CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE SYMBOL “[***]” HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO OMITTED. LOAN...
Exhibit
10.62
CERTAIN
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. THE SYMBOL “[***]” HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO
OMITTED.
(_____)
dated
as
of ______________, 2008
among
PINNACLE
AIRLINES,
INC.,
Borrower
EACH
CERTIFICATE HOLDER
FROM
TIME TO TIME
HERETO,
Certificate
Holders
and
XXXXX
FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION,
Indenture
Trustee
Xxxxxx
Price P.C.
Chicago,
Illinois
LOAN
AGREEMENT (_______)
THIS
LOAN AGREEMENT (_____)
dated as of ____________, 2008 among (i) PINNACLE AIRLINES, INC. a
Georgia corporation, (the “Borrower”), (ii) EACH
CERTIFICATE HOLDER from
time to time, and (iii) XXXXX FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION, a national banking association, as the Indenture
Trustee.
W
I T N E S S E T
H:
WHEREAS,
certain terms are
used herein as defined in Section 1(a) hereof; and
WHEREAS,
concurrently with the
execution and delivery of this Agreement, the Borrower and the Indenture Trustee
are entering into the Trust Indenture and Security Agreement (________) dated
on
or about the date hereof (the “Trust Indenture”) pursuant to
which the Borrower agrees, among other things, to issue one or more Loan
Certificates as evidence of the Borrower’s indebtedness to the Certificate
Holders, which Loan Certificates will be secured by the mortgage and security
interest created by the Borrower in favor of the Indenture Trustee, and the
Borrower shall execute and deliver the Trust Indenture Supplement covering
the
Aircraft, supplementing the Trust Indenture.
NOW
THEREFORE, in
consideration of the mutual agreements herein contained, the parties hereto
agree as follows:
Section 1. Certain
Definitions.
(a) Except
as
otherwise defined in this Agreement, including its annexes, schedules and
exhibits, terms used herein in capitalized form shall have the meanings
attributed thereto in the Trust Indenture. Unless the context
otherwise requires, any reference herein to any of the Operative Documents
refers to such document as it may be modified, amended or supplemented from
time
to time in accordance with its terms and the terms of each other agreement
restricting the modification, amendment or supplement thereof.
(b) “Financed
Amount” shall, subject to the terms of Section 2(a) hereof, be
$[***].
(c) “Administration
Fee” shall be
[***].
(d) “Applicable
Margin” shall be [***].
(e) “Make-Whole
Margin” means
[***].
(f) “Termination
Date” means
[***].
Section 2. Commitments;
Commitment
Fee. (a) Commitment. Subject
to the terms and conditions of this Agreement, each Certificate Holder agrees
to
make a secured loan to the Borrower (herein called the “Loan”) on a date to be
designated pursuant to Section 3 hereof, but in no event later than [***];
the “Commitment Termination
Date”), in the amount in Dollars set forth opposite such Certificate
Holder’s name in Schedule II hereto (its “Commitment”), and to receive,
as evidence of such secured loan, Loan Certificate(s) in an amount equal to
its
Commitment. The aggregate amount of the Commitments shall equal the
Financed Amount. The Financed Amount for the Aircraft shall not
exceed (i) [***] of the Net Purchase Price, and (ii) when taken together with
the “Financed Amount”
advanced or to be
advanced under the Other Loan Agreements, the Maximum
Commitment Amount (as hereinafter defined). In the event that the
Aircraft is not financed on the Aircraft Delivery Date, then the Financed Amount
and the amortization schedules will be adjusted accordingly, as though the
Loan
had been made on such Aircraft Delivery Date; provided that for purposes of
the
preceding sentence, the Financed Amount shall be deemed to have been advanced
on
such Aircraft Delivery Date. If any Certificate Holder shall default
in its obligation to make the amount of its Commitment available pursuant to
this Section 2 in respect of the Aircraft, no other Certificate Holder
shall have an obligation to make any portion of such amount available or to
increase the amount of its Commitment and the obligations of the non-defaulting
Certificate Holder shall remain subject to the terms and conditions set forth
in
this Agreement.
(b) Commitment
Fee. Original Certificate Holder has agreed to provide
financing to Borrower prior to the Termination Date for up to [***] Bombardier
_______ aircraft pursuant to the Letter of Offer in an aggregate amount not
to
exceed $[***] (“Maximum
Commitment Amount”). In consideration of the Original
Certificate Holder’s commitment in respect of the Maximum Commitment Amount, the
Borrower shall pay to the Original Certificate Holder on December 30 and June
30
of each calendar year (unless such date is not a Business Day, then such payment
shall be made on the next succeeding Business Day) a commitment fee (the “Commitment Fee”) of [***] on
the balance of the Maximum Commitment Amount remaining undisbursed from time
to
time ([***]), less any commitment fee paid under any Other Loan
Agreements.
Section 3. Borrower’s
Notice of Closing
Date; Closing Procedure.
(a) The
Borrower agrees to give each Certificate Holder and the Indenture Trustee at
least [***] Business Days’ prior written notice (unless waived by the
Certificate Holders) of the scheduled Closing Date which Closing Date shall
be a
Business Day not later than the Commitment Termination Date, which notice shall
specify the scheduled Closing Date, the Financed Amount, the instructions for
wiring the Financed Amount, and the election of either a Fixed Rate of interest
or the Floating Rate. The form of such notice is set out on Exhibit A
hereto.
(b) Subject
to the terms and conditions of this Agreement, and simultaneous with transfer
of
the Financed Amount to the Borrower or its designee, the Borrower shall
authorize the delivery and filing for recordation of the FAA Xxxx of Sale,
the
FAA Application for Registration and the Trust Indenture with the FAA and
consent to the registration of the contracts of sale in respect of the Warranty
Xxxx of Sale (to the extent not previously registered) and the International
Interest created by the Trust Indenture with the International
Registry. Prior to 11 a.m., New York time, on the scheduled
Closing Date specified in the Borrower’s notice referred to in the first
paragraph of this Section 3, each Certificate Holder agrees, subject to the
terms and conditions of this Agreement, to pay to the Indenture Trustee the
amount of its Commitment. Subject to the satisfaction of the
conditions precedent set forth in Section 4(a) or waiver thereof by the
Certificate Holders, at the Closing, the Indenture Trustee shall upon
instructions received from the Certificate Holders release the Commitment to
the
Borrower by paying the amount thereof by transfer of immediately available
funds
to such account as shall be specified in the notice of Closing Date delivered
pursuant to Section 3(a) above. The Certificate Holders may, in lieu
of releasing the entire Commitment to the Borrower as aforesaid and by prior
notice given to Borrower, at their option, be entitled to offset from the amount
of the Commitment to be funded hereunder, the aggregate amount payable under
the
Pinnacle PDP Facility Agreements in respect of the Aircraft as well as any
arrangement fee or Commitment Fees due and owing on such Closing
Date.
(c)
If for any reason the Closing is not consummated on the scheduled Closing Date,
the Borrower may, by telephone notice to the Indenture Trustee given by 2:00
p.m., New York City time (such telephone notice to be promptly confirmed in
writing by personal delivery or facsimile) on the scheduled Closing Date,
designate a delayed Closing Date (which may include successive delayed Closing
Dates), in which case the Indenture Trustee shall hold the funds provided by
the
Certificate Holders until such delayed Closing Date and use reasonable efforts
to invest such funds in Permitted Investments, as directed by the Borrower,
provided, that if such Closing does not occur by the third Business Day after
such initial scheduled Closing Date, such funds shall be returned to the
Certificate Holders. The Indenture Trustee shall not be liable for any loss
relating to an investment made in accordance with this Section 3(c). The
Indenture Trustee shall pay to the Borrower upon its request any earnings from
such investments, and the Borrower shall pay to the Indenture Trustee upon
its
request any losses from such investments. If the Closing fails to occur on
a
scheduled or delayed Closing Date and the Borrower does not give notice of
a
delayed Closing Date pursuant to this Section, the Indenture Trustee shall
promptly return to the Certificate Holders the amount of their Commitments
(or
so much thereof as is then on deposit with it as well as any monies received
by
the Indenture Trustee from the Borrower in reimbursement of any losses sustained
as a result of the prior investment of such funds) and, if such events have
occurred, or if the funds representing the Loan are returned as provided in
the
proviso to the first sentence of this paragraph (c), the Borrower shall pay
to
the Certificate Holders upon demand interest on the amount funded from and
including the initial scheduled Closing Date to but excluding the date on which
such funds are returned by 1:00 P.M. (New York City time) (or, if returned
after
such time on such date, to but excluding the next Business Day), at a rate
per
annum equal to the Applicable Rate, plus Break Amount (determined as if the
Loan
had been advanced as of the scheduled Closing Date). If the Borrower has
designated a delayed Closing Date pursuant to this Section and the Closing
occurs on such delayed Closing Date, the Loan shall accrue interest at the
Applicable Rate from the initial scheduled Closing Date.
Section 4. Conditions.
(a) Conditions
Precedent to the
Certificate Holders’ Participation in the Loan. It is agreed
that the respective obligations of each Certificate Holder to lend its
Commitment to the Borrower is subject to the satisfaction prior to (unless
otherwise waived by each Certificate Holder) or on the Closing Date of the
following conditions precedent, except that compliance with paragraph (iii)
by a Certificate Holder shall not be a condition precedent to the obligations
of
such Certificate Holder:
(i) Such
Certificate Holder shall have received due notice with respect to the Closing
Date pursuant to Section 3 hereof (or shall have waived such notice either
in writing or by funding in absence of such notice).
(ii) No
change
shall have occurred after the date of the execution and delivery of this
Agreement in applicable law or regulations thereunder or interpretations thereof
by appropriate regulatory authorities which, in the reasonable opinion of such
Certificate Holder would make it a violation of law or regulations for such
Certificate Holder to make its Commitment available to acquire its Loan
Certificate(s) or to realize the benefits of the security afforded by the Trust
Indenture.
(iii) Each
Certificate Holder shall have made available the amount of its Commitment for
the Aircraft in accordance with Section 3(b) hereof.
(iv) The
following documents shall have been duly authorized, executed and delivered
by
the respective party or parties thereto, shall each be satisfactory in form
and
substance to such Certificate Holder and shall be in full force and effect
and
executed counterparts shall have been delivered to such Certificate Holder
and
its counsel, provided that only such Certificate Holder shall receive an
executed original of its Loan Certificate(s):
(1) this
Agreement;
(2) the
Trust
Indenture;
(3) the
Trust
Indenture Supplement covering the Aircraft and dated as of the Closing
Date;
(4) the
Loan
Certificate(s);
(5) the
Manufacturer Consent and the Engine Consent and Agreement;
(6) a
copy of
that portion of the Purchase Agreement certified by the Secretary or an
Assistant Secretary of the Borrower as being a true and accurate copy of the
same that constitutes the Assigned Warranties;
(7) copies
of
the Bills of Sale (including the Buyer Furnished Equipment);
(8) a
copy of
the FAA Application for Registration; and
(9) the
Guaranty.
(v) A
Uniform
Commercial Code financing statement or statements covering all the security
interests created by or pursuant to the granting clause of the Trust Indenture
that are not covered by the recording system established by the Federal Aviation
Act shall have been duly filed in all places reasonably deemed necessary in
the
opinion of counsel for the Certificate Holders, to establish and perfect the
Indenture Trustee’s security interest in the Indenture Estate.
(vi) Such
Certificate Holder shall have received the following, in each case in form
and
substance reasonably satisfactory to it:
(1) a
certificate of good standing and a certified copy of the Articles of
Incorporation and Bylaws of the Indenture Trustee, the Borrower and the
Guarantor each as in effect as of the Closing Date and a copy of resolutions
of
the board of directors of the Borrower and the Guarantor or the executive
committees thereof, certified by the Secretary or an Assistant Secretary of
the
Borrower or the Guarantor, as applicable, duly authorizing the execution,
delivery and performance by the Borrower or the Guarantor, as applicable, of
this Agreement (in the case of the Borrower) and each other document required
to
be executed and delivered by such party on the Closing Date in accordance with
the provisions hereof and thereof;
(2) an
incumbency certificate of the Indenture Trustee, the Borrower and the Guarantor
as to such Person or Persons authorized to execute and deliver this Agreement,
the other Operative Documents, and any other documents to be executed on behalf
of such party in connection with the transactions contemplated hereby and as
to
the signature of such Person or Persons.
(vii) All
appropriate action required to have been taken by the Federal Aviation
Administration, or any governmental or political agency, subdivision or
instrumentality of the United States, on or prior to the Closing Date in
connection with the transaction contemplated by this Agreement shall have been
taken, and all orders, permits, waivers, authorizations, exemptions and
approvals of such entities required to be in effect on the Closing Date in
connection with the transaction contemplated by this Agreement shall have been
issued, and all such orders, permits, waivers, authorizations, exemptions and
approvals shall be in full force and effect on the Closing Date.
(viii) On
the
Closing Date the following statements shall be true, and such Certificate Holder
shall have received evidence reasonably satisfactory to it to the effect
that:
(1) the
Borrower will have good and marketable title to the Aircraft, free and clear
of
all Liens;
(2) (A)
the
Trust Indenture and the Trust Indenture Supplement have been (or are in the
process of being) duly filed for recordation with the FAA pursuant to the
Federal Aviation Act and there exist no Liens of record prior to the Lien of
the
Trust Indenture and (B) the registrations (the “Registrations”) will have been
made (or, in the case of the contract of sale, simultaneously with such
delivery, shall be made) and consented to with the International Registry of
a
contract of sale with respect to the Warranty Xxxx of Sale and a prospective
international interest (relating to the Trust Indenture as to the Airframe
and
Engines) (with no stated lapse date) between Borrower and Indenture Trustee,
in
favor of Indenture Trustee, and there shall be no other registrations with
respect to the Airframe or either Engine, which remain effective, with the
International Registry;
(3) the
Aircraft has been duly certified as to type by the FAA, and the Borrower has
authority to operate the Aircraft;
(4) the
Indenture Trustee is entitled to the protection of Section 1110 of the
United States Bankruptcy Code in connection with its right to take possession
of
the Airframe and Engines in the event of a case under Chapter 11 of the
United States Bankruptcy Code in which the Borrower is a debtor;
and
(5) since
December 31, 2006, there shall have been no material and adverse change in
the financial or operational condition of the Borrower or the Guarantor and
no
event or circumstance shall have occurred which in the reasonable judgment
of
such Certificate Holder had or would be reasonably likely to have a Material
Adverse Effect.
(ix) On
the
Closing Date, (A) the representations and warranties of the Borrower
contained in Section 7(a) of this Agreement and of the Guarantor contained
in Section 10 of the Guaranty shall be true and accurate as though made on
and as of such date except to the extent that such representations and
warranties relate solely to an earlier date (in which case such representations
and warranties shall be true and accurate on and as of such earlier date);
(B) no event shall have occurred and be continuing which constitutes (or
would, with the passage of time or the giving of notice or both, constitute)
an
Event of Default; and (C) since December 31, 2006, there shall have
been no material and adverse change in the financial or operational condition
of
the Borrower or the Guarantor and no event or circumstance shall have occurred
which in the reasonable judgment of such Certificate Holder had or would be
reasonably likely to have a Material Adverse Effect.
(x) The
Indenture Trustee and such Certificate Holder shall have received opinions
addressed to each of them from (1) Xxxxxx & Xxxxxx LLP, special counsel
to the Borrower and Guarantor, as to the due authorization and execution of
the
Operative Documents by the Guarantor and as to the valid, binding and
enforceable nature of the Operative Documents, the creation and perfection
of
the Lien created by the Indenture in place on the Closing Date and as to such
other matters as such Certificate Holder may reasonably request; and
(2) Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, P.C., special
Georgia counsel to the Borrower, as to the due authorization and execution
of
the Operative Documents by the Borrower and as to such other matters as such
Certificate Holder may reasonably request in as it relates to Georgia
law.
(xi) Such
Certificate Holder shall have received the opinion addressed to such Certificate
Holder and the Borrower from Ray, Xxxxxxx & Xxxxxxx P.C., special
counsel for the Indenture Trustee, in form and substance reasonably satisfactory
to the addressees thereof.
(xii) Such
Certificate Holder shall have received an opinion addressed to such Certificate
Holder, the Indenture Trustee and the Borrower from Xxxxx & Xxxxxxx, P.C.,
special FAA counsel in Oklahoma City, Oklahoma.
(xiii) Such
Certificate Holder shall have received from Xxxxxx Price P.C., special counsel
for the Certificate Holders, an opinion satisfactory in substance and form
to
the Certificate Holders, as to such matters incident to the transactions
contemplated hereby as such Certificate Holder may reasonably
request.
(xiv) Such
Certificate Holder shall have received a separate certificate signed by an
officer of each of the Borrower and the Guarantor, dated the Closing Date,
addressed to such Certificate Holder and certifying, in the case of the
Guarantor, as to the matters stated in paragraph (ix) (as it relates to the
Guarantor) of this Section 4(a), and certifying, in the case of the Borrower,
as
to the matters stated in paragraphs (ix) (as it relates to the Borrower)
and (xvi) of this Section 4(a). The form of such Certificate is
set out on Exhibit B hereto.
(xv) Such
Certificate Holder shall have received an independent insurance brokers’ report
and certificate(s) of insurance, in form and substance reasonably satisfactory
to such Certificate Holder as to the due compliance with the terms of
Article VI of the Trust Indenture relating to insurance with respect to the
Aircraft (or, in the case of war risk insurance, a certificate of the
FAA).
(xvi) On
the
Closing Date it shall be true that no Event of Loss (or event which with the
passage of time would become an Event of Loss) with respect to the Airframe
or
any Engine has occurred.
(xvii) No
action
or proceeding shall have been instituted before any court or governmental
agency, nor shall any order, judgment or decree have been issued or proposed
to
be issued by any court or governmental agency at the time of the Closing Date
to
set aside, restrain, enjoin or prevent the completion and consummation of this
Agreement or the transaction contemplated hereby.
(xviii) The
representations and warranties of the Indenture Trustee contained in
Section 8 shall be true and accurate in all material respects as of the
Closing Date as though made on and as of such date and such Certificate Holder
shall have received a certificate signed by the Chairman of the Board, the
President, any Executive Vice President, any Senior Vice President, any Vice
President, any Assistant Vice President or the Secretary of the Indenture
Trustee certifying as to the foregoing matters with respect to the Indenture
Trustee.
(xix) Original
Certificate Holder shall have received evidence reasonably satisfactory to
it
that the Financed Amount for the Aircraft does not exceed [***] of the purchase
price of the Aircraft, as evidenced by (I) a purchase invoice from the Borrower
or Manufacturer and (II) a certificate from the Manufacturer which attests
to
the Net Purchase Price and all price discounts and other cash credits, credits
or concessions with respect to the Aircraft.
(xx) _______________
Agreement remains in full force and effect.
(xxi) Such
Certificate Holder and the Indenture Trustee shall have received an opinion
addressed to it from Sidley Xxxxxx Xxxxx & Xxxx LLP, special counsel for
Manufacturer and opinions addressed to it from in-house counsel to the
Manufacturer, as to such matters as such Certificate Holder may reasonably
request.
(xxii) Initial
Certificate Holder shall have received (i) an arrangement fee in an amount
equal
to [***] of the Financed Amount, and (ii) any Commitment Fee then due and
owing.
(xxiii) The
Guarantor shall have a minimum unrestricted cash, cash equivalents and short
term investments balance (determined in accordance with GAAP on a consolidated
basis) of at least [***].
(xxiv) No
Default or Event of Default shall have occurred under the Other Trust Indentures
or the Pinnacle PDP Facility Agreements and, unless notice of offset has been
given as provided in the last sentence of Section 3(b) hereof, the aggregate
amount owing to the “Lender” under the Pinnacle PDP Facility Agreements in
respect of the Aircraft shall have been paid in full.
Promptly
upon the recording of the FAA Xxxx of Sale, Trust Indenture and the Trust
Indenture Supplement covering the Aircraft pursuant to the Federal Aviation
Act
and the registration with the International Registry of the international
interests in the Airframe and Engines created by the Trust Indenture and the
contract of sale with respect to the Warranty Xxxx of Sale, the Borrower will
cause special FAA counsel in Oklahoma City, Oklahoma, to deliver to each
Certificate Holder and the Borrower an opinion as to the due and valid
registration of the Aircraft by the FAA in the name of the Borrower, and the
due
recording of the Trust Indenture and the Trust Indenture Supplement and the
lack
of filing of any intervening documents with respect to the Aircraft at the
FAA
and the International Registry.
(b) Conditions
Precedent to the
Obligations of the Borrower. It is agreed that the obligations
of the Borrower to enter into the Trust Indenture and other Operative Documents
are all subject to the fulfillment to the satisfaction of the Borrower prior
to
or on the Closing Date of the following conditions precedent:
(i) The
conditions specified in Sections 4(a)(iii), 4(a)(iv), (and executed copies
of the documents referred to therein shall have been delivered to Borrower),
4(a)(vii), 4(a)(viii)(3) and 4(a)(xviii) hereof shall have been satisfied,
unless such nonsatisfaction is the result of the Borrower’s action or failure to
act.
(ii) The
Borrower shall receive good and marketable title to the Aircraft from Bombardier
Inc.
(iii) The
Borrower shall have received a copy of the general authorizing resolutions
of
the board of directors (or executive committees) or other satisfactory evidence
of authorization of the Indenture Trustee certified as of the Closing Date
by
the Secretary or an Assistant Secretary of the Indenture Trustee which authorize
the execution, delivery and performance by the Indenture Trustee of all the
Operative Documents to which it is a party, together with such other documents
and evidence with respect to the Indenture Trustee as the Borrower may
reasonably request in order to establish the consummation of the transactions
contemplated by this Agreement, the taking of all corporate proceedings in
connection therewith and compliance with the conditions herein set
forth.
(iv) The
representations and warranties of each Certificate Holder and the Indenture
Trustee, contained in Section 8 hereof shall be true and accurate as of the
Closing Date as though made on and as of such date except to the extent that
such representations and warranties relate solely to an earlier date (in which
event such representations and warranties shall have been true and accurate
on
and as of such earlier date) and the Borrower shall have received a certificate
signed by the Chairman of the Board, the President, any Vice President or any
Assistant Vice President or other authorized representative of the Indenture
Trustee as to the foregoing matters with respect to the Indenture
Trustee.
(v) The
Borrower shall have received the opinion set forth in Section 4(a)(xi)
addressed to the Borrower and dated the Closing Date.
(vi) No
change
shall have occurred after the date of the execution and delivery of this
Agreement in applicable law or regulations thereunder or interpretations thereof
by appropriate regulatory authorities which, in the opinion of the Borrower,
would make it a violation of law or regulations for the Borrower to enter into
any transaction contemplated by the Operative Documents.
Section 5. Closing
Procedure. Following the Borrower’s notice of the scheduled
Closing Date as provided in Section 3 hereof, the parties will pre-position
the executed FAA Xxxx of Sale, FAA Application for Registration, Trust Indenture
and Trust Indenture Supplement with FAA counsel in Oklahoma City, Oklahoma,
will
have completed the Registrations and will have completed the searches of the
International Registry necessary to evidence the priority of the
Registrations. Prior to 11 a.m., New York time, on the Closing
Date, each Certificate Holder will, subject to the terms and conditions of
this
Agreement, wire transfer its Commitment to the Indenture Trustee. By
conference telephone call among the Borrower, the Certificate Holders,
Bombardier, Inc. (and/or their counsel acting on their behalf), the Indenture
Trustee and FAA counsel, the appropriate party will authorize the filing of
the
FAA Xxxx of Sale, FAA Application for Registration, Trust Indenture and the
Trust Indenture Supplement upon transfer to Borrower or its designee of the
Financed Amount. The irrevocable authorization to FAA counsel to date
the FAA Xxxx of Sale, the FAA Application for Registration, the Trust Indenture
and Trust Indenture Supplement and file such documents will occur prior to
the
transfer of the Financed Amount to Borrower or its designee. The Loan
Certificate(s) will be delivered to the Certificate Holders and legal opinions
delivered to all parties upon transfer of funds by the Certificate Holders,
except that the opinion of FAA counsel will be delivered to all parties
immediately following the filing for recordation of the Trust Indenture and
Trust Indenture Supplement with the FAA.
Section 6. Intentionally
Omitted.
Section 7. Borrower’s
Representations,
Warranties, Covenants and Indemnities.
(a) In
General. The Borrower represents and warrants that as of the
Closing Date:
(i) the
Borrower is a corporation duly organized and validly existing in good standing
pursuant to the laws of the State of Georgia having the organizational
number set forth on Schedule I hereto; has the State of Georgia as its
“location” (as such term is used in Section 9-307 of the UCC of the State
of New York as in effect on the Closing Date), its true and complete name as
indicated on the public records of the State of Georgia and its mailing address
is as set forth in Schedule I hereto; is duly qualified to do business as a
foreign corporation in each jurisdiction in which its operations or the nature
of its business requires, except where the failure to be so qualified would
not
give rise to a Material Adverse Effect; is a U.S. Air Carrier; holds all
licenses, certificates, permits and franchises from the appropriate agencies
of
the United States of America and/or all other governmental authorities having
jurisdiction necessary to authorize it to engage in air transport and to carry
on scheduled passenger service as presently conducted; except where the failure
to hold any such license, certificate, permit or franchise would not give rise
to a Material Adverse Effect; and has the corporate power and authority to
engage in air transport and to carry on scheduled passenger service as presently
conducted, to own the Aircraft and to enter into and perform its obligations
under the Operative Documents;
(ii) the
execution, delivery and performance by the Borrower of the Operative Documents
to which it is a party will, on the Closing Date, have been duly authorized
by
all necessary corporate action on the part of the Borrower, do not require
any
stockholder approval, or approval or consent of any trustee or holders of any
indebtedness or obligations of the Borrower except such as have been duly
obtained or by the Closing Date will have been duly obtained and will on the
Closing Date be in full force and effect, and none of such execution, delivery
or performance contravenes any law, judgment, government rule, regulation or
order binding on the Borrower or the articles of incorporation or bylaws of
the
Borrower or contravenes the provisions of, or constitutes a default under,
or
results in the creation of any Lien (other than Permitted Liens) upon the
property of the Borrower under, any indenture, mortgage, contract or other
agreement to which the Borrower is a party or by which it or its properties
may
be bound or affected;
(iii) neither
the execution and delivery by the Borrower of the Operative Documents to which
it is a party nor the performance by the Borrower of its obligations thereunder
requires the consent or approval of, the giving of notice to, or the
registration with, or the taking of any other action in respect of any federal,
state or foreign government authority or agency, except for (A) the orders,
permits, waivers, exemptions, authorizations and approvals of the regulatory
authorities having jurisdiction over the operation of the Aircraft by the
Borrower, which orders, permits, waivers, exemptions, authorizations and
approvals have been duly obtained or will on or prior to the Closing Date be
duly obtained, and will on the Closing Date be in full force and effect, and
(B) the matters referred to in Section 7(a)(vi);
(iv) the
Operative Documents to which it is a party will each constitute legal, valid
and
binding obligations of the Borrower enforceable against the Borrower in
accordance with the terms thereof except as such may be limited by equitable
principles or applicable bankruptcy, insolvency, reorganization, moratorium
or
other similar laws affecting creditors’ rights generally;
(v) there
are
no pending or, to the Actual Knowledge of Borrower, threatened actions or
proceedings against Borrower before any court, arbitrator or administrative
agency which individually (or in the aggregate in the case of any group of
related lawsuits) is reasonably expected to result in a Material Adverse
Effect;
(vi) except
for (A) the registration of the Aircraft in the name of the Borrower with
the FAA pursuant to the Federal Aviation Act, (B) the filing with the FAA
pursuant to the FAA Regulations of an AC Form 8050-135 with respect to the
contract of sale under the Warranty Xxxx of Sale and the international interests
(or prospective international interests) under the Cape Town Convention in
the
Airframe and the procurement of an authorization code in respect thereof,
(C) the filing for recording (and the recording) pursuant to the Federal
Aviation Act of the FAA Xxxx of Sale and the Trust Indenture with the Trust
Indenture Supplement covering the Aircraft, (D) the registration with the
International Registry of the sale under the Warranty Xxxx of Sale and the
international interests (or prospective international interests) created by
the
Trust Indenture in each case with respect to the Airframe and each Engine and
(E) the filing of financing statements (and continuation statements at periodic
intervals) with respect to the security interests created by the Trust Indenture
under the Uniform Commercial Code of Georgia no further action, including any
filing or recording of any document (including any financing statement in
respect thereof under Article 9 of the Uniform Commercial Code of any applicable
jurisdiction), is necessary in order to establish and perfect the first mortgage
Lien on the Aircraft in favor of the Indenture Trustee pursuant to the Trust
Indenture in any applicable jurisdiction in the United States;
(vii) there
has
not occurred any event which constitutes a Default or an Event of Default under
the Trust Indenture or a “Default” or “Event of Default” under any of the Other
Trust Indentures or the Pinnacle PDP Facility Agreements which is presently
continuing;
(viii) the
audited consolidated balance sheet of Borrower and Guarantor as of December
31,
2006, and the related consolidated statements of operations and cash flows
for
each of Borrower and Guarantor for the year then ended, have been prepared
in
accordance with U.S. GAAP and fairly present in all material respects the
consolidated financial condition of Borrower and Guarantor as of such date
and
the consolidated results of its operations and cash flows for such period,
and
since December 31, 2006, no event or circumstance has occurred which would
have a Material Adverse Effect. The unaudited consolidated balance
sheet of Guarantor as of June 30, 2007, and the related unaudited statements
of
operations and cash flows for the quarter then ended included in Guarantor’s
quarterly report for the quarter ended June 30, 2007, as amended, have been
prepared in accordance with U.S. GAAP (subject to normal year-end adjustments
and the absence of footnotes) and present fairly in all material respects the
consolidated financial condition of the Guarantor as of such date and the
results of operations and cash flows for such period (subject, as
aforesaid);
(ix) Borrower
has filed or caused to be filed all Federal, state, local and (in the Borrower’s
opinion, as applicable) foreign tax returns which are required to be filed
and
has paid or caused to be paid or provided adequate reserves for the payment
of
all taxes shown to be due and payable on such returns or (except to the extent
being contested in good faith and by appropriate proceedings and for the payment
of which adequate reserves have been provided in accordance with generally
accepted accounting principles) on any assessment received by the Borrower,
to
the extent that such taxes have become due and payable, except such returns
or
taxes as do not materially and adversely affect the business, property or
assets, operations or financial condition, of the Borrower and do not involve
a
material risk of the sale, forfeiture or loss of, or the creation of any Lien
(other than a Permitted Lien) on the Aircraft;
(x) Borrower
is not (x) in default under any indenture, mortgage, or loan agreement or
under any other agreement or instrument of a material nature to which the
Borrower is now a party or by which it is bound, and no event has occurred
and
is continuing which, under the provisions of any such indenture, mortgage,
loan
agreement or other material agreement or instrument, with the lapse of time
or
the giving of notice, or both, would constitute a default thereunder by the
Borrower or (y) in violation of any law, order, injunction, decree, rule or
regulation applicable to the Borrower of any court or administrative body,
which, in each case, would reasonably be expected to result in a Material
Adverse Effect;
(xi) the
Aircraft has been duly certified by the FAA as to type and has suffered no
Event
of Loss;
(xii) assuming
the truth of the representations contained in Section 8(b) hereof, neither
the execution and delivery by the Borrower of the Operative Documents to which
it is a party nor the performance of its obligations thereunder will result
in a
“prohibited transaction,” within the meaning of Section 406 of ERISA or
Section 4975 of the Code which could subject any Certificate Holder to any
tax or penalty pursuant to Section 4975 of the Code or Section 502(i)
of ERISA;
(xiii) no
part
of the funds used or to be used by the Borrower to satisfy its obligations
under
the Operative Documents constitutes or will constitute assets of any “employee
benefit plan” as defined in Section 3(3) of ERISA or any “plan” as defined
in Section 4975(e)(1) of the Code;
(xiv) the
issuance of the Loan Certificate to the Original Certificate Holder will not
require registration of the Loan Certificate pursuant to the Securities
Act;
(xv) the
Borrower is not an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940;
(xvi) none
of
the information furnished in writing by or on behalf of the Borrower to the
Original Certificate Holder in connection with the negotiation of this Agreement
or delivered hereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits any material
fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(xvii) no
part
of the proceeds of any Loan will be used, whether directly or indirectly, for
any purpose that entails a violation of any of the Regulations of the Board
of
Governors of the Federal Reserve, including Regulations U and
X;
(xviii) the
Guarantor has minimum unrestricted cash, cash equivalents and short term
investments balance (determined in accordance with GAAP on a consolidated basis)
of at least [***]; and
(xix) ________________
remains in full force and effect.
