or Installment Payment Date, as the case
may be, will, as provided in the Indenture, be paid to the Person in whose name
this Certificate (or one or more predecessor Certificates) is registered at the
close of business on the Record Date for payment of such interest or Installment
Payment Amount, which shall be the fifteenth day (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date or
Installment Payment Date, as the case may be. Any such interest or Installment
Payment Amount not so punctually paid or duly provided for shall forthwith cease
to be payable to the registered Holder hereof on the such Record Date (or to the
Person in whose name this Certificate is registered upon issuance) and may be
paid to the Person in whose name this Certificate (or one or more predecessor
Certificates) is registered at the close of business on a special record date
for the payment of such Defaulted Installment or Defaulted Interest to be fixed
by the Indenture Trustee pursuant to Section 2.08 of the Indenture, notice
whereof shall be given to Holders of Certificates entitled thereto not less than
10 days prior to such special record date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Certificates may
3
be listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture.
Payment of the principal of, premiums if any, and interest on this
Certificate will be made at the principal corporate trust office of the
Indenture Trustee, or the office or agency maintained by the Indenture Trustee
for such purpose, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest and Installment Payment Amounts
- -------- -------
(other than that payable on the Maturity Date hereof) may be made at the option
of the Indenture Trustee or the Paying Agent by check mailed to the address of
the Holder entitled thereto as such address shall appear on the Register.
This Certificate shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose unless this Certificate has
been executed on behalf of the Owner Trustee by the manual or facsimile
signature of an authorized officer of the Owner Trustee, and authenticated by
the Indenture Trustee by the manual signature of an authorized officer or
signatory of the Indenture Trustee, in each case as specified in Section 2.02 of
the Indenture.
Reference is made to the Indenture and all supplements and amendments
thereto (a copy of which is on file with the Indenture Trustee at its principal
corporate trust office) for a more complete statement of the terms and
provisions thereof, including a statement of the properties thereby conveyed,
pledged and assigned, the nature and extent of the security, the respective
rights thereunder of the Owner Trustee, the Indenture Trustee and the Holders of
the Certificates, and the terms upon which the Certificates are, and are to be,
executed and delivered, as well as for a statement of the terms and conditions
of the trust created by the Indenture, to all of which terms and conditions in
the Indenture each Holder hereof agrees by its acceptance of this Certificate.
As more fully provided in the Indenture, on each Installment Payment
Date, the Holder hereof will receive a payment of principal equal to the
Installment Payment Date, the Holder hereof will receive a payment of principal
equal to the Installment Payment Percentage for such Installment Payment Date as
specified on Exhibit B-1 hereto (provided that, after the occurrence of any
--------
partial redemption or redemption pursuant to clause (ii) of Section 6.01(a) of
the Indenture, the "Installment Payment Percentage" for each Installment Payment
Date subsequent to the applicable Redemption Date shall be redetermined as
provided for in the Indenture) multiplied by the Original Principal Amount of
this Certificate specified above.
As more fully provided in the Indenture, the Certificates are subject
to redemption or partial redemption on not less than 25 nor more than 60 days'
notice by mail, under the circumstances set forth in the Indenture, at a
redemption price equal to the unpaid
4
principal amount thereof, premium if any, plus accrued interest thereon to the
Redemption Date.
If an Indenture Event of Default shall occur and be continuing, the
principal amount remaining unpaid of the Certificates may be declared due and
payable in the manner and with the effect provided in the Indenture. If, and
only if, such an event of default constitutes an event of default by the Company
under the Lease, the Indenture Trustee may declare the Lease to be in default,
and may, to the exclusion of the Owner Trustee, exercise one or more of the
remedies of the Owner Trustee provided in the Lease. Such remedies include the
right to repossess and use or operate the Aircraft, to sell or relet the
Aircraft free and clear of the Company's rights and retain the proceeds and to
require the Company to pay as liquidated damages (i) any unpaid Basic Rent plus
an amount equal to the excess of the Stipulated Loss Value of the Aircraft over
the aggregate fair market rental value thereof for the remainder of the term for
the Aircraft, (ii) any unpaid Basic Rent plus the excess of the Stipulated Loss
Value of the Aircraft over the fair market sales value thereof or (iii) if the
Aircraft has been sold, any unpaid Basic Rent plus the excess of the Stipulated
Loss Value thereof over the net sales proceeds.
By acceptance of this Certificate, the Holder hereof agrees to be
bound by the provisions of the Participation Agreement applicable to Holders.
The Owner Trustee or the Owner Participant may, in their sole
discretion, in certain circumstances cure any default by the Company under the
Lease arising from the failure of the Company to make any payment of Basic Rent
under the Lease. The Owner Trustee or the Owner Participant may in their sole
discretion in certain circumstances cure any other default by the Company in the
performance of its Obligations under the Lease which can be cured by the payment
of money, by making such payment on behalf of the Company.
The right of the Holder of this Certificate to institute action for
any remedy under the Indenture, including the enforcement of payment of any
amount due hereon, is subject to certain restrictions specified in the
Indenture.
The Owner Trustee and the Indenture Trustee will be discharged from
their respective obligations in respect of the Certificates (except for certain
matters, including obligations to register the transfer or exchange of
Certificates, replace stolen, lost or mutilated Certificates, maintain paying
agencies and hold moneys for payment in trust), and the Indenture Trustee may
thereupon cause the release of the Indenture Estate from the lien of the
Indenture, if (a) the Owner Trustee deposits or causes to be deposited
irrevocably with the Indenture Trustee, in trust, money or U.S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay principal of, premiums, if any, and interest on
5
the Outstanding Certificates on the dates such payments are due in accordance
with the terms of such Certificates and (b) certain other conditions are
satisfied, including the publication by the United States Internal Revenue
Service of a ruling to the effect that the deposit and related defeasance would
not cause the Holders of the Certificates to recognize income, gain or loss for
Federal income tax purposes.
As provided in the Indenture, in certain circumstances this
Certificate is transferable, and upon surrender of this Certificate for
registration of transfer at the principal corporate trust office of the
Registrar, or at the office or agency maintained for such purpose, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Registrar duly executed by, the Holder or his attorney duly authorized in
writing, one or more new Certificates of the same maturity and type and of
authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates. The
Certificates are issuable in denominations of $1,000 and integral multiples
thereof except that one Certificate of each maturity may be in an amount that is
not an integral multiple of $1,000. As provided in the Indenture and subject to
certain limitations therein set forth, Certificates are exchangeable for a like
aggregate principal amount of Certificates of the same maturity and type and of
authorized denominations, as requested by the Holder surrendering the same, upon
presentation thereof for such purpose at the principal corporate trust office of
the Registrar, or at an office or agency maintained for such purpose.
No service charge shall be made for any such registration of transfer
or exchange, but the Registrar may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, the Paying Agent, the
Registrar and the Company may deem and treat the person in whose name this
Certificate is registered as the absolute owner hereof for the purpose of
receiving payment of the principal of and interest on this Certificate and for
all other purposes whatsoever whether or not this Certificate be overdue, and
neither the Owner Trustee, the Indenture Trustee, the Paying Agent, the
Registrar nor the Company shall be affected by notice to the contrary.
AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS CERTIFICATE SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS OF THE STATE
OF ILLINOIS.
6
IN WITNESS WHEREOF, the Owner Trustee has caused this instrument to be
duly executed.
STATE STREET BANK AND TRUST
COMPANY
not in its individual capacity,
but solely as Owner Trustee
By: __________________________________
Title:
7
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Indenture.
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
as Indenture Trustee
By: __________________________________
Authorized officer and signatory
Exhibit A-2 to
Trust Indenture and
Mortgage
Form of Series 1995 777 B Serial Certificates
---------------------------------------------
$________ (Original Issue Price) No. _____
$_________ (Original Principal Amount)
SERIES 1995 777 B CERTIFICATE
STATE STREET BANK AND TRUST COMPANY
Not in its Individual Capacity
but Solely as Owner Trustee Under the
Trust Agreement (1995 777 B)
Dated as of May 1, 1995
Issued in connection with Aircraft N766UA
Leased to
UNITED AIR LINES, INC.
Date of Issuance: _________, 1995 MATURITY DATE
-------------
_______ , 199__
INTEREST RATE PER ANNUM: ____%
COMMENCEMENT DATE
CASH INTEREST: $__________
State Street Bank and Trust Company, not in its individual capacity,
but solely as owner trustee (the "Owner Trustee") under that certain Trust
Agreement (1995 777 B), dated as of May 1, 1995, between the Owner Trustee in
its individual capacity and the institution referred to therein as the "Owner
Participant" (herein as such Trust Agreement may be amended or supplemented from
time to time called the "Trust Agreement"), for value received, hereby promises
to pay to _________________ or registered assigns the principal sum in dollars
equal to the Original Principal Amount specified above on the Maturity Date
specified above (provided, however, that, if the obligations evidenced by this
-------- -------
Certificate shall become due and payable (upon redemption or acceleration or
otherwise) and shall be paid during the Pre-Commencement Date Period, the
principal amount hereof to be paid shall be the Original Issue Price specified
above, together with the portion of the difference between such Original Issue
Price and the Original Principal Amount specified above which
1
2
corresponds to the period from the date of issuance hereof to the date of such
payment) and to pay interest (x) in the amount of the Commencement Date Cash
Interest specified above, payable on the Commencement Date, and (y) at the
Interest Rate Per Annum specified above on the Original Principal Amount
specified above from time to time outstanding in respect of the period
commencing on and including the Commencement Date and ending on the date when
the principal amount hereof shall have been paid in full, payable on each
October 19 and April 19 in each year, commencing on October 19, 1995 (provided,
--------
however, that, if the obligations evidenced by this Certificate shall become due
- -------
and payable (upon redemption or acceleration or otherwise) and shall be paid
during the Pre-Commencement Date Period, the amount thereof in respect of
interest shall be the amount equal to the portion of such Commencement Date Cash
Interest which corresponds to the period from the date of issuance hereof to the
date of such payment the accrual at the Interest Rate Per Annum specified above
of interest on the Original Issue Price specified above from the date of
issuance of this Certificate to the date of such payment). All amounts payable
by the Owner Trustee hereunder and under the Trust Indenture and Mortgage (1995
777 B), dated as of May 1, 1995 (as the same may hereafter be further amended or
supplemented from time to time, as the "Indenture", the defined terms therein
not otherwise defined herein being used herein with the same meanings), by and
among the Owner Trustee and First Security Bank of Utah, National Association,
as Indenture Trustee thereunder, shall be made only from the income and proceeds
of the Indenture Estate. Each Holder hereof, by its acceptance of this
Certificate, agrees that (a) it will look solely to the income and proceeds of
the Indenture Estate for payment of such amounts, to the extent available for
distribution to the Holder hereof as provided in the Indenture and (b) none of
the Owner Participant, the Owner Trustee or the Indenture Trustee is or shall be
personally liable to the Holder hereof for any amount payable hereunder or under
the Indenture or, except as provided in the Indenture in the case of the
Indenture Trustee and the Owner Trustee, for any liability under the Indenture.
The interest so payable and punctually paid or duly provided for, on
the applicable Interest Payment Date will, as provided in the Indenture, be paid
to the Person in whose name this Certificate (or one or more predecessor
Certificates) is registered at the close of business on the Record Date for
payment of such interest, which shall be the fifteenth day (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holder hereof on the such Record Date (or
to the Person in whose name this Certificate is registered upon issuance) and
may be paid to the Person in whose name this Certificate (or one or more
predecessor Certificates) is registered at the close of business on a special
record date for the payment of such Defaulted Interest to be fixed by the
Indenture Trustee pursuant to Section 2.08 of the Indenture, notice whereof
shall be given to Holders of Certificates entitled thereto not less than 10 days
prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Certificates may be listed, and
3
upon such notice as may be required by such exchange, all as more fully provided
in the Indenture.
Payment of the principal of, premium if any, and interest on this
Certificate will be made at the principal corporate trust office of the
Indenture Trustee, or the office or agency maintained by the Indenture Trustee
for such purpose in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
- -------- -------
Indenture Trustee or the Paying Agent by check mailed to the address of the
Holder entitled thereto as such address shall appear on the Register.
This Certificate shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose unless this Certificate has
been executed on behalf of the Owner Trustee by the manual or facsimile
signature of an authorized officer of the Owner Trustee, and authenticated by
the Indenture Trustee by the manual signature of an authorized officer or
signatory of the Indenture Trustee, in each case as specified in Section 2.02 of
the Indenture.
Reference is made to the Indenture and all supplements and amendments
thereto (a copy of which is on file with the Indenture Trustee at its principal
corporate trust office) for a more complete statement of the terms and
provisions thereof, including a statement of the properties thereby conveyed,
pledged and assigned, the nature and extent of the security, the respective
rights thereunder of the Owner Trustee, the Company, the Indenture Trustee and
the Holders of the Certificates, and the terms upon which the Certificates are,
and are to be, executed and delivered, as well as for a statement of the terms
and conditions of the trust created by the Indenture, to all of which terms and
conditions in the Indenture each Holder hereof agrees by its acceptance of this
Certificate.
As more fully provided in the Indenture, the Certificates are subject
to redemption or partial redemption, on not less than 25 nor more than 60 days'
notice by mail, under the circumstances set forth in the Indenture, at a
redemption price equal to the unpaid principal amount thereof, premium, if any,
plus accrued interest thereon to the Redemption Date.
If an Indenture Event of Default shall occur and be continuing, the
principal of the Certificates may be declared due and payable in the manner and
with the effect provided in the Indenture. If, and only if, such an event of
default constitutes an event of default by the Company under the Lease, the
Indenture Trustee may declare the Lease to be in default, and may, to the
exclusion of the Owner Trustee, exercise one or more of the remedies of the
Owner Trustee provided in the Lease. Such remedies include the right to
repossess and use or operate the Aircraft, to sell or relet the Aircraft free
and clear of the Company's rights and retain the proceeds and to require the
Company to pay as liquidated damages (i) any
4
unpaid Basic Rent plus an amount equal to the excess of the Stipulated Loss
Value of the Aircraft over the aggregate fair market rental value thereof for
the remainder of the term for the Aircraft, (ii) any unpaid Basic Rent plus the
excess of the Stipulated Loss Value of the Aircraft over the fair market sales
value thereof or (iii) if the Aircraft has been sold, any unpaid Basic Rent plus
the excess of the Stipulated Loss Value thereof over the net sales proceeds.
By acceptance of this Certificate, the Holder hereof agrees to be
bound by the provisions of the Participation Agreement applicable to Holders.
The Owner Trustee or the Owner Participant may, in their sole
discretion, in certain circumstances cure any default by the Company under the
Lease arising from the failure of the Company to make any payment of Basic Rent
under the Lease. The Owner Trustee or the Owner Participant may in their sole
discretion in certain circumstances cure any other default by the Company in the
performance of its obligations under the Lease which can be cured by the payment
of money, by making such payment on behalf of the Company.
The right of the Holder of this Certificate to institute action for
any remedy under the Indenture, including the enforcement of payment of any
amount due hereon, is subject to certain restrictions specified in the
Indenture.
The Owner Trustee and the Indenture Trustee will be discharged from
their respective obligations in respect of the Certificates (except for certain
matters, including obligations to register the transfer or exchange of
Certificates, replace stolen, lost or mutilated Certificates, maintain paying
agencies and hold moneys for payment in trust), and the Indenture Trustee may
thereupon cause the release of the Indenture Estate from the lien of the
Indenture, if (a) the Owner Trustee deposits or causes to be deposited
irrevocably with the Indenture Trustee, in trust, money or U.S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay principal of, premium, if any, and interest on the Outstanding
Certificates on the dates such payments are due in accordance with the terms of
such Certificates and (b) certain other conditions are satisfied, including the
publication by the United States Internal Revenue Service of a ruling to the
effect that the deposit and related defeasance would not cause the Holders of
the Certificates to recognize income, gain or loss for Federal income tax
purposes.
As provided in the Indenture, in certain circumstances this
Certificate is transferable, and upon surrender of this Certificate for
registration of transfer at the principal corporate trust office of the
Registrar, or at the office or agency maintained for such purpose, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Registrar duly executed by, the Holder or his attorney duly authorized in
5
writing, one or more new Certificates of the same maturity and type and of
authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates. The
Certificates are issuable in denominations of $1,000 and integral multiples
thereof except that one Certificate of each maturity may be in an amount that is
not an integral multiple of $1,000. As provided in the Indenture and subject to
certain limitations therein set forth, Certificates are exchangeable for a like
aggregate principal amount of Certificates of the same maturity and type and of
authorized denominations, as requested by the Holder surrendering the same, upon
presentation thereof for such purpose at the principal corporate trust office of
the Registrar, or at an office or agency maintained for such purpose.
No service charge shall be made for any such registration of transfer
or exchange, but the Registrar may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment for registration of transfer of this
Certificate, the Owner Trustee, the Indenture Trustee, the Paying Agent, the
Registrar and the Company may deem and treat the person in whose name this
Certificate is registered as the absolute owner hereof for the purpose of
receiving payment of the principal of and interest on this Certificate and for
all other purposes whatsoever whether or not this Certificate be overdue, and
neither the Owner Trustee, the Indenture Trustee, the Paying Agent, the
Registrar nor the Company shall be affected by notice to the contrary.
AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THIS CERTIFICATE SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS OF THE STATE
OF ILLINOIS.
IN WITNESS WHEREOF, the Owner Trustee has caused this instrument to be
duly executed.
STATE STREET BANK AND TRUST
COMPANY
not in its individual capacity,
but solely as Owner Trustee
By: __________________________________
Title:
6
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Indenture.
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
as Indenture Trustee
By ___________________________________
Authorized Officer or signatory
Title:
Exhibit B to
Trust Indenture and
Mortgage
MATURITY DATES, PRINCIPAL AMOUNTS AND
-------------------------------------
INTEREST RATES OF SERIES 1995 777 B CERTIFICATES
------------------------------------------------
ORIGINAL COMMENCEMENT
PRINCIPAL ISSUE DATE CASH INTEREST RATE
MATURITY DATE AMOUNT PRICE INTEREST PER ANNUM
------------- --------- -------- ------------ -------------
Series 1995 777 B1 [________] $[_____] $[_____] $[________] $[_______]
Series 1995 777 B2 [________] $[_____] $[_____] $[________] $[_______]
Trust Indenture and
Mortgage
Installment Payment Dates and Installment Payment Percentages
-------------------------------------------------------------
Installment Certificates shall be those
Certificates with the following Maturity Dates:
Installment Certificate No. 1 - Maturity Date: [_________]
Corresponding
Installment Payment Installment Payment Aggregate Installment
Date Percentage Payment Amount
- -------------------------------- ------------------------- ------------------------------
[ ] [ ]% $[ ]
[ ] [ ]% [ ]
TOTAL 100.00000000% $[ ]
------------- --------------------------
B-1-2
Installment Certificate No. 2 - Maturity Date: [_________]
Corresponding
-------------
Installment Payment Installment Payment Aggregate Installment
------------------- ------------------- ---------------------
Date Percentage Payment Amount
---- ---------- --------------
%
TOTAL 100.00000000% $
------------- -----------------
Exhibit B-2 to
Trust Indenture and
Mortgage
Issuance of Series 1995 777 B Certificates
------------------------------------------
The Series 1995 777 B Certificates issued hereunder shall be issued to
and shall be payable to each of the Pass Through Trustees under the Pass Through
Trust Agreements with respect to the grantor trusts created thereby, in each
case as set forth below:
1995-Al Trust:
[_____]% Certificate due [_________]
1995-A2 Trust:
[_____]% Certificate due [_________]
[Trust Indenture and Mortgage (1995 777 B)]
EXHIBIT C
---------
TRUST AGREEMENT AND TRUST INDENTURE AND MORTGAGE SUPPLEMENT
(1995 777 B)
This TRUST AGREEMENT AND TRUST INDENTURE AND MORTGAGE SUPPLEMENT (1995
777 B), dated May __, 1995 (herein called the "Trust Supplement") of STATE
STREET BANK AND TRUST COMPANY, not in its individual capacity, but solely as
Owner Trustee (herein called the "Owner Trustee"), under the Trust Agreement
(1995 777 B), dated as of May 1, 1995 (herein called the "Trust Agreement") ,
between the Owner Trustee and the Owner Participant named therein.
WITNESSETH:
WHEREAS, the Trust Agreement provides for the execution and delivery
of one or more supplements thereto substantially in the form hereof, which shall
particularly describe the Aircraft (such term and other terms defined in the
Trust Indenture referred to below used herein as therein defined) included in
the property covered by the Trust Agreement;
WHEREAS, the Trust Indenture and Mortgage (1995 777 B), dated as of
May 1, 1995 (herein called the "Trust Indenture"), between the Owner Trustee and
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, as Indenture Trustee (herein
called the "Indenture Trustee"), provides for the execution and delivery of a
supplement thereto substantially in the form hereof, which shall particularly
describe the Aircraft, and shall specifically mortgage such Aircraft to the
Indenture Trustee; and
WHEREAS, each of the Trust Agreement and Trust Indenture relates to
the Airframe and Engines described below, and a counterpart of the Trust
Indenture is attached hereto and made a part hereof and this Trust Supplement,
together with such counterpart of the Trust Indenture, is being filed for
recordation on the date hereof with the Federal Aviation Administration as one
document;
NOW, THEREFORE, this Trust Supplement Witnesseth, that the Owner
Trustee hereby confirms that the Lien of the Trust Indenture over the Trust
Indenture Estate includes the following described property:
C-2
[Trust Indenture and Mortgage (1995 777 B)]
AIRFRAME
One Airframe Identified as follows:
FAA
Registration Manufacturer's
Manufacturer Model Number Serial Number
------------ ----- ------ -------------
The Boeing Company 777-222 N766UA 26917
together with all Parts which are from time to time incorporated or installed in
or attached thereto or which have been removed therefrom, but where title to
which remains vested in the Owner Trustee in accordance with the Lease.
AIRCRAFT ENGINES
Two aircraft engines, each such engine having 750 or more rated take-
off horsepower or the equivalent thereof, whether or not such engines shall be
installed in or attached to the Airframe or any other airframe, identified as
follows:
Manufacturer's
Manufacturer Model Serial Number
------------ -------------- -------------
Pratt & Whitney PW4084 [ ]
Pratt & Whitney PW4084 [ ]
together with all Parts which are from time to time incorporated or installed in
or attached thereto or which have been removed therefrom, but where title to
which remains vested in the Owner Trustee in accordance with the Lease.
As further security for the obligations referred to above and secured
by the Trust Indenture and hereby, the Owner Trustee hereby confirms that the
Lien of the Trust Indenture over the Trust Indenture Estate includes the Lease
Supplement of even date herewith covering the property described above.
Notwithstanding any provision hereof, no Excluded Payment shall
constitute security for any of the aforementioned obligations.
TO HAVE AND TO HOLD all and singular the aforesaid property unto the
Indenture Trustee, its successors and assigns, for the equal and proportionate
benefit and security of the and the holders from time to time of the
Certificates outstanding, without any
C-3
[Trust Indenture and Mortgage (1995 777 B)]
preference, distinction or priority of any one Certificate over any other by
reason of series, priority of time of issue, sale, negotiation, date of maturity
thereof or otherwise for any reason whatsoever, and for the uses and purposes
and subject to the terms and provisions set forth in the Trust Indenture.
This Trust supplement shall be construed as Supplemental to the Trust
Indenture and to the Trust Agreement and shall form a part of each, and the
Trust Agreement and the Trust Indenture are each hereby incorporated by
reference herein and each is hereby ratified, approved and confirmed.
* * *
C-4
[Trust Indenture and Mortgage (1995 777 B)]
IN WITNESS WHEREOF, the Owner Trustee has caused this Trust Supplement
to be duly executed by one of its officers, thereunto duly authorized, on the
day and year first above written.
STATE STREET BANK AND TRUST
COMPANY
not in its individual capacity but solely
as Owner Trustee
By:__________________________
Title:
EXHIBIT 4.1
===============================================
THIRD AMENDED AND RESTATED
TRUST INDENTURE AND MORTGAGE
(1993 747 A)
Dated as of May 1, 1995
between
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity except as expressly set forth herein,
but solely as Owner Trustee,
and
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION,
as Indenture Trustee
One Boeing 747-422 Aircraft N189UA
United Air Lines, Inc.
Series 1993 747 A Certificates
===============================================
TABLE OF CONTENTS
-----------------
Page
----
RECITALS................................................................... 1
GRANTING CLAUSE............................................................ 2
HABENDUM CLAUSE............................................................ 5
ARTICLE 1 DEFINITIONS.................................................... 7
1.01. Definitions.................................................. 7
ARTICLE 2 THE CERTIFICATES............................................... 20
2.01. Certificates; Title and Terms................................ 20
2.02. Execution and Authentication................................. 21
2.03. Registrar and Paying Agent................................... 22
2.04. Transfer and Exchange........................................ 22
2.05. Holder Lists; Ownership of Certificates...................... 23
2.06. Mutilated, Destroyed, Lost or Stolen Certificates............ 23
2.07. Cancellation................................................. 23
2.08. Payment on Certificates; Defaulted Principal and Interest.... 24
2.09. Payment from Indenture Estate Only; Non-Recourse Obligations. 25
2.10. Execution, Delivery and Dating of Certificates upon Original
Issuance..................................................... 26
ARTICLE 3 RECEIPT, DISTRIBUTION AND APPLICATION OF FUNDS IN THE INDENTURE
ESTATE................................................... 26
3.01. [Reserved for Potential Future Use]........................... 26
3.02. Payment in Case of Redemption or Purchase of Certificates.... 26
3.03. Application of Rent When No Indenture Event of Default Is
Continuing................................................... 27
3.04. Application of Certain Payments in Case of Requisition or
Event of Loss............................................... 27
3.05. Payments During Continuance of Indenture Event of Default.... 28
3.06. Payments for Which Application Is Provided in Other Documents 29
3.07. Payments for Which No Application Is Otherwise Provided...... 29
ARTICLE 4 COVENANTS OF OWNER TRUSTEE................................... 30
4.01. Covenants of the Owner Trustee............................... 30
ARTICLE 5 DISPOSITION, SUBSTITUTION AND RELEASE OF PROPERTY
INCLUDED IN THE INDENTURE ESTATE DURING
CONTINUATION OF LEASE..................................... 31
ii
5.01. Disposition, Substitution and Release of Property Included
in the Indenture Estate During Continuation of Lease........ 31
ARTICLE 6 REDEMPTION OF CERTIFICATES................................... 32
6.01. Redemption of Certificates upon Certain Events............... 32
6.02. Redemption or Purchase of Certificates upon Certain Indenture
Events of Default............................................ 34
6.03. Notice of Redemption to Holders.............................. 35
6.04. Deposit of Redemption Price.................................. 35
6.05. Certificates Payable on Redemption Date...................... 36
ARTICLE 7 MATTERS CONCERNING THE COMPANY............................... 36
7.01. Repayment of Monies for Certificate Payments Held by the
Indenture Trustee............................................ 36
7.02. Change in Registration....................................... 36
7.03. Assumption of Obligations of Owner Trustee by the Company.... 37
ARTICLE 8 DEFAULTS AND REMEDIES........................................ 39
8.01. Indenture Events of Default.................................. 39
8.02. Acceleration; Rescission and Annulment....................... 42
8.03. Other Remedies Available to Indenture Trustee................ 43
8.04. Waiver of Owner Trustee...................................... 50
8.05. Waiver of Existing Defaults.................................. 51
8.06. Control by Majority.......................................... 51
8.07. Limitation on Suits by Holders............................... 51
8.08. Rights of Holders to Receive Payment......................... 52
8.09. Indenture Trustee May File Proofs of Claim................... 52
ARTICLE 9 INDENTURE TRUSTEE............................................ 52
9.01. Duties of Indenture Trustee.................................. 52
9.02. Rights of Indenture Trustee.................................. 53
9.03. Individual Rights of Indenture Trustee....................... 53
9.04. Funds May Be Held by Indenture Trustee or Paying Agent;
Investments.................................................. 53
9.05. Notice of Defaults........................................... 54
9.06. Compensation and Indemnity................................... 55
9.07. Replacement of Indenture Trustee............................. 55
9.08. Successor Indenture Trustee, Agents by Merger, etc........... 57
9.09. Eligibility; Disqualification................................ 57
9.10. Trustee's Liens.............................................. 57
9.11. Withholding Taxes; Information Reporting..................... 57
iii
9.12. Additional Collateral........................................ 58
ARTICLE 10 SATISFACTION AND DISCHARGE; DEFEASANCE; TERMINATION OF
OBLIGATIONS.............................................. 58
10.01. Satisfaction and Discharge of Agreement; Defeasance;
Termination of Obligations................................. 58
10.02. Survival of Certain Obligations............................. 60
10.03. Monies to Be Held in Trust.................................. 60
10.04. Monies to Be Returned to Owner Trustee...................... 61
ARTICLE 11 AMENDMENTS AND WAIVERS...................................... 61
11.01. Amendments to this Agreement Without Consent of Holders..... 61
11.02. Amendments to this Agreement with Consent of Holders........ 62
11.03. Revocation and Effect of Consents........................... 63
11.04. Notation on or Exchange of Certificates..................... 63
11.05. Indenture Trustee Protected................................. 63
11.06. Amendments, Waivers, etc. of Other Operative Documents...... 63
ARTICLE 12 MISCELLANEOUS............................................... 67
12.01. Notices..................................................... 67
12.02. [Reserved for Potential Future Use].......................... 69
12.03. [Reserved for Potential Future Use].......................... 69
12.04. Rules by Indenture Trustee and Agents....................... 69
12.05. Non-Business Days........................................... 69
12.06. GOVERNING LAW............................................... 69
12.07. No Recourse Against Others.................................. 69
12.08. Execution in Counterparts................................... 69
ARTICLE 13 ACTIONS TO BE TAKEN UPON TERMINATION OF LEASE............... 70
13.01. Actions to Be Taken upon Termination of Lease............... 70
iv
SIGNATURES................................................................. 71
Exhibit A-1 Form of Series 1993 747 A Installment Certificates
Exhibit A-2 Form of Series 1993 747 A Serial Certificates
Exhibit B Maturity Dates, Original Issue Prices, Principal Amounts and
Interest Rates of Series 1993 747 A Certificates
Exhibit B-1 Installment Payment Dates and Installment Payment Percentages
Exhibit B-2 Issuance of Series 1993 747 A Certificates
Exhibit C Form of Trust Agreement and Third Amended and Restated Trust
Indenture and Mortgage Supplement
THIRD AMENDED AND RESTATED
TRUST INDENTURE AND MORTGAGE (1993 747 A)
This THIRD AMENDED AND RESTATED TRUST INDENTURE AND MORTGAGE (1993
747 A), dated as of May 1, 1995, between STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company corporation, not in its individual capacity except
as otherwise expressly provided herein, but solely as Owner Trustee under the
Trust Agreement (capitalized terms used herein having the respective meanings
specified therefor in Article 1), and FIRST SECURITY BANK OF UTAH, NATIONAL
ASSOCIATION, a national banking association, as Indenture Trustee hereunder.
W I T N E S S E T H:
-------------------
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 Certificates issued hereunder, and (ii) the
Owner Trustee has been authorized and directed pursuant to the Redemption and
Refinancing Agreement to execute and deliver this Third Amended and Restated
Trust Indenture and Mortgage;
WHEREAS, all capitalized terms used herein shall have the
respective meanings set forth or referred to in Article 1 hereof;
WHEREAS, the Owner Trustee and the Indenture Trustee entered into
that certain Trust Indenture and Mortgage (1993 747 A), dated as of April 1,
1993 (the "Original Indenture"), which Original Indenture was recorded with the
Federal Aviation Administration on April 21, 1993 and was assigned Conveyance
No. FF08935;
WHEREAS, the Owner Trustee and the Indenture Trustee entered into
that certain First Amended and Restated Trust Indenture and Mortgage (1993 747
A), dated as of April 1, 1993 (the "First Amended and Restated Indenture"),
thereby amending and restating in its entirety the Original Indenture, which
First Amended and Restated Indenture was recorded with the Federal Aviation
Administration on May 6, 1993 and was assigned Conveyance No. VV003010;
WHEREAS, the Owner Trustee and the Indenture Trustee entered into
that certain Second Amended and Restated Trust Indenture and Mortgage (1993 747
A), dated as of July 1, 1994, thereby amending and restating in its entirety
the Original Indenture, which
2
Second Amended and Restated Indenture was recorded with the Federal Aviation
Administration on August 10, 1994 and was assigned Conveyance No. ZZ006617 and
which was further amended by the First Amendment to Second Amended and Restated
Trust Indenture and Mortgage (1993 747 A) dated September 27, 1994 and assigned
conveyance No. JJ12459 (the "Amended Indenture");
WHEREAS, the parties desire by this Agreement, among other things,
(i) to further amend and restate in its entirety the Amended Indenture, (ii) to
provide for the issuance by the Owner Trustee of the Series 1993 747 A
Certificates evidencing the loans made by the Pass Through Trustees to finance
the Owner Trustee's payment of Lessor's Cost, as provided in the Redemption and
Refinancing Agreement, and (iii) to provide for the assignment, mortgage and
pledge by the Owner Trustee to the Indenture 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 Indenture Trustee, for the ratable benefit
and security of the Holders;
WHEREAS, all things have been done to make the Certificates, when
executed by the Owner Trustee and authenticated and delivered by the Indenture
Trustee hereunder, the valid, binding and enforceable obligations of the Owner
Trustee; and
WHEREAS, all things necessary to make this Agreement the legal,
valid and binding obligation of the Owner Trustee and the Indenture 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 MORTGAGE WITNESSETH, that,
to secure the prompt payment of the principal of, premium, if any, and interest
on, and all other amounts due with respect to, all Certificates 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 Operative
Documents to which it is a party, for the benefit of the Holders, 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 Certificates by the Holders, and of other good and valuable
consideration the receipt and adequacy whereof are 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 Indenture Trustee, its
successors and assigns, for the
3
security and benefit of the Holders from time to time, a 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 Agreement by any instrument supplemental hereto,
but excluding the Excluded Payments, are herein called the "Indenture Estate"):
(1) the Airframe and Engines (each such Engine having 750 or more
rated take-off horsepower or the equivalent thereof) and all replacements
thereof and substitutions therefor in which the Owner Trustee shall from
time to time acquire an interest in accordance with the Lease, as more
particularly described in the Trust Supplement and the Lease Supplement
executed and delivered with respect to the Aircraft or any such
replacements or substitutions therefor, as provided in this Agreement and
the Lease;
(2) the Lease and all Rent thereunder, including, without
limitation, all amounts of Basic Rent, Supplemental Rent, and payments of
any kind required to be made by the Company thereunder; all amounts
payable to the Owner Trustee under the Participation Agreement that do
not constitute Excluded Payments; the Purchase Agreement (to the extent
assigned by the Owner Trustee's Purchase Agreement), the Owner Trustee's
Purchase Agreement, the Owner Trustee's Bill of Sale, the Owner Trustee's
FAA Bill of Sale and any and all contracts relating to the Airframe and
Engines or any rights or interest therein to which the Owner Trustee is
now or may hereafter be a party; including, without limitation, 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 (other than the rights of the Owner Trustee provided for
hereunder);
(3) all rents, issues, profits, revenues and other income of the
property subjected or required to be subjected to the Lien of this
Agreement;
(4) all requisition proceeds with respect to the Aircraft or any
part thereof (to the extent of the Owner Trustee's interest therein
pursuant to the terms of the Lease) and all insurance proceeds with
respect to the Aircraft or any part thereof from insurance required to be
maintained by the Company under Section 11 of the Lease, but excluding
any insurance maintained by the Company and not required under Section 11
of the Lease;
4
(5) all moneys and securities now or hereafter paid or deposited
or required to be paid or deposited to or with the Indenture 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 Indenture
Trustee hereunder;
(6) all proceeds of the foregoing; and
(7) the Additional Collateral, if any.