(b) General
Indemnity. Subject to the next following paragraph, the
Borrower hereby agrees to indemnify, on an After-tax Basis, each Indemnitee
against, and agrees to protect, save and keep harmless each of them from any
and
all Expenses imposed on, incurred by or asserted against any Indemnitee arising
out of or directly resulting from (i) the operation, possession, use,
maintenance, overhaul, testing, registration, reregistration, delivery,
non-delivery, lease, nonuse, modification, alteration, or sale of the Aircraft,
Airframe, Engines or any engine used in connection with the Airframe or any
part
of any of the foregoing by the Borrower, any lessee or any other Person
whatsoever, whether or not such operation, possession, use, maintenance,
overhaul, testing, registration, reregistration, delivery, non-delivery, lease,
nonuse, modification, alteration, or sale is in compliance with the terms of
the
Trust Indenture, including, without limitation, claims for death, personal
injury or property damage or other loss or harm to any person whatsoever and
claims relating to any laws, rules or regulations pertaining to such operation,
possession, use, maintenance, overhaul, testing, registration, reregistration,
delivery, non-delivery, lease, non-use, modification, alteration, sale or return
including environmental control, noise and pollution laws, rules or regulations;
(ii) the manufacture, design, purchase, acceptance, rejection, delivery, or
condition of the Aircraft, Airframe, Engines or any engine used in connection
with the Airframe, or any part of any of the foregoing including, without
limitation, latent and other defects, whether or not discoverable, or trademark
or copyright infringement; (iii) any breach of or failure to perform or
observe, or any other noncompliance with, any covenant or agreement to be
performed, or other obligation of the Borrower under any of the Operative
Documents, or the falsity of any representation or warranty of the Borrower
in
any of the Operative Documents; and (iv) the transactions contemplated by
the Operative Documents or any lease under the Trust Indenture, any Event of
Default under the Trust Indenture or the enforcement against the Borrower or
any
Lessee of any of the terms thereof (including, without limitation,
Article IX of the Trust Indenture), including the offer, sale and delivery
by the Borrower or anyone acting on behalf of the Borrower of the Loan
Certificates or successor debt obligations issued in connection with the
refunding or refinancing thereof (including, without limitation, any claim
arising out of the Securities Act, the Securities Exchange Act of 1934, as
amended, or any other federal or state statute, law or regulation, or at common
law or otherwise relating to securities (collectively “Securities Liabilities”)) (the
indemnity provided in this Section 7(b)(iv) to extend also to any Person who
controls an Indemnitee, its successors, assigns, employees, directors, officers,
servants and agents within the meaning of Section 15 of the Securities
Act); and.
The
foregoing indemnity shall not extend to any Expense of any Indemnitee to the
extent attributable to one (1) or more of the following: (1) any
representation or warranty made by such Indemnitee in or pursuant to the
Operative Documents being incorrect in any material respect; (2) the
failure by such Indemnitee to perform or observe in any material respect any
agreement, covenant or condition in any of the Operative Documents (except
to
the extent such failure is attributable to a Default or an Event of Default);
(3) acts or omissions involving the willful misconduct or gross negligence
of such Indemnitee (other than gross negligence imputed to such Indemnitee
solely by reason of its interest in the Aircraft); (4) in the case of any
Certificate Holder, a disposition (voluntary or involuntary) by such Certificate
Holder of all or any part of its interest in a Loan Certificate (other than
as
contemplated by the Trust Indenture or this Agreement) or, in the case of the
Indenture Trustee, by such Indemnitee of all or any part of such Indemnitee’s
interest in the Airframe or any Engine or Operative Documents;
(5) negligence of any inspecting party in connection with the exercise of a
physical inspection of the Aircraft; (6) the authorization or giving or
withholding of any future amendments, supplements, waivers or consents with
respect to any of the Operative Documents, which amendments, supplements,
waivers or consents are not required pursuant to the terms of the Operative
Documents and not requested by the Borrower; (7) any Tax, or increase in
tax liability under any tax law; (8) a failure on the part of the Indenture
Trustee to distribute in accordance with the Trust Indenture any amounts
received and distributable by it thereunder; (9) any Indemnitee having
engaged in a “prohibited transaction” within the meaning of Section 406 of
ERISA or Section 4975 of the Code; (10) any amount which constitutes
an expense that is to be borne by such Indemnitee pursuant to the Operative
Documents; (11) except to the extent attributable to acts or events
occurring prior thereto, acts or events (other than acts or events related
to
the performance or failure to perform by Borrower of its obligations pursuant
to
the terms of the Operative Agreements) that occur after Indenture Trustee is
required to release the Aircraft and Indenture Estate from the Lien of the
Trust
Indenture pursuant to Section 15.01 of the Trust Indenture; (12) the offer
or sale by an Indemnitee of any interest in the Aircraft, the Loan, or any
Loan
Certificate in violation of applicable federal, state or foreign securities
laws
(other than any violation thereof caused by the acts or omissions of Borrower);
(13) if it is an ordinary and usual operating or overhead expense;
(14) if another provision of an Operative Document specifies the extent of
Borrower’s responsibility or obligation with respect to such Expense, arising
from other than failure of Borrower to comply with such specified responsibility
or obligation.
If
an
Indemnitee has actual knowledge of a claim involving one or more Expenses that
such Indemnitee is indemnified against under Section 7(b), such Indemnitee
shall promptly give notice of such claim to the Borrower; provided that the
failure to provide such notice shall not release the Borrower from any of its
obligations to indemnify hereunder except to the extent that the Borrower is
prejudiced as a result of the failure to give such notice in a timely fashion,
and no payment by the Borrower to an Indemnitee pursuant to this
Section 7(b) shall be deemed to constitute a waiver or release of any right
or remedy which the Borrower may have against such Indemnitee for any actual
damages as a result of the failure by such Indemnitee to give the Borrower
such
notice. The Borrower shall be entitled, at its sole cost and expense,
acting through counsel, so long as the Borrower has acknowledged in writing
its
responsibility for such Expense and that it will provide indemnity for such
claim hereunder, to participate in and, to the extent that it shall elect,
to
assume responsibility for and control the defense or settlement of such
claim. The Indemnitee may participate at its own expense and with its
own counsel in any judicial proceeding controlled by the Borrower pursuant
to
the preceding provisions; provided, that such Indemnitee’s participation does
not, in the reasonable opinion of the independent counsel appointed by the
Borrower or its insurers to conduct such proceedings, interfere with the defense
of such case. Notwithstanding any of the foregoing, the Borrower
shall not be entitled to assume responsibility for and control the defense
or
settlement of such claim if any Event of Default shall have occurred and be
continuing, if such proceedings will involve a material risk of the sale,
forfeiture or loss of the Aircraft unless the Borrower shall have posted a
bond
or other security reasonably satisfactory to the relevant Indemnitee with
respect to such risk or if such proceedings entail any risk of criminal
liability being imposed on such Indemnitee.
The
Indemnitee shall supply the Borrower with such information in its possession
reasonably requested by the Borrower as is necessary or advisable for the
Borrower to control or participate in any proceeding to the extent permitted
by
this Section 7(b). Such Indemnitee shall not enter into a
settlement or other compromise with respect to any Expense without the prior
written consent of the Borrower, which consent shall not be unreasonably
withheld or delayed, unless such Indemnitee waives its right to be indemnified
with respect to such Expense under this Section 7(b).
The
Borrower shall supply the Indemnitee with such information in its possession
reasonably requested by the Indemnitee as is necessary or advisable for the
Indemnitee to control or participate in any proceeding to the extent permitted
by this Section 7(b).
To
the
extent of any payment of any Expense pursuant to this Section 7(b), the
Borrower, without any further action, shall be subrogated to any claims the
Indemnitee may have relating thereto. The Indemnitee agrees to give
such further assurances or agreements and to cooperate with the Borrower to
permit the Borrower to pursue such claims, if any, to the extent reasonably
requested by the Borrower.
In
the
event that the Borrower shall have paid an amount to an Indemnitee pursuant
to
this Section 7(b), and such Indemnitee subsequently shall be reimbursed in
respect of such indemnified amount from any other Person, such Indemnitee shall
promptly pay the Borrower the amount of such reimbursement, provided that no
Special Default or Event of Default has occurred and is continuing.
Any
amount payable to the Indemnitee pursuant to this Section 7(b) by the Borrower
shall be paid within 15 days after Borrower’s receipt of a written demand
therefor from such Indemnitee accompanied by a written statement describing
in
reasonable detail the claim that is the subject of and basis for such indemnity
and the computation of the amount payable.
If
an
Indemnitee is not a party to this Agreement, Borrower may require such
Indemnitee to agree in writing to the terms of this Section 7(b) prior to making
any payment to such Indemnitee under this Section 7(b).
(c) General
Tax
Indemnity. The Borrower agrees to pay, indemnify and hold each
Indemnitee harmless from, all Taxes imposed against any Indemnitee, by any
taxing authority upon or with respect to any of the foregoing, or upon or
relating to or measured by (i) the operation, possession, use, maintenance,
overhaul, testing, registration, reregistration, delivery, non-delivery, lease,
nonuse, modification, alteration, or sale of the Aircraft or Airframe or any
Engine, or any engine used in connection with the Airframe or any part of any
of
the foregoing by the Borrower, any lessee of the Borrower or any other Person
acting by or on behalf of the Borrower whatsoever, including, without
limitation, claims for death, personal injury or property damage or other loss
or harm to any person whatsoever and claims relating to any laws, rules or
regulations pertaining to such operation, possessions, use, maintenance,
overhaul, testing, registration, reregistration, delivery, non-delivery, lease,
nonuse, modification, alteration, sale or return including environmental
control, noise and pollution laws, rules or regulations; (ii) the
manufacture, design, purchase, acceptance, rejection, delivery, or condition
of
the Aircraft or Airframe or any Engine, any engine used in connection with
the
Airframe, or any part of any of the foregoing including, without limitation,
latent and other defects, whether or not discoverable, or trademark or copyright
infringement; or (iii) upon the rentals, receipts or earnings arising therefrom,
or upon or with respect to the Borrower, or upon the Certificate or other sums
payable thereunder or under or on or with respect to the Operative Documents
or
any sums payable thereunder, the execution and delivery of this Agreement or
any
other Operative Document, or otherwise with respect to the transactions
contemplated by the Operative Documents, provided that the foregoing indemnity
shall not apply:
(i) In
the
case of any Indemnitee, to any Taxes imposed by any taxing authority on, based
on, or measured by, the income (whether denominated an income or a franchise
Tax), receipts, capital, net worth, excess profits, or items of tax preference,
including minimum Taxes and withholding Taxes measured by income of such
Indemnitee from, upon or with respect to the Aircraft or the transactions
contemplated hereby, provided, however,
that this
clause (i) shall not exclude (A) any Taxes imposed by any taxing authority
which
are sales, use, value-added, rental, excise, license, ad valorem or property
taxes or (B) any Taxes (other than U.S. federal, state or local income taxes)
imposed by any taxing authority due to (y) the place of incorporation,
commercial domicile, or other presence in such jurisdiction of the Borrower
or
any user of or person in possession of any Aircraft or any part thereof (or
any
affiliate of such person), or (z) any payments made under any of the Operative
Documents being made from the jurisdiction imposing such Taxes or (C) any Taxes
to the extent covered by Section 7(d) below;
(ii) Any
Taxes
imposed on an Indemnitee (A) to the extent resulting from the gross negligence
or willful misconduct of such Indemnitee or any Person acting on behalf of
such
Indemnitee or (B) to the extent resulting from the material falsity or material
inaccuracy of any representation or warranty of any Indemnitee or any material
misrepresentation or material breach of contract of any Indemnitee made in
connection with or arising under any of the Operative Documents;
(iii) Any
Taxes
imposed on an Indemnitee for the sale of the Aircraft or Airframe or any Engine
after an Indemnitee has purchased the Aircraft or Airframe or any Engine
pursuant to Section 4 of the Indenture and the Manufacturer
Consent;
(iv) Any
Taxes
imposed on an Indemnitee arising from the acts or omissions of any Person in
respect of the Aircraft or Airframe or any Engine, engine or part thereof
incurred in connection with or following the exercise of any remedies under
the
Indenture;
(v) Any
Tax
imposed as a result of a transfer or disposition by an Indemnitee of all or
any
portion of its interest in the Certificate, or any Operative Document or any
interest in an Indemnitee, unless in each case pursuant to an exercise of
remedies in the case of an Event of Default or pursuant to Sections 2.15(f)
or 7(d)(iv) hereof;
(vi) Any
Tax
imposed on a Certificate Holder based on or measured by any fees received by
such Certificate Holder in connection with any transaction contemplated by
the
Operative Documents;
(vii) Any
Tax
imposed on an Indemnitee to the extent such Tax would not have been imposed
but
for a present or future connection between such Indemnitee or any Affiliate
thereof and the jurisdiction imposing such Taxes (including, without limitation,
the Indemnitee or an Affiliate thereof being or having been a citizen or
resident thereof, or having been organized, present or engaged in a trade or
business therein, or having, having had, a permanent establishment or fixed
place of business therein), other than a connection arising by reason of the
transactions contemplated by the Operative Documents or the operation, presence,
storage or use of the Aircraft, Airframe, Engine or any part thereof or the
presence, activity or other matter of or in respect of the
Borrower;
(viii) Any
Tax
imposed on any Indemnitee under Section 4975 of the Code or under subtitle
B of
ERISA or equivalent state law as a result of the use by such Indemnitee or
any
of its Affiliates of the assets of an “employee benefit plan” (as defined in
Section 3(3) of ERISA) to fund the Certificate or otherwise to acquire any
interest in the Certificates; or
(ix) Any
Tax
imposed on an Indemnitee that is incurred as a result of a change by such
Indemnitee of its lending office, unless such change is effected pursuant to
Section 7(d)(iv) hereof.
(d) Withholding
Taxes.
(i) Except
as
provided in this Section 7(d), the Borrower shall have no liability to any
Certificate Holder in the event any withholding Tax is imposed on payments
made
to such Certificate Holder pursuant to this Agreement, the other Operative
Documents, or in respect of its Certificate.
(ii) Notwithstanding
anything to the contrary contained herein or any other Operative Document,
the
Borrower agrees that any payment made to or for the benefit of a Certificate
Holder with respect to interest, principal, Break Amount or other amounts
payable pursuant to this Agreement and the other Operative Documents on or
with
respect to its Certificate shall be free of all withholdings or deductions
with
respect to United States federal income withholding Taxes (“U.S. Withholding Taxes”), and
in the event that the Borrower shall be required by applicable law to make
any
such withholding or deduction for any such U.S. Withholding Taxes (a) the
Borrower shall pay to such Certificate Holder an additional amount so that
after
making all required withholdings or deductions for U.S. Withholding Taxes from
such payment such Certificate Holder receives the same amount it would have
received had no such withholdings or deductions been required, (b) the Borrower
shall make all such withholdings or deductions, (c) the Borrower shall pay
such
amount withheld or deducted to the Internal Revenue Service in accordance with
applicable law, and (d) shall indemnify such Certificate Holder in respect
of
such U.S. Withholding Taxes; provided, however,
that the
Borrower shall only have an obligation under this Section 7(d) for U.S.
Withholding Taxes to the extent (i) that such Certificate Holder is the Original
Certificate Holder, (ii) that such Certificate Holder is a Treaty Lender and
such U.S. Withholding Taxes result from a change in law, the Tax treaty between
the United States and Austria, France, Germany, Ireland, the Netherlands or
the
United Kingdom (each, a “Specified Jurisdiction”), or
interpretation of either thereof that occurs on or after the date such
Certificate Holder acquires its interest in its Certificate, or (iii) that
such
Certificate Holder is a certificate holder whose interest income from the
transactions contemplated by the Operative Documents is income effectively
connected with the conduct of a United States trade or business and such U.S.
Withholding Taxes result from a change in law, the relevant Tax treaty, or
interpretation of either thereof that occurs on or after the date such
Certificate Holder acquires its interest in its Certificate.
(iii) For
purposes of this Section 7(d), the term “Treaty Lender” shall mean a
person who is a resident of a Specified Jurisdiction and entitled to claim
the
benefits of the income Tax treaty between the United States and such Specified
Jurisdiction at the time it acquires its interest in its
Certificate.
(iv) Each
Certificate Holder agrees to investigate alternatives for reducing or avoiding
any Taxes indemnifiable pursuant to this Section 7(d) and to use
commercially reasonable efforts (at the Borrower’s reasonable expense) to avoid
or minimize any liability with respect to such Taxes, including, without
limitation, by transferring its Certificate to an Affiliate or to a third party
or by designating a different lending office of such Certificate Holder, if
such
designation or other action would avoid the need for, or reduce the amount
of,
any such Taxes; provided, however,
that this
sentence shall not obligate such Certificate Holder to take any action that
would, in its reasonable judgment, cause such Certificate Holder to incur any
economic, legal, or regulatory disadvantage, unless the Borrower agrees to
indemnify such Certificate Holder therefor in a manner reasonably satisfactory
to such Certificate Holder.
(v) In
addition, the Borrower agrees to pay and indemnify each Certificate Holder
in
respect of any present or future stamp or documentary Taxes or any other
license, excise, registration, filing or property Taxes imposed by any
governmental authority which arise from (i) the execution, delivery,
registration, filing, recording or perfection of any security interest of or
in
connection with this Agreement or other Operative Documents (other than any
such
Taxes attributable to a voluntary transfer of a Certificate by such Certificate
Holder) or (ii) in connection with an Event of Default.
(vi) The
Borrower further agrees that any payment or indemnity pursuant to this
Section 7(d) shall be in an amount which, after deduction of all Taxes
required to be paid by such recipient with respect to such payment or indemnity
under the laws of any federal, state, or local government or taxing authority
in
the United States, or under the laws of any other country or any taxing
authority or governmental subdivision of such country, or any territory or
possession of the United States, or any international authority, shall be equal
to the amount the recipient would have received in the absence of the imposition
of such Taxes.
(vii) If
by
reason of (x) any U.S. Withholding Taxes with respect to which a payment or
indemnity was made or paid by the Borrower to or on behalf of a Certificate
Holder under clause (a) of Section 7(d)(ii), or (y) any additional payments
to a Certificate Holder pursuant to Section 7(b), 7(c) or
Section 7(d)(vi) with respect to Taxes resulting from payment or
indemnification of an Expense or from payment or indemnification pursuant to
this Section 7(d) on an after-tax basis, such Certificate Holder realizes a
net tax savings (by means of a credit, deduction or otherwise), such Certificate
Holder shall pay to the Borrower, as promptly as practicably after the
realization of such net tax saving, the amount of such net tax saving together
with any additional tax saving realized as a result of such payment (it being
understood that the amount and timing of the realization of such tax saving
shall be reasonably determined by such Certificate Holder in good
faith).
(e) Interest. The
Borrower will pay to each Indemnitee within 3 Business Days, to the extent
permitted by applicable law, interest on any amount of indemnity not paid when
due pursuant to this Section 7 until the same shall be paid, at the Past
Due Rate.
(f) Indenture
Trustee’s Fees.
The Borrower agrees to pay the initial and reasonable annual trustee
fees
of the Indenture Trustee for acting as such, as set forth in the separate
agreement between the Borrower and the Indenture Trustee.
Section 8. Representations,
Warranties
and Covenants.
(a) Reregistration. (i) The
Indenture Trustee and each Certificate Holder each agrees that if the Borrower
requests a change of registration pursuant to Section 3.01 of the Trust
Indenture, it will take all such action reasonably requested by the Borrower
in
order to effect such a change in registration, including the execution and
delivery of such documents and instruments as may be necessary or advisable
in
connection therewith.
(ii) All
costs
and expenses (including reasonable legal fees and expenses) of the Certificate
Holders and the Indenture Trustee incurred in connection with any such change
of
registration shall be for the account of the Borrower. Such costs and
expenses, to the extent incurred, shall include the
following: (w) the reasonable fees and disbursements of United
States counsel and counsel in the country of registry; (x) filing or
recordation fees, taxes or similar payments incurred in connection with the
registration of the Aircraft and the creation and perfection of the security
interest therein; (y) any costs and expenses incurred in connection with
any UCC filings and Cape Town Convention registrations necessary to continue
the
perfection of the security interest of the Trust Indenture in the Aircraft
and
the Indenture Estate; and (z) any other costs, expenses or taxes, whether
initial or continuing, incurred by the Indenture Trustee or the Certificate
Holders as a result of the registration of the Aircraft, or the creation of
the
security interest therein, under the country of registry other than the United
States.
(iii) If
the
Aircraft has been registered in a country other than the United States pursuant
to the terms and conditions of the Trust Indenture, Borrower will furnish to
the
Indenture Trustee (but no more than once per year and only if in any Certificate
Holder’s reasonable business judgment such an opinion is necessary or otherwise
desirable, supported by a priority search certificate issued by the
International Registry), an opinion of special counsel selected by Borrower
and
reasonably satisfactory to the Certificate Holders stating that, in the opinion
of such counsel, either (i) such action has been taken with respect to the
recording, filing, registration, rerecording, and refiling of the Operative
Documents and any supplements and amendments thereof, including, if applicable,
any filings with the International Registry, as is necessary to establish,
perfect, and protect Indenture Trustee’s respective right, title and interest in
and to the Aircraft and the Operative Documents, reciting the details of such
actions, or (ii) no action is necessary to maintain the perfection of the
security interest created by the Trust Indenture.
(b) Use
of Plan
Assets. Each Certificate Holder severally represents, warrants
and covenants that it is not acquiring and will not hold its interest in any
Loan Certificate(s) or any interests represented thereby with the assets of
any
“employee benefit plan” as defined in Section 3(3) of ERISA, or any “plan”
as defined in Section 4975(e)(1) of the Code.
(c) Borrower
Merger. The Borrower shall not, without the prior written
consent of the Indenture Trustee and each Certificate Holder (such consent
not
to be unreasonably withheld or delayed), enter into a merger, consolidation,
sale or other transaction or series of transactions (whether related or not)
to
sell, transfer or otherwise dispose of all or any substantial part of its
business.
(d) U.S.
Air
Carrier. The Borrower covenants and agrees that at all times
it will be an U.S. Air Carrier.
(e) Indenture
Trustee
Liens. The Indenture Trustee covenants and agrees that it
shall not cause or permit to exist any Indenture Trustee
Lien. Indenture Trustee further covenants and agrees that it shall
not assign, discharge, or consent to the assignment or discharge of any
international interest registered with the International Registry vested in
Indenture Trustee pursuant to the Trust Indenture (or pursuant to an assignment
to Indenture Trustee of an international interest vested in Borrower pursuant
to
any assigned Lease) except (i) if an Event of Default has occurred and is
continuing or (ii) as otherwise expressly provided in the Operative
Documents.
(f) Indenture
Trustee
Representations. The Indenture Trustee represents and warrants
that as of the Closing Date:
(i) it
is a
“citizen of the United States” as defined in 49 U.S.C. §40102(a)(15), it will
notify promptly all parties to this agreement if in its reasonable opinion
its
status as a “citizen of the United States” is likely to change and that it will
resign as the Indenture Trustee as provided in Section 13.01 of the Trust
Indenture if it should cease to be a “citizen of the United States,” as so
defined;
(ii) it
is a
national banking association company duly organized and validly existing in
good
standing under the laws of the United States and has the corporate power and
authority to enter into and perform its obligations under the Trust Indenture
and this Agreement and to authenticate the Loan Certificate(s) to be delivered
on the Closing Date;
(iii) the
Operative Documents to which it is a party, and the authentication of the Loan
Certificate(s) to be delivered on the Closing Date, have been duly authorized
by
all necessary corporate action on its part, and neither the execution and
delivery thereof nor its performance of any of the terms and provisions thereof
will violate any federal law or regulation relating to its banking or trust
powers or contravene or result in any breach of, or constitute any default
under
its charter or bylaws or the provision of any indenture, mortgage, contract
or
other agreement to which it is a party or by which it or its properties may
be
bound or affected; and
(iv) each
of
the Operative Documents to which it is a party, has been duly executed and
delivered by it and, assuming that each such agreement is the legal, valid
and
binding obligation of each other party thereto, is the legal, valid and binding
obligation of the Indenture Trustee, enforceable against it in accordance with
its terms.
(g) Assignment
of Loan
Certificates. Each Certificate Holder covenants and agrees
that such Certificate Holder will not sell, assign, convey, exchange or
otherwise transfer any Loan Certificate or any interest in (or represented
by)
any Loan Certificate except as provided in this Section 8(g). Any
Certificate Holder may assign or transfer all, or if less than all, a portion
equal to at least [***] in the aggregate face amount of any of its Certificates
to one or more Eligible Assignees (an “Assignment”). At
the time of each assignment pursuant to this Section to a Person which is not
already a Certificate Holder hereunder and which is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) for Federal income
tax purposes, the assignee Certificate Holder shall provide to the Borrower
and
the Indenture Trustee the forms described in Section 2.03 of the Trust
Indenture. Upon the effectiveness of such assignment, the assignee
shall be deemed to be a Certificate Holder for all purposes of this Agreement
and the other Operative Documents to the extent of the interests so
assigned.
The
foregoing provisions are not intended to apply to any participation or risk
participation.
(h) Securitization
Cooperation. In addition to the foregoing, if a Certificate
Holder desires to assign or transfer any part of its Certificate to a special
purpose vehicle (“SPV”),
as part of an overall transaction pursuant to which the SPV issues notes, other
evidences of indebtedness, trust certificates or other beneficial interests
in
the SPV to investors to fund its purchase of such Certificate (a “Securitization”), the Borrower
agrees to cooperate reasonably with any such Securitization.
Section 9. Certain
Covenants of the
Borrower. The Borrower covenants and agrees with each party
hereto as follows:
(a) The
Borrower will, at its cost and expense, cause to be done, executed, acknowledged
and delivered all and every such further acts, conveyances and assurances as
any
Certificate Holder shall reasonably require for accomplishing the purposes
of
this Agreement and the other Operative Documents; provided that any instrument
or other document so executed by the Borrower will not expand any obligations
or
limit any rights of the Borrower in respect of the transactions contemplated
by
any Operative Documents.
(b) The
Borrower, at its expense, will cause the Trust Indenture, all Trust Indenture
Supplements and all amendments to the Trust Indenture to be promptly filed
and
recorded, or filed for recording, to the extent permitted under the Federal
Aviation Act, or required under any other applicable law of the jurisdiction
where the Aircraft is registered. The Borrower agrees to furnish the
Indenture Trustee and the Certificate Holders with copies of the foregoing
documents with recording data as promptly as practicable following the issuance
of same by the FAA. Further, Borrower will cause, subject to receipt
of any necessary consent, the registration with the International Registry
of
the applicable international interests in the Airframe or and each Engine
attributable to the Trust Indenture and, if required by the Operative Documents,
any Lease. Borrower shall pay all reasonable costs and expenses
associated with the foregoing.
(c) Borrower
will take or cause to be taken such action with respect to the recording,
filing, re-recording and re-filing of the FAA Xxxx of Sale, the Trust Indenture,
the Trust Supplement, and any financing statements or other instruments or,
if
required by the terms of the Operative Documents, registrations with the
International Registry, as are necessary to maintain, so long as the Trust
Indenture is in effect, the perfection of any security interest that may be
claimed to have been created by the Trust Indenture or will furnish to Indenture
Trustee timely notice of the necessity of such action, together with such
instruments, in execution form, and such other information as may be required
to
enable it to take such action. Except as otherwise provided in the
Operative Documents, Borrower shall pay all reasonable costs and expenses
associated with the foregoing.
(d) The
Borrower shall pay all reasonable fees and expenses incurred by the Indenture
Trustee and the Certificate Holders incurred after the Closing Date in
connection with any supplements or amendments of the Operative Documents
(including, without limitation, any related recording costs) which are requested
by the Borrower.