Notwithstanding the foregoing provisions:
(a) there shall be excluded from the security interest granted by
this Agreement all Excluded Payments;
(b) (i) whether or not a Lease Event of Default or an Indenture
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 Indenture Trustee (a) to Excluded Payments and to commence an
action at law to obtain such Excluded Payments, (b) to adjust Basic Rent
and the percentages relating to Stipulated Loss Value and Termination
Value, the Special Termination Value Percentage and the EBO Percentages
as provided in Section 3(c) of the Lease and Section 18 of the
Participation Agreement, (c) to exercise any election or option to make
any decision or determination, or to give or receive any notice, consent,
waiver or approval, or to take any other action in respect of, but in
each case only to the extent relating to, Excluded Payments, (d) to
retain the rights of the "Lessor" with respect to solicitations of bids,
and the election to retain the Aircraft pursuant to Section 9 of the
Lease, (e) to exercise the right of "Lessor" to determine the fair market
rental value or fair market sales value pursuant to Section 19 of the
Lease, (f) to exercise all rights with respect to insurance maintained
for its own account which Section 11(e) of the Lease specifically confers
on the "Lessor" and (g) to exercise, to the extent necessary to enable it
to exercise its rights under Section 8.03(e)(i) hereof, the rights of the
"Lessor" under Section 21 of the Lease;
(ii) whether or not a Lease Event of Default or Indenture Event of
Default shall occur and be continuing, the Owner Trustee and the
Indenture Trustee shall each have the right separately but not to the
exclusion of the other, (a) to receive from the Company all notices,
certificates, reports, filings, Opinions of Counsel, copies of all
documents and all information which the Company is permitted or required
to give or furnish to the "Lessor" pursuant to the Lease or to the Owner
Trustee pursuant to any other Operative Document, (b) to exercise
inspection rights pursuant to Section 12 of the Lease, (c) to maintain
separate insurance pursuant to Section 11(e) of the Lease and to retain
all rights with respect to such insurance maintained for its own account,
5
(d) to give any notice of default under Section 15 of the Lease and to
declare the Lease in default in respect thereof, (e) to cause the Company
to take any action and execute and deliver such documents and assurances
as the "Lessor" may from time to time reasonably request pursuant to
Section 16 of the Lease; (f) to consent (with the concurrent consent of
the other such party to the extent such consent is required) to changes
to the list of countries on Exhibit F or G to the Lease and (g) to
purchase an engine pursuant to Section 5(e) of the Lease;
(iii) so long as no Indenture Event of Default shall have occurred
and be continuing (but subject to the provisions of Section 11.06), the
Owner Trustee shall retain the right, to the exclusion of the Indenture
Trustee, to exercise the following rights of the "Lessor" under the
Lease: (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,
(b) the right to waive the opinion required pursuant to Section
8(e)(ii)(C) of the Participation Agreement in connection with an Event of
Loss relating only to one or more Engines and (c) the right to elect (or
not to elect) under Section 10(b) of the Lease to require the Company to
pay the amounts set forth in clauses (A) and (B) of Section 10(b);
(c) the leasehold interest granted to the Company by the Lease
shall not be subject to the security interest granted by this Agreement,
and nothing in this Agreement shall affect the rights of the Company
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 Indenture Trustee,
nothing contained in this Granting Clause shall prevent the Owner
Trustee, as the "Lessor" under the Lease, from seeking specific
performance of the covenants of the Company under the Lease relating to
the protection, insurance, maintenance, possession and use of the
Aircraft and from maintaining separate insurance with respect to the
Aircraft to the extent permitted by Section 11 of the Lease.
None of the payments and rights described in the foregoing clauses
(a) through (d) shall be included in the Indenture Estate.
HABENDUM CLAUSE
TO HAVE AND TO HOLD all and singular the aforesaid property unto
the Indenture Trustee, its successors and assigns, in trust for the benefit and
security of the Indenture Trustee and the Holders from time to time, without
any priority of any one Certificate over any other, and for the uses and
purposes and subject to the terms and provisions set forth in this Agreement.
6
1. The Owner Trustee agrees that this Agreement creates and
grants and is intended to and shall create and grant a security interest in the
Aircraft to the Indenture Trustee, which security interest attached on the
Delivery Date. The security interest created by this Agreement and granted to
the Indenture Trustee hereunder in the Indenture Estate other than in the
Aircraft attached upon the delivery of the Original Indenture Agreement.
2. 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 its
obligations assumed by it thereunder, all in accordance with and pursuant to
the terms and provisions thereof, and the Indenture Trustee and the Holders
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 Indenture Trustee (except as to the
Indenture Trustee, if the Indenture Trustee shall have become the "Lessor"
under the Lease) or the Holders be required or obligated in any manner to
perform or fulfill any obligations of the Owner Trustee under any of the
Operative Documents to which the Owner Trustee is a party, or, except as herein
expressly provided, to make any payment, or to make any inquiry as to the
nature or sufficiency of any payment received by it, or present or file any
claim, or take any action to collect or enforce the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
3. The Owner Trustee does hereby constitute the Indenture
Trustee the true and lawful attorney of the Owner Trustee, irrevocably, with
full power (in the name of the Owner Trustee or otherwise) subject to the terms
and conditions of this Indenture, 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 Excluded Payments) under or arising
out of the Lease (subject to Section 11.06(b)(1)), the Purchase Agreement and
the Owner Trustee's Purchase Agreement, 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 Indenture Trustee may deem to
be necessary or advisable in the premises. The Owner Trustee has directed the
Company to make all payments of Rent (other than Excluded Payments) payable to
the Owner Trustee by the Company and all other amounts which are required to be
paid to or deposited with the Owner Trustee pursuant to the Lease directly to
the Indenture Trustee at such address as the Indenture Trustee shall specify,
for application as provided in this Agreement. The Owner Trustee agrees that
promptly on receipt thereof, it will transfer to the Indenture Trustee any and
all moneys from time to time received by it constituting part of the Indenture
Estate, for distribution by the Indenture Trustee pursuant to this Agreement,
except that the Owner Trustee shall accept for distribution pursuant to the
Trust Agreement any amounts distributed to it by the Indenture Trustee as
expressly provided in this Agreement and any Excluded Payments.
7
4. The Owner Trustee agrees that at any time and from time to
time, upon the written request of the Indenture Trustee, the Owner Trustee will
promptly and duly execute and deliver or cause to be duly executed and
delivered any and all such further instruments and documents as the Indenture
Trustee may reasonably deem desirable in obtaining the full benefits of the
assignment hereunder and of the rights and powers herein granted; provided,
--------
however, that the Owner Trustee shall have no obligation to execute and
- -------
deliver or cause to be executed or delivered to the Indenture Trustee any such
instrument or document if such execution and delivery would result in the
imposition of additional liabilities on the Owner Trustee or the Owner
Participant and would result in a burden on the Owner Participant's business
activities, unless the Owner Trustee or the Owner Participant, as the case may
be, is indemnified to its reasonable satisfaction against any losses,
liabilities and expenses incurred in connection with such execution and
delivery pursuant to any Operative Document.
5. The Owner Trustee does hereby warrant and represent that it
has not assigned or pledged, and hereby covenants that it will not assign or
pledge, so long as the assignment hereunder shall remain in effect, any of its
right, title or interest hereby assigned, to any Person other than the
Indenture Trustee, and that it will not, except as provided in or permitted by
this Agreement, accept any payment from the Company, enter into an agreement
amending or supplementing any of the Operative Documents, execute any waiver or
modification of, or consent under the terms of any of the Operative Documents,
settle or compromise any claim (other than claims in respect of Excluded
Payments) against the Company 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 arbitration
thereunder.
IT IS HEREBY FURTHER COVENANTED AND AGREED by and among the parties
hereto as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. (a) For all purposes of this
-----------
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms defined in this Article 1 have the meanings
assigned to them in this Article 1, and include the plural as well as the
singular;
8
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States;
(3) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(4) all references in this Agreement to Articles, Sections and
Exhibits refer to Articles, Sections and Exhibits of this Agreement.
(b) For all purposes of this Agreement, the following capitalized
terms have the following respective meanings:
"Actual Knowledge" means, (i) as it applies to the Owner
----------------
Trustee or Indenture Trustee, as the case may be, actual knowledge of a
responsible officer in the Corporate Trust Department or the Corporate Trust
Office, as the case may be, and (ii) as it applies to the Owner Participant,
actual knowledge of a Vice President or more senior officer of the Owner
Participant or other officer of the Owner Participant in each case having
responsibility for the transactions contemplated by the Operative Documents;
provided that each of the Owner Trustee, the Indenture Trustee and the Owner
Participant shall be deemed to have "Actual Knowledge" of any matter as to
which it has been given notice by any of Lessee, the Owner Participant, any
Holder, the Owner Trustee or the Indenture Trustee, such notice having been
given pursuant to and in accordance with Section 12.01.
"Additional Collateral" means any property in addition to the
---------------------
collateral listed in clauses (1) through (5) of the Granting Clause which may
be added to the Indenture Estate from time to time by the Owner Participant in
accordance with Section 9.12 hereof for so long as such property is to be
included in the Indenture Estate in accordance with the grant made in said
Section 9.12.
"Affiliate" with respect to a specified Person, means any other
---------
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person. For the purposes of this definition,
"control" when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means any Paying Agent or Registrar.
-----
"Aircraft" shall have the meaning specified therefor in the
--------
Lease.
9
"Airframe" shall have the meaning specified therefor in the
--------
Lease.
"Appraiser" means a Person engaged in the business of making
---------
appraisals and, in the case of the Aircraft, familiar with commercial aviation
equipment.
"Bankruptcy Code" shall have the meaning specified therefor in
---------------
the Lease.
"Basic Rent" shall have the meaning specified therefor in the
----------
Lease.
"Business Day" shall have the meaning specified therefor in the
------------
Lease.
"Certificate" or "Certificates" means any Certificate
----------- ------------
issued under this Agreement, including the Series 1993 747 A Certificates
issued hereunder substantially in the form of Exhibits A-1 and A-2 hereto as
such form may be varied pursuant to the terms hereof and any and all
Certificates issued in replacement or exchange therein in accordance with the
provisions hereof.
"Certificate Holder" shall have the meaning specified for the
------------------
term "Holder" hereunder.
"Citizen of the United States" shall have the meaning specified
----------------------------
therefor in the Lease.
"Commencement Date" shall have the meaning specified therefor
-----------------
in the Lease.
"Commencement Date Cash Interest" when used with respect to a
-------------------------------
Certificate, shall be such Certificate's pro rata portion of the
--- ----
aggregate commencement date cash interest as determined on the basis of the
data included in Exhibit B.
"Company" means United Air Lines, Inc., a Delaware corporation,
-------
and, subject to the provisions of the Participation Agreement, its permitted
successors and assigns.
"Company Request" means a written request of the Company
---------------
executed on its behalf by a Responsible Company Officer.
"Co-Registrar" shall have the meaning specified therefor in
------------
Section 2.03.
"Debt" shall mean any liability for borrowed money, or any
----
liability for the payment of money in connection with any letter of credit
transaction, or other liabilities evidenced or to be evidenced by bonds,
debentures, notes or other similar instruments.
10
"Defaulted Installment" shall have the meaning specified
---------------------
therefor in Section 2.08.
"Defaulted Interest" shall have the meaning specified therefor
------------------
in Section 2.08.
"Delivery Date" shall have the meaning specified therefor in
-------------
the Lease.
"EBO Date" shall have the meaning specified therefor in the
--------
Lease.
"Engine" shall have the meaning specified therefor in the
------
Lease.
"Event of Loss" shall have the meaning specified therefor in
-------------
the Lease.
"Excess Amount" shall have the meaning specified therefor in
-------------
the Lease.
"Excluded Payments" means (i) any right, title or interest of
-----------------
the Owner Trustee in its individual capacity, the Owner Participant or their
respective Affiliates or of their respective successors, permitted assigns,
directors, officers, employees, servants and agents to any payment which by the
terms of Section 7(b) or 7(c) of the Participation Agreement, Section 5.03 or
7.01 of the Trust Agreement or any section of the Tax Indemnity Agreement or
any corresponding payment under Section 3(d) of the Lease is payable to such
Person, (ii) any insurance proceeds payable under insurance maintained by the
Owner Trustee in its individual capacity or the Owner Participant (whether
directly or through the Owner Trustee), or to their respective Affiliates,
successors, permitted assigns, directors, officers, employees, servants and
agents, (iii) any insurance proceeds (or proceeds of governmental indemnities
in lieu thereof) payable to the Owner Trustee in its individual capacity or to
the Owner Participant, or to their respective Affiliates, successors, permitted
assigns, directors, officers, employees, servants and agents, under any
liability insurance maintained by the Company pursuant to Section 11 of the
Lease or by any other Person (or proceeds of governmental indemnities in lieu
thereof), (iv) any rights of the Owner Participant or the Owner Trustee to
demand, collect, sue for, or otherwise receive and enforce payment of the
foregoing amounts (including interest thereon to the extent provided in the
applicable provisions of the Operative Documents) and the right to declare an
Event of Default under the Lease in respect of any of the foregoing amounts,
but not including the right to exercise any remedies under the Lease except for
those specifically provided for in this clause (iv), (v) payments to the Owner
Participant by the Owner Trustee pursuant to Section 2 of the Participation
Agreement and any funds held by the Owner Trustee or payable to the Owner
Participant pursuant to any funding letter entered into in lieu of the
provisions of Section 2 of the Participation Agreement, (vi) if the Lessee has
assumed the obligations of the Owner Trustee in respect of the Certificates in
accordance with Section 7.03 hereof and Section 8(r) of the Participation
Agreement, the amount payable as purchase price pursuant to Section 19(b) of
the Lease, (vii) Transaction Expenses or other
11
amounts or expenses paid or payable to, or for the benefit of, the Owner
Participant pursuant to the Participation Agreement, (viii) the respective
rights of the Owner Trustee in its individual capacity or the Owner Participant
to the proceeds of the foregoing and (ix) any right to demand, collect or
otherwise receive and enforce the payment of any amount described in clauses
(i) through (viii) above.
"Federal Aviation Act" shall have the meaning specified
--------------------
therefor in the Lease.
"Federal Aviation Administration" and "FAA" shall have the
------------------------------- ---
meaning specified therefor in the Lease.
"Holder" means a person in whose name a Certificate is
------
registered on the Register including, so long as it holds any Certificate
issued hereunder, the respective Pass Through Trustee under each Pass Through
Trust Agreement.
"Indenture Default" means any event which is, or after
-----------------
notice or passage of time, or both, would be, an Indenture Event of Default.
"Indenture Estate" shall have the meaning specified therefor in
----------------
the Granting Clause hereof.
"Indenture Event of Default" shall have the meaning
--------------------------
specified therefor in Article 8.
"Indenture Trustee" means (x) with respect to any time
-----------------
prior to the execution and delivery of the Redemption and Refinancing
Agreement, State Street Bank and Trust Company of Connecticut, National
Association, a national banking association, and (y) at the time of the
execution and delivery of the Redemption and Refinancing Agreement and
thereafter, First Security Bank of Utah, National Association, a national
banking association, each and each other Person which may from time to time be
acting as Indenture Trustee in accordance with the provisions of this
Agreement.
"Independent" when used with respect to an engineer,
-----------
Appraiser or other expert, means an engineer, Appraiser or other expert who (i)
is in fact independent, (ii) does not have any direct financial interest or any
material indirect financial interest in the Company or any Affiliate of the
Company, and (iii) is not connected with the Company or any Affiliate of the
Company as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions.
"Independent Investment Banker" shall mean an independent
-----------------------------
investment banking institution of national standing appointed by (i) the
Company on behalf of the Owner Trustee or (ii) in the case of a redemption or
purchase of the Certificates under
12
Section 6.01(b) pursuant to Section 8.03(e)(ii), the Owner Trustee;
provided that, if the Indenture Trustee shall not have received written
- --------
notice of such an appointment at least 10 days prior to the relevant Redemption
Date or if a Lease Event of Default shall have occurred and be
continuing,"Independent Investment Banker" shall mean such an institution
-----------------------------
appointed by the Indenture Trustee.
"Installment Certificate" shall mean a Certificate
-----------------------
substantially in the form of Exhibit A-1, should any such Certificate be issued
hereunder.
"Installment Payment Amount" means, with respect to each
--------------------------
Installment Certificate, the amount of the installment payment of principal due
and payable on each Installment Payment Date, which amount shall be equal to
the product of the original principal amount of such Certificate and the
Installment Payment Percentage for such Installment Payment Date.
"Installment Payment Date" means each date on which an
------------------------
installment payment of principal is due and payable on any Installment
Certificate, as set forth in Exhibit B-1.
"Installment Payment Percentage" means, with respect to
------------------------------
each Installment Payment Date, the percentage set forth opposite such
Installment Payment Date in Exhibit B-1;
provided that, after the occurrence of any partial redemption or
- --------
redemptions pursuant to clause (ii) of Section 6.01(a), the "Installment
------------
Payment Percentage" for each Installment Payment Date subsequent to the
- ------------------
applicable Redemption Date shall be equal to the percentage obtained from the
following calculation:
(p - n) x y
-----------
p x s
where, for Installment Certificates maturing on the same Maturity Date:
p = the sum of the original principal amounts of all Installment
Certificates maturing on such Maturity Date as reflected on
Exhibit B hereto;
n = the sum of the principal amounts paid to all holders of
Installment Certificates maturing on such Maturity Date as a
result of all such partial redemptions (excluding any
Installment Payment Amounts paid on a Redemption Date as a
result of any such Redemption Date occurring on an
Installment Payment Date) and all payments of principal paid
on Installment Payment Dates on or prior to the applicable
Redemption Date;
13
y = the Installment Payment Percentage set forth in such Exhibit
B-1 applicable to the Installment Payment Date for which this
calculation is being performed; and
s = the sum of the Installment Payment Percentages for
Installment Payment Dates related to such Installment
Certificates maturing on such Maturity Date and subsequent to
the applicable Redemption Date.
"Interest Payment Date" means each [October 19] and
---------------------
[April 19], commencing on the Commencement Date.
"Lease" means (x) with respect to any time prior to the
-----
execution and delivery of the Redemption and Refinancing Agreement, that
certain Lease Agreement (1993 747 A), dated as of April 1, 1993, between the
Original Owner Trustee, as lessor, and the Company, as lessee, recorded by the
FAA on April 21, 1993, and assigned Conveyance No. FF08936, as amended and
restated by the First Amended and Restated Lease Agreement (1993 747 A), dated
as of April 1, 1993, between the Original Owner Trustee, as lessor, and the
Company, as lessee, recorded by the FAA on May 6, 1993 and assigned Conveyance
No. VV003011 and as amended by the First Amendment to First Amended and
Restated Lease Agreement (1993 747 A), dated as of April 19, 1994, between the
Original Owner Trustee, as lessor, and the Company, as lessee, recorded by the
FAA on June 15, 1994 and assigned Conveyance No. HK002085, and as amended by
the Second Amendment to First Amended and Restated Lease Agreement (1993 747
A), dated as of July 1, 1994, between the Original Owner Trustee, as lessor,
and the Company, as lessee, recorded by the FAA on August 10, 1994 and assigned
Conveyance No. ZZ000018, as amended by the Third Amendment to First Amended and
Restated Lease Agreement (1993 747 A), dated July 22, 1994, between the
Original Owner Trustee, as lessor, and the Company, as lessee, recorded by the
FAA on August 18, 1994 and assigned Conveyance No. ZZ006619 (the "Restated
Lease") and (y) at the time of the execution and delivery of the Redemption and
Refinancing Agreement and thereafter, the Restated Lease, as Amended and
Restated by the Second Amended and Restated Lease Agreement (1993 747 A), dated
May 1, 1995, as such Lease Agreement may from time to time be further
supplemented, amended or modified in accordance with the terms thereof and this
Agreement. The term "Lease" shall also include each Lease Supplement
-----
entered into pursuant to the terms of the Lease.