(e) The
Borrower shall promptly give written notice to the Certificate Holders of any
cancellation of the ______________ Agreement. The Borrower also
agrees to provide access to the Original Certificate Holder to review copies
of
the _____________ Agreement and any amendments thereto, at any time during
the
term of the Loan, upon prior written notice to the Borrower and during normal
business hours.
Section 10. Notices. All
notices, demands, instructions and other communications required or permitted
to
be given to or made upon any party hereto shall be in writing and shall be
personally delivered or sent by registered or certified mail, postage prepaid,
or by facsimile or electronic mail, or by prepaid courier service, and shall
be
deemed to be given for purposes of this Agreement on the day that such writing
is delivered, in accordance with the provisions of this
Section 10.
Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 10, notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at their respective address (or to their respective facsimile
numbers) as follows: (a) if to the Borrower or the Indenture
Trustee, to the respective addresses set forth in Section 15.06 of the
Trust Indenture, (b) if to the Original Certificate Holder, to the address
set forth on Schedule I hereto, or (c) if to any subsequent
Certificate Holder, addressed to such Certificate Holder at its address set
forth in the Certificate Register maintained pursuant to the Trust Indenture,
provided that any Person may change its address (or facsimile number) then
in
effect under this Section by written notice given to all other parties specified
in clauses (a), (b) and (c).
Section 11. Miscellaneous;
Governing
Law.
(a) Each
Certificate Holder covenants and agrees that it shall not unreasonably withhold
its consent to any consent requested of the Indenture Trustee under the terms
of
the Trust Indenture which by its terms is not to be unreasonably withheld by
the
Indenture Trustee.
(b) The
representations, warranties, indemnities and agreements of the Borrower, the
Indenture Trustee and each Certificate Holder provided for in this Agreement
and
each party’s obligations under any and all thereof, shall survive the execution
and delivery of this Agreement and the other Operative Documents and the making
of the Loan hereunder.
(c) This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same
instrument. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified, except by an instrument
in writing signed by the party or parties thereto. This Agreement
shall in all respects be governed by, and construed in accordance with, the
law
of the State of New York, including all matters of construction, validity and
performance.
(d) This
Agreement shall be binding upon and shall inure to the benefit of, and shall
be
enforceable by, the parties hereto and their respective successors and permitted
assigns including each successive Certificate Holder whether or not an express
assignment to any such holder of rights under the Agreement has been made
provided that Borrower may not assign or transfer its rights and obligations
under this Agreement without Indenture Trustee’s prior written consent not to be
unreasonably withheld or delayed.
(e) No
Certificate Holder shall have any obligation or duty to the Borrower, or to
other Persons with respect to the transactions contemplated hereby except those
obligations or duties of such Certificate Holder expressly set forth in this
Agreement and the other Operative Documents and no Certificate Holder shall
be
liable for performance by any other party hereto of such other party’s
obligations or duties hereunder.
(f) Any
reference herein to an approval, consent or waiver to be given by the
Certificate Holders shall be deemed hereunder to be an approval, consent or
waiver, as the case may be, of a Majority in Interest of Certificate
Holders.
(g) EACH
PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF
OR RELATING TO THIS LOAN AGREEMENT, ANY OTHER OPERATIVE DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(h) Each
party hereto irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of
New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Operative Document,
or
for recognition or enforcement of any judgment, and each of any such action
or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party hereto may otherwise have to bring any action
or
proceeding relating to this Agreement or the other Operative Documents against
any other party hereto, or such party’s properties, in the courts of any
jurisdiction.
(i) Each
party to this Agreement as to itself hereby agrees that if pursuant to the
terms
of the Operative Documents an assignment, registration, discharge or release
is
to be made with the International Registry and a registration or consent by
such
party is required to give effect thereto, such party shall upon request make
or
consent to such assignment, registration, discharge or release.
Section 12. Invoices
and Payment of
Expenses. Each of the Indenture Trustee and the Certificate
Holders shall promptly submit to the Borrower for payment copies of invoices
of
the Transaction Expenses (as defined below) as they are received. The
Borrower shall promptly, but in no event later than 30 days after receipt of
such invoices, pay all Transaction Expenses. For the purposes hereof,
“Transaction Expenses”
means (i) with respect to the
closing on the Closing Date, the reasonable
and actual fees, expenses and disbursements of Xxxxx & Xxxxxxx, P.C.,
special FAA counsel in Oklahoma City (including filing fees associated with
documents filed at the FAA or registrations made with the International
Registry), Oklahoma; Xxxxxx & Xxxxxx, LLP, special counsel to the Borrower
and Guarantor; Baker, Donelson, Bearman, Xxxxxxxx & Xxxxxxxxx, P.C., special
Georgia counsel to the Borrower; Xxxxxx Price, P.C., special counsel to the
Certificate Holders (subject to the cap referred to in the Letter of Offer);
and
Ray, Xxxxxxx & Xxxxxxx P.C., counsel to the Indenture Trustee,
(ii) all fees and other charges payable to effect the recording or filing
of UCC financing statements, (iii) the initial fee and reasonable and
actual disbursements of the Indenture Trustee under the Trust Indenture and
(iv) each Certificate Holder’s reasonable out-of-pocket costs and expenses
relating to the negotiation and closing of this transaction, including travel
expenses.
Section 13. Section 1110
Compliance. Notwithstanding any provision herein or elsewhere
contained to the contrary, it is understood and agreed among the parties hereto
that the transactions contemplated by this Loan Agreement, and the other
Operative Documents are expressly intended to be, shall be and should be
construed so as to be, entitled to the full benefits of Section 1110 of the
Bankruptcy Code, as amended from time to time, and any successor provision
thereto.
Section 14. Confidentiality. Each
of the Certificate Holders and the Indenture Trustee covenants and agrees to
keep confidential, and not to disclose to any third parties, Annexes A and
B to
the Trust Indenture and all non-public information received by it from the
Borrower pursuant to the Operative Documents, including any insurance report
received pursuant to Article VI of the Trust Indenture, provided that such
information may be made available: (1) to prospective and
permitted transferees of a Certificate Holder’s Loan Certificates or the
Indenture Trustee’s respective interest in the Aircraft, who agree to hold such
information confidential, (2) to any Certificate Holder’s counsel or
independent certified public accountants, independent insurance advisors or
other agents who agree to hold such information confidential, (3) as may be
required by applicable law or by any statute, court or administrative order
or
decree or governmental ruling or regulation (including, as to the Certificate
Holder, any requirement that such information be disclosed by virtue of the
Certificate Holder’s status as an agent of Her Majesty in Right of Canada or by
virtue of any law, regulation, order-in-council, court or administrative order,
or Canadian government policy or by virtue of any international agreement to
which the government of Canada or Certificate Holder is a party, including
without limitation, the WTO Subsidies and Countervailing Measures Agreement),
(4) in the case of any Certificate Holder, to any bank examiner or other
similar regulatory authority or (5) in the case of the Original Certificate
Holder, to the government of Canada and may make publicly available (i) the
name
of the Borrower and the Guarantor, (ii) the financial service provided, (iii)
a
general description of the commercial transaction, (iv) the amount of the
Financed Amount in approximate Canadian dollar range and (v) the name of the
Manufacturer.
Section 15. Quiet
Enjoyment. The Indenture Trustee and each Certificate Holder
each agrees that it will not (and will not permit any of its Affiliates or
any
Person claiming by, through or under it to) take any action contrary to, or
otherwise interfere with, the Borrower’s or, provided that any Lease is subject
and subordinate to the Trust Indenture, any Lessee’s quiet enjoyment of the use
and possession of the Aircraft and the Indenture Estate so long as no Event
of
Default shall have occurred and be continuing under the Trust
Indenture.
*
* *
IN
WITNESS WHEREOF, the
parties hereto have caused this Loan Agreement to be duly executed by their
respective officers thereunto duly authorized as of the day and year first
above
written.
|
PINNACLE
AIRLINES, INC.
Borrower
By: /s/
Xxxxxx X. Xxx
Its: Vice
President, Finance and Treasurer
|
|
|
XXXXX
FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, Indenture Trustee
By:
/s/ Xxx X. Xxxxx
Its: Vice
President
|
|
|
EXPORT
DEVELOPMENT
CANADA, Original Certificate Holder
By: /s/
Xxxx Xxxxxxx
Its: Financing
Manager
By:
/s/ Marc Xxxxx Xxxxxx
Its: Senior
Associate
|
SCHEDULE I
NOTICE &
ACCOUNT INFORMATION
Certificate
Holder
Notice
to:
Export
Development Canada
151
O’Xxxxxx Xxxxxx
Xxxxxx,
Xxxxxxx, Xxxxxx
X0X
0X0
[***]
Indenture
Trustee
Address:
[***]
Borrower
Address:
[***]
SCHEDULE II
PARTICIPATION
IN FINANCED AMOUNT
|
Certificate
Holder
|
Commitment
|
|
Export
Development Canada
|
[***]
|
EXHIBIT
A
FORM
OF NOTICE OF CLOSING DATE
____________,
20__
To
each
Certificate Holder to the Loan Agreement
|
|
Re:
|
Long-Term
Financing for Pinnacle Airlines, Inc. -
|
|
|
EDC
Reference Number
880-USA-40123-000
|
Ladies
and Gentlemen:
Reference
is hereby made to that certain Loan Agreement dated as of ___________, 2008
(the
“Loan Agreement”;
capitalized terms used herein without definition shall have the definitions
set
forth in the Loan Agreement) among Pinnacle Airlines, Inc. (“Borrower”), each Certificate
Holder from time to time thereto, and Xxxxx Fargo Bank Northwest, National
Association, as the Indenture Trustee.
1. Pursuant
to Section 3(a) of the Loan Agreement, Borrower hereby notifies you of the
scheduled Closing in accordance with the following parameters:
(1) Aircraft
MSN: _______
(2) Scheduled
Closing Date: ______________, 2008
(3)
Financed
Amount:
US$
(4) Interest
Rate: Fixed Rate
2. Please
distribute the proceeds of the Financed Amount as follows: [Insert payment
instructions]
The
terms
and provisions of this Notice of Closing Date shall be binding upon and inure
to
the benefit of each Certificate Holder and the Borrower and their successors
and
assigns.
This
Notice of Closing Date shall be governed by the internal laws of the State
of
New York.
|
Very
truly yours,
PINNACLE
AIRLINES, INC.
By:
Name:
Title:
|
EXHIBIT
B
FORM
OF CLOSING CERTIFICATE
This
Certificate, effective as of _________ __, 2007, is given pursuant to
Section 4(a)(xiv) of that certain Loan Agreement (________) dated as of
_____________, 2008 (the “Loan
Agreement”) among Pinnacle Airlines, Inc., as Borrower, each Certificate
Holder from time to time thereto, and Xxxxx Fargo Bank Northwest, National
Association, as the Indenture Trustee. Capitalized terms used but not
defined herein shall have the meanings set forth in the Loan Agreement.
The
undersigned officer of the [Pinnacle Airlines, Inc.]1[Pinnacle
Airlines Corp.]2
(the “Company”) hereby confirms
and
certifies that on effective date hereof, (A) the representations and
warranties of the Company contained in [Section 7(a) to the Loan
Agreement]3
[Section 10 of the
Guaranty]4
are true and accurate as of such
date except to the extent that such representations and warranties relate solely
to an earlier date (in which case such representations and warranties shall
be
true and accurate on and as of such earlier date), (B) no event has
occurred or is continuing which constitutes (or would, with the passage of
time
or the giving of notice or both, constitute) an Event of Default, [and]5
(C) since December 31,
2006, there has been no material and adverse change in the financial or
operational condition of the Company and no event or circumstance has occurred
or is occurring which had or would be reasonably likely to have a Material
Adverse Effect [and (D) no Event of Loss (or event which with the passage
of time would become an Event of Loss) with respect to the Airframe or any
Engine has occurred]6.
* * *
In
witness whereof, the undersigned officer of the Company has executed this
Certificate this __ day of ______________, 2008.
|
By:________________________________
Name:
Title:
|
FAA
Authorization Code:
IR
File
No. (airframe MSN _______):
IR
File
No. (engine MSN _______):
IR
File
No. (engine MSN _________:
TRUST
INDENTURE AND SECURITY AGREEMENT (_________)
dated
as
of ____________, 2008
between
PINNACLE
AIRLINES,
INC.,
Borrower
and
XXXXX
FARGO BANK NORTHWEST, NATIONAL
ASSOCIATION,
Indenture
Trustee
_______________________
One
Bombardier Model _________ Aircraft
Manufacturer’s
Serial Number ________
bearing
U.S. Registration ___________
_______________________
Xxxxxx
Price P.C.
Chicago,
Illinois
TRUST
INDENTURE AND SECURITY
AGREEMENT (_________), dated as of __________________, 2008, between
PINNACLE AIRLINES,
INC.,
a Georgia corporation (the “Borrower”)
and XXXXX FARGO BANK NORTHWEST,
NATIONAL
ASSOCIATION, a national banking association not in its individual
capacity, except as expressly stated herein, but solely as Indenture Trustee
hereunder (together with its successors hereunder in such capacity, the “Indenture Trustee”).
WHEREAS,
all capitalized terms
used herein shall have the respective meanings set forth or referred to in
Article I hereof;
WHEREAS,
the Borrower desires
by this Trust Indenture, among other things (i) to provide for the issuance
by the Borrower to the Certificate Holders of Certificates evidencing
participation by the Certificate Holders in the Loan as provided in the Loan
Agreement, and (ii) to provide for the assignment, mortgage and pledge by
the Borrower to the Indenture Trustee, of the Indenture Estate hereunder, of
the
Borrower’s right, title and interest in and to the Aircraft and the payments and
other amounts received in respect thereof in accordance with the terms hereof,
as security for, among other things, the Borrower’s obligations to the
Certificate Holders, and for the benefit and security of the Certificate
Holders;
WHEREAS,
all things have been
done to make the Certificates, when executed by the Borrower and authenticated,
issued and delivered hereunder, the valid obligations of the Borrower;
and
WHEREAS,
all things necessary
to make this Indenture the valid, binding and legal obligation of the Borrower,
for the uses and purposes herein set forth and in accordance with its terms,
have been done and performed and have happened;
--
GRANTING CLAUSE --
NOW,
THEREFORE, THIS TRUST INDENTURE
AND SECURITY AGREEMENT WITNESSETH, that, to secure (i) the prompt
payment of the principal of and Break Amount (if any) and interest on, and
all
other amounts due with respect to, all Certificates from time to time
outstanding hereunder and the performance and observance by the Borrower of
all
the agreements, covenants and provisions for the benefit of the Certificate
Holders herein and in the Loan Agreement and the Certificates contained, and
the
prompt payment of any and all amounts from time to time owing hereunder and
under the Loan Agreement and the other Operative Documents for the security
and
benefit of the Certificate Holders and the Indenture Trustee and (ii) the
prompt payment of the Other Secured Obligations and the performance and
observance by the Borrower of all the agreements, covenants and provisions
of
the Other Operative Documents for the security and benefit of the Other Secured
Parties (clauses (i) and (ii) are referred to collectively herein as the
“Secured Obligations”),
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 thereof, and of the sum
of
$[***] paid to the Borrower by the Indenture Trustee at or before the delivery
hereof, the receipt whereof is hereby acknowledged, the Borrower 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 and its successors
and
assigns, a first priority security interest in and first mortgage lien upon,
all
right, title and interest of the Borrower in, to and under the following
described property, rights and privileges (which collectively, including all
property hereafter specifically subjected to the Lien of this Indenture by
an
Indenture Supplement or any other mortgage supplemental hereto, shall constitute
the “Indenture Estate”),
to wit:
1.
the Aircraft (including the Airframe and the Engines) and all replacements
thereof and substitutions therefor to which the Borrower shall from time to
time
acquire title as provided herein, all as more particularly described in the
Indenture Supplement executed and delivered with respect to the Aircraft or
any
such replacements or substitutions therefor, as provided in this Indenture,
and
all records, logs, manuals, data and inspection, modification and overhaul
records and other documents at any time maintained with respect to the foregoing
property;
2.
(i) the Aircraft Warranties and the Engine Warranties and (ii) the Bills of
Sale, in each case to the extent the same relate to continuing rights of the
Borrower in respect of any warranty, indemnity or agreement, express or implied,
as to title, materials, or workmanship, with respect to the Airframe or the
Engines (reserving to the Borrower, however, all of the Borrower’s other rights
and interest in and to the Purchase Agreement), together in each case under
this
clause 2 with all rights, powers, privileges, options and other benefits of
the
Borrower thereunder (subject to such reservation) with respect to the Airframe
or the Engines, including, without limitation, the right to make all waivers
and
agreements, to give and receive all notices and other instruments or
communications, to take such action upon the occurrence of a default thereunder,
including the commencement, conduct and consummation of legal, administrative
or
other proceedings, as shall be permitted thereby or by law, and to do any and
all other things which the Borrower is or may be entitled to do thereunder
(subject to such reservation), subject, with respect to the Aircraft Warranties
and the Engine Warranties, to the terms and conditions of the Manufacturer
Consent and the Engine Consent and Agreement;
3.
each Lease, to the extent assigned under any lease assignment pursuant to
Section 3.03(g), together with all rights, powers, privileges, options and
other
benefits thereunder, including the right to receive and collect all payments
thereunder and to make all waivers and agreements, to give and receive notices,
and to take all action thereunder or in respect thereof, as and to the extent
provided in the applicable lease assignment;
4.
all insurance and requisition proceeds with respect to the Aircraft, but
excluding all proceeds of, and all rights under, any insurance maintained by
the
Borrower pursuant to Section 6.02 and not required under Section A or B of
Annex
B;
5.
all monies and securities deposited or required to be deposited with the
Indenture Trustee pursuant to any term of this Indenture and required to be
held
by the Indenture Trustee hereunder; and
6.
all proceeds of the foregoing.
Any
and
all properties referred to in this Granting Clause which are hereafter acquired
by the Borrower, shall, without further conveyance, assignment or act by the
Borrower or the Indenture Trustee thereby become and be subject to the security
interest hereby granted as fully and completely as though specifically described
herein.
Notwithstanding
any of the foregoing provisions of this Granting Clause, so
long as no Event of Default shall have occurred and be continuing, the Borrower
shall have the right, to the exclusion of the Indenture Trustee, the Certificate
Holders and the Other Secured Parties, (i) to quiet enjoyment of the
Aircraft, the Airframe and the Engines and to possess, use, retain and control
the Aircraft, the Airframe and the Engines and the Indenture Estate, and all
revenues, income and profits derived therefrom and (ii) with respect to the
agreements and instruments included in the Indenture Estate pursuant to clauses
2 and 3 of the Granting Clauses (the “Assigned Agreements”), to
exercise in the Borrower’s name all rights and powers of the Borrower under the
Assigned Agreements and to retain any recovery or benefit resulting from the
enforcement of any warranty or indemnity or other obligation under the Assigned
Agreements; provided,
further,
that upon the
occurrence and continuation of an Event of Default, the Indenture Trustee shall
be entitled to enter into any amendment, modification, supplement, rescission,
cancellation or termination of the Assigned Agreements.
--
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 Certificate Holders,
and
for the uses and purposes and subject to the terms and provisions set forth
in
this Indenture.
The
Borrower does hereby constitute the Indenture Trustee the true and lawful
attorney of the Borrower (which appointment is coupled with an interest),
irrevocably, with full power (in the name of the Borrower or otherwise) to
ask,
require, demand, receive, compound and give acquittance for any and all monies
and claims for monies (in each case including insurance and requisition
proceeds) due and to become due under or arising out of all property which
now
or hereafter constitutes part of the Indenture Estate, to endorse any checks
or
other instruments or orders in connection therewith and to file any claims
or to
take any action or to institute any proceedings which the Indenture Trustee
may
deem to be necessary or advisable in the premises; provided that the Indenture
Trustee agrees not to exercise such power of attorney unless an Event of Default
shall be continuing.
The
Borrower does hereby warrant and represent that (except as permitted herein)
it
has not assigned or pledged any of its right, title, and interest hereby
assigned to anyone other than the Indenture Trustee.
IT
IS HEREBY COVENANTED AND
AGREED by and between the parties hereto as follows:
ARTICLE I
DEFINITIONS
Section
1.01 Definitions. For
all purposes of this Indenture the following terms shall have the following
meanings (such definitions to be equally applicable to both the singular and
plural forms of the terms defined). Any agreement referred to below
shall mean such agreement as amended, supplemented and modified from time to
time in accordance with the applicable provisions thereof and of the other
Operative Documents. Unless otherwise specified, Section and
Article references are to Sections and Articles of this
Indenture:
“Actual
Knowledge” means, with respect to any Person, actual knowledge of a
President, Vice President, Director or more senior officer of such Person,
or
any other officer of such Person having responsibility for the transactions
contemplated by the Operative Documents; provided that each party shall be
deemed to have “Actual Knowledge” of any matter as to which it has received
notice in accordance with Section 10 of the Loan Agreement or Section 15.06
of
this Trust Indenture.
“Additional
Costs” has the meaning assigned thereto in Section 2.15 hereof.
“Administration
Fee” has the meaning set forth in Section 1(c) of the Loan
Agreement.
“Additional
Insured(s)” means the Indenture Trustee, the Holders and the Borrower in
its capacity as lessor under any Lease together with their respective officers,
directors, employees, servants, agents, successors and assigns.
“Affiliate”
means, with respect to any Person, any other Person which directly or indirectly
controls, is controlled by, or under common control with, such
Person. The term “control” means the possession, directly or
indirectly of the power to direct or cause the direction of the management
and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
“After-tax
Basis” means, with respect to any payment to be received or accrued by
any Person, the amount of such payment adjusted, if necessary, so that such
payment, after taking into account all Taxes payable to any taxing authority
as
a result of the receipt or accrual of such payments and any savings in Taxes
with respect to the indemnified Taxes or other liability in respect of which
such payment is due, shall be equal to the payment to be received or
accrued.
“Aircraft”
means the Airframe (including all Buyer Furnished Equipment) together with
the
two (2) Engines whether or not such Engines are installed on the Airframe or
any
other airframe, and, where the context permits, all logs, manuals and data
and
inspection, modification and overhaul records maintained with respect to the
foregoing property.
“Aircraft
Warranties” means all warranties and assurances, including rights to
intellectual property necessary for the operation of the Aircraft; relating
to
the Aircraft and related equipment manufactured by the Manufacturer contained
in
Article 1 of Annex B of the Purchase Agreement.
“Airframe”
means: (i) the Bombardier ___________ aircraft (excluding
Engines or engines specified by United States Registration Number and
Manufacturer’s Serial Number in the Trust Indenture Supplement; (ii) any
and all related Parts; and (iii) any replacement airframe which may be
substituted for the Airframe then subject to this Indenture pursuant to
Section 5.01 hereof, provided that at such time as a Replacement Airframe
shall be so substituted, such replaced Airframe shall cease to be the Airframe
under the Trust Indenture.
“Applicable
Margin” has the meaning set forth in Section 1(d) of the Loan
Agreement.
“Applicable
Rate” means, [***].
“Assigned
Warranties” means the Aircraft Warranties and the Engine
Warranties.
“Bills
of
Sale” means the FAA Xxxx of Sale and the Warranty Xxxx of Sale.
“Break
Amount” means, as at any date of determination, Make-Whole Amount.
“Business
Day” means any day other than a Saturday or Sunday or a day on which
commercial banks are required or authorized to close in Xxxxxxx, Xxxxxxxxx,
Xxxxxx, Xxxxxx, the city and state in which the Corporate Trust Office is
located or New York, New York.
“Buyer
Furnished Equipment” means the equipment purchased by Borrower and
supplied to the Manufacturer to be incorporated into the Aircraft as
contemplated by the Purchase Agreement.
“Cape
Town
Convention” means collectively, the official English language texts of
the Convention on International Interests in Mobile Equipment (the “Convention”) and the Protocol
to the Convention on International Interests in Mobile Equipment on Matters
Specific to Aircraft Equipment (the “Protocol”), both signed in
Cape Town, South Africa on November 16, 2001, together with any protocols,
regulations, rules, orders, agreements, instruments, amendments, supplements,
revisions or otherwise that have or will be subsequently made in connection
with
the Convention or the Protocol by the “Supervisory Authority” (as defined in the
Consolidated Text), the International Registry or “Registrar” (as defined in the
Consolidated Text) or any other international or national, body or authority,
all as in effect in the United States or other relevant Contracting State (as
used in the Consolidated Text). All references to articles or
sections of the Cape Town Convention shall mean the article or section of the
Consolidated Text. Except to the extent otherwise defined in the Operative
Documents, terms used in the Operative Documents that are defined in the Cape
Town Convention shall when used in relation to the Cape Town Convention have
the
meanings ascribed to them in the Cape Town Convention.
“Certificate”
and “Loan
Certificate” means a Loan Certificate issued pursuant to
Section 2.02(a) and any such certificates issued in exchange or replacement
therefor pursuant to Section 2.08 or 2.09.
“Certificate
Holder”, “Holder”
or “holder”
means, at any time, any registered holder of one or more Certificates, as
reflected in the Certificate Register.
“Certificate
Register” has the meaning specified in Section 2.08.
“Change
in
Control” means the occurrence of a “Change in Control” as defined in the
Indenture dated as of February 8, 2005 between Guarantor and Deutsche Bank
National Trust Company in respect of Guarantor’s 3¼% Senior Convertible Notes
due 2025, requiring the repurchase of such Notes, at the option of the holders
thereof, and which repurchase would result in the Guarantor’s consolidated
unrestricted cash, cash equivalents and short-term investments balance
(determined in accordance with GAAP) to fall below $[***].
“Civil
Reserve Air Fleet Program” or “CRAF”
means the Civil Reserve Air Fleet Program administered by the United States
Government or any substantially similar program.
“Closing”
means the time at which the Loan has been delivered to Borrower or its
designee.
“Closing
Date” means the date of the initial Trust Indenture Supplement for the
Aircraft, which date shall be the date of the Closing (provided, that if the
last sentence of Section 3(c) of the Loan Agreement is applicable, for
purposes of the definitions of “Interest Payment Date” and “Interest Period”,
Closing Date shall mean the date from which the Loan accrues interest pursuant
to such sentence).
“Code”
means
the Internal Revenue
Code of 1986, as amended from time to time (or any corresponding provision
of
succeeding law).
“Consolidated
Text” means the combination of the Convention or the Protocol (each as
defined in the definition of Cape Town Convention) that was authorized and
created pursuant to Resolution No. 1 adopted by the Cape Town Diplomatic
Conference and any reference to a provision of the Consolidated Text is a
reference to the provision of the Convention or the Protocol from which it
is
derived.
“Corporate
Trust Office” means the principal office of the Indenture Trustee located
at MAC: U1228-120, 000 Xxxxx Xxxx Xxxxxx, 00xx Xx., Xxxx Xxxx Xxxx, XX 00000,
or
such other office at which the Indenture Trustee’s corporate trust business
shall be administered and which the Indenture Trustee shall have specified
by
notice in writing to the Borrower and each Certificate Holder. The
Indenture Trustee’s bank account and wiring details at the Corporate Trust
Office are set forth on Schedule I to the Loan Agreement.
“Default”
means any event which with the giving of notice or the lapse of time or both
if
not timely cured or remedied would become an Event of Default pursuant to
Article VIII.
“Delta
Connection Agreement” the Delta Connection Agreement dated as of April
27, 2007 among Borrower, Guarantor and Delta Air Lines, Inc., as the same may
be
amended, restated or otherwise modified from time to time (or such other code
share agreement or similar agreement with another major airline (which is a
U.S.
Air Carrier) consistent with industry standards and acceptable to the Majority
in Interest of Certificate Holders, such consent not to be unreasonably withheld
or delayed).
“Dollars”,
“Dollar”
and “$”
means the lawful currency of the United States of America.
“XXXXX”
means the Electronic Data Gathering Analysis & Retrieval computer
system for the receipt, acceptance, review and dissemination of documents
submitted to the United States Securities and Exchange Commission in electronic
format.
“Eligible
Account” means an account established by and with an Eligible Institution
acting at the request of the Indenture Trustee, which institution agrees, for
all purposes of the UCC including Article 8 thereof, that (a) such account
shall
be a “securities account” (as defined in Section 8-501 of the UCC), (b) all
property (other than cash) credited to such account shall be treated as a
“financial asset” (as defined in Section 8-102(9) of the UCC), (c) the Indenture
Trustee shall be the “entitlement holder” (as defined in Section 8-102(7) of the
UCC) in respect of such account, (d) it will comply with all entitlement orders
issued by the Indenture Trustee to the exclusion of the Borrower, and (e) the
“securities intermediary jurisdiction” (under Section 8-110(e) of the UCC) shall
be the State of New York.
“Eligible
Assignee” means any commercial bank, financial institution or other
Person organized under the laws of any country that is a member of the
Organization for Economic Cooperation and Development (“OECD”), or a political
subdivision of any such country, provided that such bank, financial institution
or other Person is acting through a branch, agency or Affiliate located in
the
country in which it is organized or another country that is also a member of
the
OECD.
“Eligible
Institution” means a depository institution organized under the laws of
the United States of America or any one of the states thereof or the District
of
Columbia (or any U.S. branch of a foreign bank), which has a long-term unsecured
debt rating from Xxxxx’x Investors Service, Inc. of at least A-2 and Standard
& Poor’s Ratings Services of at least A, or its equivalent.
“Engine”
means (i) each of the two (2) ___________ Model _______ engines listed
by manufacturer’s serial numbers in the initial Trust Indenture Supplement,
whether or not from time to time installed on the Airframe or any other
airframe; (ii) any Replacement Engine which may from time to time be
substituted for any Engine pursuant to the terms hereof; and (iii) in each
case, any and all related Parts. The term “Engines” means, as of any date
of determination, both Engines then subject to the lien hereof. At
such time as a Replacement Engine shall be substituted for an Engine pursuant
to
the terms hereof, such replaced Engine shall cease to be an Engine
hereunder.
“Engine
Consent and Agreement” means the Engine Consent and Agreement, dated as
of the date of the Loan Agreement, between the Engine Manufacturer and the
Indenture Trustee.
“Engine
Manufacturer” means ______________, or any successor division, subsidiary
or affiliate thereof.
“Engine
Warranties” means all warranties and assurances, including rights to
intellectual property necessary for the operation of the Engines, relating
to
the Engines and related equipment manufactured by the Engine
Manufacturer.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from
time
to time.
“Event
of
Default” has the meaning specified in Article VIII hereof.
“Event
of
Loss” with respect to the Aircraft, Airframe or any Engine means any of
the following events with respect to such property: (i) the loss
of such property, or of the use thereof, due to the destruction of or damage
to
such property which renders repair uneconomical or which renders such property
permanently unfit for normal use by the Borrower for any reason whatsoever;
(ii) any damage to such property which results in the receipt of insurance
proceeds with respect to such property on the basis of an actual, constructive
or compromised total loss; (iii) theft, hijacking or disappearance of such
property for a period in excess of 30 consecutive days (or, if earlier, the
date
on which the Borrower has confirmed to the Indenture Trustee in writing that
it
cannot recover such property); (iv) the confiscation, condemnation, or
seizure of, or requisition of title to, or use of, such property by any
governmental or purported governmental authority (other than a requisition
of
use (but not title) by a Permitted Government Entity or any agency or
instrumentality thereof which bears the full faith and credit of such Permitted
Government Entity); (v) as a result of any law, rule, regulation, order or
other action by the FAA or other similar governmental body of the government
of
registry of the Aircraft having jurisdiction, use of such type of property
in
the normal course of the business of air transportation shall have been
prohibited for a period of twelve (12) consecutive months provided that no
Event
of Loss shall be deemed to have occurred if such prohibition has been applicable
to the Borrower’s entire fleet of Bombardier Model ____________ aircraft and the
Borrower, prior to the expiration of such 12 month period, shall have
conformed at least one (1) of such aircraft in its fleet and shall have
commenced regular commercial use of the same and shall be diligently carrying
forward, in a manner which does not discriminate against the Aircraft, all
steps
which are necessary or desirable to permit the normal use of the Aircraft by
the
Borrower and all such steps necessary or desirable to permit such use are
capable of being completed and are completed within another [***]; (vi) any
event treated as an Event of Loss pursuant to Section 3.03(d) hereof and
(vii) the requisition of title to such property by any governmental or purported
governmental authority (other than a requisition of use (but not title) by
a
Permitted Government Entity or any agency or instrumentality thereof which
bears
the full faith and credit of such Permitted Government Entity).
An
Event
of Loss with respect to the Aircraft shall be deemed to have occurred if an
Event of Loss occurs with respect to the Airframe.
“Expense”
or “Expenses”
means any and all liabilities, obligations, losses, damages, penalties, claims,
actions, suits, reasonable out of pocket costs, expenses and disbursements
(including reasonable legal fees and expenses) of whatever kind and nature
but
excluding Taxes, any amounts that would be included in Break Amount, and
overhead of whatsoever kind and nature.
“FAA
Application for Registration” means the application for registration of
the Aircraft in the name of the Borrower filed with the FAA.
“FAA
Xxxx
of Sale” means a xxxx of sale conveying the Aircraft from Bombardier,
Inc. to the Borrower on AC Form 8050-2 or such other form as may be
approved by the FAA.
“Federal
Aviation Act” means subtitle VII of Title 49 of the United
States Code, or any successor provision.
“Federal
Aviation Administration” and “FAA”
mean the United States Federal Aviation Administration and any successor agency
or agencies thereto.
“FedWire”
means the funds transfer system used to transfer reserve balances for
immediately available credit among the member banks of the United States Federal
Reserve System.
“Financed
Amount” with respect to a Loan Certificate, means the stated original
amount (that is, principal) of such Loan Certificate, and, with respect to
all
the Loan Certificates, means the aggregate stated original amounts of such
Loan
Certificates, as the case may be, which shall, on the Closing Date, equal the
amount of the Loan (as specified in Section 1(b) of the Loan
Agreement).
“Fixed
Rate” means a fixed rate of interest equal to the sum of (a) the
interpolated semi-annual rate to “swap” floating debt to fixed rate debt (offer
side) for loans with a maturity closest to the remaining weighted average life
to maturity of the Loan at approximately 11:00 a.m. New York City time, two
Business Days prior to the Closing Date (such interpolated semi-annual rate
to
be calculated on the rates posted on Telerate page 19901 (SEMI-BOND,
column 5) or any substitute or replacement page providing the same service
for the two closest available annual periods to the remaining weighted average
life of the Loan) plus (b) the Applicable Margin plus (c) the
Administration Fee. Such Fixed Rate shall be determined by the
Majority in Interest of Certificate Holders, which rate shall be conclusive
except in the case of manifest error.
“Fixed
Rate Period” means with respect to a Loan Certificate, any period during
which the Applicable Rate is determined by reference to the Fixed Rate.
“GAAP”
means the United States generally accepted accounting principles, consistently
applied.
“Guarantor”
means Pinnacle Airlines Corp., a Delaware corporation.
“Guaranty”
means the Guaranty dated as of __________, 2008 from the Guarantor in favor
of
the Indenture Trustee and the Certificate Holders.
“Indebtedness”
means (a) all amounts
which in accordance with GAAP would be included in determining total liabilities
as shown on the liability side of a balance sheet of Borrower as of the date
on
which Indebtedness is to be determined including indebtedness for borrowed
money
and (b) all indebtedness secured by any Lien on any property or asset owned
or
held by such person subject thereto, whether or not the indebtedness secured
thereby shall have been assumed.
“Indemnitee”
or “Indemnitees”
means the Indenture Trustee, the Certificate Holders and each of their
respective successors, permitted assigns, directors, officers, and
employees.
“Indenture”,
“this
Indenture”, and “the
Trust
Indenture” mean this Trust Indenture and Security Agreement (__________),
including any Trust Indenture Supplement and each other supplement from time
to
time entered into pursuant hereto.
“Indenture
Estate” or “Trust
Indenture Estate” means the “Indenture
Estate” as defined in the Granting Clause hereof.
“Indenture
Supplement”, “Trust
Supplement” or “Trust
Indenture Supplement” means a supplement to this Indenture substantially
in the form of Exhibit A, which shall particularly describe the Airframe
and Engines, or any Replacement Airframe or Replacement Engine, included in
the
property of the Borrower covered by this Indenture, or any other supplement
hereto.
“Indenture
Trustee” means Xxxxx Fargo Bank Northwest, National Association, and any
successor thereto in such capacity.
“Indenture
Trustee Liens” means any Lien attributable to the Indenture Trustee with
respect to the Aircraft, any interest therein, or any other portion of the
Indenture Estate, arising as a result of (a) claims against the Indenture
Trustee in its individual capacity not related to its interest in the Aircraft
or the administration of the Indenture Estate pursuant to the Trust Indenture,
(b) acts of the Indenture Trustee not permitted by, or failure of the Indenture
Trustee to take any action required by, the Operative Documents, (c) Taxes
against the Indenture Trustee or any of its Affiliates not required to be
indemnified by Borrower under the Loan Agreement, or (d) claims against the
Indenture Trustee arising out of the transfer by the Indenture Trustee of all
or
any portion of its interest in the Indenture Estate, other than a transfer
pursuant to the exercise of remedies set forth in Article IX of the Trust
Indenture.
“Interest
Payment Date” means the day corresponding to the Closing Date in the
sixth month following the month that includes the Closing Date and each
subsequent anniversary of the Closing Date and such corresponding day (or if
no
date corresponds to such anniversary of the Closing Date, the last day of such
month); provided that, if
any
such date shall not be a Business Day, then the relevant Interest Payment Date
shall be the next succeeding Business Day [unless by virtue of such extension
such date would fall in the next succeeding calendar month, in which case the
relevant Interest Payment Date shall be the next preceding Business Day.
“Interest
Period” means, (a) initially, the period commencing on the Closing
Date and ending on (but excluding) the first Interest Payment Date, and
(b) thereafter, each successive semiannual period commencing on the final
day of the preceding Interest Period and ending on but excluding the next
succeeding Interest Payment Date.
“International
Registry” has the meaning set forth in the Consolidated Text.
“Lease”
means any lease agreement permitted by the terms of Section 3.03
hereof.
“Lessee”
means any air carrier permitted to lease the Aircraft, the Airframe or any
Engine as provided in Section 3.03 hereof.
“Letter
of
Offer” means that certain Letter of Offer dated September 28, 2007
(REF 880-USA-40123-000) from Original Certificate Holder to Guarantor (as such
Letter of Offer may be amended, modified or supplemented from time to time)
relating to the financing of up to ______________ aircraft.
“Lien”
means any mortgage, pledge, lien, claim, encumbrance, lease, security interest
or other lien of any kind on property.
“Loan”
means the money borrowed on the Closing Date by the Borrower from the
Certificate Holders.
“Loan
Agreement” means that certain Loan Agreement (________), dated as of
_______________, 2008, among the Borrower, the Certificate Holders and the
Indenture Trustee as such Loan Agreement may be amended or supplemented from
time to time pursuant to the applicable provisions thereof.
“Loan
Certificate” and “Certificate”
means the Loan Certificate originally issued pursuant to Section 2.02 and
any Loan Certificate issued in exchange therefor or replacement thereof pursuant
to Section 2.08 or Section 2.09.
“London
Reference Banks” means Bank of America, Citibank, N.A. and Deutsche Bank,
AG and XX Xxxxxx Chase Bank.
“Maintenance
Program” means the maintenance program for the Aircraft of the Borrower
or a Lessee which is approved by the government of registry of the
Aircraft.
“Majority
in Interest of Certificate Holders” means, as of any date of the
determination thereof, the Holders of not less than a majority in aggregate
outstanding principal amount of all Certificates as of such date. For
all purposes of the foregoing definition, in determining as of any date the
then
aggregate outstanding principal amount of Certificates, there shall be excluded
any Certificate, if any, held by the Borrower or any of its Affiliates (unless
Borrower and/or its Affiliates, as the case may be, own all Certificates then
outstanding).
“Make-Whole
Amount” means, with respect to the prepayment of any Certificate bearing
interest at a Fixed Rate, an amount equal to the excess, if any, of (i) the
present value, as of the date of the relevant prepayment of such Certificate,
of
the respective installments of principal of, and interest on, such Certificate
that, but for such prepayment, would have been payable on each Interest Payment
Date after such prepayment over (ii) the principal amount of such
Certificate then being prepaid. Such present value shall be
determined by discounting the amounts of such installments from their respective
Interest Payment Dates to the date of such prepayment at a rate equal to the
sum
of (a) the interpolated semi-annual rate to “swap” floating debt to fixed
rate debt (offer side) for loans with a maturity closest to the remaining
weighted average life to maturity of the Loan at 11:00 a.m. New York City
time, two Business Days prior to the date of the relevant calculation of
Make-Whole Amount (such interpolated semi-annual rate to be calculated on the
rates posted on Telerate page 19901 (SEMI-BOND, column 5) or any
substitute or replacement page providing the same service for the two closest
available annual periods to the remaining weighted average life of the Loan)
plus (b) the Make-Whole Margin. Each holder of a Certificate
will furnish to the Borrower and the Indenture Trustee a certificate setting
forth the calculation and amount of the Make-Whole Amount with respect to its
Certificate, which amount shall be conclusive absent manifest
error. In no event shall the Make-Whole Amount be less than
zero.
“Make-Whole
Margin” has the meaning set forth in Section 1(e) of the Loan
Agreement.
“Manufacturer”
means Bombardier Inc., a Canadian corporation, represented by its Bombardier
Aerospace Regional Aircraft Division.
“Manufacturer
Consent” means the consent of the Manufacturer to the grant of a security
interest pursuant to the Trust Indenture in the Aircraft Warranties.
“Material
Adverse Effect” means a material adverse effect on (i) the business,
operations, properties, prospects or financial condition of the Borrower or
Guarantor and their respective subsidiaries on a consolidated basis, or
(ii) the ability of the Borrower or Guarantor to observe or perform its
obligations, liabilities and agreements under the Credit Agreement or any other
Operative Document to which it is a party.
“Net
Purchase Price” means, with respect to the Aircraft, the net purchase
price of such Aircraft as contained in the Purchase Agreement, less the amount
of any credit memos, discounts, rebates or similar financial incentives that
have the effect of reducing the purchase price of the Aircraft, as reasonably
determined by the Original Certificate Holder.
“Non-U.S.
Person” means any Person other than (i) a citizen or resident of the
United States of America (for purposes of this definition, the “United States”), (ii) a
corporation, partnership, limited liability company or other entity created
or
organized under the laws of the United States or any political subdivision
thereof or therein or (iii) an estate or trust that is subject to United
States federal income taxation regardless of the source of its income.
“Operative
Documents” means the Loan Agreement, the Trust Indenture, any Indenture
Supplement, the Loan Certificates, the Guaranty, the Bills of Sale, the Engine
Consent and Agreement and the Manufacturer Consent, and any amendments, of
supplements of any of the foregoing.
“Original
Certificate Holder” means Export Development Canada.
“Other
Aircraft” means each of the Bombardier ________ aircraft financed or to
be financed pursuant to the Letter of Offer.
“Other
Loan Agreements” means each loan agreement (other than the Loan
Agreement) among, inter alia, Borrower and Original Certificate Holder, wherein
Original Certificate Holder provides a direct loan to Borrower for the financing
of any Other Aircraft.
“Other
Loan Certificates” means the “Loan Certificates” as defined in each of
the Other Trust Indentures.
“Other
Operative Documents” means any document or instrument (including, without
limitation, any credit agreement or loan agreement or other document or
instrument relating to any indebtedness) entered into by Borrower and/or
Guarantor with Original Certificate Holder, including without limitation, the
Other Loan Agreements and the Pinnacle PDP Facility Agreements, provided that
any such document or instrument shall only constitute an “Other Operative
Document” so long as a Certificate Holder (or any Affiliate thereof) shall
constitute a Lender, certificate holder or lessor (or direct or indirect
beneficiary of any of the foregoing) in connection therewith.
“Other
Secured Obligations” means any and all moneys, liabilities and
obligations which are now or at any time hereafter may be expressed to be due,
owing or payable by the Borrower or the Guarantor, actually or contingently,
with another or others, as principal or surety, on any account whatsoever under
any Other Operative Document or as a consequence of any breach, non-performance,
disclaimer or repudiation by Borrower or Guarantor (or by a liquidator,
receiver, administrative receiver, administrator, or any similar officer in
respect of the Borrower or Guarantor) of any of the Borrower’s or Guarantor’s
obligations to the Other Secured Parties under any Other Operative
Document.
“Other
Secured Parties” means the “Certificate Holders,” “Indenture Trustee”
and/or “Lender” as defined in each of the Other Operative Documents (and any
similarly situated party under any other financing included in Other Operative
Documents).
“Other
Trust Indentures” means each “Trust Indenture” as defined in each of the
Other Loan Agreements.
“Parts”
means all appliances, parts, instruments, appurtenances, accessories,
furnishings and other equipment of whatever nature (other than complete Engines
or engines), which are from time to time incorporated or installed in or
attached to the Airframe or any Engine and all such items which are subsequently
removed therefrom so long as the Lien of this Trust Indenture shall cover the
same pursuant to the terms hereof.
“Past
Due
Rate” means a per annum rate equal to the Applicable Rate plus [***],
calculated on the basis of a year of twelve 30-day months during the Fixed
Rate
Period compounded semi-annually.
“Permitted
Government Entity” means (i) the U.S. Government or (ii) the national
government of Canada, France, Switzerland, the Netherlands, Germany, the United
Kingdom or Japan or any instrumentality or agency thereof that is backed by
the
full faith and credit of such national government, if the Aircraft is then
registered under the laws of such country.
“Permitted
Investments” means those investments described in Section 12.01
hereof.
“Permitted
Lien” shall have the meaning set forth in Section 7.01
hereof.
“Person”
means any individual, corporation, limited liability company, partnership,
joint
venture, association, joint-stock company, trust, unincorporated organization
or
government or any agency or political subdivision thereof.
“Pinnacle
Event” shall mean the termination or cancellation of the airline service
agreement between Borrower and Northwest Airlines, Inc.
“Pinnacle
PDP Facility Agreements” means the Credit Agreement dated as of
September 28, 2007 between Borrower and Original Certificate Holder,
together with all other documents and/or instruments entered into in connection
therewith, including, without limitation, the Guaranty of the Guarantor dated
as
of September 28, 2007.
“Plan”
means an “employee benefit plan” (as such term is defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended) or any
“plan” (as such term is defined in Section 4975(e)(1) of the Code) which
has been established or maintained or contributed to by the Borrower or an
Affiliate that, together with the Borrower, is treated as a single employer
under Section 414(b), (c) or (m) of the Code.
“Purchase
Agreement” means those provisions of Purchase Agreement No. 597-B
dated as of April 26, 2007 together with the exhibits, amendments and
supplements from time to time related thereto but only insofar as the foregoing
relates to the Aircraft, and the related letter agreements; together with the
Assignment and Assumption Agreement dated April 26, 2007 among Delta Air
Lines, Inc. (“Delta”),
Borrower, Guarantor and the Manufacturer pursuant to which Delta assigned all
of
its right, title and interest in and to such Purchase Agreement (insofar as
it
relates to the Aircraft) to Borrower.
“Registrations”
shall have the meaning set forth in Section 4(a)(viii)(2)(B) of the Loan
Agreement.
“Regulation D”
means Regulation D of the Board of Governors of the Federal Reserve System
(or any successor), as the same may be modified and supplemented and in effect
from time to time.
“Regulatory
Change” means, with respect to any Certificate Holder, any change that
occurs after the date of the Indenture in Federal, state or foreign law or
regulations (including Regulation D) or the adoption or making after such date
of any interpretation, directive or request applying to a class of banks or
financial institutions including such Certificate Holder of or under any
Federal, state or foreign law or regulations (whether or not having the force
of
law and whether or not failure to comply therewith would be unlawful so long
as
compliance therewith is standard banking practice in the relevant jurisdiction)
by any court or governmental or monetary authority charged with the
interpretation or administration thereof. For the avoidance of doubt,
the coming into effect of any applicable law or regulations, policies, orders,
directives or guidelines issued by any governmental body, monetary authority
or
other regulatory organization (whether or not having the force of law) with
respect to, arising out of, or in connection with the matters discussed and/or
set forth in the proposals set forth in the June 1999 Consultative Paper issued
by the Basle Committee or Banking Supervision (as modified, supplemented,
revised and/or superseded by any subsequent proposal, consultative paper or
other document) shall be deemed a Regulatory Change.
“Replacement
Aircraft” means any aircraft substituted for the Aircraft pursuant to
Section 5.01.
“Replacement
Airframe” means any airframe substituted for an Airframe pursuant to
Section 5.01.
“Replacement
Engine” means any engine substituted for an Engine pursuant to
Section 5.01 or 5.02.
“Requisite
Portion” means, with respect to any prepayment of a Loan Certificate (or
Drawings), [***] in the case of a Pinnacle Event and [***] in the case of a
Change in Control.
“Reserve
Requirement” means, for any Loan Certificate, the average maximum rate at
which reserves (including, without limitation, any marginal, supplemental or
emergency reserves) are required to be maintained during the Interest Period
in
respect of such Certificate under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding one billion Dollars
against “Eurocurrency liabilities” (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve
Requirement includes any other reserves required to be maintained by such member
banks by reason of any Regulatory Change with respect to (i) any category of
liabilities that includes deposits by reference to which the LIBO Rate is to
be
determined or (ii) any category of extensions of credit or other assets that
includes the Certificates.
“Section
1110” means 11 U.S.C. § 1110 of the Bankruptcy Code or any successor
section of the federal bankruptcy Law in effect from time to time.
“Secured
Obligations” has the meaning assigned thereto in the Granting
Clauses.
“Securities
Act” means the Securities Act of 1933, as amended.
“Special
Default” means a Default under any of Section 8.01, 8.02, 8.06 or
8.07 hereof.
“Tax”
or “Taxes”
means any and all fees (including, without limitation, license, documentation
and registration fees), taxes (including, without limitation, income, gross
receipts, sales, rental, use, turnover, value added, property (tangible and
intangible), excise and stamp taxes), licenses, levies, imposts, duties,
recording charges or fees, charges, assessments, or withholdings of any nature
whatsoever, together with any assessments, penalties, fines, additions to tax
and interest thereon.
“Threshold
Amount” means $[***].
“Trust
Indenture” means this Trust Indenture and Security Agreement (_________),
as originally executed or as modified, amended or supplemented in accordance
with the provisions thereof, including by any Indenture Supplement.
“U.S.
Air
Carrier” means any United States air carrier as to which there is in
force a certificate issued pursuant to Section 41102(a) of the Federal
Aviation Act, and holding an air carrier operating certificate issued by the
Secretary of Transportation pursuant to chapter 447 of title 49 of the
U.S. Code (or the equivalent authority issued by the Civil Aeronautics Board
under the predecessor regulatory laws, rules and regulations) for aircraft
capable of carrying 10 or more individuals or 6,000 pounds or more of cargo
or
which may operate as an air carrier by certification or otherwise under any
successor or substitute provisions therefor or in the absence thereof.
“U.S.
Government” means the federal government of the United States, or any
instrumentality or agency thereof the obligations of which are guaranteed by
the
full faith and credit of the federal government of the United States.
“Warranty
Xxxx of Sale” means the full warranty xxxx of sale covering the Aircraft
executed by Bombardier, Inc. in favor of Borrower, dated the Closing
Date.
“War
Risk
Insurance” means war risk and allied perils insurance covering
(i) hull risks in respect of the Aircraft and (ii) liability risks in
respect of the Aircraft.
“Wet
Lease” means any arrangement whereby the Borrower agrees to furnish the
Airframe and Engines or engines installed thereon to a third party pursuant
to
which such Airframe and Engines or engines (i) are operated by pilots who
are regular employees of the Borrower, and (ii) such property is maintained
by the Borrower.
ARTICLE II
THE
CERTIFICATES
Section
2.01 Form
of
Certificates. The Certificates and the Indenture Trustee’s
form of certificate of authentication to appear on the Certificates shall each
be substantially in the form set forth below, as follows:
_____________
PINNACLE
AIRLINES, INC.
THIS
CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED,
AND
MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED
OF EXCEPT WHILE SUCH A REGISTRATION IS IN
EFFECT
OR
PURSUANT TO AN EXEMPTION FROM
REGISTRATION
UNDER SAID ACT
THIS
CERTIFICATE IS SUBJECT TO CERTAIN ADDITIONAL
RESTRICTIONS
ON TRANSFER SET FORTH IN
THE
INDENTURE REFERRED TO BELOW.
CERTIFICATE
DUE ________, ____
ISSUED
IN
CONNECTION WITH ONE BOMBARDIER MODEL ________ AIRCRAFT WITH MANUFACTURER’S
SERIAL NUMBER _______ AND INITIALLY BEARING UNITED STATES FEDERAL AVIATION
ADMINISTRATION REGISTRATION NO. _______ AND _____ _____________
MODEL _______ ENGINES
No. R- New
York, New York
$ _______________,
2008
PINNACLE
AIRLINES, INC. (the
“Borrower”) hereby
promises to pay to EXPORT
DEVELOPMENT CANADA, or registered transferees, the principal sum of
_________________________________ Dollars, in consecutive installments, equal
to
the amount, and payable on the dates, set forth in Annex A hereto, together
with interest on the unpaid principal amount hereof from time to time
outstanding from and including the date hereof until such principal amount
is
paid in full. Interest shall accrue with respect to each Interest
Period at a rate per annum equal to ___% and shall be payable in arrears on
each
Interest Payment Date and on the date this Certificate is paid in
full. This Certificate shall bear interest at the applicable Past Due
Rate on any principal hereof, and, to the extent permitted by applicable law,
interest and other amounts due hereunder, not paid when due (whether at stated
maturity, by acceleration or otherwise), for any period during which the same
shall be overdue, payable on demand by the Holder hereof given through the
Indenture Trustee.
Interest
shall be calculated on the basis of a year of 360 days consisting of 12 thirty
day months provided that for
any
period during which interest is calculated on the basis of the Past Due Rate,
it
shall be calculated as the basis specified in the definition of “Past Due Rate”
in Section 1.01 of the Indenture. If any sum payable hereunder
falls due on a day which is not a Business Day, then such sum shall be payable
on the next succeeding Business Day.
All
payments of principal, Break Amount, if any, and interest and other amounts
to
be made to the Holder hereof or under the Trust Indenture and Security Agreement
(__________) dated as of ________________, 2008 (as amended or supplemented
from
time to time, herein called the “Indenture”, the terms defined
therein and not otherwise defined herein being used herein with the same
meanings) between the Borrower and Xxxxx Fargo Bank Northwest, National
Association, as Indenture Trustee thereunder, (i) shall be made in
accordance with the terms of the Loan Agreement and the Trust Indenture and
(ii) are guaranteed by Pinnacle Airlines Corp. pursuant to the terms of the
Guaranty dated as of ________________, 2008 from Guarantor.
Principal
and interest and other amounts due hereon shall be payable in Dollars in
immediately available funds prior to 10:00 a.m., New York, New York time,
on the due date thereof, to the Indenture Trustee at the Corporate Trust Office
and the Indenture Trustee shall, subject to the terms and conditions of the
Indenture, remit all such amounts so received by it to the Holder hereof in
accordance with the terms of Indenture at such account or accounts at such
financial institution or institutions as the Holder hereof shall have designated
to the Indenture Trustee in writing, in immediately available funds, such
payment to be made, in the case of any such designated account in New York,
New
York, prior to noon, New York time, on the due date thereof. In the
event the Indenture Trustee shall fail to make any such payment as provided
in
the immediately foregoing sentence after its receipt of funds at the place
and
prior to the time specified above, the Indenture Trustee agrees to compensate
the Holder hereof for loss of use of funds in a commercially reasonable
manner. All such payments by the Borrower and the Indenture Trustee
shall be made free and clear of and without reduction for or on account of
all
wire or other like charges.
Each
Holder hereof, by its acceptance of this Certificate, agrees that, except as
otherwise expressly provided in the Indenture, each payment received by it
in
respect hereof shall be applied, first, to the
payment
of any amount (other than the principal of or interest on this Certificate)
due
in respect of this Certificate, second, to the
payment of interest hereon (as well as any interest on overdue principal and,
to
the extent permitted by law, interest and other amounts payable hereunder)
due
hereunder, third, to the
payment
of the principal of this Certificate then due and fourth, the balance,
if any, remaining thereafter, to the payment of the principal of this
Certificate remaining unpaid, in the manner set forth in the last sentence
of
Section 2.06 of the Indenture. Without limiting the foregoing,
the Holder hereof, by its acceptance of this Certificate, agrees that if it
receives any payment or distribution in respect of this Certificate that it
is
not entitled to receive under Section 2.02 or Section 9.07 of the
Indenture, it shall hold any amount so received in trust for the Indenture
Trustee and forthwith turn over such amount to the Indenture Trustee in the
form
received to be applied as provided in Section 9.07 of the Indenture.
This
Certificate is one of the Certificates referred to in the Indenture which have
been or are to be issued by the Borrower pursuant to the terms of the
Indenture. The Indenture Estate is held by the Indenture Trustee as
security, in part, for the Certificates. Reference is hereby made to
the Indenture and the Loan Agreement referred to therein for a statement of
the
rights and obligations of the Holder hereof, and the nature and extent of the
security for this Certificate and of the rights and obligations of the other
Certificate Holders, and the nature and extent of the security for the other
Certificates, as well as for a statement of the terms and conditions of the
trusts created by the Indenture, to all of which terms and conditions in the
Indenture and such Loan Agreement each Holder hereof agrees by its acceptance
of
this Certificate.
There
shall be maintained a Certificate Register for the purpose of registering
transfers and exchanges of Certificates at the Corporate Trust Office of the
Indenture Trustee or at the office of any successor indenture trustee in the
manner provided in Section 2.08 of the Indenture. As provided in
the Indenture and subject to certain limitations set forth therein and in the
Loan Agreement, this Certificate or any interest herein may, subject to the
next
following paragraph, be assigned or transferred, and the Certificates are
exchangeable for a like aggregate original principal amount of Certificates
of
any authorized denomination, as requested by the Certificate Holder surrendering
the same.
Prior
to
the due presentment for registration of transfer of this Certificate, the
Borrower and the Indenture Trustee shall deem and treat the person in whose
name
this Certificate is registered on the Certificate Register as the absolute
owner
of this Certificate and the Certificate Holder for the purpose of receiving
payment of all amounts payable with respect to this Certificate and for all
other purposes whether or not this Certificate is overdue, and neither the
Borrower nor the Indenture Trustee shall be affected by notice to the
contrary.
This
Certificate is subject to prepayment as permitted by Sections 2.11 and 2.12
of the Indenture and to purchase without the consent of the Holder hereof as
provided in Section 2.15(e) of the Indenture and to acceleration by the
Indenture Trustee as provided in Section 9.01 of the Indenture, and the
Holder hereof, by its acceptance of this Certificate, agrees to be bound by
said
provisions.
This
Certificate shall not be secured by or be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose, unless authenticated by
the
Indenture Trustee as evidenced by the manual signature of one of its authorized
signatories on the certificate below.
This
Certificate shall be governed by and construed in accordance with the law of
the
State of New York.
IN
WITNESS WHEREOF, the
Borrower has caused this Certificate to be executed in its corporate name by
its
officer thereunto duly authorized, as of the date hereof.
|
PINNACLE
AIRLINES, INC.
By:
Its:
|
[FORM
OF
INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION]
This
is
one of the Certificates referred to in the within-mentioned Indenture.
|
XXXXX
FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, as Indenture Trustee
By:
Its:
|
Annex
A to Certificate
SCHEDULE OF
PRINCIPAL PAYMENTS
|
Interest
Payment Date
|
Principal
Amount to be Paid7
|
* * *
Section
2.02 Terms
of
Certificates. (a) On the Closing Date the Borrower
shall issue Certificates in an aggregate original principal amount equal to
the
Financed Amount to the Certificate Holders (or their respective nominees) in
such amounts as shall be set forth in Schedule II to the Loan
Agreement. Each Certificate shall bear interest on the unpaid
principal amount thereof from time to time outstanding from and including the
date thereof until such principal amount is paid in full. Such
interest shall accrue with respect to each Interest Period at the Applicable
Rate in effect for such Interest Period and shall be payable in arrears on
each
Interest Payment Date and on the date such Certificate is paid in
full.
(b) The
principal of the Certificates shall be due and payable in consecutive
installments as set forth in Annex A to each Certificate.