"Lease Event of Default" shall have the meaning specified
----------------------
for the term "Event of Default" in the Lease.
"Lease Loss Payment Date" shall have the meaning specified
-----------------------
for the term "Loss Payment Date" in the Lease.
"Lease Supplement" shall have the meaning specified
----------------
therefor in the Lease.
14
"Lease Termination Date" shall have the meaning
----------------------
specified for the term "Termination Date" in the Lease.
"Lessor Liens" shall have the meaning specified therefor in
------------
the Lease.
"Lien" means any mortgage, pledge, lien, charge, encumbrance,
----
lease, exercise of rights, security interest or claim.
"Loan Certificate" shall have the meaning specified for
----------------
the term "Certificate" hereunder.
"Maturity Date" means each of the dates specified in
-------------
Exhibit B as a maturity date of one or more of the Certificates.
"Officers' Certificate" means a certificate signed, in the
---------------------
case of the Company, by (i) the Chairman of the Board of Directors, the
President, or any Senior Vice President of the Company, signing alone, or (ii)
any Vice President signing together with the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Company or, in the
case of the Owner Trustee, a Responsible Officer of the Owner Trustee.
"Operative Documents" means this Agreement, the
-------------------
Participation Agreement, the Redemption and Refinancing Agreeement, the Lease,
the Tax Indemnity Agreement, the Consent and Agreement, the Owner Trustee's
Bill of Sale, the Owner Trustee's FAA Bill of Sale, the Acceptance Certificate,
the Purchase Agreement (to the extent assigned by the Owner Trustee's Purchase
Agreement), the Owner Trustee's Purchase Agreement, the Certificates, the Trust
Agreement, the Trust Supplement and the Redemption and Refinancing Agreement.
"Opinion of Counsel" means a written opinion of legal
------------------
counsel, who in the case of counsel for the Company may be (i) the senior
attorney employed by the Company, (ii) Vedder, Price, Kaufman & Kammholz or
(iii) other counsel designated by the Company and who shall be reasonably
satisfactory to the Indenture Trustee or, in the case of legal counsel for the
Owner Trustee, may be (x) Bingham, Dana & Gould or (y) other counsel designated
by the Owner Trustee and who shall be reasonably satisfactory to the Indenture
Trustee.
"Original Issue Price", when used with respect to a
--------------------
Certificate, shall be such Certificate's pro rata portion of the
--- ----
aggregate original issue price as determined on the basis of the data included
in Exhibit B hereto.
15
"Outstanding", when used with respect to Certificates,
-----------
means, as of the date of determination, all Certificates theretofore executed
and delivered under this Agreement other than:
(i) Certificates theretofore cancelled by the Indenture Trustee
or delivered to the Indenture Trustee for cancellation pursuant to
Section 2.07 or otherwise;
(ii) Certificates for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Indenture
Trustee in trust for the Holders of such Certificates; provided that
--------
if such Certificates are to be redeemed, notice of such redemption has
been duly given pursuant to this Agreement or provision therefor
satisfactory to the Indenture Trustee has been made; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been executed and delivered pursuant to this Agreement;
provided, however, that in determining whether the Holders of the
- -------- -------
requisite aggregate principal amount of Certificates Outstanding have given any
request, demand, authorization, declaration, direction, notice, consent or
waiver hereunder, Certificates owned by or pledged to the Company or any
Affiliate of the Company or the Owner Trustee or the Owner Participant or any
Affiliate thereof, shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, declaration, direction,
notice, consent or waiver, only Certificates which the Indenture Trustee knows
to be so owned or so pledged shall be disregarded. Certificates owned by the
Company, or the Owner Trustee or the Owner Participant, which have been pledged
in good faith may be regarded as Outstanding if the Company, or the Owner
Trustee or the Owner Participant, as the case may be, establishes to the
satisfaction of the Indenture Trustee the pledgee's right to act with respect
to such Certificates and that the pledgee is not the Company, or the Owner
Trustee or the Owner Participant or any Affiliate thereof.
"Owner Participant" shall be the party specified as the
-----------------
"Owner Participant" in the Participation Agreement, its successors and, to the
extent permitted by Article VIII of the Trust Agreement and Section 8(l) of the
Participation Agreement, its permitted successors and assigns.
"Owner Trustee" means (x) with respect to any time prior to
-------------
the execution and delivery of the Redemption and Refinancing Agreement,
Wilmington Trust Company, a Delaware banking corporation, and (y) at the time
of the execution and delivery of the Redemption and Refinancing Agreement and
thereafter, State Street Bank and Trust Company, a Massachusetts trust company,
not in its individual capacity, but solely as trustee
16
under the Trust Agreement, and each other Person which may from time to time be
acting as Owner Trustee in accordance with the provisions of the Operative
Documents.
"Owner Trustee's Purchase Agreement" shall have the meaning
----------------------------------
specified therefor in the Lease.
"Participation Agreement" shall have the meaning specified
-----------------------
therefor in the Lease.
"Parts" shall have the meaning specified therefor in the
-----
Lease.
"Pass Through Certificates" means any of the Pass Through
-------------------------
Certificates issued pursuant to any of the Pass Through Trust Agreements.
"Pass Through Trust" means each pass through trust created
------------------
pursuant to the related Pass Through Trust Agreement.
"Pass Through Trust Agreements" means the Pass Through Trust
-----------------------------
Agreement, dated as of February 1, 1992, as amended and restated as of May 1,
1995, between the Company and the Pass Through Trustee as supplemented by each
of the two Pass Through Trust Supplements Nos. 1995 A-1 and 1995 A-2, each
dated as of May [ ], 1995, as the same may from time to time be further
amended, supplemented or otherwise modified.
"Pass Through Trust Supplement" shall have the meaning
-----------------------------
specified for the term "Trust Supplement" in the Pass Through Trust Agreement.
"Pass Through Trustee" means First Security Bank of Utah,
--------------------
National Association in its capacity as trustee under each Pass Through Trust
Agreement, and such other Person that may from time to time be acting as
successor trustee under any such Pass Through Trust Agreement.
"Paying Agent" means any person acting as Paying Agent
------------
hereunder pursuant to Section 2.03.
"Permitted Investment" means each of (i) obligations of, or
--------------------
guaranteed by, the United States Government or agencies thereof, (ii) open
market commercial paper of any corporation incorporated under the laws of the
United States of America or any State thereof rated at least P-2 or its
equivalent by Moody's Investors Service, Inc. or at least A-2 or its equivalent
by Standard & Poor's Corporation, (iii) certificates of deposit issued by
commercial banks organized under the laws of the United States or of any
political subdivision thereof having a combined capital and surplus in excess
of $500,000,000 which banks or their holding companies have a rating of A or
its equivalent by Moody's Investors
17
Service or Standard & Poor's Corporation; provided, however, that
-------- -------
the aggregate amount at any one time so invested in certificates of deposit
issued by any one bank shall not exceed 5% of such bank's capital and surplus,
(iv) U.S. dollar denominated offshore certificates of deposit issued by, or
offshore time deposits with, any commercial bank described in clause (iii) or
any subsidiary thereof and (v) repurchase agreements with any financial
institution having combined capital and surplus of at least $500,000,000 with
any of the obligations described in clauses (i) through (iv) as collateral.
"Permitted Lien" shall have the meaning specified therefor
--------------
in the Lease.
"Person" means any individual, corporation, partnership,
------
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Pre-Commencement Date Period" means, with respect to any
----------------------------
Certificate, the period commencing on the date of the original issuance of such
Certificate and ending on and including the day immediately preceding the
Commencement Date.
"Premium" or "premium" shall have the meaning specified
------- -------
in Section 6.01(b) hereto.
"Premium Termination Date" means, with respect to a
------------------------
Certificate, the date set forth below opposite the Maturity Date of such
Certificate:
Premium
Certificates Maturity Date Termination Date
------------ ------------- ----------------
Series [1993 747 A-1]
Certificate [_________] [_________]
Series [1993 747 A-2]
Certificate [_________] [_________]
"Purchase Agreement" shall have the meaning specified
------------------
therefor in the Lease.
"Purchase Option Date" shall have the meaning specified
--------------------
therefor in the Lease.
"Record Date" for the interest or Installment Payment
-----------
Amount payable on any Certificate on any Interest Payment Date or Installment
Payment Date (other than the Maturity Date) for such Certificate, as the case
may be, means the calendar day (whether or not a Business Day) which is 15
calendar days prior to the related Interest Payment Date or the related
Installment Payment Date.
18
"Redemption and Refinancing Agreement" shall have the meaning
------------------------------------
specified therefor in the lease.
"Redemption Date" means the date on which the Certificates
---------------
are to be redeemed or purchased pursuant to Section 6.01 or Section 6.02, as
the case may be, as specified in the notice delivered pursuant to Section 6.03
hereof.
"Redemption Price" means the price at which the
----------------
Certificates are to be redeemed or purchased, determined as of the applicable
Redemption Date, pursuant to Section 6.01 or Section 6.02, as the case may be;
provided, however, that in the case of a Certificate which is
- -------- -------
issued at a discount which shall become due and payable (upon redemption,
acceleration or otherwise) and shall be paid or shall be purchased during the
Pre-Commencement Date Period, the Redemption Price or purchase price therefor
shall be the amount payable upon such Certificate becoming due and payable and
being paid during the Pre-Commencement Date Period as specified therein.
"Refinancing Date" shall mean the date designated by the
----------------
Lessee as the date for a refinancing of the Certificates in accordance with
Section 17 of the Participation Agreement.
"Register" shall have the meaning specified therefor in
--------
Section 2.03.
"Registrar" means any person acting as Registrar hereunder
---------
pursuant to Section 2.03.
"Rent" shall have the meaning specified therefor in the Lease.
----
"Replacement Airframe" shall have the meaning specified
--------------------
therefor in the Lease.
"Replacement Engine" shall have the meaning specified
------------------
therefor in the Lease.
"Responsible Company Officer" means, with respect to the
---------------------------
Company, its Chairman of the Board, its President, any Senior Vice President,
the Chief Financial Officer, any Vice President, the Treasurer or any other
management employee (a) working under the direct supervision of such Chairman
of the Board, President, Senior Vice President, Chief Financial Officer, Vice
President or Treasurer and (b) whose responsibilities include the
administration of the transactions and agreements, including the Lease,
contemplated by the Participation Agreement.
"Responsible Officer", with respect to the Owner Trustee or
-------------------
the Indenture Trustee, shall mean any officer in its Corporate Trust
Administration Department or any
19
officer of the Owner Trustee or the Indenture Trustee, as the case may be,
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred because of his knowledge of and familiarity with a
particular subject.
"SEC" means the Securities and Exchange Commission.
---
"Series 1993 747 A Certificate" means any Certificate
-----------------------------
issued by the Owner Trustee under this Agreement substantially in the form of
Exhibit A-1 or A-2, and any and all of the Series 1993 747 A Certificates
issued in replacement or exchange thereof in accordance with the provisions
hereof.
"Special Purchase Option Date" shall have the meaning
----------------------------
specified therefor in the Lease.
"Stipulated Loss Value" shall have the meaning specified
---------------------
therefor in the Lease.
"Supplemental Rent" shall have the meaning specified
-----------------
therefor in the Lease.
"Tax Indemnity Agreement" shall have the meaning specified
-----------------------
therefor in the Lease.
"Termination Value" shall have the meaning specified
-----------------
therefor in the Lease.
"Treasury Yield" means, with respect to each Certificate to be
--------------
redeemed or purchased, (x) in the case of a Certificate having a maturity less
than one year after the applicable redemption or purchase date, the average
yield to stated maturity on a government bond equivalent basis of the
applicable United States Treasury Bill due the week of the maturity of such
Certificate or (y) in the case of a Certificate having a maturity of one year
or more after the applicable redemption or purchase date, the average yield to
stated maturity of the most comparable United States Treasury Notes or Bonds as
identified by an independent investment banker, corresponding in maturity to
the Remaining Weighted Average Life (as defined below) of such Certificate (or,
if there is no maturity corresponding to such Remaining Weighted Average Life,
an interpolation of maturities by such independent investment banker), in each
case under (x) and (y) above determined by such independent investment banker
based on the average of the yields to stated maturity determined from the bid
prices on the fourth Business Day preceding the applicable redemption or
purchase date. For purposes hereof, "Remaining Weighted Average Life" means,
for any Certificate, at the redemption or purchase date of such Certificate,
the number of years obtained by dividing (a) the sum of the products obtained
by multiplying (i) the amount of each then remaining scheduled payment of
principal, including the payment due on the maturity date of such Certificate,
by (ii) the number of years (calculated to the
20
nearest one-twelfth) which will elapse between the redemption or purchase date
and the regular distribution dates as of such scheduled payments of principal,
by (b) the then outstanding principal amount (including accretion of discount)
of such Certificate.
"Trust Agreement" shall have the meaning specified therefor
---------------
in the Lease.
"Trust Indenture Act" means the Trust Indenture Act of
-------------------
1939, as amended.
"Trust Indenture and Mortgage" or "this Agreement"
----------------------------
means this Third Amended and Restated Trust Indenture and Mortgage (1993 747
A), as the same may from time to time be supplemented, amended or modified.
"Trust Indenture Estate" shall have the meaning specified
----------------------
for the term "Indenture Estate" hereunder.
"Trust Office" shall mean the principal corporate trust
------------
office of the Owner Trustee located at 225 Franklin Street, Boston,
Massachusetts 02110, Attention: Corporate Trust Department, or at such other
office at which the Owner Trustee's corporate trust business shall be
administered which the Owner Trustee shall have specified by notice in writing
to the Company, the Indenture Trustee and each Holder.
"Trust Supplement" means a supplement to the Trust
----------------
Agreement and this Agreement in the form of Exhibit C hereto.
"Trustee's Liens" shall have the meaning specified therefor
---------------
in Section 9.10.
"United States" or "U.S." means the United States of
------------- ----
America.
"U.S. Government Obligations" means securities that are
---------------------------
direct obligations of the United States or agencies or instrumentalities
thereof for the payment of which the full faith and credit of the United States
are pledged which are not callable or redeemable, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt so long as such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.
21
ARTICLE 2
THE CERTIFICATES
Section 2.01. Certificates; Title and Terms. The
-----------------------------
Certificates issued hereunder shall be designated as Series 1993 747 A
Certificates. The Installment Certificates and the Serial Certificates shall
be substantially in the form set forth in Exhibit A-1 or A-2, respectively.
The Certificates originally issued hereunder shall be dated the date of
issuance thereof and shall be issued in the maturities and principal amounts
and at the Original Issue Prices, shall provide for Commencement Date Cash
Interest, if any, and shall bear interest during and after the Pre-Commencement
Date Period at the rates per annum, in each case as specified in or determined
pursuant to Exhibit B. The principal of each Certificate, other than
Installment Certificates, shall be payable in full on the Maturity Date for
such Certificate. The principal of each Installment Certificate shall be
payable in installments, on each Installment Payment Date, in amounts equal to
the Installment Payment Amount for such Installment Payment Date. Each
Certificate shall be issued to the Pass Through Trustee under each of the Pass
Through Trust Agreements, as set forth in Exhibit B-2.
The Certificates shall be issued in registered form only. The
Certificates shall be issued in denominations of $1,000 and integral multiples
thereof except that one Certificate of each maturity may be in an amount that
is not an integral multiple of $1,000.
The Certificates are not redeemable or subject to purchase prior to
maturity except as provided in this Agreement. Interest accrued on the
Certificates shall be calculated on the basis of a 360-day year consisting of
twelve 30-day months.
Section 2.02. Execution and Authentication. (a)
----------------------------
Certificates shall be executed on behalf of the Owner Trustee by the manual or
facsimile signature of its President, a senior vice president, a vice
president, an assistant vice president, its treasurer, its secretary, an
assistant secretary or an assistant treasurer.
(b) If any officer of the Owner Trustee executing the
Certificates no longer holds that office at the time the Certificate is
executed on behalf of the Owner Trustee, the Certificate shall be valid
nevertheless.
(c) At any time and from time to time after the execution of the
Certificates, the Owner Trustee may deliver such Certificates to the Indenture
Trustee for authentication and, subject to the provisions of Section 2.10, the
Indenture Trustee shall authenticate the Certificates by manual signature upon
written orders of the Owner Trustee. Certificates shall be authenticated on
behalf of the Indenture Trustee by any authorized officer or signatory of the
Indenture Trustee.
22
(d) A Certificate shall not be valid or obligatory for any
purpose or entitled to any security or benefit hereunder until executed on
behalf of the Owner Trustee by the manual or facsimile signature of an officer
of the Owner Trustee as provided in Section 2.02(a) and until authenticated on
behalf of the Indenture Trustee by the manual signature of an authorized
officer or signatory of the Indenture Trustee as provided in Section 2.02(c).
Such signatures shall be conclusive evidence that such Certificate has been
duly executed, authenticated and issued under this Agreement.
Section 2.03. Registrar and Paying Agent. The Indenture
--------------------------
Trustee shall maintain an office or agency where the Certificates may be
presented for registration of transfer or for exchange (the "Registrar") and an
office or agency where (subject to Sections 2.04 and 2.08) the Certificates may
be presented for payment or for exchange (the "Paying Agent"). The Registrar
shall keep a register (the "Register") with respect to the Certificates and to
their transfer and exchange and the payments of Installment Payment Amounts
thereon, if any. The Indenture Trustee may appoint one or more co-registrars
(the "Co-Registrars") and one or more additional Paying Agents for the
Certificates and the Indenture Trustee may terminate the appointment of any
Co-Registrar or Paying Agent at any time upon written notice. The term
"Registrar" includes any Co-Registrar. The term "Paying Agent" includes any
additional Paying Agent.
The Indenture Trustee shall initially act as Registrar and Paying
Agent.
Section 2.04. Transfer and Exchange. At the option of the
---------------------
Holder thereof, Certificates may be exchanged for an equal aggregate principal
amount of other Certificates of the same maturity and type and of any
authorized denominations or transferred upon surrender of the Certificates to
be exchanged or transferred at the principal corporate trust office of the
Indenture Trustee, or at any office or agency maintained for such purpose
pursuant to Section 2.03. Whenever any Certificates are so surrendered for
exchange, the Owner Trustee shall execute, and the Indenture Trustee shall
authenticate and deliver, the replacement Certificates, dated the same date as
the Certificate or Certificates being replaced which the Holder making the
exchange is entitled to receive.
All Certificates issued upon any registration of transfer or
exchange of Certificates shall be the valid obligations of the Owner Trustee,
evidencing the same obligations, and entitled to the same security and benefits
under this Agreement, as the Certificates surrendered upon such registration of
transfer or exchange.
Every Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in form satisfactory
to the Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing.
23
No service charge shall be made to a Holder for any registration of
transfer or exchange of Certificates, but the Registrar may, as a condition to
any transfer or exchange hereunder, require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Certificates.
The Registrar shall not be required to register the transfer of or
to exchange any Certificate called for redemption or purchase pursuant to such
Section 6.01 or 6.02.
Section 2.05. Holder Lists; Ownership of Certificates.
---------------------------------------
(a) The Indenture Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders, which list shall be available to the Owner Trustee or its
representative (which may be the Owner Participant) and the Company for
inspection. If the Indenture Trustee is not the Registrar, the Registrar shall
be required to furnish to the Indenture Trustee semi-annually on or before each
Interest Payment Date, and at such other times as the Indenture Trustee may
request in writing, a list, in such form and as of such date as the Indenture
Trustee may reasonably require, containing all the information in the
possession or control of the Registrar as to the names and addresses of the
Holders.
(b) Ownership of the Certificates shall be proved by the Register
kept by the Registrar. Prior to due presentment for registration of transfer
of any Certificate, the Owner Trustee, the Owner Participant, the Company, the
Indenture Trustee, the Paying Agent and the Registrar may deem and treat the
Person in whose name any Certificate is registered as the absolute owner of
such Certificate for the purpose of receiving payment of principal (including,
subject to the provisions herein regarding the applicable Record Dates,
Installment Payment Amounts) of, premium, if any, and interest on such
Certificate and for all other purposes whatsoever, whether or not such
Certificate is overdue, and none of the Owner Trustee, the Indenture Trustee,
the Paying Agent or the Registrar shall be affected by notice to the contrary.
Section 2.06. Mutilated, Destroyed, Lost or Stolen
-------------------------------------
Certificates. If any Certificate shall become mutilated, destroyed, lost
- ------------
or stolen, the Owner Trustee shall, upon the written request of the Holder of
such Certificate, issue and execute, and the Indenture Trustee shall
authenticate and deliver, in replacement thereof, as applicable, a new
Certificate of the same type and having the same maturity, payable to the same
Holder in the same principal amount and dated the same date as the Certificate
so mutilated, destroyed, lost or stolen. If the Certificate being replaced has
become mutilated, such Certificate shall be surrendered to the Indenture
Trustee. If the Certificate being replaced has been destroyed, lost or stolen,
the Holder of such Certificate shall furnish to the Owner Trustee and the
Indenture Trustee such security or indemnity as may be required by it to save
the Owner Trustee and the Indenture Trustee harmless and evidence satisfactory
to the Owner
24
Trustee and the Indenture Trustee of the destruction, loss or theft of such
Certificate and of the ownership thereof.
Section 2.07. Cancellation. The Registrar and any Paying
------------
Agent shall forward to the Indenture Trustee all Certificates surrendered to
them for replacement, redemption, registration of transfer, exchange or
payment. The Indenture Trustee shall cancel all Certificates surrendered for
replacement, redemption, registration of transfer, exchange, payment or
cancellation and shall destroy cancelled Certificates.
Section 2.08. Payment on Certificates; Defaulted Principal and
------------------------------------------------
Interest. (a) The Indenture Trustee will arrange directly with any
- --------
Paying Agent for the payment, or the Indenture Trustee will make payment, all
pursuant to Section 2.09, of the principal of, premium, if any, and interest on
the Certificates at the principal corporate trust office of the Indenture
Trustee or at any office or agency maintained for such purpose to Section 2.03
hereof. All payments in respect of the Certificates shall be made in such coin
or currency of the United States as at the time of payment in legal tender for
payment of public and private debts. Payments (other than on the Maturity Date
therefor or on the Redemption Date in respect of the redemption in whole
thereof) on Certificates shall be made to the Holder thereof at the close of
business on the relevant Record Date; provided, however, that the
-------- -------
Paying Agent will, at the request of the Indenture Trustee and may, at its
option, pay such interest, premium or principal by check mailed to such
Holder's address as it appears on the Register. Principal of Certificates and
premium, if any, with respect thereto, shall (except as provided pursuant to
the immediately preceding sentence) be payable only against presentation and
surrender thereof at the principal corporate trust office of the Indenture
Trustee or at the office of the Paying Agent maintained for such purpose
pursuant to Section 2.03.
A Holder shall have no further interest in, or other right with
respect to, the Indenture Estate when and if the principal amount of, premium,
if any, and interest on all Certificates held by such Holder and all other sums
payable to such Holder hereunder, under such Certificates and under the
Participation Agreement shall have been paid in full.
(b) Any Installment Payment Amount payable on an Installment
Payment Date (other than the Maturity Date with respect to a Certificate) or
any interest payable on an Interest Payment Date on any Certificate which is
not punctually paid on such Installment Payment Date or such Interest Payment
Date, as the case may be (herein called, respectively, a "Defaulted
Installment" and "Defaulted Interest"), shall forthwith cease to be payable to
the Holder on the relevant Record Date by virtue of his having been such
Holder; and such Defaulted Installment or Defaulted Interest may be paid by the
Indenture Trustee, at its election in each case, as provided in clause (1) or
(2) below:
25
(1) The Indenture Trustee may elect to make payment of any
Defaulted Installment or Defaulted Interest, as the case may be, to the
person in whose name any Certificate is registered at the close of
business on a special record date for the payment of such Defaulted
Installment or Defaulted Interest, as the case may be, which shall be
fixed in the following manner. The Indenture Trustee shall notify the
Paying Agent in writing of the amount of Defaulted Installment or
Defaulted Interest, as the case may be, proposed to be paid on each such
Certificate and the date of the proposed payment, and at the same time
the Indenture Trustee shall make arrangements to set aside an amount of
money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Installment or Defaulted Interest, as the case may be,
prior to the date of the proposed payment, to be held in trust for the
benefit of the Persons entitled to such Defaulted Installment or
Defaulted Interest, as the case may be, as this clause provides and shall
fix a special record date for the payment of such Defaulted Installment
or Defaulted Interest, as the case may be, which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment. The Indenture Trustee shall promptly notify the Owner Trustee,
the Company and the Registrar of such special record date and shall cause
notice of the proposed payment of such Defaulted Installment or Defaulted
Interest, as the case may be, and the special record date therefor to be
mailed, first class postage prepaid, to each Holder at its address as it
appears in the Register, not less than 10 days prior to such special
record date. Notice of the proposed payment of such Defaulted
Installment or Defaulted Interest, as the case may be, and the special
record date therefor having been mailed, as aforesaid, such Defaulted
Installment or Defaulted Interest, as the case may be, shall be paid to
the Persons in whose names the applicable Certificates are registered on
such special record date and shall no longer be payable pursuant to the
following clause (2).
(2) The Indenture Trustee may make, or cause to be made, payment
of any Defaulted Installment or Defaulted Interest, as the case may be,
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which Certificates may be listed, and upon such
notice as may be required by such exchange, if such payment shall be
deemed practicable by the Indenture Trustee.
(c) The Indenture Trustee shall require each Paying Agent to
agree in writing that such Paying Agent will hold in trust, for the benefit of
the Holders of the Certificates and the Indenture Trustee, all money held by
the Paying Agent for the payment of the principal of, premium, if any, or
interest and shall give to such Indenture Trustee notice of any default in the
making of any such payment upon the Certificates. The Indenture Trustee at any
time may require a Paying Agent to repay to the Indenture Trustee all money
held by it. Upon so doing the Paying Agent shall have no further liability for
the money so paid.
26
Section 2.09. Payment from Indenture Estate Only; Non-Recourse
-------------------------------------------------
Obligations. All amounts payable by the Indenture Trustee and the Owner
- -----------
Trustee under the Certificates and this Agreement shall be made only from the
income and proceeds of the Indenture Estate. Each Holder of a Certificate, by
its acceptance of such Certificate, 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 Indenture Trustee is or shall
be personally liable to the Holder of any Certificate for any amount payable
under such Certificate or this Agreement or, except as expressly provided in
this Agreement in the case of the Owner Trustee and the Indenture Trustee, for
any liability thereunder.
State Street Bank and Trust Company is entering into this Agreement
solely as Owner Trustee under the Trust Agreement and not in its individual
capacity, and in no case whatsoever shall State Street Bank and Trust Company
(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 State Street Bank and Trust Company shall be liable hereunder
- --------
in its individual capacity, (i) for the performance of its agreements in its
individual capacity under Section 8 of the Participation Agreement, (ii) for
its own willful misconduct or gross negligence, and (iii) for the failure to
use ordinary care in the disbursement of funds. 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 State Street Bank and Trust
Company shall be released from all further duties and obligations hereunder,
without prejudice to any claims against State Street Bank and Trust Company or
such predecessor Owner Trustee for any default by State Street Bank and Trust
Company or such predecessor Owner Trustee, respectively, in the performance of
its obligations hereunder prior to such appointment.
Section 2.10. Execution, Delivery and Dating of Certificates
----------------------------------------------
upon Original Issuance. The Owner Trustee shall issue and execute, and
- ----------------------
the Indenture Trustee shall authenticate and deliver, the Certificates for
original issuance upon payment to the Indenture Trustee of an amount equal to
its Original Issue Price. Each Certificate shall (except for those issued
pursuant to Section 2.04 or Section 2.06) be dated the date of its issuance.
ARTICLE 3
RECEIPT, DISTRIBUTION AND APPLICATION
OF FUNDS IN THE INDENTURE ESTATE
Section 3.01. [Reserved for Potential Future Use]
27
Section 3.02. Payment in Case of Redemption or Purchase of
---------------------------------------------
Certificates. Except as otherwise provided in Section 3.05, in the event the
- ------------
Certificates are redeemed or purchased in accordance with the provisions of
Section 6.01 or 6.02, the Indenture Trustee will apply on the Redemption Date
any amounts then held by it in the Indenture Estate and received by it from or
on behalf of the Company or the Owner Trustee in the following order of
priority:
first, so much thereof as was received by the Indenture
-----
Trustee with respect to the amounts due to it pursuant to Section 9.06
shall be applied to pay the Indenture Trustee such amounts;
second, so much thereof remaining as shall be required to
------
pay an amount equal to the Redemption Price on the Outstanding
Certificates pursuant to Section 6.01 or 6.02, as the case may be, on the
Redemption Date shall be applied to the redemption or purchase of the
Certificates on the Redemption Date; and
third, the balance, if any, thereof remaining thereafter
-----
shall be distributed to the Owner Trustee to be held or distributed to
the Owner Participant in accordance with the terms of the Trust
Agreement.
Section 3.03. Application of Rent When No Indenture Event of
-----------------------------------------------
Default Is Continuing. Except as otherwise provided in Section 3.02, 3.04,
- ---------------------
3.05 or 3.06, each amount of Excess Amount or Rent received by the Indenture
Trustee from the Owner Trustee or the Company, together with any amount
received by the Indenture Trustee pursuant to Section 8.03(e) shall be
distributed by the Indenture Trustee in the following order of priority:
first, so much of such aggregate amount as shall be
-----
required to pay in full the interest, principal of, premium (to the
extent received by the Indenture Trustee from the Company as Supplemental
Rent), if any, then due on, all Outstanding Certificates shall be
distributed to the Persons entitled thereto; and in case such payments or
amounts shall be insufficient to pay in full the whole amount so due and
unpaid, then to the payment of such interest, principal and premium, if
any, without any preference or priority of one Certificate over another,
ratably according to the aggregate amount so due for interest, principal
and premium, if any, at the date fixed by the Indenture Trustee for the
distribution of such payments or amounts;
second, so much of such aggregate amount remaining as shall
------
be required to pay any amount due the Indenture Trustee pursuant to
Section 9.06 shall be applied to pay the Indenture Trustee such amounts;
and
28
third, the balance, if any, of such aggregate amount
-----
remaining thereafter shall be distributed to the Owner Trustee to be held
or distributed in accordance with the terms of the Lease, the
Participation Agreement and the Trust Agreement.
Section 3.04. Application of Certain Payments in Case of
------------------------------------------
Requisition or Event of Loss. Except as otherwise provided in Section 3.05,
- ----------------------------
any amounts received directly or otherwise pursuant to the Lease from any
governmental authority or other party pursuant to Section 10 of the Lease with
respect to the Airframe or the Airframe and the Engines or engines then
installed on the Airframe as the result of an Event of Loss, to the extent that
such amounts are not at the time required to be paid to the Company pursuant to
said Section 10, and any amounts of insurance proceeds for damage to the
Indenture Estate received directly or otherwise pursuant to the Lease from any
insurer pursuant to Section 11 of the Lease with respect thereto as the result
of an Event of Loss, to the extent such amounts are not at the time required to
be paid to the Company pursuant to said Section 11, shall, except as otherwise
provided in the next sentence, be applied by the Indenture Trustee on behalf of
the Owner Trustee in reduction of the Company's obligations to pay Stipulated
Loss Value and the other amounts payable by the Company pursuant to Section 10
of the Lease and the remainder, if any, shall, except as provided in the next
sentence, be distributed to the Owner Trustee to be held or distributed in
accordance with the terms of the Lease. Any portion of any such amount
referred to in the preceding sentence which is not required to be so paid to
the Company pursuant to the Lease, solely because a Lease Event of Default
shall have occurred and be continuing, shall be held by the Indenture Trustee
on behalf of the Owner Trustee as security for the obligations of the Company
under the Lease and at such time as there shall not be continuing any Lease
Event of Default or such earlier time as shall be provided for in the Lease,
such portion shall be paid to the Owner Trustee to be held or distributed in
accordance with the terms of the Lease, unless the Indenture Trustee (as
assignee from the Owner Trustee of the Lease) shall have theretofore declared
the Lease to be in default pursuant to Section 15 thereof, in which event such
portion shall be distributed forthwith upon such declaration in accordance with
the provisions of Section 3.05 hereof.
Section 3.05. Payments During Continuance of Indenture Event of
-------------------------------------------------
Default. All payments (except Excluded Payments) received and amounts
- -------
held or realized by the Indenture Trustee after an Indenture Event of Default
shall have occurred and be continuing (including any amounts realized by the
Indenture Trustee from the exercise of any remedies pursuant to Article 8), as
well as all payments or amounts then held or thereafter received by the
Indenture Trustee as part of the Indenture Estate while such Indenture Event of
Default shall be continuing, shall be distributed by the Indenture Trustee in
the following order of priority:
first, so much of such payments or amounts as shall be
-----
required to pay the Indenture Trustee all amounts then due it pursuant to
Section 9.06 shall be applied to pay the Indenture Trustee such amounts;
29
second, so much of such payments or amounts remaining as
------
shall be required to pay the expenses incurred (including unbilled
expenses in respect of property delivered or contracted for or services
rendered or contracted for if the amount of such expenses is liquidated)
in using, operating, storing, leasing, controlling or managing the
Indenture Estate, and of all maintenance, insurance, repairs,
replacements, alterations, additions and improvements of and to the
Indenture Estate and to make all payments which the Indenture Trustee may
be required or may elect to make, if any, for taxes, assessments,
insurance or other proper charges upon the Indenture Estate or any part
thereof (including the employment of engineers and accountants to examine
and make reports upon the properties, books and records of the Owner
Trustee and, to the extent permitted under the Lease, the Company), all
in accordance with Section 8.03(c), shall be applied for such purposes;
third, so much of such payments or amounts remaining as
-----
shall be required to pay the principal of, premium, if any, to the extent
payable by the Owner Trustee pursuant to Section 6.0l(b)(ii) or to the
extent received by the Indenture Trustee from the Company as Supplemental
Rent, and accrued interest, on all Certificates Outstanding, whether by
declaration of acceleration pursuant to Section 8.02 or otherwise, shall
be applied to the payment of such interest, principal and premium, if
any, and in case such payments or amounts shall be insufficient to pay in
full the whole amount so due and unpaid, then to the payment of such
interest principal and premium, if any, without any preference or
priority of one Certificate over another, ratably according to the
aggregate amount so due for interest, principal and premium, if any, at
the date fixed by the Indenture Trustee for the distribution of such
payments or amounts; and
fourth, the balance, if any, of such payments or amounts
------
remaining thereafter shall be held by the Indenture Trustee as collateral
security for the obligations secured hereby until such time as no
Indenture Event of Default shall be continuing hereunder or the
Certificates have been accelerated and all amounts due thereon have been
paid, at which time such payments or amounts shall be distributed to the
Owner Trustee to be held or distributed in accordance with the terms of
the Lease, the Participation Agreement and the Trust Agreement;
provided that at such time as one or more Lease Events of Default
--------
shall have occurred and any such Lease Event of Default shall have
continued for a period of 180 days during which time the Certificates
could, but shall not, have been accelerated pursuant to Section 8.02,
such amounts shall be distributed to the Owner Trustee to be held or
distributed in accordance with the terms of the Lease, the Participation
Agreement and the Trust Agreement so long as no Indenture Event of
Default exists other than by virtue of such Lease Event of Default.
Section 3.06. Payments for Which Application Is Provided in
---------------------------------------------
Other Documents. Except as otherwise provided in this Agreement, any payment
- ---------------
received by the
30
Indenture Trustee for which provision as to the application thereof is made in
the Lease or any other Operative Document shall be distributed to the Person
for whose benefit such payments were made. The Indenture Trustee shall be
obligated to distribute any Excluded Payments received by the Indenture Trustee
promptly upon receipt thereof by the Indenture Trustee to the Person entitled
thereto.
Section 3.07. Payments for Which No Application Is Otherwise
----------------------------------------------
Provided. Except as otherwise provided in Section 3.05:
- --------
(a) any payment received by the Indenture Trustee for which no
provision as to the application thereof is made elsewhere in this
Agreement, and
(b) any payment received and amounts realized by the Indenture
Trustee with respect to the Aircraft to the extent received or realized
at any time after the conditions set forth in Article 10 for the
satisfaction and discharge of this Agreement or for the defeasance of the
Certificates shall have been satisfied, as well as any other amounts
remaining as part of the Indenture Estate after such satisfaction shall
be distributed by the Indenture Trustee in the following order of
priority:
first, so much of such aggregate amount as shall be
-----
required to pay the Indenture Trustee all amounts then due it
pursuant to Section 9.06 shall be applied to pay the Indenture
Trustee such amounts; and
second, the balance if any, of such aggregate amount
------
remaining thereafter shall be distributed to the Owner Trustee to
be held or distributed in accordance with the terms of the Trust
Agreement.