(c) Each
Certificate shall bear interest at the Past Due Rate on any principal thereof
and, to the extent permitted by applicable law, interest and other amounts
due
thereunder and hereunder, not paid when due (whether at stated maturity, by
acceleration or otherwise), for any period during which the same shall be
overdue, payable on demand by the respective Certificate Holder given through
the Indenture Trustee.
(d) The
Certificates shall be executed on behalf of the Borrower by one of its
authorized officers. Certificates bearing the signatures of
individuals who were at any time the proper officers of the Borrower shall
bind
the Borrower, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Certificates or did not hold such offices at the respective dates of such
Certificates. No Certificates shall be issued hereunder except those
provided for in Section 2.02(a) and any Certificates issued in exchange or
replacement therefor pursuant to the terms of this Indenture. Each
Certificate issued under this Section 2.02 shall be dated as of the Closing
Date. No Certificate shall be secured by or entitled to any benefit
under this Indenture or be valid or obligatory for any purpose, unless there
appears on such Certificate a certificate of authentication in the form provided
for herein executed by the Indenture Trustee by the manual signature of one
of
its authorized officers and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly
authenticated and delivered hereunder.
Section
2.03 Tax
Forms. The Indenture Trustee agrees, to the extent required by
applicable law, to withhold from each payment due hereunder or under any
Certificate United States federal withholding taxes at the appropriate rate,
and, on a timely basis, to deposit such amounts with an authorized depository
and make such reports, filings and other reports in connection therewith, and
in
the manner, required under applicable law. The Indenture Trustee
shall furnish no later than March 15 of each year to each Certificate
Holder a U.S. Treasury Form 1042S (or similar forms as at any relevant time
in effect), if applicable, indicating payment in full of any Taxes withheld
from
any payments by the Indenture Trustee to such Certificate Holder together with
all such other information and documents reasonably requested by such
Certificate Holder and necessary or appropriate to enable such Person to
substantiate a claim for credit or deduction with respect thereto for income
tax
purposes of any jurisdiction with respect to which such Person is required
to
file a tax return. Provided that each Certificate Holder which is a
Non-U.S. Person has furnished to the Indenture Trustee either (x) a
properly completed and currently effective U.S. Treasury Form W-8BEN (or
such substitute or successor form as may be required by the United States
Treasury Department) establishing exemptions from withholding of United States
federal income tax on or prior to the Closing Date (and at such other times
as
applicable law may require), and has not notified the Indenture Trustee of
the
withdrawal of such Form prior to the date of each interest payment, or
(y) a properly completed and currently effective U.S. Treasury
Form W-8ECI or other certificate or form establishing exemption from
withholding of United States federal income tax on or prior to the Closing
Date
(and at such other times as applicable law may require), and has not notified
the Indenture Trustee of the withdrawal of such Form or certificate prior to
the
date of each interest payment, then no amount shall be withheld from payments
under the Certificates held by such Certificate Holder in respect of United
States federal income tax. Each Certificate Holder shall indemnify
and hold harmless the Indenture Trustee and the Borrower against any claim
for
United States federal withholding taxes which the Indenture Trustee improperly
fails to withhold on payments to such Certificate Holder as a direct result
of
the invalidity of any certificate or Form provided by such Certificate Holder
pursuant to this Section 2.03 (it being understood that the provision of
such form or certificate shall constitute a representation by the relevant
Certificate Holder as to such Certificate Holder’s qualification for complete or
partial exemption from United States federal gross income tax
withholding).
Section
2.04 Reserved.
Section
2.05 Method
of
Payment. Principal and interest and other amounts due
hereunder or under the Certificates or in respect hereof or thereof shall be
payable in Dollars in immediately available funds prior to 10:00 a.m., New
York, New York time, on the due date thereof, to the Indenture Trustee at the
Corporate Trust Office and the Indenture Trustee shall, subject to the terms
and
conditions hereof, remit all such amounts so received by it to the Certificate
Holders entitled thereto at such account or accounts at such financial
institution or institutions as the Certificate Holders shall have designated
to
the Indenture Trustee in writing, in immediately available funds for
distribution to the relevant Certificate Holders, such payment to be made,
in
the case of any such designated account in New York, New York, prior to noon,
New York time, on the due date thereof. In the event the Indenture
Trustee shall fail to make any such payment as provided in the immediately
foregoing sentence after its receipt of funds at the place and prior to the
time
specified above, the Indenture Trustee agrees to compensate the Certificate
Holders for loss of use of funds in a commercially reasonable
manner. All such payments by the Borrower and the Indenture Trustee
shall be made without presentment or surrender of any Certificate and free
and
clear of and without reduction on account of all wire and other like
charges. Prior to the due presentment for registration of transfer of
any Certificate, the Borrower and the Indenture Trustee may deem and treat
the
Person in whose name any Certificate is registered on the Certificate Register
as the absolute owner of such Certificate for the purpose of receiving payment
of all amounts payable with respect to such Certificate and for all other
purposes whether or not such Certificate shall be overdue, and neither the
Borrower nor the Indenture Trustee shall be affected by any notice to the
contrary. Interest hereunder and under the Certificates shall be
calculated on the basis of a year of 360 days consisting of 12 thirty day
months; provided that for any period during which interest is calculated on
the
basis of the Past Due Rate, it shall be calculated on the basis specified in
the
definition of “Past Due Rate” in Section 1.01. If any sum
payable under the Certificates or under this Indenture falls due on a day which
is not a Business Day, then such sum shall be payable on the next succeeding
Business Day.
Section
2.06 Application
of
Payments. Except as otherwise expressly provided herein, each
payment of principal and interest or other amounts due in respect of each
Certificate shall be distributed to the Holders thereof ratably, without
priority of any one Certificate over any other Certificate, in the proportion
that the amount of such payment or payments then due under each Certificate
bears to the aggregate amount of the payments then due under all
Certificates. Each such payment shall, except as otherwise expressly
provided herein, be applied, first, to the
payment
of any amount (other than the principal of or interest on such Certificate)
due
in respect of such Certificate, second, to the
payment of interest on such Certificate (as well as any interest on overdue
principal and, to the extent permitted by law, interest and other amounts
payable thereunder) due thereunder, third, to the
payment
of the principal of such Certificate then due and fourth, the balance,
if any, remaining thereafter, to the payment of the principal of such
Certificate remaining unpaid (provided that such Certificate shall not be
subject to prepayment or purchase without the consent of the affected
Certificate Holder except as permitted by Sections 2.11 and
2.12). The amounts paid pursuant to clause fourth above shall be
applied to the installments of principal of such Certificate in inverse order
of
maturity.
Section
2.07 Intentionally
Omitted.
Section
2.08 Registration,
Transfer and
Exchange of Certificates. The Indenture Trustee agrees with
the Borrower that the Indenture Trustee shall keep a register (herein sometimes
referred to as the “Certificate
Register”) in which provision shall be made for the registration of
Certificates and the registration of transfers of Certificates. Prior
to the due presentment for registration of the transfer of any Certificate,
the
Borrower and the Indenture Trustee shall deem and treat the person in whose
name
such Certificate is registered on the Certificate Register as the absolute
owner
of such Certificate, and the Certificate Holder for the purpose of receiving
payment of all amounts payable with respect to such Certificate, and for all
other purposes whether or not such Certificate is overdue, and neither the
Borrower nor the Indenture Trustee shall be affected by notice to the
contrary. The Certificate Register shall be kept at the Corporate
Trust Office of the Indenture Trustee or at the office of any successor
indenture trustee, and the Indenture Trustee is hereby appointed “Certificate Registrar” for the
purpose of registering Certificates and transfers of Certificates as herein
provided. Subject to the satisfaction of the conditions specified in
Section 8(g) of the Loan Agreement, upon surrender for registration of
transfer of any Certificate at the Corporate Trust Office, the Borrower shall
execute, and the Indenture Trustee shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of
a
like aggregate principal amount. At the option of the Certificate
Holder, its Certificates may be exchanged for other Certificates of any
authorized denominations, of a like aggregate principal amount, upon surrender
of the Certificates to be exchanged at the Corporate Trust
Office. Each new Certificate issued upon transfer or exchange shall
be in a principal amount of at least [***] (except as may be necessary to
evidence the entire outstanding principal amount of a Certificate) and dated
the
Closing Date. Whenever any Certificates are so surrendered for
exchange, the Borrower shall execute, and the Indenture Trustee shall
authenticate and deliver, the Certificates which the Certificate 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 Borrower evidencing the same respective obligations, and
entitled to the same security and benefits under this Indenture, as the
Certificates surrendered upon such registration of transfer or
exchange. Every Certificate presented or surrendered for registration
of transfer or exchange, shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by the Certificate Holder thereof or his attorney duly authorized
in
writing, and the Indenture Trustee may require evidence reasonably satisfactory
to it as to the compliance of any such transfer with the Securities Act and
the
securities laws of any applicable state. The Indenture Trustee shall
make a notation on each new Certificate or Certificates of the amount of all
payments of principal previously made on the old Certificate or Certificates
with respect to which such new Certificate is issued and the date to which
interest accrued on such old Certificate or Certificates has been
paid. The Indenture Trustee shall not be required to register the
transfer of or exchange any surrendered Certificates as above provided during
the five calendar day period preceding the due date of any payment on such
Certificates. The Borrower and the Indenture Trustee shall treat the
Person in whose name each Certificate is registered on the Certificate Register
as the Certificate Holder with respect thereto for all purposes hereof until
due
presentment for registration of transfer as provided in this
Section 2.08. The Indenture Trustee shall give the Borrower and
each Certificate Holder prompt written notice of such transfer of a Certificate
under this Section 2.08. Each Holder of a Certificate, by its
acceptance thereof, agrees to comply with the requirements of Section 8(g)
of
the Loan Agreement, and that any transfer of any Certificate acquired by it
hereunder shall not be effected unless the transferee shall have delivered
to
the Indenture Trustee and the Borrower a written representation as to the
matters specified in Section 8(g) of the Loan Agreement and, notwithstanding
the
above, such transferee by its acceptance of a Certificate shall be deemed to
have made such a representation as of its date of acceptance.
Section
2.09 Mutilated,
Destroyed, Lost
or Stolen Certificates. If any Certificate shall become
mutilated, destroyed, lost or stolen, the Borrower shall, upon the written
request of the affected Certificate Holder, execute, and the Indenture Trustee
shall authenticate and deliver in replacement thereof, a new Certificate, in
the
same principal amount, dated the date of such Certificate and designated as
issued under this Indenture. If the Certificate being replaced has
become mutilated, such Certificate shall be surrendered to the Indenture Trustee
and a photocopy thereof shall be furnished to the Borrower by the Indenture
Trustee. If the Certificate being replaced has been destroyed, lost
or stolen, the affected Certificate Holder shall furnish to the Borrower and
the
Indenture Trustee such security or indemnity as may be reasonably required
by
them to hold the Borrower and the Indenture Trustee harmless and evidence
satisfactory to the Borrower and the Indenture Trustee of the destruction,
loss
or theft of such Certificate and of the ownership thereof; provided, however,
that if the
affected Certificate Holder is the Original Certificate Holder, the written
notice of such destruction, loss or theft and such ownership and the written
undertaking of such Certificate Holder delivered to the Borrower and the
Indenture Trustee to hold harmless the Borrower and the Indenture Trustee in
respect of the execution, authentication and delivery of such new Certificate
shall be sufficient evidence, security and indemnity.
Section
2.10 Payment
of Expenses on
Transfer. Upon the issuance of a new Certificate or new
Certificates pursuant to Section 2.08 or 2.09, the Borrower and/or the
Indenture Trustee may require from the party requesting such new Certificate
or
Certificates payment of a sum sufficient to reimburse the Borrower and/or the
Indenture Trustee for, or to provide funds for, the payment of any Tax or other
governmental charge in connection therewith or any charges and expenses and
reasonable out-of-pocket expenses including reasonable attorneys’ fees connected
with such Tax or other governmental charge paid or payable by the Borrower
or
the Indenture Trustee.
Section
2.11 Prepayment. (a) So
long as no Event of Default has occurred and is continuing, the Borrower may,
at
any time after the first principal repayment date and on 30 days’ irrevocable
written notice to the Indenture Trustee, prepay on the date specified in such
notice in whole, or in part, the Loan Certificates then outstanding at the
principal amount thereof (or portion thereof to be repaid), together with
accrued interest thereon to the date of prepayment plus all Break Amount, if
any, and all other amounts then due to the Holders of the Certificates
hereunder, thereunder and under the other Operative Documents; provided that
any
partial prepayment shall be in an aggregate original principal amount of at
least $[***] and in $[***] multiples thereof unless the Borrower is prepaying
[***] of the outstanding principal amount in full, and the amount thereof shall
be specified in such written notice. The Indenture Trustee will give
prompt notice of the Borrower’s intent to prepay to the Certificate
Holders.
(b)
(i) The
Certificates shall be prepaid in full, but not in part, together with accrued
interest thereon to the date of prepayment (but excluding all Make-Whole Amount)
and all other amounts due hereunder and under the other Operative Documents
to
the Certificate Holders upon the occurrence of an Event of Loss with respect
to
the Airframe (unless pursuant to Section 5.01, a Replacement Airframe,
together with the same number of Replacement Engines as the Engines, if any,
subject to such Event of Loss, shall have been substituted for the Airframe
and
the Engines subject to such Event of Loss), on the earlier of the date of the
Borrower’s payment with respect to such Event of Loss in Section 5.01 or
the last day permitted for such payment under said
Section 5.01. The Indenture Trustee will give notice of
prepayment to the Certificate Holders under this Section 2.11(b)(i)
promptly.
(ii) The
Certificates held by any Holder making a claim under Section 2.15 hereof or
Section 7(d) of the Loan Agreement may be prepaid in full, together with
accrued interest thereon to the date of prepayment plus all Break Amount and
all
other amounts due hereunder (including, without limitation, under
Section 2.15 hereof or Section 7(d) of the Loan Agreement) and under
the other Operative Documents by the Borrower upon providing at least five
Business Days’ prior written notice to such Holder of its intention to so prepay
such Holder’s Certificates. Upon receipt by the Indenture Trustee of
the amounts required for prepayment as provided in this clause (ii), the
Indenture Trustee shall pay such amounts to the affected Holder.
(c) On
the
second Business Day prior to the occurrence or anticipated occurrence of a
Pinnacle Event or Change in Control, the Requisite Portion of the Certificates
shall become due and payable, and the Borrower shall immediately prepay the
Certificates in an amount equal to the Requisite Portion thereof, together
with
accrued interest thereon to the date of prepayment plus any Break Amount and
all
other amounts due thereunder and hereunder and under the other Operative
Documents.
(d) In
the
event that any Certificate Holder is entitled to a payment under Section 2.15
hereof or Section 7(c) of the Loan Agreement, the Borrower and such Certificate
Holder shall cooperate for a period of 60 days to:
(i) first,
restructure the Loan for such Certificate Holder so as to eliminate the need
for
any such payment (it being agreed that such Certificate Holder shall have no
obligation to proceed with such restructuring to the extent such restructuring
would:
(1) result
in
an adverse regulatory consequence for such Certificate Holder; or
(2) involve
any unreimbursed or unindemnified cost for such Certificate Holder);
or
(ii) if
no
restructuring can be arranged, attempt, with the Borrower acting as marketing
agent, to find an entity reasonably satisfactory to such Certificate Holder
to
purchase its Certificate.
The
affected Certificate Holder shall be paid (by the purchasing entity or the
Borrower) the outstanding principal balance of the Certificate, all accrued
and
unpaid interest thereon, any Break Amount incurred (calculated as if such
purchase were a prepayment of such Certificate) and all other amounts owed
to
such Certificate Holder under any Operative Document as a condition precedent
to
such purchase.
In
the
event the Borrower is unable to find a purchaser of such Certificate, then,
so
long as no Default or Event of Default shall have occurred and be continuing
on
at least 5 Business Days’ prior written notice, the Borrower may prepay on the
date specified in its notice of prepayment, in whole such Certificate at the
principal amount thereof together with accrued and unpaid interest thereon
to
the date of prepayment plus the Break Amount, if any and all other amounts
due
to such Certificate Holder hereunder, thereunder and under the other Operative
Documents.
Section
2.12 Provisions
Relating to
Prepayment. (a) Notice of prepayment having been
given, the principal amount of the Certificates so to be prepaid, plus accrued
interest thereon to the date of prepayment, together with any required Break
Amount, herein provided, shall become due and payable on the prepayment
date.
(b) On
the
date fixed for prepayment under Section 2.11, immediately available funds
in Dollars shall be deposited by the Borrower in the account of the Indenture
Trustee at the place and by the time and otherwise in the manner provided in
Section 2.05, in an amount equal to the principal amount of Certificates to
be prepaid together with accrued and unpaid interest thereon to the date fixed
for such prepayment, any required Break Amount, and all other amounts then
due
to the Holders of the Certificates hereunder and under the other Operative
Documents.
(c) Each
Holder of a Certificate shall furnish to the Borrower, with a copy to the
Indenture Trustee, by no later than the Business Day next preceding the
scheduled prepayment date, a certificate setting forth in reasonable detail
the
calculation of the amounts of Break Amount due to such Holder, which certificate
shall be conclusive and binding absent manifest error.
Section
2.13 Reserved.
Section
2.14 Certificates
in Respect of
Replacement Aircraft. Upon the execution and delivery of an
Indenture Supplement covering a Replacement Airframe or Replacement Engine,
as
provided in Section 5.01, each Certificate shall be deemed to have been
issued in connection with such Replacement Airframe and Replacement Engine
and
each Certificate issued thereafter upon a transfer or exchange of, or as a
replacement for, a Certificate, shall be designated as having been issued in
connection with such Replacement Airframe and Replacement Engine, but without
any other change therein except as provided for in this
Article II.
Section
2.15 Increased
Costs. (a) The Borrower shall pay directly to each
Certificate Holder from time to time such amounts as such Certificate Holder
may
determine to be necessary to compensate such Certificate Holder for any increase
in actual costs that such Certificate Holder reasonably determines are
attributable to its making or maintaining of its Loan or the loans evidenced
by
its Certificate or funding arrangements utilized in connection with such loans,
or any reduction in any amount receivable by such Certificate Holder hereunder
in respect of any of its Loans, such loans or such arrangements (such increases
in costs and reductions in amounts receivable being herein called “Additional Costs”), resulting
from any Regulatory Change that:
(i) imposes
any Tax that is the functional equivalent of any reserve, special deposit or
similar requirement of the sort covered by Section 2.15(a)(ii); or
(ii) imposes
or modifies any reserve, special deposit or similar requirements (including
any
Reserve Requirement) relating to any extensions of credit or other assets of,
or
any deposits with or other liabilities of, such Certificate Holder (including,
without limitation, any of such loans or any deposits referred to in the
definition of “LIBO
Rate”), or any such obligations; or
(iii) imposes
any other condition affecting this Agreement or such Holder’s Certificate (or
any of such extensions of credit or liabilities) or any such
obligation.
(b) Without
limiting the effect of the foregoing provisions of this Section 2.15 (but
without duplication), the Borrower shall pay directly to any Certificate Holder
from time to time on request such amounts as such Certificate Holder may
reasonably determine to be necessary to compensate such Certificate Holder
(or,
without duplication, the holding company of which such Certificate Holder is
a
subsidiary) for any increase in actual costs that it determines are attributable
to the maintenance by such Certificate Holder (or any lending office or such
holding company), pursuant to any law or regulation or any interpretation,
directive or request (whether or not having the force of law and whether or
not
failure to comply therewith would be unlawful so long as compliance therewith
is
standard banking practice in the relevant jurisdiction) of any court or
governmental or monetary authority following:
(i) any
Regulatory Change; or
(ii) implementing
any risk-based capital guideline or other similar requirement hereafter issued
by any government or governmental or supervisory authority, of capital in
respect of its Loans or such Certificate or funding arrangements utilized in
connection with such Certificate; such compensation to include, without
limitation, an amount equal to any reduction of the rate of return on assets
or
equity of such Certificate Holder (or any lending office or such bank holding
company) could have achieved but for such law, regulation, interpretation,
directive or request.
(c) The
affected Certificate Holder shall notify the Borrower of any event occurring
after the date of this Agreement entitling such Certificate Holder to
compensation under Sections 2.15(a) or (b) as promptly as practicable, but
in
any event within 60 days after such Certificate Holder obtains actual knowledge
thereof, provided that, such Certificate Holder will use commercially reasonable
efforts (at the Borrower’s expense) to mitigate the amount of the Additional
Costs associated with such event, including designating a different lending
office for its Certificate if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the reasonable opinion
of such Certificate Holder, result in any economic, legal or regulatory
disadvantage to such Certificate Holder (other than economic disadvantages
for
which the Borrower agrees to indemnify such Certificate Holder and which
indemnity is acceptable to such Certificate Holder in its discretion acting
reasonably based on its credit assessment of the Borrower).
(d) The
affected Certificate Holder will furnish to the Borrower an officer’s
certificate setting forth in reasonable detail:
(i) the
events giving rise to such Additional Costs;
(ii) the
basis
for determining and allocating such Additional Costs; and
(iii) the
amount of each request by such Certificate Holder for compensation under
Sections 2.15(a) or (b) (subject, however, to any limitations such Certificate
Holder may require in respect of disclosure of confidential information relating
to its capital structure unless Borrower agrees to enter into a confidentiality
agreement with such Certificate Holder), together with a statement that the
determinations and allocations made in respect of the Additional Costs comply
with the provisions of this Section 2.15.
Determinations
and allocations by any Certificate Holder for purposes of this Section 2.15
of
the effect of any Regulatory Change pursuant to Section 2.15(a), or of the
effect of capital maintained pursuant to Section 2.15(b), on its costs or rate
of return of maintaining its Loan or its Certificate or its funding, or on
amounts receivable by it in respect of its Certificate, and of the amounts
required to compensate such Certificate Holder under this Section 2.15, shall
be
conclusive absent manifest error, provided that such determinations and
allocations are made on a reasonable basis and, in the case of allocations,
are
made fairly.
(e) The
Borrower shall not be required to make payments under this Section to any
Certificate Holder if (i) a claim hereunder arises through circumstances
peculiar to such Certificate Holder and which do not affect commercial lenders
in the same jurisdiction generally; (ii) such Certificate Holder is required
by
Section 2.15(f) to sell its Certificate to a designated purchaser (which may
be
the Borrower) but fails to do so (other than as a result of such designated
purchaser failing to purchase such Certificate); (iii) such Certificate Holder
is not also seeking indemnification against similar increased costs, to the
extent it is entitled to do so, in transactions with substantial borrowers
(it
being agreed that an officer’s certificate to the contrary from such Certificate
Holder shall constitute conclusive evidence of such fact); or (iv) the claim
arises out of a voluntary relocation by such Certificate Holder of its lending
office (it being understood that any such relocation effected pursuant to this
Section 2.15 is not “voluntary”).
(f) If
any
Certificate Holder gives notice of a claim against the Borrower under Section
2.15(c), the Borrower shall have the right by notice to such Certificate Holder
to request such Certificate Holder to sell, without representation or warranty
(except for its own acts), its Certificate on a Business Day not fewer than
ten
days after the giving of such notice (the “PurchaseDate”)
to a Person (which may
be the Borrower) designated by the Borrower (the “Purchaser”) at a purchase
price equal to either (A) the sum of (i) the aggregate outstanding principal
amount of such Certificate, plus (ii) accrued interest to the Purchase Date,
plus (iii) any Break Amount, if any, as if such Certificate was being prepaid
pursuant to Section 2.11, plus (iv) all other amounts owing to such Certificate
Holder under the Operative Documents, or (B) a lesser amount than the preceding
clause (A), so long as the Borrower pays an additional amount sufficient to
cover the amount of such shortfall (as compared to such clause
(A)).
Section
2.16 Illegality. Notwithstanding
any other provision of this Agreement or the Indenture, if any Certificate
Holder (the “Illegal
Certificate Holder”) shall notify any of the parties hereto that the
introduction after the date of this Agreement of or any change after the date
of
this Agreement or any other Operative Document in or in the interpretation
of
any law or regulation makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for such Certificate Holder
to make, fund or allow to remain outstanding its Certificate, then such
Certificate Holder shall, promptly after becoming aware of the same, deliver
to
the Borrower a certificate to that effect, and the Certificate Holder shall,
at
Borrower’s expense, use reasonable efforts to attempt to cure such illegality
and in the event such illegality shall not have been cured, on or before the
earlier of (a) the next Interest Payment Date or (b) thirty (30) days following
such notification, the Borrower shall immediately prepay the aggregate
outstanding principal amount of such Certificate in full, together with accrued
interest thereon to the date of prepayment plus all the Break Amount, if any
and
all other amounts due thereunder and hereunder and under the other Operative
Documents to such Illegal Certificate Holder.
ARTICLE III
REGISTRATION
AND MAINTENANCE; OPERATION; POSSESSION AND LEASES; INSIGNIA
Section
3.01 Registration
and
Maintenance. The Borrower
shall: (1) (a) on the Closing Date, cause the Aircraft to
be duly registered in its name (if not so registered) and, at all times
thereafter, cause the Aircraft to remain duly registered in the United States
of
America in its name under the Federal Aviation Act (except to the extent that
the Aircraft is registered in another country as permitted by the Operative
Documents) and (b) on the Closing Date, cause this Trust Indenture to be
duly filed for recording with the FAA and cause the international interest
granted in the Airframe and Engines pursuant to the Trust Indenture to be
registered pursuant to the Cape Town Convention, subject to the Indenture
Trustee providing its consent to the International Registry with respect
thereto, and, at all times thereafter, so long as any Certificate shall be
outstanding or any amount shall be owing to any Holder, cause the Trust
Indenture to be maintained of record as a first priority (subject to Permitted
Liens) and perfected mortgage on the Aircraft (or, in the case of registration
of the Aircraft outside of the United States, cause to be in force and effect
documentation appropriate for that jurisdiction that protects the interests
of
the Holders on a first priority (subject to Permitted Liens) and perfected
basis, including, without limitation, pursuant to the Cape Town Convention,
if
applicable); (2) maintain, service, repair, and overhaul (or cause to be
maintained, serviced, repaired, and overhauled) the Aircraft (and any engine
which is not an Engine but which is installed on the Aircraft) (a) so as to
keep the Aircraft in as good an operating condition as when delivered to the
Borrower by the Manufacturer (ordinary wear and tear excepted) and so as to
keep
the Aircraft in such condition as may be necessary to enable the airworthiness
certification for the Aircraft to be maintained in good standing at all times
under the Federal Aviation Act (or under the applicable requirements of another
country of registry) except when (i) the Aircraft is being temporarily
stored and is not operational, (ii) the Aircraft is being serviced,
repaired, maintained, overhauled, tested or modified, in each case in compliance
with the terms hereof, (iii) all Bombardier Model ____________ aircraft of
comparable vintage and/or configuration have been grounded by the FAA, or
(iv) laws or regulations affecting airworthiness are being contested in
good faith and by appropriate proceedings so long as such proceedings do not
materially adversely affect the Indenture Trustee or its interest in the
Aircraft, and (b) in accordance with the Maintenance Program for the
Aircraft and except during periods when a Lease is in effect, the same standards
as the Borrower uses with respect to aircraft of similar size in its fleet
and,
during a period when a Lease is in effect, the same standards used by the Lessee
thereunder with respect to similar aircraft of similar size in its fleet and
operated by such Lessee in similar circumstances; and (3) maintain or cause
to be maintained in English all records, logs and other materials required
to be
maintained in respect of the Aircraft by the FAA or the applicable regulatory
agency or body of any other jurisdiction in which the Aircraft may then be
registered.
Notwithstanding
the registration requirements of clause (1)(a) of the preceding paragraph,
the
Borrower shall have the right, at any time so long as no Special Default or
Event of Default shall have occurred and be continuing, with at least 45 days’
prior written notice, to register the Aircraft outside of the United
States. Any such change in registration shall be effected only in
compliance with, and subject to all of the conditions set forth in, Annex A
of
this Trust Indenture.
Section
3.02 Operation. The
Borrower will not (and will not permit any Lessee to) maintain, use, service,
repair, overhaul or operate the Aircraft in violation of any law, rule,
regulation, treaty, or order of any government or governmental authority
(domestic or foreign) having jurisdiction over such activity, or in violation
of
any airworthiness certificate, license or registration relating to the Aircraft
issued by any such authority (except minor or non-recurring violations with
respect to which corrective measures are taken promptly by the Borrower or
Lessee or which could not reasonably be expected to have a Material Adverse
Effect), unless (i) the Borrower or any Lessee is contesting in good faith
the validity or application of any such law, rule, regulation, treaty or order,
or requirement under any certificate, license or registration, so long as such
contest does not involve a material risk of the sale, forfeiture or loss of
the
Aircraft, the Airframe or any Engine, or the Indenture Trustee’s interest
therein or any imposition of material civil or any criminal penalties against
Indenture Trustee or any Certificate Holder or (ii) it is not possible for
the
Borrower (or a Lessee) to comply with the laws of a jurisdiction other than
the
United States (or other than any jurisdiction in which the Aircraft is then
registered) because of a conflict with the applicable laws of the United States
(or such jurisdiction in which the Aircraft is then registered), so long as
the
failure to comply with the laws of such jurisdiction does not involve a material
risk of the sale, forfeiture or loss of the Aircraft, Airframe or any Engine
or
the Indenture Trustee’s interest therein or any imposition of material civil or
any criminal penalties against Indenture Trustee or any Certificate
Holder. The Borrower will not operate or fly the Aircraft (i) in or
to any war zone or any area of recognized hostility if the indemnities specified
in Section 6.06 or War Risk Insurance, or some combination thereof, has not
been
obtained, or (ii) in any area excluded from coverage by any insurance required
to be maintained by the terms of Article VI (or any indemnity issued pursuant
to
Section 6.06 hereof in lieu thereof); provided, however, that the failure of
the
Borrower to comply with the provisions of this sentence shall not give rise
to
an Event of Default hereunder where such failure is an extraordinary occurrence
attributable to a hijacking, medical emergency, equipment malfunction, weather
condition, navigational error or diversion forced by military
aircraft.