ARTICLE 4
COVENANTS OF OWNER TRUSTEE
Section 4.01. Covenants of the Owner Trustee. The Owner
------------------------------
Trustee hereby covenants and agrees that:
(i) the Owner Trustee will duly and punctually pay the principal
of, premium, if any, and interest on and other amounts due under the
Certificates, provided it or the Indenture Trustee has funds in the Trust
Estate for this purpose;
(ii) the Owner Trustee will, in its individual capacity, not
directly or indirectly create, incur, assume or suffer to exist any
Lessor Lien attributable to it in
31
its individual capacity with respect to any of the properties or assets
of the Indenture Estate;
(iii) in the event an officer in the Corporate Trust Department 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 of such Indenture Event of Default or
Indenture Default or Event of Loss to the Indenture Trustee, the Owner
Participant and the Company;
(iv) except as contemplated by the Operative Documents, the Owner
Trustee will not contract for, create, incur, assume or permit to exist
any Debt, and will not guarantee (directly or indirectly or by an
instrument having the effect of assuring 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
(v) the Owner Trustee will not enter into any business or other
activity other than owning the Aircraft, the leasing thereof to the
Company and the carrying out of the transactions contemplated hereby and
by the Participation Agreement, the Trust Agreement and 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
Agreement and be leased to the Company under the Lease; provided
--------
that, to the extent permitted by and as provided in the Lease, the
Company shall have the right, at any time and from time to time, without
any release from or consent by the Owner Trustee or the Indenture
Trustee, to remove, replace and pool Parts and to make alterations,
improvements and modifications in, and additions to, the Aircraft. The
Indenture Trustee agrees that, to the extent permitted by and as provided
in the Lease, title to any such Part shall vest in the Company. The
Indenture Trustee shall from time to time execute an appropriate written
instrument or instruments to confirm the release of the security interest
of the
32
Indenture Trustee in any Part as provided in this Section 5.01, in each
case upon receipt by the Indenture Trustee of a Company Request stating
that said action was duly taken by the Company in conformity with this
Section 5.01 and that the execution of such written instrument or
instruments is appropriate to evidence such release of a security
interest under this Section 5.01.
(b) Substitution Under the Lease upon an Event of Loss
--------------------------------------------------
Occurring to Airframe or Engines or upon Voluntary Termination of Lease
-----------------------------------------------------------------------
with Respect to Engines. Upon (i) the occurrence of an Event of Loss
-----------------------
occurring to the Airframe or an Engine, or (ii) a voluntary termination
of the Lease with respect to an Engine, the Company, in accordance with
the Lease, may, in the case of an Event of Loss which has occurred to the
Airframe, or shall, except as provided in Section 10(b) of the Lease, in
the case of an Event of Loss which has occurred to or termination of the
Lease with respect to an Engine, substitute an airframe or engine, as the
case may be, in which case, upon satisfaction of all conditions to such
substitution specified in Section 10 of the Lease, the Indenture Trustee
shall release all of its right, interest and lien in and to the Airframe
or such Engine in accordance with the provisions of the following two
sentences. The Indenture Trustee shall execute and deliver to the Owner
Trustee an instrument releasing its lien in and to the Airframe or such
Engine and shall execute for recording in public offices, at the expense
of the Owner Trustee (if requested by the Owner Trustee) or the Company
(if requested by the Company), such instruments in writing as the Owner
Trustee or the Company shall reasonably request and as shall be
reasonably acceptable to the Indenture Trustee in order to make clear
upon public records that such lien has been released under the laws of
the applicable jurisdiction.
Each of the Owner Trustee and the Company hereby waives and releases any and
all rights existing or that may be acquired to any penalties, forfeit or
damages from or against the Indenture 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
Indenture 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 Company.
ARTICLE 6
REDEMPTION OF CERTIFICATES
Section 6.01. Redemption of Certificates upon Certain
---------------------------------------
Events. (a) (i) If there shall be an Event of Loss to the Aircraft and
the Aircraft is not replaced pursuant to Section 10(a)(ii) of the Lease, each
Outstanding Certificate shall be redeemed in whole at a
33
Redemption Price equal to 100% of the outstanding principal amount of such
Certificate plus accrued and unpaid interest thereon to but excluding the
applicable Redemption Date.
(ii) If there shall be an Event of Loss to any Engine under
circumstances in which there has not occurred an Event of Loss with respect to
the Airframe and, as a result of such an Event of Loss, Lessor elects to
receive payment for such Engine from Lessee pursuant to Section 10(b) of the
Lease and Lessee shall not have elected to replace such Engine notwithstanding
such election by Lessor, a portion of the principal of each Outstanding
Certificate equal to the product obtained by multiplying the unpaid principal
amount of such Certificate on the Redemption Date applicable to such partial
redemption (assuming, only for the purposes of this calculation, that, if such
Redemption Date is coincident with a Maturity Date or an Installment Payment
Date, the scheduled principal payment due on such Redemption Date is paid prior
to the time the Redemption Price is calculated pursuant to this Section
6.0l(a)(ii) and applied to principal in accordance with Section 3.03 hereof) by
_________________. The Redemption Price for each such Certificate shall be the
sum of such portion of principal being redeemed plus the amount of interest
accrued and unpaid to such Redemption Date on the principal amount of such
Certificate to be redeemed on such Redemption Date (assuming, only for the
purposes of this calculation, that, if, such Redemption Date is coincident with
an Interest Payment Date, the interest due on such Interest Payment Date is
paid prior to the time such Redemption Price is calculated pursuant to this
Section 6.0l(a)(ii) and applied to interest in accordance with Section 3.03
hereof); provided that each Certificate shall receive, as to the principal
--------
thereof, the same portion of such Redemption Price as the principal value of
such Certificate at such Redemption Date represents of the total principal
value of all Certificates Outstanding at such Redemption Date. Upon the
occurrence of any partial redemption or redemptions pursuant to the preceding
sentence the principal amount of each Outstanding Certificate shall be adjusted
to take account of any such partial redemption or redemptions, and the
Installment Payment Percentages applicable to any Installment Certificates
issued hereunder shall be adjusted as provided for in the definition thereof.
The Redemption Date for Certificates to be redeemed pursuant to this Section
6.01(a) shall be the Lease Loss Payment Date.
(b) If (i) the Lease shall be terminated by the Company at its
option pursuant to Section 9(b) of the Lease or upon the purchase of the
Aircraft by the Company at its option on a Special Purchase Option Date or the
EBO Date pursuant to Section 19(b) of the Lease (unless the Company shall have
elected to assume the rights and obligations of the Owner Trustee hereunder to
the extent and as provided for in Section 8(r) of the Participation Agreement)
or (ii) the Owner Trustee or the Owner Participant shall have given notice of
redemption or purchase to the Indenture Trustee pursuant to Section 8.03(e)(ii)
at any time after one or more Lease Events of Default shall have occurred and
be continuing for a period of 180 days or more but less than one year (or a
period of less than 180 days if any such Lease Event of Default shall be a
Lease Event of Default under Section 14(a) of the Lease) and the Certificates
shall not have been accelerated, each Outstanding Certificate shall be
34
redeemed or purchased in whole on the Redemption Date and at the Redemption
Price determined below. Prior to the Premium Termination Date applicable to
such Certificate, the Redemption Price applicable to a redemption or purchase
pursuant to this Section 6.01(b) shall be equal to an amount which an
Independent Investment Banker (or, in the case of the deposit of estimated
premium pursuant to Section 8.03(e)(ii), the Owner Trustee) determines to be
equal to the greater of (x) the unpaid principal amount of such Certificate as
at such Redemption Date together (assuming, only for the purposes of this
calculation, that, if such Redemption Date is coincident with an Interest
Payment Date, the interest due on such Interest Payment Date is paid prior to
the time such Redemption Price is calculated pursuant to this Section 6.01(b)
and applied to interest in accordance with Section 3.03 hereof) with an amount
equal to the interest accrued thereon from the immediately preceding Interest
Payment Date to such Redemption Date and (y) the present value (computed in
accordance with generally accepted financial practices on a semiannual basis at
a discount rate equal to the Treasury Yield applicable to such Certificate as
of such Redemption Date) as at such Redemption Date of (A) the regularly
scheduled future payments of interest on such Certificate as required by the
terms thereof and of this Agreement and (B) the regularly scheduled future
payments of principal payable on such Certificate (the excess, if any, of the
amount referred to in clause (y) of this sentence over the amount referred to
in clause (x) constituting a "premium" or a "Premium"), plus, in either case,
interest on the principal of such Certificate accrued as at the immediately
preceding Interest Payment Date and unpaid as of such Redemption Date. On or
after the Premium Termination Date applicable to such Certificate, the
Redemption Price applicable to a redemption or purchase pursuant to this
Section 6.01(b) shall equal the unpaid principal amount of such Certificate as
at such Redemption Date together with an amount equal to the interest accrued
thereon from the immediately preceding Interest Payment Date to such Redemption
Date plus interest on the principal of such Certificate accrued as at the
immediately preceding Interest Payment Date and unpaid as of such Redemption
Date and, in the case of either of the two immediately preceding sentences (but
without duplication), if such Redemption Date is coincident with an Interest
Payment Date, the regularly scheduled interest payment due on such Interest
Payment Date. The Redemption Date for Certificates to be redeemed or purchased
(x) pursuant to clause (i) of this Section 6.01(b) shall be (A) in the case of
a termination of the Lease pursuant to Section 9(b) thereof, the third Business
Day following the Lease Termination Date, if any, or, in the case of purchase
of the Aircraft by the Company pursuant to Section 19(b) of the Lease, the
applicable Special Purchase Option Date or EBO Date and (y) pursuant to clause
(ii) of this Section 6.01(b), shall be the same date as if the redemption had
occurred pursuant to Section 6.02. If the Owner Trustee elects to purchase the
Certificates under Section 8.03(e)(ii), nothing herein, including use of the
terms "Redemption Date" and "Redemption Price" shall be deemed to result in a
redemption of the Certificates.
(c) Certificates may be redeemed if the Company shall have
requested the Owner Trustee and the Owner Participant to effect a redemption
thereof pursuant to
35
Section 17 of the Participation Agreement as part of a refunding or
refinancing, and if all the conditions to such refunding or refinancing set
forth in such Section 17 of the Participation Agreement shall have been
satisfied. In such event, each Outstanding Certificate may be so redeemed at a
Redemption Price determined in accordance with the procedures described above
in Section 6.01(b); provided, however, that the applicable Redemption
-------- -------
Date for Certificates to be redeemed pursuant to this Section 6.01(c) shall be
the applicable Refinancing Date under Section 17 of the Participation
Agreement.
Section 6.02. Redemption or Purchase of Certificates upon
-------------------------------------------
Certain Indenture Events of Default. If the Owner Trustee or the Owner
- -----------------------------------
Participant shall have given notice of redemption or purchase to the Indenture
Trustee pursuant to Section 8.03(e)(ii) at any time after the Certificates
shall have been accelerated pursuant to Section 8.02 or after one or more Lease
Events of Default shall have occurred and be continuing for a period of one
year or more (or a period of 180 days or more if any such Lease Event of
Default shall be a Lease Event of Default under Section 14(a) of the Lease) and
the Certificates shall not have been accelerated, each Outstanding Certificate
shall be redeemed or purchased in whole at a Redemption Price equal to 100% of
its principal amount plus accrued and unpaid interest thereon to but excluding
the applicable Redemption Date as determined below. The Redemption Date for
Certificates to be redeemed or purchased pursuant to this Section 6.02 shall be
the date specified in the notice given by the Owner Trustee to the Indenture
Trustee pursuant to Section 8.03(e)(ii). If the Owner Trustee elects to
purchase the Certificates under Section 8.03(e)(ii), nothing herein, including
use of the terms "Redemption Date" and "Redemption Price" shall be deemed to
result in a redemption of the Certificates.
Section 6.03. Notice of Redemption to Holders. Notice of
-------------------------------
redemption or purchase shall be given by first-class mail, postage prepaid,
mailed not less than 25 nor more than 60 days prior to the Redemption Date, to
each Holder of Certificates to be redeemed or purchased, at such Holder's
address appearing in the Register; provided that, in the case of a
--------
redemption pursuant to Section 6.01(b)(1) related to Lessee's exercise of its
option pursuant to Section 9(b) of the Lease, such notice shall be revocable
and shall be deemed revoked in the event the Lease does not in fact terminate
on the related Lease Termination 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 Certificate, and that interest on
Certificates shall cease to accrue on and after such Redemption Date, and
36
(4) the place or places where such Certificates are to be
surrendered for payment of the Redemption Price.
Notice of redemption or purchase of Certificates to be redeemed or purchased
shall be given by the Indenture Trustee.
Section 6.04. Deposit of Redemption Price. 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
Certificates to be redeemed or purchased on the Redemption Date shall not then
be held in the Indenture Estate, deposit or cause to be deposited with the
Indenture Trustee or the Paying Agent by 12:00 noon in immediately available
funds the Redemption Price of the Certificates to be redeemed or purchased on
the Redemption Date.
Section 6.05. Certificates Payable on Redemption Date.
---------------------------------------
Notice of redemption or purchase having been given as aforesaid (and not deemed
revoked as contemplated in the proviso to Section 6.03), the Certificates
shall, on the applicable Redemption Date, become due and payable at the
principal corporate trust office of the Indenture Trustee or at any office or
agency maintained for such purposes pursuant to Section 2.03, and from and
after such Redemption Date (unless there shall be a default in the payment of
the Redemption Price) any Certificates then Outstanding shall cease to bear
interest. Upon surrender of any such Certificate for redemption or purchase in
accordance with said notice such Certificate shall be paid at the Redemption
Price.
If any Certificate called for redemption or purchase shall not be
so paid upon surrender thereof for redemption or purchase, the principal amount
thereof shall, until paid, continue to bear interest from the applicable
Redemption Date at the interest rate applicable to such Certificate.
ARTICLE 7
MATTERS CONCERNING THE COMPANY
Section 7.01. Repayment of Monies for Certificate Payments Held
-------------------------------------------------
by the Indenture Trustee. Any money held by the Indenture Trustee or any
- ------------------------
Paying Agent in trust for any payment of the principal of, premium, if any, or
interest on any Certificate, including without limitation any money deposited
pursuant to Article 10 and remaining unclaimed for two years and eleven months
after the due date for such payment, shall be paid to the Owner Trustee; and
the Holders of any Outstanding Certificates shall thereafter, as unsecured
general creditors, look only to the Company on behalf of the Owner Trustee for
payment thereof, and all liability of the Indenture Trustee or any such Paying
Agent with
37
respect to such trust money shall thereupon cease; provided that the
--------
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be mailed to each such
Holder 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 7.02. Change in Registration. The Indenture
----------------------
Trustee shall, upon the request of the Company, consent to the deregistration
of the Aircraft under the laws of the jurisdiction in which it is at the time
registered and the registration of the Aircraft under the laws of another
jurisdiction (herein called a "change in registration") provided that the
following conditions are met:
(a) such change in registration complies with the provisions of
the Participation Agreement or the Lease;
(b) no Lease Event of Default and no event which, with lapse of
time or notice, or both, would become a Lease Event of Default shall have
occurred and be continuing at the date of such request or at the
effective date of the change in registration, provided that it shall not
be necessary to comply with this condition (b) if the change in
registration results in the registration of the Aircraft under the laws
of the United States or if the Indenture Trustee in its discretion
believes the change in registration would be advantageous to the Holders;
and
(c) the Indenture Trustee shall have received an opinion of
counsel reasonably satisfactory to the Indenture Trustee to the effect
that:
(i) after giving effect to the change in registration, the
Lien on the Aircraft and the other property included in the
Indenture Estate shall continue as a fully perfected lien and that
all filing, recording or other action necessary to perfect and
protect the lien of this Indenture has been accomplished (or if
such opinion cannot be given at the time by which the Indenture
Trustee has been requested to consent to a change in registration,
(x) the opinion shall detail what filing, recording or other action
is necessary and (y) the Indenture Trustee shall have received a
certificate from the Company that all possible preparations to
accomplish such filing, recording and other action shall have been
done, and such filing, recording and other action shall be
accomplished and a supplemental opinion to that effect shall be
delivered to the Indenture Trustee on or prior to the effective
date of the change in registration); and
(ii) the terms of the Lease and this Agreement (including
the governing law clauses) being legal, valid and binding and
enforceable in such
38
jurisdiction, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally, and by general
principles of equity and except as limited by applicable laws which
may affect the remedies provided in the Lease and this Agreement,
respectively, which laws, however, do not in the opinion of such
counsel make the remedies provided in the Lease and this Agreement,
respectively, inadequate for the practical realization of the
rights and benefits provided thereby.
The Indenture Trustee shall execute such documents as the Company or the Owner
Trustee shall reasonably request in order to satisfy the above conditions and
upon satisfaction of such conditions to effect the change in registration.
Section 7.03. Assumption of Obligations of Owner Trustee by the
-------------------------------------------------
Company. In the event that the Company shall have elected to assume all
- -------
of the rights and obligations of the Owner Trustee under this Agreement in
respect of the Certificates in connection with the purchase by the Company of
the Aircraft pursuant to Section 8(r) of the Participation Agreement and, if on
or prior to the Purchase Option Date:
(a) the Company shall have delivered to the Indenture Trustee a
certificate, dated the Purchase Option Date, of a Responsible Company
Officer stating that the Company has paid to the Owner Trustee all
amounts required to be paid to the Owner Trustee pursuant to Section
19(b) of the Lease in connection with such purchase and assumption;
(b) no event which constitutes or, with the lapse of time or
notice, or both, would become, an Event of Default under this Agreement
after giving effect to the indenture supplement referred to below shall
have occurred and be continuing immediately subsequent to such purchase
or assumption and the Indenture Trustee shall have received a
certificate, dated the Purchase Option Date, of a Responsible Company
Officer to such effect;
(c) the Indenture Trustee shall have received, on or prior to the
Purchase Option Date, evidence of all filings, recordings and other
action referred to in the Opinion or Opinions of Counsel referred to
below;
(d) the Indenture Trustee shall have received an Opinion or
opinions of Counsel for the Company, dated the Purchase Option Date,
which without unusual qualification shall be to the effect that, after
giving effect to the indenture supplement referred to below:
39
(i) this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by
general principles of equity, and except as limited by applicable
laws which may affect the remedies provided for in this Agreement,
which laws, however, do not in the opinion of such counsel make the
remedies provided for in this Agreement inadequate for the
practical realization of the rights and benefits provided for in
this Agreement;
(ii) the Aircraft is duly registered in compliance with
applicable law;
(iii) the Lien on the Aircraft constitutes a fully perfected
Lien and all filing, recording or other action (specifying the
same) necessary to perfect and protect the Lien of this Agreement
has been accomplished;
(iv) the Indenture Trustee would be entitled to the benefits
of Section 1110 of the Bankruptcy Code with respect to the
Aircraft; provided that such opinion may contain qualifications
--------
of the tenor contained in the opinion of special counsel for the
Company delivered pursuant to Section 4(a)(xi)(b) of the
Participation Agreement on the Delivery Date; and
(v) no Holder will be required to recognize gain or loss
for tax purposes in connection with such assumption; and
(e) an indenture supplement reasonably satisfactory to the
Indenture Trustee, dated the Purchase Option Date, shall have been
executed by the Indenture Trustee and any other parties necessary thereto
and shall have been delivered to the Indenture Trustee;
then, automatically and without the requirement of further action by any
Person, effective as of the Purchase Option Date, the Owner Trustee shall be
released from all of its obligations under the Agreement in respect of the
Certificates or otherwise (other than any obligations or liabilities of the
Owner Trustee in its individual capacity incurred on or prior to the Purchase
Option Date or arising out of or based upon events occurring on or prior to the
Purchase Option Date, which obligations and liabilities shall remain the sole
responsibility of the Owner Trustee).
If, concurrent with an assumption pursuant to this Section 7.03,
the Aircraft is being reregistered the Company must comply with the provisions
of Section 7.02 hereof.
40
ARTICLE 8
DEFAULTS AND REMEDIES
Section 8.01. Indenture Events of Default. The following
---------------------------
events shall constitute "Indenture Events of Default" under this Agreement
(whether any 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 upon any Certificate or of principal
of any Certificate or of premium, if any, in respect of any Certificate
shall not be paid when due and payable (whether upon redemption or
purchase, final maturity, acceleration or otherwise) and such default in
payment shall continue for more than 10 days after such amount shall have
become due and payable; or
(b) any failure by the Owner Trustee, in its individual capacity
or as Owner Trustee, as the case may be, to observe or perform in any
material respect any covenant or obligation required pursuant to Article
4 or clauses 1-5 under the Habendum Clause hereof or Section 8(b), 8(c),
8(g), 8(n) or 10 of the Participation Agreement or the failure by the
Owner Participant to observe or perform in any material respect any
covenant or obligation of it required pursuant to Section 8(b), 8(g) or
10 of the Participation Agreement, or, to the extent that the interest of
the Indenture Trustee or any Holder of an Outstanding Certificate is
adversely affected by such failure, in Section 4.01(a) of the Trust
Agreement or the termination or revocation by the Owner Participant of
the trust created by the Trust Agreement without the Indenture Trustee's
prior written consent if, but only if, such failure or termination or
revocation is not remedied within a period of 30 days after there has
been given to the Owner Trustee and the Owner Participant by registered
or certified mail, a written notice specifying such failure and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder, by the Indenture Trustee or by the Holders of at least 25% in
principal amount of Outstanding Certificates; provided that no
--------
Indenture Event of Default shall arise under this Section 8.01(b) solely
as a result of a failure by the Owner Participant or the Owner Trustee to
observe or perform any covenant contained in Section 8(g) of the
Participation Agreement if all action necessary to discharge all Lessor
Liens referred to in such Section shall have been taken and the Indenture
Trustee and the Indenture Estate shall have been compensated for all
claims, losses and expenses arising from the failure of the Owner Trustee
or the Owner Participant, as the case may be, to observe and perform any
such covenant; or
41
(c) any failure by the Owner Trustee, in its individual capacity
or as Owner Trustee, to observe or perform any other covenant or
obligation of the Owner Trustee contained in this Agreement or in the
Participation Agreement or any failure by the Owner Participant to
observe or perform any other covenant or obligation of the Owner
Participant contained in the Participation Agreement which failure, in
any case and either individually or together with other then existing
failures, shall have a material adverse effect on the rights and
interests of the Holders and is not remedied within a period of 30 days
after there has been given to the Owner Trustee and the Owner Participant
by registered or certified mail, a written notice specifying such failure
and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder, by the Indenture Trustee or by the Holders of at
least 25% in principal amount of Outstanding Certificates; provided,
--------
however, that, if the Owner Trustee, in its individual capacity or as
-------
Owner Trustee, or the Owner Participant shall have undertaken to cure any
such failure and, notwithstanding the reasonable diligence of any of them
in attempting to cure such failure, such failure is not cured within said
30 day period but is curable with future due diligence, there shall exist
no Indenture Event of Default as a consequence of such failure so long as
the Owner Trustee in its individual capacity or as Owner Trustee or the
Owner Participant is proceeding with due diligence to cure such failure,
there exists no adverse effect on the Lien of this Agreement and such
failure is in fact cured within a further period of 30 days; or
(d) any material representation or warranty made by the Owner
Trustee, in its individual capacity or as Owner Trustee, or by the Owner
Participant under the Participation Agreement or the Redemption and
Refinancing Agreement, or by the Owner Trustee hereunder, or by the Owner
Trustee, in its individual capacity or as Owner Trustee, or by the Owner
Participant in any document or certificate furnished to the Indenture
Trustee in connection herewith or therewith or pursuant hereto or hereto,
shall prove at any time to have been incorrect in any material respect as
of the date made and such incorrectness shall remain material at the date
of the notice referred to below and such incorrectness shall continue
unremedied for a period of 30 days after there has been given to the
Owner Trustee and the Owner Participant by registered or certified mail,
a written notice specifying such incorrectness and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder,
by the Indenture Trustee or by the Holders of at least 25% in principal
amount of Outstanding Certificates; or
(e) there shall be a Lease Event of Default other than any such
Lease Event of Default arising by reason of nonpayment of any Excluded
Payments when due; provided that any Lease Event of Default shall be
--------
deemed to exist and continue so long as, but only so long as, it shall
not be remedied; or
42
(f) either the Indenture Estate or the Owner Trustee with respect
thereto (and not in its individual capacity) or the Owner Participant, 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 appointment of a custodian, receiver, trustee or other
officer with similar powers of itself or any substantial part of its
property; provided that an event referred to in this Section 8.01(f)
--------
with respect to the Owner Participant shall not constitute an Indenture
Event of Default if (A) an order, judgment or decree shall be entered in
a proceeding by a court or a trustee, custodian, receiver or liquidator
which is either final and non-appealable or has not been stayed pending
any appeal, or (B) an opinion of counsel satisfactory to the Indenture
Trustee shall be provided by the Owner Participant, in each case to the
effect that no part of the Trust Estate created by the Trust Agreement
(except for the Owner Participant's beneficial interest in such Trust
Estate) and no right, title or interest under the Indenture Estate shall
be included in, or be subject to, any declaration or adjudication of, or
proceedings with respect to the bankruptcy, insolvency or liquidation of
the Owner Participant referred to in this Section 8.01(f); or
(g) a court or governmental authority of competent jurisdiction
shall enter an order appointing, without consent by the Indenture Estate
or the Owner Trustee with respect thereto (and not in its individual
capacity) or the Owner Participant, 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 Indenture
Estate or the Owner Trustee with respect thereto (and not in its
individual capacity) or the Owner Participant, 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; provided that an event referred to in this
----
Section 8.01(g) with respect to the Owner Participant shall not
constitute an Indenture Event of Default if (A) an order, judgment or
decree shall be entered in a proceeding by a court or a trustee,
custodian, receiver or liquidator which is either final and
non-appealable or has not been stayed pending an appeal, or (B) an
opinion of counsel satisfactory to the Indenture Trustee shall be
provided by Owner Participant, in each case to the effect that no part of
the Trust Estate created by the Trust Agreement (except for the Owner
Participant's beneficial interest in such Trust Estate) and no right,
title or interest under the Indenture Estate shall be included in, or be
subject to, any declaration or adjudication of, or proceedings with
respect
43
to, the bankruptcy, insolvency or liquidation of the Owner Participant
referred to in this Section 8.01(g).
Section 8.02. Acceleration; Rescission and Annulment. If an
--------------------------------------
Indenture Event of Default occurs and is continuing, either the Indenture
Trustee, by notice to the Company and the Owner Trustee, or the Holders of at
least 25% in aggregate principal amount of Outstanding Certificates, by notice
to the Company, the Indenture Trustee, the Owner Trustee and the Owner
Participant, may declare the principal of all the Certificates to be due and
payable. Upon such declaration, the principal of all Certificates 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 such
declaration and prior to the sale or disposition of the Indenture Estate, the
Holders of a majority in aggregate principal amount of all of the Outstanding
Certificates, by notice to the Indenture Trustee, the Company, the Owner
Trustee and the Owner Participant, may rescind such a declaration and thereby
annul its consequences if (i) an amount sufficient to pay all principal on any
Certificates which have become due otherwise than by such declaration and any
interest thereon and interest due or past due, if any, and all sums due and
payable to the Indenture Trustee have been deposited with the Indenture
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 Agreement have been cured or waived except nonpayment of principal of, or
interest on, the Certificates that has become due solely because of such
acceleration.
Section 8.03. Other Remedies Available to Indenture
-------------------------------------
Trustee. (a) After an Indenture Event of Default shall have occurred
- -------
and so long as such Indenture Event of Default shall be continuing, then and in
every such case the Indenture Trustee, as trustee of an express trust and as
assignee hereunder of the Lease or as holder of a security interest in the
Aircraft or Engines or otherwise, may, and when required pursuant to the
provisions of Article 9 shall, exercise, subject to Sections 8.03(b), 8.03(e),
8.03(f) and 8.03(h), any or all of the rights and powers and pursue any and all
of the remedies accorded to the Owner Trustee pursuant to Section 15 of the
Lease and this Article 8, may recover judgment in its own name as Indenture
Trustee against the Indenture Estate and may take possession of all or any part
of the Indenture Estate and may exclude the Owner Trustee and the Owner
Participant and all persons claiming under any of them wholly or partly
therefrom.
(b) After an Indenture Event of Default shall have occurred and
so long as such Indenture Event of Default shall be continuing, subject to
Sections 8.03(e), 8.03(f) and 8.03(h), the Indenture Trustee may, if at the
time such action may be lawful and always subject to compliance with any
mandatory legal requirements, either with or without taking possession, and
either before or after taking possession and without instituting any legal
proceedings whatsoever, and having first given notice of such sale by
registered mail to the Owner Trustee, the Owner Participant and the Company
once at least 30 days prior to the
44
date of such sale, and any other notice which may be required by law, sell and
dispose of the Indenture Estate, or any part thereof, or interest therein, at
public auction to the highest bidder, in one lot as an entirety or in separate
lots, and either for cash or on credit and on such terms as the Indenture
Trustee may determine, and at any place (whether or not it be the location of
the Indenture Estate or any part thereof) and time designated in the notice
above referred to; provided, however, that, notwithstanding any
-------- -------
provision herein to the contrary, the Indenture Trustee may not provide the
notice provided for above of its intention to sell any of the Indenture Estate,
exercise remedies under the Lease or exercise other remedies against the
Indenture Estate seeking to deprive the Owner Trustee or the Owner Participant
of its rights therein unless a declaration of acceleration has been made
pursuant to Section 8.02 or the Certificates have otherwise theretofore become
due and payable through redemption or otherwise. Any such sale or sales may be
adjourned from time to time by announcement at the time and place appointed for
such sale or sales, or for any such adjourned sale or sales, without further
notice, and the Indenture Trustee and the Holder or Holders of any
Certificates, or any interest therein, may bid and become the purchaser at any
such sale. No such sale may be consummated if the Owner Trustee shall, prior
to the consummation thereof, have given notice pursuant to and made the deposit
required by Section 8.03(e)(ii). The Indenture Trustee may exercise such right
without possession or production of the Certificates or proof of ownership
thereof, and as representative of the Holders may exercise such right without
notice to the Holders or including the Holders as parties to any suit or
proceeding relating to foreclosure of any property in the Indenture Estate.
The Owner Trustee hereby irrevocably constitutes the Indenture Trustee the true
and lawful attorney-in-fact of the Owner Trustee (in the name of the Owner
Trustee or otherwise) for the purpose of effectuating any sale, assignment,
transfer or delivery for enforcement of the lien created under this Agreement,
whether pursuant to foreclosure or power of sale or otherwise, to execute and
deliver all such bills of sale, assignments and other instruments as the
Indenture Trustee may consider necessary or appropriate, with full power of
substitution, the Owner Trustee hereby ratifying and confirming all that such
attorney or any substitute shall lawfully do by virtue hereof. Nevertheless,
if so requested by the Indenture Trustee or any purchaser, the Owner Trustee
shall ratify and confirm any such sale, assignment, transfer or delivery, by
executing and delivering to the Indenture Trustee or such purchaser all bills
of sale, assignments, releases and other proper instruments to effect such
ratification and confirmation as may be designated in any such request.
(c) Subject to Sections 8.03(e) and 8.03(f), if an Indenture
Event of Default has occurred and is continuing, the Owner Trustee shall, at
the request of the Indenture Trustee, promptly execute and deliver to the
Indenture Trustee such instruments of title or other documents as the Indenture
Trustee may deem necessary or advisable to enable the Indenture Trustee or an
agent or representative designated by the Indenture Trustee, at such time or
times and place or places as the Indenture Trustee may specify, to obtain
possession of all or any part of the Indenture Estate. If the Owner Trustee
shall for any reason fail to execute and deliver such instruments and documents
after such request by the
45
Indenture Trustee, the Indenture Trustee shall be entitled, in a proceeding to
which the Owner Trustee will be a necessary party, to a judgment for specific
performance of the covenants contained in the foregoing sentence, conferring
upon the Indenture Trustee the right to immediate possession and requiring the
Owner Trustee to execute and deliver such instruments and documents to the
Indenture Trustee. The Indenture Trustee shall also be entitled to pursue all
or any part of the Indenture Estate wherever it may be found and may enter any
of the premises of the Owner Trustee or any other Person wherever the Indenture
Estate may be or be supposed to be and search for the Indenture Estate and take
possession of any item of the Indenture Estate pursuant to this Section
8.03(c). The Indenture 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
Indenture Estate, as it may deem proper. In each such case, the Indenture
Trustee shall have the right to use, operate, store, lease, control or manage
the Indenture Estate, and to exercise all rights and powers of the Owner
Trustee relating to the Indenture Estate as the Indenture Trustee shall deem
appropriate, including the right to enter into any and all such agreements with
respect to the use, operation, storage, leasing, control or management of the
Indenture Estate or any part thereof; and the Indenture Trustee shall be
entitled to collect and receive directly all tolls, rents (including Rent),
issues, profits, products, pursuant to this Section 8.03(c). The Indenture
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 Indenture Estate, as it
may deem proper. In each such case, the Indenture Trustee shall have the right
to use, operate, store, lease, control or manage the Indenture Estate, and to
exercise all rights and powers of the Owner Trustee relating to the Indenture
Estate as the Indenture Trustee shall deem appropriate, including the right to
enter into any and all such agreements with respect to the use, operation,
storage, leasing, control or management of the Indenture Estate or any part
thereof; and the Indenture Trustee shall be entitled to collect and receive
directly all tolls, rents (including Rent), issues, profits, products, revenues
and other income of the Indenture Estate and every part thereof, without
prejudice, however, to the right of the Indenture Trustee under any provision
of this Agreement to collect and receive all cash held by, or required to be
deposited with, the Indenture Trustee hereunder. In accordance with the terms
of this Section 8.03(c), such tolls, rents (including Rent), issues, profits,
products, revenues and other income shall be applied to pay the expenses of
using, operating, storing, leasing, controlling or managing the Indenture
Estate, and of all maintenance, insurance, repairs, replacements, alterations,
additions and improvements, and to make all payments which the Indenture
Trustee may be required or may elect to make, if any, for taxes, assessments,
insurance or other proper charges upon the Indenture Estate or any part thereof
(including the employment of engineers and accountants to examine, inspect and
make reports upon the properties and books and records of the Owner Trustee
and, to the extent permitted by the Lease, the Company), and all other payments
which the Indenture Trustee may be required or authorized to make under any
provision of this Agreement, including this
46
Section 8.03(c), as well as just and reasonable compensation for the services
of the Indenture Trustee, and of all persons properly engaged and employed by
the Indenture Trustee.
If an Indenture Event of Default occurs and is continuing and the
Indenture Trustee shall have obtained possession of or title to the Aircraft,
the Indenture Trustee shall not be obligated to use or operate the Aircraft or
cause the Aircraft to be used or operated directly or indirectly by itself or
through agents or other representatives or to lease, license or otherwise
permit or provide for the use or operation of the Aircraft by any other Person
unless (i) the Indenture Trustee shall have been able to obtain insurance in
kinds, at rates and in amounts satisfactory to it in its discretion to protect
the Indenture Estate and the Indenture Trustee, as trustee and individually,
against any and all liability for loss or damage to the Aircraft and for public
liability and property damage resulting from use or operation of the Aircraft
and (ii) funds are available in the Indenture Estate to pay for all such
insurance or, in lieu of such insurance, the Indenture Trustee is furnished
with indemnification from the Holders or any other Person upon terms and in
amounts satisfactory to the Indenture Trustee in its discretion to protect the
Indenture Estate and the Indenture Trustee, as trustee and individually,
against any and all such liabilities.
(d) Subject to Sections 8.03(b), 8.03(e) and 8.03(f), the
Indenture Trustee may proceed to protect and enforce this Agreement and the
Certificates by suit or suits or proceedings in equity, at law or in
bankruptcy, and whether for the specific performance of any covenant or
agreement herein contained or in execution or aid of any power herein granted;
or for foreclosure hereunder, or for the appointment of a receiver or receivers
for the Indenture Estate or any part thereof, or for the recovery of judgment
for the indebtedness secured by the Lien created under this Agreement or for
the enforcement of any other proper, legal or equitable remedy available under
applicable law.