Section
3.03 Possession
and
Leases. The Borrower will not, without the prior written
consent of the Indenture Trustee (such consent not to be unreasonably withheld
or delayed), lease or otherwise in any manner deliver, transfer or relinquish
possession of the Airframe or any Engine or install or permit any Engine to
be
installed on any airframe other than the Airframe; provided that so long as
no
Event of Default shall have occurred and be continuing at the time of such
Lease, delivery, transfer or relinquishment of possession or installation,
the
Borrower may, without the prior written consent of the Indenture
Trustee:
(a) subject
or permit any Lessee to subject any Engine to normal interchange agreements
or
to normal pooling or similar arrangements, in each case customary in the airline
industry and entered into by the Borrower (or any Lessee) in the ordinary course
of its business with (w) a U.S. Air Carrier, (x) any Canadian air
carrier who shall be authorized by the Canadian Minister of Transport to operate
the Engine or (y) any other air carrier approved in writing by the
Indenture Trustee (which approval will not be unreasonably withheld or delayed)
who shall not then be subject to a proceeding or final order under applicable
bankruptcy, insolvency or reorganization laws; provided that (i) no such
agreement or arrangement contemplates or requires the transfer of title to
the
Airframe or any Engine and (ii) if the Borrower’s title to any Engine shall
be divested under any such agreement or arrangement, such divestiture shall
be
deemed to be an Event of Loss with respect to such Engine and the Borrower
shall
(or shall cause any Lessee to) comply with Section 5.02 hereof in respect
thereof;
(b) deliver
or permit any Lessee to deliver possession of the Airframe or any Engine (i)
to
the Manufacturer or the Engine Manufacturer, or to any Person for testing,
service, repair, maintenance or overhaul work on the Airframe or any Engine
or
for alterations or modifications in or additions to the Airframe or Engine(s)
or
(ii) to any Person for the purpose of transport to a Person referred to in
the preceding clause (i);
(c) install
or permit Lessee to install an Engine on (1) an airframe owned by the Borrower
or such Lessee, free and clear of all Liens, except (i) Permitted Liens and
those that do not apply to such Engine and (ii) the rights of third parties
under normal interchange or pooling agreements and arrangements which are
customary in the airline industry and do not contemplate or require the transfer
of title to such Engine or (2) an airframe owned by the Borrower (or any
Lessee), leased to the Borrower (or any Lessee), or owned or purchased by the
Borrower (or any Lessee) subject to a conditional sale or other security
agreement, provided that (A) such airframe is free and clear of all Liens,
except (i) in the case of airframes leased to the Borrower (or any Lessee)
or owned or purchased by the Borrower (or any Lessee) subject to a conditional
sale or other security agreement, the rights of the parties to the lease or
conditional sale agreement or other security agreement covering such airframe,
or their assignee, (ii) Permitted Liens, and (iii) the rights of other
air carriers under normal interchange agreements which are customary in the
airline industry and do not contemplate or require the transfer of title to
such
Engine, and (B) any such lease, conditional sale or other security
agreement provides that such Engine shall not become subject to the Lien of
such
lease, conditional sale or other security agreement, notwithstanding the
installation thereof on such airframe, and the inclusion in such agreement
of a
provision similar to the last paragraph of this Section 3.03 shall satisfy
such requirement;
(d) install
or permit Lessee to install an Engine on an airframe owned by the Borrower
or
Lessee, leased to the Borrower or purchased by the Borrower or Lessee subject
to
a conditional sale or other security agreement under circumstances where
paragraph 3.03(c) above is inapplicable, provided that such installation
shall be deemed an Event of Loss with respect to such Engine and the Borrower
shall comply with Section 5.02 hereof in respect thereof, the Indenture
Trustee not intending hereby to waive any right or interest it may have to
or in
such Engine under applicable law until compliance by the Borrower with such
Section 5.02;
(e) transfer
or permit any Lessee to transfer possession of the Airframe or any Engine to
the
United States of America or any instrumentality or agency thereof pursuant
to
CRAF so long as the Borrower (or such Lessee) shall promptly notify the
Indenture Trustee upon transferring possession of the Airframe or any Engine
to
the United States of America or any agency or instrumentality thereof pursuant
to such program and provide the Indenture Trustee with the name and address
of
the Contracting Office Representative for the Military Aircraft Command of
the
United States Air Force to whom notice must be given in the event the Indenture
Trustee desires to give notice as provided in Article IX
hereof;
(f) transfer
or permit any Lessee to transfer possession of the Airframe or any Engine to
the
United States of America or any instrumentality or agency thereof which bears
the full faith and credit of the United States of America; and
(g) provided
that no Special Default has occurred and is continuing, with the prior written
consent of the Indenture Trustee (such consent not to be unreasonably withheld),
enter into a lease of the Aircraft, the Airframe or any Engine
with: (a) any U.S. Air Carrier not then subject to bankruptcy,
reorganization or insolvency proceedings; or (b) any non-U.S. Air Carrier
principally based and domiciled in a country reasonably satisfactory to the
Indenture Trustee if at the time of such lease the United States of America
and
Canada maintain normal diplomatic relations with the country in which such
air
carrier is based and the Indenture Trustee shall have received (A) evidence
that: (1) if requested by the Indenture Trustee (and such
request is reasonable in light of the circumstances) and if and to the extent
obtainable with reasonable effort, all necessary governmental approvals required
for the leased equipment, the Airframe or any Engine, as the case may be, to
be
exported from the applicable country of domicile upon repossession of such
leased equipment by the Indenture Trustee (and the Borrower as lessor) shall
have been obtained prior to commencement of any such lease; and (2) the
insurance requirements of Article VI are satisfied and (B) an opinion
of counsel (which is reasonably satisfactory to the Indenture Trustee)
that: (1) it is not necessary for the Indenture Trustee or any
Certificate Holder to register or qualify to do business in such country solely
as a result of the proposed lease and without giving effect to any other
activity of the Indenture Trustee or such Certificate Holder, unless the only
result of such registration or qualification is a Tax or cost that the Borrower
is indemnifying such party against; (2) that the Indenture Trustee’s Lien
on the leased equipment will be recognized under the laws of such country;
(3) the laws of such country of domicile require fair compensation by the
government of such jurisdiction payable in a currency freely convertible into
Dollars for the loss of the title to the leased equipment in the event of the
requisition by such government of title (unless the Borrower shall provide
insurance covering the risk of requisition of title to the leased equipment
by
the government of such jurisdiction so long as the leased equipment is subject
to such lease); (4) the required agreement of such non-U.S. Air Carrier
that its rights under the Lease are subject and subordinate to all of the terms
of this Trust Indenture is enforceable against such non-U.S. Air Carrier under
applicable law (subject only to customary exceptions to enforceability); and
(5) there exist no possessory rights in favor of such Lessee under the laws
of such jurisdiction which would, upon bankruptcy of the Borrower or other
default by the Borrower or Lessee and assuming that at such time such Lessee
is
not insolvent or bankrupt, prevent the return of the Aircraft to the Borrower
or
the Indenture Trustee in accordance with and when permitted by the terms of
Article IX hereof upon the exercise by the Indenture Trustee of remedies
under Article IX hereof.
The
rights of any Lessee or other transferee who receives possession by reason
of a
transfer permitted by this Section 3.03 (other than the transfer of an
Engine deemed an Event of Loss) shall be subject and subordinate to, and any
Lease permitted by this Section 3.03, shall expressly provide that it is
subject and subordinate to, all the terms of this Trust Indenture; provided
that
in the case of the use of the Aircraft in CRAF the subject and subordinate
requirements herein shall be subject to the notice specified in Article IX
and other requirements of the CRAF program. In the case of any Lease,
the Borrower shall remain primarily liable hereunder for the performance of
all
of the terms of this Trust Indenture, and the terms of any such Lease shall
not
permit any Lessee to take any action not permitted to be taken by the Borrower
hereunder with respect to the Aircraft and may permit the Borrower to cure
any
default by Lessee and to terminate the Lease upon such default; provided,
however, that the Borrower may procure such performance from any Lessee pursuant
to the relevant Lease, and the Indenture Trustee hereby agrees to accept such
performance by such Lessee in satisfaction of the Borrower’s obligations
hereunder; and provided further that all rights accruing hereunder to the
Borrower shall likewise accrue to such Lessee. Without the prior
written consent of Indenture Trustee, which consent shall not be unreasonably
withheld or delayed, no Lease shall permit the further leasing of the
Aircraft. Subject to Borrower’s obligations in paragraph (g)
above, concurrently with the commencement of any Lease, Borrower shall deliver
to Indenture Trustee (i) a notice stating the identity of the applicable
Lessee and stating that no Event of Default shall have occurred and be
continuing, that such Lease complies with this Section 3.03 and the
applicable Lessee is not then subject to a proceeding or final order under
applicable bankruptcy, insolvency or reorganization laws; (ii) an insurance
certificate evidencing compliance with the requirements of this Lease; (iii)
an
opinion of counsel satisfying the requirement set forth in clause (a) of Annex
A
covering the country in which the Lessee is domiciled and addressing subleasing
of the Aircraft rather than reregistration, if such opinion is required by
the
Operative Documents; and (iv) a copy of the Lease documentation.
Leases
having a term in excess of six (6) months shall be assigned by Borrower to
Indenture Trustee as security for Borrower’s obligations under the Trust
Indenture; provided that, except
during the continuance of an Event of Default, (x) the rentals payable
thereunder shall not be required to be paid to the Indenture Trustee and
(y) rights as lessor under any Lease shall not vest (to the exclusion of
Borrower as lessor thereunder) in the Indenture Trustee. During the
continuance of an Event of Default the Indenture Trustee shall have the
exclusive right to enforce the terms of such Lease.
In
addition to the foregoing, with respect to any Lease to a Lessee that is
situated in a Contracting State to the Cape Town Convention (as at the time
of
entry into such Lease, whether in respect of both the Airframe and the Engines
or only the Airframe), in connection with such Lease, (A) each of Borrower
and
Indenture Trustee agree that there shall be registered with the International
Registry (i) first, the international interest in the Airframe and Engines,
as
the case may be, vested in Borrower as lessor under the Lease and (ii) second,
if Borrower is obligated to assign such Lease to Indenture Trustee, an
assignment by Borrower of such international interest attributable to such
Lease
(excluding, in any case, Borrower’s ownership interest in the Aircraft) and (B)
Borrower shall have received a favorable opinion of counsel (which is reasonably
satisfactory to Indenture Trustee and Certificate Holder), and a supporting
priority search certificate issued by the International Registry, regarding
such
registrations. Indenture Trustee agrees that with respect to any
Lease assigned to Indenture Trustee as provided herein, upon termination of
such
Lease, Indenture Trustee shall discharge at the International Registry Indenture
Trustee’s interest in the Airframe and Engines attributable to the assignment of
such Lease.
Any
Wet
Lease or similar arrangement under which the Borrower maintains operational
control of the Aircraft shall not constitute a delivery, transfer or
relinquishment of possession for purposes of this
Section 3.03. Any consolidation or merger of the Borrower or
conveyance, transfer or lease of all or substantially all of the Borrower’s
assets permitted by the Operative Documents shall not be prohibited by this
Section 3.03. In connection with any Lease, all necessary action
shall be taken by Borrower at its expense which is required to continue the
perfection of the Indenture Trustee’s perfected security interest in the
Aircraft, the Airframe and the Engines. The Borrower agrees to pay
all reasonable out-of-pocket costs and reasonable expenses (including, without
limitation, reasonable counsel fees and disbursements) of Indenture Trustee
and
each Certificate Holder in connection with any leasing pursuant to this
Section 3.03.
The
Indenture Trustee and each Certificate Holder agrees, for the benefit of the
Borrower (and any Lessee) and for the benefit of any mortgagee or other holder
of a security interest in any engine owned by the Borrower (or any Lessee),
any
lessor of any engine leased to the Borrower (or any Lessee) and any conditional
vendor of any engine purchased by the Borrower (or any Lessee) subject to a
conditional sale agreement or any other security agreement, that no interest
shall be created hereunder in any engine so owned, leased or purchased and
that the Indenture Trustee and such Certificate Holder, and their
respective successors or assigns, will not acquire or claim, as against the
Borrower (or any Lessee) or any such mortgagee, lessor or conditional vendor
or
other holder of a security interest any right, title or interest in such engine
as the result of such engine being installed on the Airframe.
Section
3.04 Insignia. On
or prior to the Closing Date, or as soon thereafter as practicable, the Borrower
agrees to affix and maintain (or cause to be affixed and maintained) in the
cockpit of the Airframe and on each Engine (subject to temporary removal during
maintenance) a nameplate bearing the inscription:
Mortgaged
To
Xxxxx
Fargo Bank Northwest, National Association, as Indenture Trustee
(such
nameplate to be replaced, if necessary, with a nameplate reflecting the name
of
any successor to the Indenture Trustee as permitted under the Operative
Documents).
Nothing
herein contained shall prohibit the Borrower (or any Lessee) from placing its
customary colors and insignia on the Airframe or any Engine or from otherwise
operating the Aircraft in its livery.
ARTICLE IV
REPLACEMENT
AND POOLING OF PARTS; ALTERATIONS, MODIFICATIONS AND ADDITIONS
Section
4.01 Replacement
of
Parts. The Borrower will promptly replace or cause to be
replaced all Parts which may from time to time become worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently rendered
unfit for use for any reason whatsoever, except as otherwise provided in
Section 4.03. In addition, the Borrower may, at its own cost and
expense, or may permit a Lessee at its own cost and expense to, remove (or
cause
to be removed) in the ordinary course of maintenance, service, repair, overhaul
or testing any Parts, whether or not worn out, lost, stolen, destroyed, seized,
confiscated, damaged beyond repair or permanently rendered unfit for use;
provided, however, that the Borrower, except as otherwise provided herein,
at
its own cost and expense, will, or will cause, a Lessee at its own cost and
expense to, replace such Parts as promptly as practicable. All
replacement parts (other than replacement parts temporarily installed as
provided in Section 4.02) shall be free and clear of all Liens (except
Permitted Liens and any arrangement permitted by Section 4.02), and shall
be in as good an operating condition, and shall have a value and utility
substantially equal to, the Parts replaced, assuming such replaced Parts were
in
the condition and repair required to be maintained by the terms
hereof. All Parts at any time removed from the Airframe or any Engine
shall remain subject to the Lien of this Trust Indenture, no matter where
located, until such time as such Parts shall be replaced by parts which meet
the
requirements for replacement parts specified above. Immediately, upon
any replacement part becoming incorporated or installed in or attached to the
Airframe or any Engine, without further act (subject only to Permitted Liens
and
any arrangement permitted by Section 4.02 hereof), (i) such replacement part
shall become subject to the Lien of this Trust Indenture and be deemed a Part
for all purposes hereof to the same extent as the Parts originally incorporated
or installed in or attached to the Airframe or such Engine and (ii) the replaced
Part shall no longer be deemed a Part hereunder and shall be free and clear
of
the Lien of this Trust Indenture.
Section
4.02 Pooling
of Parts; Temporary
Replacement Parts. Any Part removed from the Airframe or any
Engine as provided in Section 4.01 hereof may be subjected by the Borrower
(or any Lessee) to a pooling arrangement of the type which is permitted for
Engines by paragraph 3.03(a); provided that the part replacing such removed
Part
shall be incorporated or installed in or attached to such Airframe or Engine
in
accordance with Section 4.01 as promptly as practicable after the removal
of such removed Part. In addition, the Borrower (or any Lessee) may
use temporary parts or pooled parts on the Aircraft as temporary replacements
for Parts, provided that the Borrower (or any Lessee) as promptly thereafter
as
practicable, either (1) causes such pooled or temporary replacement part to
become subject to the Lien of this Trust Indenture free and clear of all Liens
other than Permitted Liens or (2) replaces such replacement part with a
further replacement part owned by the Borrower (or any Lessee) which meets
the
requirements of Section 4.01 and which shall become subject to the Lien of
this Trust Indenture, free and clear of all Liens other than Permitted
Liens.
Section
4.03 Alterations,
Modifications
and Additions. The Borrower will make (or cause to be made)
such alterations, modifications and additions to the Airframe and Engines as
may
be required to meet the applicable standards of the FAA or any other regulatory
agency or body of the jurisdiction in which the Aircraft may be registered
except when (i) the Aircraft is being temporarily stored and is not operational,
(ii) all Bombardier Model _________ aircraft of comparable vintage and/or
configuration have been grounded by the FAA, or (iii) the requirement to make
such Mandatory Modification is being contested in good faith and by
appropriate proceedings so long as such proceedings do not materially adversely
affect the Indenture Trustee or its interest in the Aircraft. In
addition, the Borrower, at its own expense may from time to time make (or permit
a Lessee to make) such alterations and modifications in and additions to the
Airframe or any Engine (each, an “Optional Modification”) as the
Borrower may deem desirable in the proper conduct of its business, including
removal of Parts which the Borrower (or Lessee) deems to be obsolete or no
longer suitable or appropriate for use on the Airframe or such Engine (“Obsolete Parts”); provided
that no such alteration, modification, removal or addition impairs the condition
or airworthiness of the Airframe or such Engine, or materially diminishes the
value, utility and remaining useful life of the Airframe or such Engine below
the value, utility or remaining useful life thereof immediately prior to such
Optional Modification (assuming the Airframe or such Engine was in the condition
required by this Trust Indenture immediately prior to such Optional
Modification). All parts incorporated or installed in or attached or
added to the Airframe or an Engine as the result of such alteration,
modification or addition (except those parts which the Borrower has leased
from
others and Parts which may be removed by the Borrower pursuant to the next
sentence) (the “Additional
Part” or “Additional
Parts”) shall, without further act, become subject to the Lien of this
Trust Indenture. Notwithstanding the foregoing, the Borrower (or
Lessee) may remove any Additional Part, provided that such Additional Part
(i)
is in addition to, and not in replacement of or substitution for, any Part
originally incorporated or installed in or attached to the Airframe or any
Engine at the time of delivery thereof hereunder or any Part in replacement
of
or substitution for any such Part, (ii) is not required to be incorporated
or
installed in or attached or added to the Airframe or any Engine pursuant to
the
terms of Article III hereof or the first sentence of this Section 4.03, and
(iii) can be removed from the Airframe or such Engine without impairing the
airworthiness of the Airframe or such Engine or materially diminishing the
value, utility and remaining useful life of the Airframe or such Engine required
to be maintained pursuant to this Indenture which the Airframe or such Engine
would have had at such time had such removal not occurred and such Additional
Part had not been incorporated or installed in or attached to the Airframe
or
any Engine. Upon the removal by Borrower or a Lessee of any Removable
Part or Obsolete Part as above provided, such Part shall no longer be deemed
a
Part hereunder and shall be free and clear of the Lien of this Trust
Indenture.
Section
4.04 Improvements
Owned by
Others. Notwithstanding any other provision of this Indenture,
the Borrower may install, have installed or permit to be installed in the
Aircraft audio-visual, entertainment or telephonic equipment owned by third
parties and leased or otherwise furnished to the Borrower in the ordinary course
of business, provided that such equipment meets all requirements for removal
of
Additional Parts as specified in Section 4.03, and the Lien of this Trust
Indenture shall not attach thereto and the rights of the owners therein shall
not constitute a default under the Operative Documents.
ARTICLE V
LOSS,
DESTRUCTION, REQUISITION, ETC.
Section
5.01 Event
of Loss With Respect
to the Aircraft. (a) Upon the occurrence of an Event of Loss
with respect to the Airframe or the Airframe, any Engines and/or engines then
installed thereon, the Borrower shall forthwith but in any event within 15
days
of such occurrence give each Holder and the Indenture Trustee written notice
of
such Event of Loss, and within sixty (60) days after such occurrence, give
the
Indenture Trustee written notice of its election to perform one of the following
options (it being understood that the failure to give such notice shall be
deemed to be an election of the option set forth in paragraph (1)
below.
1.
On or before the Business Day next following the earlier of (x) the 90th day
following the occurrence of such Event of Loss or (y) the third Business Day
following the receipt of the insurance proceeds in respect of such Event of
Loss
(but in any event not earlier than the date of Borrower’s election to make
payment under this paragraph (1)), the Borrower shall pay or cause to be paid
to
the Indenture Trustee an amount equal to the aggregate amount of outstanding
principal, (but without Make-Whole Amount, if any), interest and other amounts
then due on or in respect of the Loan Certificates, or
2.
provided no Special Default or Event of Default shall have occurred and be
continuing, not later than the 90th day following the occurrence of such Event
of Loss (or the next succeeding Business day if the 90th day is not a Business
Day) the Borrower shall cause to be subject to the Lien of the Trust Indenture
pursuant to Section 5.01(c) an airframe and an engine for each Engine
suffering such Event of Loss if any (of the same manufacturer of an equivalent
or improved model as the Engine and suitable for installation and use on the
Airframe and compatible with the other Engine mortgaged hereunder), in each
case
owned by the Borrower free and clear of all Liens (other than Permitted Liens)
and having at least the value, utility and remaining useful life and being
in as
good an operating condition as the Airframe and corresponding Engine, if any,
subject to such Event of Loss (in each case without taking into account hours,
cycles and maintenance schedule) assuming that such Aircraft had been maintained
in accordance with the terms of this Trust Indenture; provided that any aircraft
or airframe so substituted hereunder shall be of the same or improved make
and
model as initially mortgaged hereunder and shall be in a passenger configuration
(or will be brought into such configuration by Borrower before or at the time
of
any such substitution).
(b) If
the
Borrower elects to replace the Aircraft, the Airframe, or the Airframe and
one
or more Engines pursuant to Section 5.01(a)(2) but fails to do so within the
time period provided, the Borrower shall be deemed to have elected to pay,
and
shall pay, to the Indenture Trustee within three Business Days the amount
determined in accordance with Section 5.01(a)(1).
(c) Prior
to
or at the time of any substitution pursuant to Section 5.01(a)(2), the Borrower
will:
1.
(A) cause a Trust Indenture Supplement with respect to any Replacement Airframe
or Replacement Engine to be duly executed by the Borrower and filed for
recording pursuant to the Federal Aviation Act, or the applicable laws, rules
and regulations of any other jurisdiction in which the airframe is to be
registered, and (B) cause a financing statement or other requisite documents
of
a similar nature to be filed pursuant to the Uniform Commercial Code in such
place or places as necessary in order to perfect the security interests created
by this Trust Indenture and any Trust Supplement in such Replacement Airframe
and any Replacement Engine, and (C) register or consent to the registration
with
the International Registry of the contract of sale to Borrower and of the
international interest in such Replacement Airframe and any Replacement Engine
for the benefit of Indenture Trustee under this Indenture and the Indenture
Supplement referred to above;
2.
furnish a certificate of its independent insurance broker to the effect that
the
insurance provisions of Article VI with respect to such Replacement
Airframe or Replacement Engine have been complied with;
3.
furnish a certificate signed by a duly authorized officer of the Borrower
stating the following on behalf of the Borrower:
(a) with
respect to any Replacement Airframe: (i) a description of the
Airframe which shall be identified by manufacturer, model, U.S. registration
number (or other applicable registration information) and manufacturer’s serial
number; (ii) a description of the Replacement Airframe to be received
(including the manufacturer, model, U.S. registration number (or other
applicable registration information) and manufacturer’s serial number);
(iii) that on the date of the Trust Indenture Supplement relating to the
Replacement Airframe the Borrower will be the owner of such Replacement
Airframe, free and clear of all Liens except Permitted Liens, that such
Replacement Airframe will on such date meet the requirements of
Section 5.01(a)(2); and (iv) that no Special Default or Event of Default
has occurred and is continuing, or
(b) with
respect to any Replacement Engine: (i) a description of the
Engine suffering the Event of Loss, which shall be identified by manufacturer’s
serial number; (ii) a description of the Replacement Engine (including, in
each case, the manufacturer’s name and serial number); (iii) that on the
date of the Trust Indenture Supplement relating to the Replacement Engine,
the
Borrower will be the owner of such Replacement Engine, free and clear of all
Liens except Permitted Liens, that such Replacement Engine will on such date
meet the requirements of Section 5.01(a)(2).
4.
furnish the appropriate instruments assigning to the Indenture Trustee as
additional collateral under this Trust Indenture the benefit of Manufacturer’s
warranties with respect to such (A) Replacement Airframe substantially the
same
as the Aircraft Warranties, to the extent then in effect and (B) Replacement
Engine substantially the same as the Engine Warranties, to the extent then
in
effect.
5.
deliver a certificate from a firm of independent aircraft appraisers reasonably
satisfactory to the Indenture Trustee confirming the value, utility and
remaining useful life requirements set forth in Section 5.01(a)(2) with respect
to the Replacement Airframe and any Replacement Engine.
6.
provide an opinion or opinions from the Borrower’s counsel reasonably
satisfactory to the Indenture Trustee, with a supporting priority search
certificate issued by the International Registry to the effect that the Trust
Indenture Supplement and warranty assignment referred to in clauses (1) and
(4)
above have been duly authorized and delivered, the Replacement Airframe and
any
Replacement Engines (together the “Replacement Property”) are
free and clear of all Liens of record with the FAA and International Registry
other than Permitted Liens, the Indenture Trustee is entitled to the benefits
of
11 USC §1110 with respect to the Aircraft which includes the Replacement
Property to the same extent as with respect to the Aircraft immediately prior
to
the applicable Event of Loss, the Replacement Property has been duly subjected
to the Lien of the Trust Indenture on a first priority (subject to Permitted
Liens) and perfected basis (or, if the Aircraft is not then subject to U.S.
registry, having the same priority and perfection required to be maintained
under the Operative Documents in respect of the property being so replaced),
the
Trust Indenture Supplement subjecting such Replacement Property to the Trust
Indenture has been duly filed for recordation pursuant to the Federal Aviation
Act or any other law then applicable if the Aircraft is not registered in the
United States and that the registrations with the International Registry
required under clause (C) of paragraph 1 above have been made.
Upon
compliance by the Borrower with all of the terms of Section 5.01(c)
applicable to any Replacement Airframe or Engine, the Airframe and any Engines
suffering such Event of Loss shall cease to be an “Airframe” and “Engine”
hereunder, and the Indenture Trustee will execute such documents and provide
its
consent to the International Registry as Borrower shall request to release
from
the Lien of this Trust Indenture the Aircraft or the Airframe and one or more
Engines, with respect to which such Event of Loss occurred. For all
purposes hereof, the property so substituted shall after such transfer be deemed
part of the property subject to the Lien of this Trust Indenture and shall
be
deemed an “Aircraft,” “Airframe” and “Engine,” as the case may be, as defined
herein.
Section
5.02 Event
of Loss With Respect
to an Engine. (a) Upon the occurrence of an Event
of Loss with respect to an Engine under circumstances in which there has not
occurred an Event of Loss with respect to the Airframe, the Borrower shall
within 15 days give the Indenture Trustee written notice
thereof. Within ninety (90) days after the occurrence of such Event
of Loss (or, in the case of an Event of Loss described in clause (vi) of the
definition thereof, within ninety (90) days after the Chief Financial Officer,
Treasurer, any Vice President or other officer of the Borrower elected by the
Borrower’s Board of Directors has received actual knowledge of such Event of
Loss), as replacement for the Engine with respect to which such Event of Loss
occurred, the Borrower shall subject to the Lien of this Trust Indenture another
_____________ Model ___________ engine (or an engine of the same manufacturer
of
an equivalent or an improved model and suitable for installation and use on
the
Airframe and compatible with the other Engine mortgaged hereunder), free and
clear of all Liens (other than Permitted Liens) and having a value, utility
and
remaining useful life (without regard to hours, cycles and maintenance schedule)
at least equal to the Engine subject to such Event of Loss, assuming such Engine
was maintained in accordance with the provisions of this Trust
Indenture.
(b) Unless
a
Special Default or Event of Default shall have occurred and be continuing,
upon
not less than fifteen days’ prior written notice to Indenture Trustee, Borrower
may replace any Engine subject to the Lien of this Trust Indenture with another
engine (the “Exchanged
Engine”) meeting the requirements of Section 5.02(a) for a Replacement
Engine. Such Exchanged Engine shall be deemed to be a “Replacement
Engine” and Borrower and Indenture Trustee shall comply with the provisions of
Section 5.02(c) with regard to the Exchanged Engine and the Engine so
replaced.
(c) Prior
to
or at the time of any substitution pursuant to Section 5.02(a) or 5.02(b),
the Borrower will (i) cause a Trust Indenture Supplement with respect to such
Replacement Engine to be duly executed and filed for recording pursuant to
the
Federal Aviation Act, or the applicable laws, rules and regulations of any
other
jurisdiction in which the Airframe may then be registered, and register or
consent to the registration with the International Registry of the international
interest in such Replacement Engine for the benefit of Indenture Trustee under
this Indenture and the Indenture Supplement referred to above and the sale
to
Borrower of such Replacement Engine) shall have been registered on the
International Registry, (ii) furnish the Indenture Trustee with an opinion
or
opinions of the Borrower’s counsel with a supporting priority search certificate
issued by the International Registry to the effect that such Replacement Engine
is free and clear of all Liens of record with the FAA and International Registry
(other than Permitted Liens), and that upon execution and filing of the Trust
Indenture Supplement or other required document (which Borrower has caused
to be
prepared) the Replacement Engine will be subject to the Lien of the Trust
Indenture on a first priority (subject to Permitted Liens) and perfected basis
(or, if the Aircraft is not then subject to U.S. registry, having the same
priority and perfection required to be maintained under the Operative Documents
in respect of the property being so replaced) and that the registrations with
the International Registry required under the preceding clause (i) have been
made, (iii) furnish the certificate required to be furnished under clause (3)(b)
of Section 5.01(c) hereof, (iv) furnish the appropriate instruments required
to
be furnished under clauses 4 and 5 of Section 5.01(c) hereof with respect to
a
Replacement Engine and (v) furnish the Indenture Trustee with a certificate
of
its regularly retained independent insurance broker to the effect that the
insurance provisions of Article VI with respect to such Replacement Engine
have
been complied with. Upon compliance by the Borrower with all of the
terms of this Section 5.02(c) such Engine suffering the Event of Loss shall
thereupon cease to be an Engine secured hereunder, and the Indenture Trustee
will execute such documents and provide its consent to the International
Registry as Borrower shall request to release such Engine from the Lien of
this
Trust Indenture. For all purposes hereof, each such Replacement
Engine shall, after such compliance, be deemed an “Engine”
hereunder.