(e) (i) If the Company shall fail to make any payment of Basic
Rent under the Lease when the same shall become due, and if such failure of the
Company to make such payment of Basic Rent shall not constitute the fourth
consecutive such failure or the seventh or subsequent cumulative such failure,
then as long as no Indenture Event of Default (other than arising from a Lease
Event of Default not involving any failure to make any payments to which the
Indenture Trustee or any Holder is entitled hereunder when due) shall have
occurred and be continuing, the Owner Participant or the Owner Trustee may (but
need not) pay to the Indenture Trustee, at any time prior to the day which is
the later of (x) the 11th day subsequent to notice of such failure by the
Indenture Trustee to the Owner Trustee or the Owner Participant and (y) the
sixth day subsequent to the expiration of the grace period provided for in
Section 14(a) of the Lease with respect to the payment of Basic Rent (and the
Indenture Trustee shall not (without the prior written consent of the Owner
Trustee) declare the Lease in default pursuant to Section 15 thereof or
exercise any of the rights, powers or remedies pursuant to such Section 15 or
this Section 8 prior to the occurrence of such later date), an amount equal to
the full amount of such payment of Basic Rent, together with any
47
interest due thereon on account of the delayed payment thereof to the date of
such payment, and such payment by the Owner Participant or the Owner Trustee
shall be deemed to cure as of the date of such payment any Indenture Event of
Default which arose from such failure of the Company (including any Lease Event
of Default arising from the Lessee's failure to pay interest in respect of such
overdue Basic Rent for the period commencing on the date of such payment), but
such cure shall not relieve the Company of any of its obligations. If the
Company shall fail to perform or observe any covenant, condition or agreement
to be performed or observed by it under the Lease, and if (but only if) the
performance or observance thereof can be effected by the payment of money alone
(it being understood that actions such as the obtaining of insurance and the
procurement of maintenance services can be so effected), then as long as no
other Indenture Event of Default (other than those arising from a Lease Event
of Default) shall have occurred and be continuing, the Owner Participant or the
Owner Trustee may (but need not) pay to the Indenture Trustee (or to such other
person as may be entitled to receive the same), at any time prior to the day
which is the later of (x) the 11th day subsequent to notice of such failure by
the Indenture Trustee to the Owner Trustee or the Owner Participant and (y) the
sixth day subsequent to the expiration of the grace period, if any, provided
with respect to such failure on the part of the Company in Section 14 of the
Lease (and the Indenture Trustee shall not (without the prior written consent
of the Owner Trustee) declare the Lease in default pursuant to Section 15
thereof or exercise any of the rights, powers or remedies pursuant to such
Section 15 or this Section 8 prior to the occurrence of such later date), all
sums necessary to effect the performance or observance of such covenant or
agreement of the Company, together with any interest due thereon on account of
the delayed payment thereof to the date of such payments and such payment by
the Owner Participant or the Owner Trustee shall be deemed to cure as of the
date of such payment any Indenture Event of Default which arose from such
failure of the Company (including any Lease Event of Default arising from the
Lessee's failure to pay interest in respect of such overdue payment for the
period commencing on the date of such payment), but such cure shall not relieve
the Company of any of its obligations. Upon any payment of Basic Rent by the
Owner Participant or the Owner Trustee in accordance with the first sentence of
this Section 8.03(e)(i), or upon any payment of any other sums by the Owner
Participant or the Owner Trustee in accordance with the second sentence of this
Section 8.03(e)(i), the Owner Participant or the Owner Trustee shall, to the
extent of their respective payments, be subrogated, in the case of any such
payment in accordance with such first sentence, to the rights of the Indenture
Trustee, as assignee hereunder of the Owner Trustee, or, in the case of any
such payment in accordance with such second sentence, to the rights of the
Indenture Trustee or such other person as the case may be, which actually
received such payment, to receive such payment of Basic Rent or such other
payment, as the case may be (and any interest due thereon on account of the
delayed payment thereof), and shall be entitled to receive such payment upon
its receipt by the Indenture Trustee or such other person, as aforesaid (but in
each case only if all amounts of principal of, and interest at the time due and
payable on, the Certificates together with interest due thereon on account of
the delayed payment thereof shall have been paid in full); provided that
--------
neither the Owner
48
Participant nor the Owner Trustee shall attempt to recover any such amount paid
by it on behalf of the Company pursuant to this Section 8.03(e)(i) except by
demanding of the Company payment of such amount or by proceeding by appropriate
court action against the Company to enforce the payment of such amount pursuant
to Section 15(f), but only said Section 15(f), of the Lease.
(ii) In the event that (A) at any time one or more Lease Events of
Default shall have occurred and be continuing for a period of 180 days or more
but less than one year (or a period of less than 180 days if any such Lease
Event of Default shall be a Lease Event of Default under Section 14(a) of the
Lease) and the Certificates shall not have been accelerated or (B) the
Certificates shall have been accelerated pursuant to Section 8.02 or after one
or more Lease Events of Default shall have occurred and be continuing for a
period of one year or more (or a period of 180 days or more, if such Lease
Event of Default shall be a Lease Event of Default under Section 14(a) of the
Lease), the Owner Trustee or the Owner Participant may, at its option, give at
least 30 days' prior irrevocable notice to the Indenture Trustee that the Owner
Trustee or the Owner Participant will redeem or purchase all Certificates then
outstanding on the Business Day specified in such notice and, concurrently with
such notice, the Owner Trustee or the Owner Participant will deposit with the
Indenture Trustee an amount sufficient to redeem or purchase at the applicable
Redemption Price determined consistently with the applicable provisions of
Article 6 all Certificates then outstanding (including, if Section 6.01(b) is
applicable, an estimate of the premium to be paid on the Redemption Date
computed using the Treasury Yield determined as if the Redemption Date were the
date of such notice) and to pay the Indenture Trustee all amounts then due it
hereunder, which funds shall be held by the Indenture Trustee as provided in
Section 9.04. Upon the giving of such notice and the receipt by the Indenture
Trustee of such deposit, the Indenture Trustee shall deem all instructions
received from the Owner Trustee as having been given by the Holders of 100% of
the outstanding principal amount of Certificates for all purposes of this
Indenture. If such notice is given, the Owner Trustee further agrees that it
will deposit or cause to be deposited with the Indenture Trustee, on or prior
to the Business Day preceding the applicable Redemption Date, whether or not an
Indenture Event of Default is then continuing, funds sufficient, when added to
the funds already held by the Indenture Trustee for such purpose, to redeem or
purchase at the applicable Redemption Price (including the premium actually
payable in respect thereof) on such Redemption Date all Certificates then
outstanding and to pay the Indenture Trustee all amounts then due it hereunder.
(iii) Anything in this Agreement to the contrary notwithstanding
the Indenture Trustee shall not be entitled to exercise any remedy hereunder as
a result of an Indenture Event of Default which arises solely by reason of one
or more events or circumstances which constitute a Lease Event of Default
unless the Indenture Trustee as security assignee of the Owner Trustee shall
have exercised or concurrently be exercising one or more of the remedies
provided for in Section 15(a)-(f) of the Lease with respect to the
49
Aircraft; provided, however, that such requirement to exercise one
-------- -------
or more of such remedies under the Lease shall not apply in circumstances where
the Indenture 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(a)(l)(A) 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, however, 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 (A) 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)(1)(A) of the Bankruptcy Code and
continues to perform as required by Section 1110(a)(1)(A-B) of the Bankruptcy
Code or (B) is an extension of the Section 1110 Period with the consent of the
Indenture Trustee pursuant to Section 1110(b) of the Bankruptcy Code or (C)
results from the Company's assumption during the Section 1110 period with the
approval of the relevant court of the Lease pursuant to Section 365 of the
Bankruptcy Code or (D) is the consequence of the Indenture Trustee's own
failure to give any requisite notice to any person or (E) is pursuant to a
judicial stay pending the resolution of litigation with respect to the
applicability of Section 1110 of the Bankruptcy Code and there is either no
Lease Event of Default other than one arising solely from the Company's
bankruptcy or any such other Lease Event of Default has been cured;
provided further, however, that the requirement to exercise one
- -------- ------- -------
or more of such remedies under the Lease during a Continuous Stay Period
subsequent to the expiration of the Section 1110 period based upon a judicial
stay as provided for in this clause (E) shall in any event cease to be
applicable subsequent to the 120th day of such Continuous Stay Period. If the
limitation upon cures of the Lessee's failure to pay Basic Rent as provided in
Section 8.03(e)(i) would otherwise prohibit the Owner Participant or the Owner
Trustee from making a payment to cure a Lease Event of Default for purposes of
clause (E) above, the Owner Participant or the Owner Trustee shall nonetheless
be entitled to make such payment. If the Indenture Trustee shall acquire title
to the Aircraft through foreclosure during a Continuous Stay period without
having exercised one or more of such remedies under the Lease by virtue of the
Continuous Stay Period having continued beyond its 120th day as provided above
in clause (E) and the Indenture Trustee shall have received prior to the 183rd
day subsequent to its acquisition of title to the Aircraft, the proceeds from
its sale of the Aircraft, the Indenture Trustee shall, notwithstanding any
other provision of this Indenture, distribute to the Owner Trustee the amount,
if any, by which such proceeds (net of the Indenture Trustee's costs and
expenses (including the fees and expenses of counsel and other experts and
agents retained by it), commissions and other costs and expenses with respect
to such foreclosure, the maintenance and preservation of the Aircraft and such
sale (including amounts in respect of any thereof paid by others to whom the
Indenture Trustee has a reimbursement obligation) and any other amounts to
which the Indenture Trustee is entitled pursuant to Section 9.06 or otherwise)
50
exceed an amount equal to the aggregate of the principal amount of the
Certificates outstanding on the date of such foreclosure, together with
interest accrued thereon to such foreclosure date and an amount equal to the
amount of interest that would have accrued (at the rate per annum applicable
under the Certificates) on such principal amount from the date of such
foreclosure to the date of the distribution by the Indenture Trustee of such
proceeds for the benefit of the Holders if such principal amount had remained
outstanding. References in this subsection (iii) to particular sections of the
Bankruptcy Code as in effect on the date of the amendment and restatement of
this Indenture shall include any substantially similar successor provisions.
(f) Notwithstanding any provision of this Agreement to the
contrary, including, without limitation, Sections 8.03(b), 8.03(c) and 8.03(d),
as long as no Lease Event of Default shall have occurred and be continuing,
neither the Indenture Trustee nor the Owner Trustee shall take any action in
violation of the Company's rights under the Lease, including, without
limitation, (x) the right to receive all monies due and payable to it in
accordance with the provisions of the Lease and (y) the Company's rights to
possession and use of, and of quiet enjoyment of, the Aircraft.
(g) Each and every right, power and remedy herein given to the
Indenture Trustee specifically or otherwise in this Agreement 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 in
such order as may be deemed expedient by the Indenture Trustee, and the
exercise or the beginning of the exercise of any power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy. No delay or omission by the
Indenture Trustee in the exercise of any right, remedy or power or in pursuing
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 Company or to be
an acquiescence therein.
(h) Notwithstanding anything contained herein to the contrary, so
long as the Pass Through Trustee is a Holder, the Indenture Trustee is not
authorized or empowered to acquire title to the Indenture Estate, or to take
any action with respect to any of the Indenture Estate so acquired by it, if
such acquisition or action would cause any Pass Through Trust to fail to
qualify as a "grantor trust" for federal income tax purposes.
Section 8.04. Waiver of Owner Trustee. To the extent now
-----------------------
or at any time hereafter enforceable under applicable law, the Owner Trustee
covenants that it will not at any time insist upon or plead, or in any manner
whatsoever claim or take any benefit or advantage of or from any law now or
hereafter in force providing for the valuation or appraisal of the Indenture
Estate or any part thereof, prior to any sale or sales thereof to be
51
made pursuant to any provision herein contained, or prior to any applicable
decree, judgment or order of any court of competent jurisdiction; nor, after
such sale or sales, claim or exercise any right under any statute now or
hereafter made or enacted by any state or otherwise to redeem the property so
sold or any part thereof, and hereby expressly waives for itself and on behalf
of each and every Person, except decree or judgment creditors of the Owner
Trustee acquiring any interest in or title to the Indenture Estate or any part
thereof subsequent to the date of this Agreement, all benefit and advantage of
any such law or laws, and covenants that it will not invoke or utilize any such
law or laws, but will suffer and permit the execution of every such power as
though no such law or laws had been made or enacted. Nothing in this Section
8.04 shall be deemed to be a waiver by the Owner Trustee of its rights under
Section 8.03(e).
The Indenture Trustee may maintain such a pleading, or, in any
manner whatsoever, claim or take any benefit or advantage of or from any law
now or hereafter in force even if it does not possess any of the Certificates
or does not produce any of them in the proceeding. A delay or omission by the
Indenture Trustee or any Holder in exercising any right or remedy accruing upon
an Indenture Event of Default under this Agreement shall not impair the right
or remedy or constitute a waiver of or acquiescence in such Indenture Event of
Default.
Section 8.05. Waiver of Existing Defaults. The Holders of a
---------------------------
majority in the aggregate principal amount of the Outstanding Certificates by
notice to the Indenture Trustee may waive on behalf of the Holders an existing
Indenture Default or Indenture Event of Default and its consequences except (i)
an Indenture Default or Indenture Event of Default in the payment of the
principal of or interest on any Certificate or (ii) in respect of a covenant or
provision hereof which pursuant to Section 11.02 cannot be amended or modified
without the consent of the Holder affected.
Section 8.06. Control by Majority. (a) The Holders of a
-------------------
majority in aggregate principal amount of the Outstanding Certificates may
direct the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee or exercising any trust or power conferred
on it by this Agreement. However, the Indenture Trustee may refuse to follow
any direction that conflicts with law or this Agreement, that is unduly
prejudicial to the rights of the Holders so affected, or that would subject the
Indenture Trustee to personal liability.
(b) The Owner Trustee may pursuant to the direction and
instruction of the Owner Participant by delivery of written notice to the
Indenture Trustee set a record date to determine the Holders 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 Holders in connection therewith. If such a record date is
fixed, such consent, request,
52
demand, authorization, direction, notice, waiver or other act may be given
before or after such record date, but only the Holders of record at the close
of business on such record date shall be deemed to be Holders for the purposes
of determining whether Holders holding the requisite proportion of certificates
have authorized or agreed or consented to such consent, request, demand,
authorization, direction, notice, waiver or other act, and for that purpose the
Outstanding Certificates shall be computed as of such record date; provided
that no such consent, request, demand, authorization, direction, notice, waiver
or other act by the Holders on such record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Agreement
not later than one year after the record date.
Section 8.07. Limitation on Suits by Holders. A Holder
------------------------------
may pursue a remedy under this Agreement or thereunder only if:
(1) the Holder gives to the Indenture Trustee written notice of a
continuing Indenture Event of Default under this Agreement;
(2) the Holders of at least 25% in aggregate principal amount of
the Outstanding Certificates make a written request to the Indenture
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Indenture Trustee
indemnity satisfactory to the Indenture Trustee against any loss,
liability or expense to be, or which may be, incurred by the Indenture
Trustee in pursuing the remedy;
(4) the Indenture Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in
aggregate principal amount of the Outstanding Certificates do not give
the Indenture Trustee a direction inconsistent with the request.
A Holder may not use this Agreement to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
Section 8.08. Rights of Holders to Receive Payment.
------------------------------------
Notwithstanding any other provision of this Agreement the right of any Holder
to receive payment of principal of, premium, if any, and interest on such
Certificate on or after the respective due dates expressed in such Certificate,
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
53
Section 8.09. Indenture Trustee May File Proofs of Claim.
------------------------------------------
The Indenture Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee and of the Holders allowed in any judicial proceedings
relating to any obligor on the Certificates, its creditors, or its property.
ARTICLE 9
INDENTURE TRUSTEE
Section 9.01. Duties of Indenture Trustee. (a) The
---------------------------
Indenture Trustee may refuse to perform any duty or exercise any right or power
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(b) Subject to the provisions of Section 9.04, the Indenture
Trustee shall not be liable for interest on any money received except as
otherwise provided in any other Operative Document. Money held in trust by the
Indenture Trustee need not be segregated from other funds except to the extent
required by law.
Section 9.02. Rights of Indenture Trustee. (a) The
---------------------------
Indenture Trustee may rely on any document believed by it to be genuine and to
have been signed or presented by the proper person. The Indenture Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it
may consult with counsel or require an Officer's Certificate or an Opinion of
Counsel from the Company or the Owner Trustee after which it will take such
action or refrain from acting as it deems appropriate. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith and
in accordance herewith in reliance on a resolution of the Board of Directors of
the Company, the written advice of counsel acceptable to the Owner Trustee, the
Company and the Indenture Trustee, officer's certificates or opinions of
counsel provided by the Company or the Owner Trustee.
(c) The Indenture Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any such agent appointed with
due care; provided that, so long as no Lease Event of Default shall have
--------
occurred and be continuing no such agents shall be appointed by the Indenture
Trustee without the consent of the Company and the Owner Trustee, which consent
shall, in each case, not be unreasonably withheld.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers.
54
(e) If an Indenture Event of Default under this Agreement has
occurred and is continuing, the Indenture Trustee shall exercise its rights and
powers under this Agreement, and shall use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
Section 9.03. Individual Rights of Indenture Trustee. The
--------------------------------------
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates and may otherwise deal with the Owner Trustee, the
Company or an Affiliate of the Owner Trustee or the Company or a subsidiary of
the Owner Trustee or the Company with the same rights it would have if it were
not the Indenture Trustee. Any Agent may do the same with like rights.
Section 9.04. Funds May Be Held by Indenture Trustee or Paying
------------------------------------------------
Agent; Investments. Any monies (including without limitation for purpose
- ------------------
of this Section 9.04 Permitted Investments constituting the proceeds of the
maturity, sale or other disposition of any Permitted Investment) held by the
Indenture Trustee or the Paying Agent hereunder as part of the Indenture
Estate, until paid out by the Indenture Trustee or the Paying Agent as herein
provided, (i) subject to clause (ii) below, may be carried by the Indenture
Trustee or the Paying Agent on deposit with itself or on deposit to its account
with any bank, trust company or national banking association incorporated or
doing business under the laws of the United States of America or one of the
States thereof having combined capital and surplus and retained earnings of at
least $100,000,000, and neither the Indenture Trustee nor the Paying Agent
shall have any liability for interest upon any such monies except as otherwise
agreed in writing or (ii) 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 Company to the Indenture Trustee) of the Company 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 Indenture Trustee in trust
as part of the Indenture Estate until so sold; provided that the Company
--------
pursuant to Section 22 of the Lease, on behalf of the Owner Trustee, as agent
of the Owner Trustee, shall upon demand pay to the Indenture 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 Indenture Trustee,
and the Indenture Trustee shall promptly pay to the Company, on behalf of the
Owner Trustee, any profit, income, interest, dividend or gain realized upon
maturity, sale or other disposition of any 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 shall be held as part of the Indenture Estate and
shall be applied by the Indenture 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