Section
5.03 Application
of
Payments. Any payments (other than insurance proceeds in
respect of damage or loss not constituting an Event of Loss, the application
of
which is provided for in Article VI) received at any time by the Borrower
or the Indenture Trustee from any governmental authority or other Person with
respect to an Event of Loss will be applied as follows:
1.
If payments are received with respect to the Airframe (or the Airframe, any
Engines or engines then installed thereon), (a) unless the same are
replaced pursuant to Section 5.01, after reimbursement of the Indenture
Trustee and the Holders for reasonable costs and expenses, so much of such
payments up to the amount required to be paid by the Borrower pursuant to
Section 5.01 shall be paid to the Indenture Trustee and applied in
reduction of the Borrower’s obligation to pay such amounts, if not already paid
by the Borrower, or, if already paid by the Borrower, shall be applied to
reimburse the Borrower for its payment of such amounts, and following the
foregoing application, the balance, if any, of such payments shall be paid
to
the Borrower or (b) if such property is to be replaced pursuant to
Section 5.01, the balance of such payments remaining after reimbursement of
the Indenture Trustee and the Holders for reasonable costs and expenses shall
be
paid over to or retained by the Indenture Trustee, and upon completion of such
replacement, or to pay for such replacement, to the Borrower; provided, that
the
Borrower shall have fully performed or, concurrently therewith, will fully
perform the terms of Section 5.01(c)` with respect to the Event of Loss for
which such payments are made; and
2.
If such payments are received with respect to an Engine under circumstances
contemplated by Section 5.02 hereof, so much of such payments remaining
after reimbursement of the Indenture Trustee for reasonable costs and expenses
shall be paid over to, or retained by, the Borrower, provided that the Borrower
shall have fully performed, or will perform, the terms of Section 5.02(c)
with respect to the Event of Loss for which such payments are made.
Section
5.04 Requisition
for Use of the
Aircraft by the United States Government or the Government of Registry of the
Aircraft. In the event of the requisition for use of the
Airframe or the Engines or engines installed on the Airframe by the government
of the United States of America or any other government of registry of the
Aircraft or any instrumentality or agency of any thereof or a CRAF activation,
in either case not constituting an Event of Loss, the Borrower shall promptly
notify the Indenture Trustee of such requisition or activation, and all of
the
Borrower’s obligations under this Trust Indenture Agreement with respect to the
Aircraft shall continue to the same extent as if such requisition or activation
had not occurred except to the extent that the performance or observance of
any
obligation by the Borrower shall have been prevented or delayed by such
requisition (it being understood that the foregoing exception shall not diminish
the Borrower’s obligations once any such requisitioned Airframe or Engine has
been returned to the Borrower). All payments received by the
Indenture Trustee or the Borrower from such government for the use of such
Airframe and Engines or engines shall be paid over to, or retained by, the
Borrower. No such requisition shall result in any reduction of any
payments or interest on the Certificates due to the Certificate Holders under
the Operative Documents.
Section
5.05 Application
of Payments
During Existence of Special Defaults or Events of Default. Any
amount referred to in this Article V which is payable to or retainable by
the Borrower shall not be paid to or retained by the Borrower if at the time
of
such payment or retention a Special Default or an Event of Default shall have
occurred and be continuing, but shall be held by or paid over to the Indenture
Trustee as security for the obligations of the Borrower (or such Lessee) under
this Trust Indenture and, if the Indenture Trustee declares this Trust Indenture
to be in default pursuant to Article IX hereof, applied against the
Borrower’s obligations hereunder as and when due. At such time as
there shall not be continuing any such Special Default or Event of Default,
such
amount shall be paid to the Borrower to the extent not previously applied in
accordance with the preceding sentence.
ARTICLE VI
INSURANCE
Section
6.01 Borrower’s
Obligation to
Insure. Borrower shall comply with, or cause to be complied
with, each of the provisions of Annex B, which provisions are hereby
incorporated by reference as if set forth in full herein.
Section
6.02 Insurance
for Own
Account. Nothing in this Article VI shall limit or prohibit
(a) Borrower from maintaining the policies of insurance required under this
Article VI with higher limits than those specified in this Article VI or other
insurance for its own account or (b) Indenture Trustee or any Certificate
Holder from obtaining insurance for its own account (and any proceeds payable
under such separate insurance shall be payable as provided in the policy
relating thereto); provided, however, that no insurance may be obtained or
maintained that would limit or otherwise adversely affect the coverage of any
insurance required to be obtained or maintained by Borrower pursuant to this
Article VI, it being understood that all salvage rights to the Airframe or
Engines shall remain with the Borrower’s insurers at all times.
Section
6.03 Application
of Insurance
Proceeds. As between Borrower and Indenture Trustee, all
insurance proceeds received as a result of the occurrence of an Event of Loss
with respect to the Aircraft or any Engine under policies required to be
maintained by Borrower pursuant to Article VI will be applied as provided in
Section 5.03. All proceeds of insurance required to be
maintained by Borrower, in accordance with this Article VI, in respect of any
property damage or loss not constituting an Event of Loss with respect to the
Aircraft, Airframe or any Engine will be paid to the Indenture Trustee (unless
such proceeds do not exceed the Threshold Amount, in which case they will be
paid to Borrower), and applied in payment (or to reimburse Borrower) for repairs
or for replacement property, and any balance remaining after such repairs or
replacement with respect to such damage or loss shall be paid over to, or
retained by, Borrower.
Section
6.04 Indemnification
by
Government in Lieu of Insurance. Notwithstanding any
provisions of this Article VI requiring insurance, the Indenture Trustee
agrees to accept, in lieu of insurance against any risk with respect to the
Aircraft, indemnification from, or insurance provided by, the government of
the
United States of America or any agency or instrumentality thereof the
obligations of which are supported by the full faith and credit of the
government of the United States of America, against such risk in an amount
which, when added to the amount of insurance against such risk maintained by
the
Borrower (or any Lessee) shall be at least equal to the amount of insurance
against such risk otherwise required by this Article VI (taking into
account self insurance permitted by Annex B). The Borrower shall
furnish to the Indenture Trustee and to the Certificate Holders, in advance
of
attachment of such indemnity or insurance, a certificate of a responsible
financial or legal officer of the Borrower confirming in reasonable detail the
amount and scope of such indemnification or insurance and that such
indemnification or insurance complies with the preceding sentence.
Section
6.05 Application
of Payments
During Existence of a Special Default or an Event of
Default. Any amount referred to in this Article VI which
is payable to or retainable by or to be held for the benefit of the Borrower
(or
any Lessee) shall not be paid to or retained by or held for the benefit of
the
Borrower (or any Lessee) if at the time of such payment or retention a Special
Default or an Event of Default shall have occurred and be continuing, but shall
be held by or paid over to the Indenture Trustee, as security for the
obligations of the Borrower under this Trust Indenture and, if the Indenture
Trustee shall have declared this Trust Indenture to be in default, applied
against the Borrower’s obligations hereunder as and when due. At such
time as there shall not be continuing any such Special Default or Event of
Default, such amount shall be paid to the Borrower to the extent not previously
applied in accordance with the preceding sentence.
ARTICLE VII
OTHER
COVENANTS OF BORROWER
Section
7.01 Liens. The
Borrower will not directly or indirectly create, incur, assume or suffer to
exist any Lien on or with respect to the Aircraft, Airframe or Engines,
Borrower’s title thereto or any of Borrower’s interest therein except
(i) the rights of the Borrower as herein provided (including any Lease
permitted pursuant to Section 3.03(g)), the Lien hereof and any other
rights existing pursuant to the Operative Documents, (ii) Liens for Taxes
of the Borrower (or any Lessee) either not yet due or being contested in good
faith by appropriate proceedings, so long as the continuing existence of such
Liens during such proceedings do not involve any material risk of the sale,
forfeiture or loss of the Airframe or any Engine or any interest therein,
(iii) mechanics’, suppliers’, workers’, repairers’, airport operators’, air
traffic control authorities’, employees’ or other like Liens arising in the
ordinary course of the Borrower’s or any Lessee’s business for amounts that are
not overdue by more than ninety (90) days or are being contested in good faith
by appropriate proceedings, so long as there is not, or the continuing existence
of such Liens during such proceedings do not involve, any material risk of
sale,
forfeiture or loss of the Airframe or any Engine or any material interest
therein, (iv) Liens arising out of any judgment or award against the
Borrower (or any Lessee) so long as within 30 days after entry thereof a stay
of
execution shall have been entered or such Lien shall have been discharged or
vacated, so long as such Liens do not result in a material risk of the sale,
forfeiture or loss of the Airframe or any Engine or any material interest
therein, (v) the rights of others under agreements or arrangements to the
extent expressly permitted by the terms of Sections 3.03 or Article IV
hereof, (vi) salvage or similar rights of insurers under policies required
to be maintained by the Borrower (or Lessee) under Article VI hereof and
(vii) any other Lien with respect to which the Borrower (or any Lessee)
shall have provided a bond or other security in an amount and under terms
reasonably satisfactory to the Indenture Trustee (Liens described in clauses
(i)
through (vii) being defined as “Permitted
Liens”). The Borrower will promptly, at its own expense, take
(or cause to be taken) such actions as may be necessary duly to discharge any
Lien not a Permitted Lien if the same shall arise at any time.
Section
7.02 Inspection. At
all reasonable times, but no more than once in any 12-month period while there
are Certificates outstanding (which limitation shall not be applicable if an
Event of Default shall be continuing), the Indenture Trustee, or its authorized
representatives (subject to no more than two inspecting persons per visit),
may
inspect the Aircraft and FAA (or other applicable governmental authority of
the
country of registry) required records of the Borrower (or any Lessee) relating
to the maintenance of the Aircraft (at the inspecting party’s expense (other
than in the case of an inspection occurring while an Event of Default has
occurred and is continuing, in which case the Borrower shall bear the reasonable
cost of such inspection)) and shall keep any information obtained thereby
confidential as provided in Section 14 of the Loan
Agreement. Any such inspection of the Aircraft shall be upon
reasonable advance notice from such inspecting party to the Borrower, shall
be
during normal business hours and shall be limited to a visual, walk-around
inspection (including on-board inspection), but shall not include opening any
panels, bays or the like without the express written consent of the Borrower;
provided that, so long as no Event of Default shall have occurred and be
continuing, no exercise of such inspection right shall interfere with the normal
operation or maintenance of the Aircraft by, or the business of, the Borrower
(or any Lessee). Upon the written request of any Holder, Borrower
will give, and will use reasonable efforts to cause any Lessee to give, such
Holder notice of the next scheduled “C” check or other heavy maintenance visit
with respect to the Aircraft or any Engine and afford such Person an opportunity
to be present at the same without interfering (so long as no Event of Default
has occurred and is continuing) in any material respect with the maintenance,
operations or business of the Borrower or such Lessee. Borrower shall
furnish to the Indenture Trustee such additional information concerning the
location, condition, use and operation of the Aircraft as the Indenture Trustee
may reasonably request. Neither the Indenture Trustee, or any Holder
shall have any duty to make any such inspection nor shall any such Person incur
any liability or obligation by reason of not making any such
inspection.
Section
7.03 Amendments,
Supplements,
Etc. Forthwith upon the execution and delivery of each Trust
Indenture Supplement from time to time required by the terms hereof and upon
the
execution and delivery of any amendment to this Trust Indenture, the Borrower
at
its own expense will cause such Trust Indenture Supplement or amendment to
be
duly filed for recordation, in accordance with the applicable laws of the
government of registry of the Aircraft. In addition, the Borrower
will promptly and duly execute and deliver to the Indenture Trustee such further
documents and take such further action as the Indenture Trustee may from time
to
time reasonably request in order to more effectively carry out the intent and
purpose of this Trust Indenture and the other Operative Documents and to
establish and protect the rights and remedies created or intended to be created
in favor of the Indenture Trustee hereunder and to maintain the perfection
of
the Lien created by this Trust Indenture, including, without limitation, if
reasonably requested by the Indenture Trustee, at the expense of Borrower,
(x) upon preparation and execution by the appropriate party, the filing of
all UCC financing and continuation statements and all similar notices required
by applicable law at all times to be kept, filed and recorded in such manner
and
in such places as the Indenture Trustee may reasonably request and (y) the
registration or consents to registrations, with the International Registry
of
international interests granted for the benefit of Indenture Trustee under
this
Indenture and any amendment or supplement hereto.
Section
7.04 Access
to or Furnishing of
Information. The Borrower agrees to furnish to the Indenture
Trustee and each Holder:
(a) as
soon
as available, but not later than 120 days after the close of each fiscal year
occurring after the date hereof, (i) an unaudited balance sheet and related
statements of each of the Borrower and Xxxxxx Air, Inc. at and as of the end
of
such fiscal year, together with an unaudited statement of income and cash flows
of each of the Borrower and Xxxxxx Air, Inc. for such fiscal year, each of
which
shall be prepared in accordance with GAAP and (ii) an audited balance sheet
and
related statements of the Guarantor at and as of the end of such fiscal year,
together with an audited statement of income and cash flows of the Guarantor
for
such fiscal year, each of which shall be prepared in accordance with
GAAP;
(b) as
soon
as available, but not later than 60 days after the close of each of the first
three quarters of each fiscal year an unaudited balance sheet of each of the
Borrower, Guarantor and Xxxxxx Air, Inc. at and as of the end of such quarter,
together with an unaudited statement of income and cash flows of each of the
Borrower, Guarantor and Xxxxxx Air, Inc. for such quarter, each of which shall
be prepared in accordance with GAAP;
(c) as
soon
as available, but not later than 120 days after the close of each fiscal year
of
the Borrower occurring while amounts are outstanding under the Loan Agreement
or
any Certificate, a certificate of the chief financial officer, Treasurer, any
Vice President, or other officer of the Borrower elected by the Borrower’s Board
of Directors stating that such authorized officer has reviewed the activities
of
the Borrower and that, to the knowledge of such authorized officer, there exists
no Default or Event of Default hereunder;
(d) from
time
to time, such other non-confidential (except to the extent the recipients are
bound by confidentiality agreements reasonably acceptable to the Borrower)
or
non-proprietary information as the Certificate Holder may reasonably request;
and
(e) promptly
after the occurrence thereof and actual knowledge thereof by a responsible
officer of the Borrower, notice of any Event of Default.
Borrower
shall be deemed compliant with any requirement pursuant to clauses (a) or (b)
above to provide any financial information to the extent such information is
available on XXXXX.
ARTICLE VIII
EVENTS
OF DEFAULT
Each
of
the following events shall constitute an Event of Default (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, to the extent the Cape Town Convention is applicable,
shall be the circumstances that shall constitute a “default” as referred to in
Article 17(1) of the Consolidated Text, and each such Event of Default shall
continue so long as, but only as long as, it shall not have been
remedied:
Section
8.01 Payment
of Principal or
Interest. The Borrower shall have failed to make a payment of
any principal or interest on the Loan and such failure shall continue for three
(3) Business Days after the same shall have become due; or
Section
8.02 Other
Payments. The Borrower shall have failed to make any payment
of any amount other than principal and interest on the Loan after the same
shall
have become due and such failure shall continue for five (5) Business Days
after
the Borrower’s receipt of notice from the Indenture Trustee of the failure to
make such payment when due; or
Section
8.03 Insurance. The
Borrower shall fail to procure and maintain (or cause to be procured and
maintained), with respect to the Aircraft, insurance required to be maintained
in accordance with the provisions of Article VI hereof; or
Section
8.04 Covenants. The
Borrower shall have failed to perform or observe, or caused to be performed
and
observed, in any material respect, any other covenant or agreement to be
performed or observed by it under any Operative Document, and such failure
shall
continue unremedied for a period of thirty (30) Business Days after the
Borrower’s or Guarantor’s receipt of written notice thereof from the Indenture
Trustee; provided, however, that such grace period shall not apply if such
breach gives rise to any reasonable likelihood of the sale, forfeiture or other
loss of any portion of the Indenture Estate including the Aircraft or any
interest therein; or
Section
8.05 Representations
and
Warranties. Any representation or warranty made by the
Borrower or the Guarantor in any Operative Document or any certificate furnished
by the Borrower or the Guarantor pursuant thereto shall prove to have been
incorrect or misleading in any material respect at the time made;
or
Section
8.06 Voluntary
Bankruptcy. The commencement by the Borrower or the Guarantor
of a voluntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or other similar law in the United States, or the consent by the
Borrower or the Guarantor to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Borrower or the Guarantor or for all or substantially
all of its property, or the making by the Borrower or the Guarantor of any
assignment for the benefit of creditors or the Borrower or the Guarantor shall
take any corporate action to authorize any of the foregoing or to authorize
a
general payment moratorium; or
Section
8.07 Involuntary
Bankruptcy. The commencement of an involuntary case or other
proceeding in respect of the Borrower or the Guarantor under the federal
bankruptcy laws as now or hereinafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law in the United
States or seeking the appointment of a receiver liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Borrower or the Guarantor
or
for all or substantially all of such Person’s property, or seeking the
winding-up or liquidation of the Borrower’s or the Guarantor’s affairs and the
continuation of any such case or other proceeding undismissed and unstayed
for a
period of ninety (90) consecutive days, or an order, judgment or decree shall
be
entered in any proceeding by any court of competent jurisdiction appointing,
without the consent of the Borrower or the Guarantor, a receiver, trustee or
liquidator of the Borrower or the Guarantor, or for all or substantially all
of
the Borrower’s or Guarantor’s property, or sequestering of all or substantially
all of the property of the Borrower or Guarantor and any such order, judgment
or
decree or appointment or sequestration shall be final or shall remain in force
undismissed, unstayed or unvacated for a period of ninety (90) consecutive
days
after the date of entry thereof; or
Section
8.08 Judgment
Default. Final judgment or judgments for the payment of money
in excess of $[***] shall be outstanding against Borrower for more than
30 days from the date of its entry and has not been discharged in full,
vacated, bonded (in a manner sufficient to satisfy such judgment(s)) or stayed;
or
Section
8.09 Intentionally
Omitted.
Section
8.10 US
Air
Carrier. Borrower ceases to be a U.S. Air Carrier;
or
Section
8.11 Cross
Default. Any “Event of Default”(as defined in the Other
Operative Documents, excluding any “Event of Default” of the type set forth in
Section 8.14 below), termination event or similar event, howsoever described,
shall have occurred and is continuing under any Other Operative Document;
or
Section
8.12 Guaranty. The
Guaranty ceases to be in full force and effect; or
Section
8.13 Perfected
Security
Interest. The Certificate Holders shall cease to hold a valid
and perfected security interest in the Indenture Estate; or
Section
8.14 Delta
Connection
Agreement. The Delta Connection Agreement ceases to be in full
force and effect;
provided,
however,
that, notwithstanding anything to the contrary contained in this
Article VIII, any failure of the Borrower to perform or observe any
covenant, condition, agreement or any error in a representation or warranty
shall not constitute an Event of Default if such failure or error is caused
solely by reason of any event that constitutes an Event of Loss so long as
the
Borrower is continuing to comply with all of the terms of Article V
hereof.
ARTICLE IX
REMEDIES
Section
9.01 General;
Acceleration. (a) If an Event of Default shall have
occurred and be continuing and so long as the same shall be continuing
unremedied, then and in every such case, the Indenture Trustee may exercise
any
or all of the rights and powers and pursue any and all of the remedies pursuant
to this Article IX; shall have and may exercise all of the rights and
remedies of a secured party under the Uniform Commercial Code; and may exercise
remedies available under the Cape Town Convention.
(b) If
an
Event of Default referred to in Section 8.06 or 8.07 shall have occurred,
then and in every such case the unpaid principal of all Certificates then
outstanding, together with interest accrued but unpaid thereon, and all other
amounts due to the holders of the Certificates thereunder and hereunder and
under the other Operative Documents, shall, unless the Indenture Trustee acting
upon the instructions of the Majority in Interest of Certificate Holders shall
otherwise direct, immediately and without further act become due and payable,
without presentment, demand, protest or notice, all of which are hereby
waived.
(c) If
any
other Event of Default shall have occurred and be continuing, then and in every
such case, the Indenture Trustee may at any time, by written notice or notices
to the Borrower, declare all the Certificates to be due and payable, whereupon
the unpaid principal of all Certificates then outstanding, together with accrued
but unpaid interest thereon, and all other amounts due to the holders of the
Certificates thereunder, hereunder and under the other Operative Documents,
shall immediately and without further act become due and payable without
presentment, demand, protest or other notice, all of which are hereby
waived.
(d) If
the
principal of the Certificates shall have become due and payable pursuant to
this
Section 9.01, there shall also become due and payable, to the fullest
extent permitted by law, to each holder of a Certificate upon demand, without
presentment, protest or notice, all of which are hereby waived, the Break Amount
therefor.
(e) Subject
to the consent of Majority in Interest of Certificate Holders, each Certificate
Holder shall be entitled, at any sale pursuant to this Article IX, to
credit against any purchase price bid at such sale by such Certificate Holder
all or any part of the unpaid obligations owing to such Certificate Holder
and
secured by the Lien of this Indenture. The Indenture Trustee and the
Certificate Holders shall, upon any such purchase, acquire good title to the
property so purchased, to the extent permitted by applicable law, free of all
rights of redemption.
Section
9.02 Repossession
and
Sale. At any time during the continuation of an Event of
Default, the Indenture Trustee, in addition to any rights it might otherwise
have at law, may do either or both of the
following: (a) upon the written demand of the Indenture
Trustee and at the Borrower’s expense, cause the Borrower to return promptly,
and the Borrower shall return promptly, all or any part of the Aircraft as
the
Indenture Trustee may so demand, to the Indenture Trustee at a major airport
in
the Borrower’s route system in one of the forty eight (48) contiguous states of
the United States of America chosen by the Indenture Trustee, or, alternatively,
the Indenture Trustee, at its option, may enter upon the premises where all
or
any part of the Aircraft is located and take immediate possession of and remove
the same by summary proceedings or otherwise (and, at the Indenture Trustee’s
option, store the same at the Borrower’s premises until disposal thereof by the
Indenture Trustee), all without liability accruing to the Indenture Trustee
for
or by reason of such entry or taking of possession or removal other than for
restoration of property damaged by such taking of possession or removal, unless
the Borrower does not cooperate in releasing the Aircraft; provided that during
any period the Aircraft is activated under CRAF in accordance with the
provisions of Section 3.03 hereof and in the possession of the government
of the United States of America or an instrumentality or agency thereof, the
Indenture Trustee shall not, on account of any Event of Default, be entitled
to
do any of the following in such manner as to limit the Borrower’s control under
this Trust Indenture (or any Lessee’s control under any Lease) of the Airframe
or any Engine installed thereon unless at least sixty (60) days’ (or such lesser
period as may then be applicable under the Military Airlift Command program
of
the government of the United States of America) prior written notice of default
hereunder shall have been given by the Indenture Trustee by registered or
certified mail to the Borrower (and any Lessee) with a copy addressed to the
Contracting Office Representative for the Military Airlift Command of the United
States Air Force under the contract with the Borrower (or any Lessee) relating
to the Aircraft; or (b) with or without taking possession thereof, sell all
or
any part of the Aircraft at public or private sale, as the Indenture Trustee
may
determine, or otherwise dispose of, hold, use, operate or lease to others,
as
the Indenture Trustee, in its sole discretion, may determine, all free and
clear
of any rights of the Borrower, except as hereinafter set forth in this Article
IX.
In
addition, the Borrower shall be liable, except as otherwise provided above
and
without duplication of amounts payable hereunder, for any and all reasonable
and
actual legal fees and other costs and expenses incurred by the Indenture Trustee
and the Holders (acting under common counsel) in connection with the enforcement
of any of their respective rights and remedies hereunder.
At
any
sale of the Aircraft or any part thereof pursuant to this Article IX, the
Indenture Trustee and, subject to Section 9.01(e), any Certificate Holder,
may bid for and purchase such property. The Indenture Trustee agrees
to give the Borrower commercially reasonable notice of the date fixed for any
public sale of the Airframe or any Engine or of the date on or after which
will
occur the execution of any contract providing for any private sale (together
with details thereof). Except as otherwise expressly provided above,
no remedy referred to in this Article IX is intended to be exclusive, but
each shall be cumulative and in addition to any other remedy referred to above
or otherwise available to the Indenture Trustee at law or in equity; and the
exercise or beginning of exercise by the Indenture Trustee of any one (1) or
more of such remedies shall not preclude the simultaneous or later exercise
by
the Indenture Trustee of any or all of such other remedies. No
express or implied waiver by the Indenture Trustee of any Event of Default
shall
in any way be, or be construed to be, a waiver of any future or subsequent
Event
of Default.
Section
9.03 Taking
of
Aircraft. (a) If an Event of Default shall have
occurred and be continuing and the Certificates have been accelerated pursuant
to Section 9.01(b) or 9.01(c) hereof, at the request of the Indenture
Trustee the Borrower shall promptly execute and deliver to the Indenture Trustee
such instruments of title and other documents as the Indenture Trustee may
deem
necessary or advisable to enable the Indenture Trustee or an agent or
representative designated by the Indenture Trustee, at such time or times and
place or places as the Indenture Trustee may specify, to obtain possession
of
all or any part of the Indenture Estate to which the Indenture Trustee shall
at
the time be entitled hereunder. If the Borrower shall for any reason
fail to execute and deliver such instruments and documents after such request
by
the Indenture Trustee, the Indenture Trustee may (i) obtain a judgment
conferring on the Indenture Trustee the right to immediate possession and
requiring the Borrower to execute and deliver such instruments and documents
to
the Indenture Trustee, to the entry of which judgment the Borrower hereby
specifically consents, and (ii) pursue all or part of the Indenture Estate
wherever such Indenture Estate may be found and may enter any of the premises
of
the Borrower wherever it may be or be supposed to be or may be reasonably
expected to be and search for and take possession of and remove the
same. All expenses of obtaining such judgment or of pursuing,
searching for and taking such property shall, until paid, be secured by the
Lien
of this Indenture.
(b) Upon
every such taking of possession, 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 maintain, use, operate, store, lease, control or manage the Indenture Estate
and to carry on the business and to exercise all rights and powers of the
Borrower relating to the Indenture Estate, as the Indenture Trustee shall deem
best, including the right to enter into any and all such agreements with respect
to the maintenance, insurance, use, operation, storage, leasing, control,
management or disposition of the Indenture Estate or any part thereof as the
Indenture Trustee may determine; and the Indenture Trustee shall be entitled
to
collect and receive directly all tolls, rents, revenues, issues, income,
products and profits of the Indenture Estate and every part
thereof. Such tolls, rents, revenues, issues, income, products and
profits shall be applied to pay the expenses of the use, operation, storage,
leasing, control, management or disposition of the Indenture Estate and of
conducting the business thereof, and of all maintenance, 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
Borrower), and all other payments which the Indenture Trustee may be required
or
authorized to make under any provision of this Indenture, as well as just and
reasonable compensation for the services of the Indenture Trustee, and of all
persons properly engaged by the Indenture Trustee.
(c) In
connection with any sale or other disposition of the Aircraft or any other
part
of the Indenture Estate, the Indenture Trustee may disclaim or modify any or
all
of the warranties specified in Section 9-610 of the Uniform Commercial Code
as in effect in any relevant jurisdiction at any relevant time, and the Borrower
hereby irrevocably acknowledges that such waiver or modification is commercially
reasonable. The Borrower shall be entitled to furnish to any Person
to which the Aircraft or other part of the Indenture Estate is sold or disposed
any such warranty so disclaimed or modified as part of any such sale or
disposition.
Section
9.04 Discontinuance
of
Proceedings. In case the Indenture Trustee shall have
instituted any proceeding to enforce any right, power or remedy under this
Indenture by foreclosure, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, then and in every such case, the Indenture
Trustee and the Borrower shall, subject to any determination in such
proceedings, be restored to their former positions and rights hereunder with
respect to the Indenture Estate, and all rights, remedies and powers of the
Indenture Trustee shall continue as if no such proceedings had been
instituted.
Section
9.05 Waiver
of Past
Defaults. Upon written instructions from a Majority in
Interest of Certificate Holders, the Indenture Trustee shall waive any past
Default or Event of Default hereunder and its consequences and upon any such
waiver such Default or Event of Default shall cease to exist and any Event
of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture, but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon; provided, however,
that in the
absence of written instructions from all Certificate Holders, the Indenture
Trustee shall not waive any Default (i) in the payment of the principal of,
or interest on, or other amounts due under, any Certificate then outstanding,
or
(ii) in respect of a covenant or provision hereof which, under the proviso
to the first sentence of Section 14.01 or under the penultimate sentence of
Section 14.01, cannot be waived without the consent of each Certificate
Holder.
Section
9.06 Remedies
Cumulative. Each and every right, power and remedy given to
the Indenture Trustee specifically or otherwise in this Indenture shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or
by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time and as often
and
in such order as may be deemed expedient by the Indenture Trustee, and the
exercise or the beginning of the exercise of any power or remedy shall not
be
construed to be a waiver of the right to exercise at the same time or thereafter
any other right, power or remedy. No delay or omission by the
Indenture Trustee in the exercise of any right, remedy or power or in the
pursuit of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any default on the part of the Borrower or to be
an
acquiescence therein.
Section
9.07 Payment
After Event of
Default, etc. All payments received and amounts held or
realized by the Indenture Trustee after an Event of Default shall have occurred
and so long as such Event of Default shall be continuing, and after the
Indenture Trustee has received a request in accordance with the first sentence
of Section 10.02(b) or after the Indenture Trustee shall foreclose or
enforce this Indenture or after the Certificates shall have become due and
payable as provided in Section 9.01(b) or (c), as well as all payments or
amounts then held by the Indenture Trustee as part of the Indenture Estate,
shall be promptly distributed by the Indenture Trustee in the following order
of
priority:
first,
so much of
such payments or amounts as shall be required to reimburse the Indenture Trustee
for any tax, expense, charge or other loss (including, without limitation,
all
amounts to be expended at the expense of, or charged upon the tolls, rents,
revenues, issues, income, products and profits of, the property included in
the
Indenture Estate pursuant to Section 9.03(b)) incurred by the Indenture
Trustee hereunder or under the Other Trust Indentures (to the extent not
previously reimbursed) (including, without limitation, the reasonable expenses
of any sale, taking or other proceeding, reasonable attorneys’ fees and
expenses, court costs, and any other reasonable expenditures incurred or
expenditures or advances made by the Indenture Trustee in the protection,
exercise or enforcement of any right, power or remedy or any damages sustained
by the Indenture Trustee, liquidated or otherwise, upon such Event of Default)
shall be applied by the Indenture Trustee in reimbursement of such
expenses;
second,
so much of
such payments or amounts remaining as shall be required to reimburse the holders
of the Certificates and the Other Secured Parties in full for payments made
pursuant to Section 10.03 (to the extent not previously reimbursed) of this
Trust Indenture or of the Other Trust Indentures shall be distributed to such
holders and Other Secured Parties, and if the aggregate amount remaining shall
be insufficient to reimburse all such payments in full, it shall be distributed
ratably, without priority of any Certificate Holder or Other Secured Party
over
any other, in the proportion that the aggregate amount of the unreimbursed
payments made by each such holder of Certificates and any Other Secured Party
pursuant to Section 10.03 of this Trust Indenture or of the Other Trust
Indentures bears to the aggregate amount of the unreimbursed payments made
by
all holders of Certificates and the Other Secured Parties pursuant to
Section 10.03 of this Trust Indenture or of the Other Trust
Indentures;
third,
so much of
such payments or amounts remaining as shall be required to pay in full to the
holders of Certificates and the Other Secured Parties all other amounts payable
pursuant to the indemnification provisions of the Loan Agreement and the Other
Loan Agreements or pursuant to any other provision of any Operative Document
and
any related Other Operative Document and secured hereunder (other than amounts
payable pursuant to clause “second” or “fourth”
of
this
Section 9.07) to the holders of Certificates and the Other Secured Parties
and remaining unpaid, including Break Amount, shall be distributed to such
holders, and if the aggregate amount remaining shall be insufficient to pay
all
such amounts in full, it shall be distributed ratably, without priority of
any
such holder or Other Secured Party over any other, in the proportion that the
aggregate amount due each holder of Certificates and the Other Secured Parties
under this clause “third” bears to the aggregate
amount due all holders of Certificates and the Other Secured Parties under
this
clause “third”;
fourth,
so much of
such payments or amounts remaining as shall be required to pay in full the
aggregate unpaid principal amount of, and all accrued but unpaid interest to
the
date of distribution on, the Certificates and the Other Loan Certificates shall
be distributed to the holders of the Certificates and the Other Loan
Certificates, and if the aggregate amount remaining shall be insufficient to
pay
all such amounts in full, it shall be distributed ratably, without priority
of
any one holder or any Other Secured Party over any other, in the proportion
that
the principal amount of and all accrued but unpaid interest to the date of
distribution on, each Certificate and Other Loan Certificates bears to the
aggregate principal amount of and all accrued but unpaid interest to the date
of
distribution on all Certificates and Other Loan Certificates;
fifth,
so much of
such payments or amounts remaining as shall be required to pay in full the
remaining Other Secured Obligations to the extent not covered under clauses
“first” through “fourth” above shall be distributed to the Other Secured Parties
ratably, without priority of any one party over any other;
sixth,
the balance,
if any, of such payments or amount remaining thereafter shall be distributed
to
the Borrower or as a court of competent jurisdiction shall direct.
ARTICLE X
DUTIES
OF THE INDENTURE TRUSTEE
Section
10.01 Notice
of Event of
Default. (a) In the event the Indenture Trustee
shall have actual knowledge of an Event of Default or of a Default arising
from
a failure to pay principal or interest, the Indenture Trustee shall forthwith
give facsimile notice thereof to the Borrower and the Certificate Holders
(promptly confirmed by mail to such Persons). Subject to the terms of
Sections 9.04 and 10.03, the Indenture Trustee shall take such action, or
refrain from taking such action, with respect to any such Event of Default
(including with respect to the exercise of any rights or remedies hereunder)
as
the Indenture Trustee shall be instructed in writing by the Majority in Interest
of Certificate Holders. Subject to the provisions of
Section 10.03, if the Indenture Trustee shall not have received
instructions as above provided within 20 calendar days after giving notice
of
such Event of Default to the Certificate Holders, the Indenture Trustee may,
subject to instructions thereafter received pursuant to the preceding provisions
of this Section 10.01, take such action, or refrain from taking such
action, but shall be under no duty to take or refrain from taking any action,
with respect to any such Event of Default as it shall determine advisable in
the
best interests of the Certificate Holders and shall use the same degree of
care
and skill in connection therewith as a prudent person would use under the
circumstances in the conduct of such person’s own affairs; provided that the
Indenture Trustee may not sell the Airframe or any Engine without the consent
of
the Majority in Interest of Certificate Holders. In the event the
Indenture Trustee shall at any time commence to foreclose or otherwise enforce
this Indenture, the Indenture Trustee shall forthwith notify the Certificate
Holders and the Borrower. For all purposes of this Indenture, in the
absence of actual knowledge on the part of a responsible officer in its
Corporate Trust Department, the Indenture Trustee, shall not be deemed to have
knowledge of any Default, or any Event of Default (except the failure of the
Borrower to pay any installment of principal and interest when due, which
failure shall constitute knowledge of a Default) unless notified in writing
by
the Borrower or one or more Certificate Holders. This
Section 10.01, however, is subject to the condition that, if at any time
after the principal of the Certificates shall have become due and payable
pursuant to Article IX and before any judgment or decree for the payment of
the money so due, or any thereof, shall be entered, all overdue payments of
interest upon the Certificates and all other amounts payable under the
Certificates (except the principal of the Certificates which by such declaration
shall have become payable) shall have been duly paid, and every other Default
and Event of Default with respect to any covenant or provision of this Indenture
shall have been cured, then and in every such case a Majority in Interest of
Certificate Holders may (but shall not be obligated to), by written instrument
filed with the Indenture Trustee, rescind and annul such acceleration and its
consequences; but no such rescission or annulment shall extend to or affect
any
subsequent Default or Event of Default or impair any right consequent
thereon.
(b) Other
Notices. The Indenture Trustee will furnish to each Certificate
Holder promptly upon receipt thereof, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and other
instruments furnished to the Indenture Trustee under any Operative Document
to
the extent the same shall not have been otherwise directly distributed to the
Certificate Holders pursuant to the express provision of any other Operative
Document.
Section
10.02 Action
Upon
Instructions. (a) Subject to the terms of
Sections 9.05, 10.01 and 10.03, upon the written instructions at any time
and from time to time of a Majority in Interest of Certificate Holders, the
Indenture Trustee shall take such of the following actions as may be specified
in such instructions: (i) exercise such election or option, or
make such decision or determination, or give such notice, consent, waiver or
approval or exercise such right, remedy or power or take such other action
hereunder or under any other Operative Document or in respect of any part or
all
of the Indenture Estate as shall be specified in such instructions and which
shall not be inconsistent with the terms hereof; (ii) take such action with
respect to, or to preserve or protect, the Indenture Estate (including the
discharge of Liens) as shall be specified in such instructions and as are
consistent with this Indenture; and (iii) take such other action in respect
of the subject matter of this Indenture as is consistent with the terms hereof
and the other Operative Documents. The Indenture Trustee will
authorize and file or cause to be filed such continuation statements with
respect to financing statements relating to the security interest created
hereunder in the Indenture Estate as may be specified from time to time in
written instructions of a Majority in Interest of Certificate Holders (which
instructions may, by their terms, be operative only at a future date and which
shall be accompanied by the execution form of such continuation statement so
to
be filed).
(b) If
any
Event of Default shall have occurred and be continuing, on request of a Majority
in Interest of Certificate Holders, and subject to the terms and conditions
set
forth in this Indenture, the Indenture Trustee shall exercise such remedies
under Article IX as shall be specified in such request. The
Indenture Trustee agrees to provide to the Certificate Holders concurrently
with
(or, if commercially reasonable, prior to) such action by the Indenture Trustee,
notice of such action by the Indenture Trustee, provided that the failure to
give any such notice to such Certificate Holders shall not affect the validity
of such action.
Section
10.03 Indemnification. The
Indenture Trustee shall not be required to take any action or refrain from
taking any action under Sections 10.01 (other than the first sentence
thereof) or 10.02 or Article IX unless the Indenture Trustee shall have
been indemnified by the Certificate Holders against any liability, cost or
expense (including counsel fees) which may be incurred in connection
therewith. The Indenture Trustee shall not be under any obligation to
take any action under this Indenture and nothing in this Indenture contained
shall require the Indenture Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder
or in the exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. The Indenture
Trustee shall not be required to take any action under Section 10.01 (other
than the first sentence thereof) or 10.02 or Article IX, nor shall any
other provision of this Indenture be deemed to impose a duty on the Indenture
Trustee to take any action, if the Indenture Trustee shall have been advised
by
counsel that such action is contrary to the terms hereof or is otherwise
contrary to law.
Section
10.04 No
Duties Except as
Specified in Indenture or Instructions. The Indenture Trustee
shall not have any duty or obligation to use, operate, store, lease, control,
manage, sell, dispose of or otherwise deal with the Aircraft or any other part
of the Indenture Estate, or to otherwise take or refrain from taking any action
under, or in connection with, this Indenture or any part of the Indenture
Estate, except as expressly provided by the terms of this Indenture or as
expressly provided in written instructions from Certificate Holders as provided
in this Indenture; and no implied duties or obligations shall be read into
this
Indenture against the Indenture Trustee. The Indenture Trustee agrees
that it will, in its individual capacity and at its own cost and expense
promptly take such action as may be necessary to duly discharge all Indenture
Trustee Liens on any part of the Indenture Estate.
Section
10.05 No
Action Except Under Loan
Agreement, Trust Indenture or Instructions. The Indenture
Trustee agrees that it will not use, operate, store, lease, control, manage,
sell, dispose of or otherwise deal with the Aircraft or any other part of the
Indenture Estate except in accordance with the powers granted or reserved to,
or
the authority conferred upon, the Indenture Trustee pursuant to this Indenture
and in accordance with the express terms hereof.
ARTICLE XI
THE
INDENTURE TRUSTEE
Section
11.01 Acceptance
of Trusts and
Duties. The Indenture Trustee accepts the duties hereby
created and applicable to it and agrees to perform the same but only upon the
terms of this Indenture and agrees to receive and disburse all monies
constituting part of the Indenture Estate in accordance with the terms
hereof. The Indenture Trustee, in its individual capacity shall not
be answerable or accountable under any circumstances, except (a) for its
own willful misconduct or gross negligence or failure to use ordinary care
in
the receipt, handling and disbursement of the funds, (b) as provided in
Section 2.05 or the last sentence of Section 10.04, and (c) for
liabilities that may result from the inaccuracy or nonperformance of any
representation or warranty or covenant of the Indenture Trustee in the Loan
Agreement or any other Operative Document.
Section
11.02 Absence
of
Duties. Except in accordance with written instructions
furnished pursuant to Section 10.01 or 10.02, and except as provided in,
and without limiting the generality of, Sections 10.03 and 10.04, the
Indenture Trustee shall have no duty (i) to see to any registration of the
Aircraft or any recording or filing of this Indenture or any other document,
or
to see to the maintenance of any such registration, recording or filing,
(ii) to see to any insurance, whether or not the Borrower shall be in
default with respect thereto, (iii) to see to the payment or discharge of
any Lien of any kind against any part of the Indenture Estate other than
Indenture Trustee Liens, (iv) to confirm, verify or inquire into the
failure to receive any financial statements of the Borrower or (v) to
inspect the Aircraft at any time or ascertain or inquire as to the performance
or observance of any of the Borrower’s covenants under this Trust Indenture with
respect to the Aircraft. Except as expressly otherwise provided
herein and in the Loan Agreement provided, the Certificate Holders shall not
have any duty or responsibility hereunder, including, without limitation, any
of
the duties mentioned in clauses (i) through (v) above.
Section
11.03 No
Representations or
Warranties as to Aircraft or Documents. THE INDENTURE TRUSTEE
DOES NOT MAKE AND SHALL NOT BE DEEMED TO HAVE MADE AND EXPRESSLY DISCLAIMS
ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, AIRWORTHINESS,
VALUE, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN, QUALITY, DURABILITY,
OPERATION, MERCHANTABILITY, CONSTRUCTION, PERFORMANCE OR FITNESS FOR USE OR
PURPOSE OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF
OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR AS TO THE QUALITY OF THE
MATERIAL OR WORKMANSHIP OF THE AIRCRAFT OR ANY ENGINE OR ANY PART THEREOF OR
ANY
OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE
OR
ANY PART THEREOF WHATSOEVER. The Indenture Trustee does not make and
shall not be deemed to have made any representation or warranty as to the
validity, legality or enforceability of this Indenture or the Certificates
or as
to the correctness of any statement contained in any thereof, except for the
representations and warranties of the Indenture Trustee made under this
Indenture or in the Loan Agreement. The Certificate Holders make no
representation or warranty hereunder whatsoever.
Section
11.04 No
Segregation of Monies; No
Interest. Subject to the provisions of Article XII, any monies
paid to or retained by the Indenture Trustee pursuant to any provision hereof
and not then required to be distributed to any Certificate Holder as provided
in
Section 2.05 need not be segregated in any manner except to the extent
required by law, and may be deposited under such general conditions as may
be
prescribed by law, and the Indenture Trustee shall not (except as otherwise
provided in Section 12.01) be liable for any interest thereon; provided that any
payments received or applied hereunder by the Indenture Trustee shall be
accounted for by the Indenture Trustee so that any portion thereof paid or
applied pursuant hereto shall be identifiable as to the source
thereof.
Section
11.05 Reliance;
Agents; Advice of
Counsel. The Indenture Trustee shall not incur liability to
anyone in acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
believed by it to be genuine and believed by it to be signed by the proper
party
or parties. The Indenture Trustee may accept a copy of a resolution
of the Board of Directors of any party to the Loan Agreement, certified by
the
Secretary or an Assistant Secretary thereof as duly adopted and in full force
and effect, as conclusive evidence that such resolution has been duly adopted
and that the same is in full force and effect. As to the aggregate
unpaid principal amount of Certificates outstanding as of any date and any
other
amounts owed under such Certificates, the Borrower may for all purposes hereof
rely on a certificate signed by any Vice President or other authorized corporate
trust officer of the Indenture Trustee. As to any fact or matter
relating to the Borrower the manner of ascertainment of which is not
specifically described herein, the Indenture Trustee may for all purposes hereof
rely on a certificate, signed by a duly authorized officer of the Borrower,
as
to such fact or matter, and such certificate shall constitute full protection
to
the Indenture Trustee for any action taken or omitted to be taken by it in
good
faith in reliance thereon. The Indenture Trustee shall assume, and
shall be fully protected in assuming, that the Borrower is authorized to enter
into this Indenture and to take all action to be taken by it pursuant to the
provisions hereof, and shall not inquire into the authorization of the Borrower
with respect thereto. In the administration of the trust hereunder,
the Indenture Trustee may execute any of the trusts or powers hereof and perform
its powers and duties hereunder directly or through agents or attorneys and
may,
at the expense of the Indenture Estate, advise with counsel, accountants and
other skilled persons to be selected and retained by it, and the Borrower and
the Indenture Trustee shall not be liable for anything done, suffered or omitted
in good faith in accordance with the written advice or written opinion of any
such counsel, accountants or other skilled persons.
Section
11.06 Compensation. The
Indenture Trustee shall be entitled to reasonable compensation, including
reasonable expenses and disbursements (including reasonable fees and expenses
of
its counsel), for all services rendered hereunder and shall have a priority
claim on the Indenture Estate for the payment of such compensation, to the
extent that such compensation shall not be paid by the Borrower or others,
as
required hereunder or under the Loan Agreement, and shall have the right to
use
or apply any monies held by it hereunder in the Indenture Estate toward such
payments. The Indenture Trustee agrees that it shall have no right
against the Certificate Holders for any fee as compensation for its services
as
trustee under this Indenture.
Section
11.07 Further
Assurances;
Financing Statements. At any time and from time to time, upon
the request of the Indenture Trustee, the Borrower shall promptly and duly
execute and deliver any and all such further instruments and documents as may
be
specified in such request and as are necessary or desirable to perfect, preserve
or protect the security interests created or intended to be created hereby,
or
to obtain for the Indenture Trustee the full benefit of the specific rights
and
powers herein granted, including, without limitation, the authorization and
delivery of Uniform Commercial Code financing statements and continuation
statements with respect thereto, or similar instruments relating to the
perfection of the security interests created or intended to be created
hereby.
ARTICLE XII
INVESTMENT
OF FUNDS
Section
12.01 Investment
of
Funds. Any moneys paid to or retained by the Indenture Trustee
that are required to be paid to the Borrower or applied for the benefit or
at
the direction of the Borrower, but which the Indenture Trustee is entitled
to
hold under the terms hereof pending the occurrence of some event or the
performance of some act (including, without limitation, the remedying of a
Special Default or Event of Default), shall, until paid to Borrower or otherwise
applied in accordance with the terms of the Operative Documents, be invested
by
the Indenture Trustee as Borrower (or if an Event of Default shall have occurred
and is continuing, the Indenture Trustee) may from time-to-time direct in
writing (or orally and confirmed in writing) (it being understood that absent
such a direction, there shall be no obligation to invest such moneys) in
(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 Xxxxx’x Investors Service, Inc. or at
least A-2 or its equivalent by Standard & Poor’s Ratings Service,
(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 $[***] which banks or their holding
companies have a rating of A or its equivalent by Xxxxx’x Investors Service,
Inc. or Standard & Poor’s Ratings Service; provided, however, that the
aggregate amount at any one time so invested in certificates of deposit issued
by any one bank shall not exceed [***] of such bank’s capital and surplus,
(iv) 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 $[***] with any
of
the obligations described in clauses (i) through (iv) as collateral,
none of which investments (but exclusive of any underlying investment that
may
be subject to a repo) shall have a term to maturity in excess of 60
days. There shall be promptly remitted to Borrower or its order (but
no more frequently than monthly) any gain (including interest received) realized
as a result of any such investment (net or any, fees, commissions and other
expenses, if any, incurred in connection with such investment) unless a Special
Default or an Event of Default shall have occurred and be
continuing. The Borrower shall be responsible for any net loss
realized as a result of any such investment and shall reimburse the Indenture
Trustee on demand. All investments held by the Indenture Trustee
pursuant to this Section 12.01 shall either be (a) registered in the name
of, payable to the order of, or specially endorsed to, the Indenture Trustee,
or
(b) held in an Eligible Account.
ARTICLE XIII
SUCCESSOR
TRUSTEES
Section
13.01 Resignation
of Indenture
Trustee; Appointment of Successor. (a) The
Indenture Trustee or any successor thereto may resign at any time without cause
by giving at least 30 calendar days’ prior written notice to the Borrower and
each Certificate Holder, such resignation to be effective upon the acceptance
of
the trusteeship by a successor Indenture Trustee. In addition, a
Majority in Interest of Certificate Holders may at any time remove the Indenture
Trustee without cause by an instrument in writing delivered to the Borrower
and
the Indenture Trustee, such removal to be effective upon the acceptance of
the
trusteeship by a successor Indenture Trustee. In the case of the
resignation or removal of the Indenture Trustee, a Majority in Interest of
Certificate Holders may appoint a successor Indenture Trustee by an instrument
signed by such Holders and, so long as no Event of Default shall have occurred
and be continuing, approved by the Borrower. If a successor Indenture
Trustee shall not have been appointed within 30 calendar days after such notice
of resignation or removal, the Indenture Trustee, the Borrower or any
Certificate Holder may apply to any court of competent jurisdiction to appoint
a
successor Indenture Trustee to act until such time, if any, as a successor
shall
have been appointed as above provided. The successor Indenture
Trustee so appointed by such court shall immediately and without further act
be
superseded by any successor Indenture Trustee appointed as above provided within
one year from the date of the appointment by such court.
(b) Any
successor Indenture Trustee, however appointed, shall execute and deliver to
the
Borrower and to the predecessor Indenture Trustee an instrument accepting such
appointment (including, consenting to the registration with the International
Registry of an assignment of international interests registered for the benefit
of the predecessor Indenture Trustee relating to the Airframe and any Engines),
and thereupon such successor Indenture Trustee, without further act, shall
become vested with all the estates, properties, rights, powers and duties of
the
predecessor Indenture Trustee hereunder in the trusts hereunder applicable
to it
with like effect as if originally named the Indenture Trustee herein; but
nevertheless upon the written request of such successor Indenture Trustee,
such
predecessor Indenture Trustee shall execute and deliver an instrument
transferring to such successor Indenture Trustee, upon the trusts herein
expressed applicable to it, all the estates, properties, rights and powers
of
such predecessor Indenture Trustee, and such predecessor Indenture Trustee
shall
duly assign, transfer, deliver and pay over to such successor Indenture Trustee
all monies or other property then held by such predecessor Indenture Trustee
hereunder.
(c) Any
successor Indenture Trustee, however appointed, shall, so long as no Event
of
Default shall be continuing, be reasonably acceptable to the Borrower, be a
“citizen of the United States” within the meaning of Section 40102(a)(15)
of the Federal Aviation Act and shall also be a bank or trust company having
a
combined capital and surplus of at least $[***], if there be such an institution
willing, able and legally qualified to perform the duties of the Indenture
Trustee hereunder upon reasonable or customary terms.
(d) Any
corporation into which the Indenture Trustee may be merged or converted or
with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Indenture Trustee shall be a party,
or
any corporation to which substantially all the corporate trust business of
the
Indenture Trustee may be transferred, shall, subject to the terms of
paragraph (c) of this Section, be the Indenture Trustee under this
Indenture without further act.
ARTICLE XIV
SUPPLEMENTS
AND AMENDMENTS TO THIS
INDENTURE
AND OTHER DOCUMENTS
Section
14.01 Instructions
of Majority;
Limitations. (a) At any time and from time to time
but subject to the terms and provisions of this Indenture, at the request of
the
Borrower, the Indenture Trustee (but only on the written request of a Majority
in Interest of Certificate Holders) shall execute a supplement hereto for the
purpose of adding provisions to, or changing or eliminating provisions of,
this
Indenture as specified in such request, provided, however, that, without the
consent of each Certificate Holder, no such amendment of or supplement to any
such document, or waiver or modification of the terms of any thereof, shall
(i) modify any of the provisions of this Section 14.01 or the
definitions of the terms, “Majority in Interest of Certificate
Holders”, or “Operative
Documents”, contained herein or in any other Operative Document,
(ii) increase the principal amount of any Certificate or reduce the amount
or extend the time of payment of any amount owing or payable under any
Certificate or (except as provided in this Indenture) increase or reduce the
Break Amount or interest payable on any Certificate (except that only the
consent of the Certificate Holder shall be required for any decrease in any
amounts of or the rate of Break Amount or interest payable on such Certificate
or any extension for the time of payment of any amount payable under such
Certificate), (iii) reduce, modify or amend any indemnities in favor of any
Certificate Holder to be paid by the Borrower or alter the definition of “Indemnitee” to exclude any
Certificate Holder (except as consented to by each Person adversely affected
thereby), or (iv) release the Borrower from its obligations in respect of
the payment of the principal and interest on the Certificates then outstanding
(or other amounts payable therewith). This Section 14.01 shall
not apply to any indenture or indentures supplemental hereto permitted by,
and
complying with the terms of, Article V. Notwithstanding the
foregoing, without the consent of each Certificate Holder, no such supplement
to
this Indenture, or waiver or modification of the terms hereof or of any other
agreement or document shall expressly permit the creation of any Lien on the
Indenture Estate or any part thereof, except as herein expressly permitted,
or
deprive any Certificate Holder of the benefit of the Lien of this Indenture
on
the Indenture Estate, except as provided in Sections 10.01 and 10.02 or in
connection with the exercise of remedies under
Article IX. Except as provided in this Section 14.01, the
Indenture Trustee shall not amend, supplement or waive of the terms of the
Trust
Indenture or Loan Agreement.
Section
14.02 Indenture
Trustee
Protected. If, in the opinion of the institution acting as the
Indenture Trustee hereunder any document required to be executed pursuant to
the
terms of Section 14.01 affects any right, duty, immunity or indemnity with
respect to it under this Indenture, the Indenture Trustee may in its reasonable
discretion decline to execute such document.
Section
14.03 Documents
Mailed to
Holders. Promptly after the execution by the Indenture Trustee
of any document entered into pursuant to Section 14.01, the Indenture
Trustee shall mail, by certified mail, postage prepaid, a conformed copy thereof
to each Certificate Holder at its address shown on the Certificate Register,
but
the failure of the Borrower or Indenture Trustee, to mail such conformed copies
shall not impair or affect the validity of such document.
ARTICLE XV
MISCELLANEOUS
Section
15.01 Termination
of
Indenture. Upon payment in full of the principal of and
interest on and Break Amount, if any, and all other amounts due under all
Certificates and the payment and performance in full of all other Secured
Obligations referred to in clause (i) of the Granting Clause hereof then due
and, if a Specified Default or an Event of Default shall have occurred and
be
continuing, payment in full of the Other Secured Obligations then due and
unpaid, the Indenture Trustee shall execute and deliver to or as directed in
writing by the Borrower an appropriate instrument releasing the Aircraft and
the
Indenture Estate from the Lien of this Indenture, and the Indenture Trustee
shall execute and deliver such instrument as aforesaid and, at the Borrower’s
expense, will execute and deliver such other instruments or documents as may
be
reasonably requested by the Borrower to give effect to such release; provided, however,
that this
Indenture and the trusts created hereby shall earlier terminate and this
Indenture shall be of no further force or effect and the rights of the Holders
of the Certificates and the Indenture Trustee shall terminate (and the Indenture
Trustee shall release, by an appropriate instrument, the Indenture Estate and
the Aircraft from the Lien of this Indenture) upon any sale or other final
disposition by the Indenture Trustee of all property constituting part of the
Indenture Estate and the final distribution by the Indenture Trustee of all
monies or other property or proceeds constituting part of the Indenture Estate
in accordance with the terms hereof. In addition, in connection with
the release of the Lien of this Indenture, if an international interest in
favor
of Indenture Trustee with respect to the Airframe and any Engine subject to
the
Indenture shall have been registered with the International Registry, Indenture
Trustee shall discharge or consent in writing to the discharge of such
registration. Except as aforesaid otherwise provided, this Indenture
and the trusts created hereby shall continue in full force and effect in
accordance with the terms hereof.
Section
15.02 No
Legal Title to Indenture
Estate in Holders. No Certificate Holder shall have legal
title to any part of the Indenture Estate. No transfer, by operation
of law or otherwise, of any Certificate or other right, title and interest
of
any Certificate Holder in and to the Indenture Estate or hereunder shall operate
to terminate this Indenture or entitle such Certificate Holder or any successor
or transferee of such Holder to an accounting or to the transfer to it of legal
title to any part of the Indenture Estate.
Section
15.03 Sale
of Aircraft by
Indenture Trustee is Binding. Any sale or other conveyance of
the Aircraft by the Indenture Trustee made pursuant to the terms of this
Indenture shall bind the Certificate Holders and shall be effective to transfer
or convey all right, title and interest of the Indenture Trustee, the Borrower
and the Certificate Holders in and to such Aircraft. No purchaser or
other grantee shall be required to inquire as to the authorization, necessity,
expediency or regularity of such sale or conveyance or as to the application
of
any sale or other proceeds with respect thereto by the Indenture
Trustee.
Section
15.04 Indenture
for Benefit of
Indenture Trustee and Certificate Holders. Nothing in this
Indenture, whether express or implied, shall be construed to give to any person
other than the Borrower, the Indenture Trustee, and the Certificate Holders
any
legal or equitable right, remedy or claim under or in respect of this
Indenture.
Section
15.05 No
Action Contrary to
Borrower’s Rights; Quiet Enjoyment. Notwithstanding any of the
provisions of this Indenture to the contrary, so long as no Event of Default
shall have occurred and be continuing, the Indenture Trustee agrees that it
will
not take any action in violation of the Borrower’s rights, including the right
to quiet enjoyment, possession and use of the Aircraft in accordance with the
terms of this Trust Indenture by Borrower or its Lessee.
Section
15.06 Notices. Unless
otherwise expressly specified or permitted by the terms hereof, all notices,
requests, demands, authorizations, directions, consents, waivers or documents
provided or permitted by this Indenture to be made, given, furnished or filed
shall be in writing, mailed by certified mail, postage prepaid, or by confirmed
telex, or by confirmed telecopy or electronic mail and (i) if to the
Indenture Trustee, addressed to it at its office at MAC: U1228-120, 000 Xxxxx
Xxxx Xxxxxx, 00xx Xx., Xxxx Xxxx Xxxx XX 00000, telecopy: (000) 000-0000 or
(ii) if the Borrower, addressed to it at its office at 0000 Xxxxxxxxx
Xxxx., Xxxxx 000 Xxxxxxx, XX 00000, Attention: Xxxxxx X. Xxx,
Telephone: 000-000-0000, telecopy: 000-000-0000, email
xxxx@xxxx.xxx, or (iii) if to any Certificate Holder or any Certificate
Holder, addressed to such party at such address as such party shall have
furnished by notice to the Borrower and the Indenture Trustee, or, until an
address is so furnished, addressed to the address of such party (if any) set
forth on Schedule I to the Loan Agreement. Whenever any notice
in writing is required to be given by the Borrower or the Indenture Trustee
or
any Certificate Holder to any of the other of them, such notice shall be deemed
given and such requirement satisfied when such notice is received, if such
notice is received, if such notice is mailed by certified mail, postage prepaid,
or is sent by courier service, or by confirmed telecopy addressed as provided
above. Any party hereto may change the address to which notices to
such party will be sent by giving notice of such change to the other parties
to
this Indenture.
Section
15.07 Authorization
of Financing
Statements. Pursuant to any applicable law, the Borrower
authorizes the Indenture Trustee (which shall be deemed a permissive right
and
not an obligation) to file or record financing statements and other filing
or
recording documents or instruments with respect to the Indenture Estate in
such
form and in such offices as the Indenture Trustee and the Majority in Interest
of Certificate Holders determine appropriate to perfect the security interests
of the Indenture Trustee under this Trust Indenture.
Section
15.08 Severability. To
the fullest extent permitted by law, any provision of this Indenture which
is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section
15.09 No
Oral Modifications or
Continuing Waivers. No terms or provisions of this Indenture
or the Certificates may be changed, waived, discharged or terminated orally,
but
only by an instrument in writing signed by the party or other Person against
whom enforcement of the change, waiver, discharge or termination is sought
and
any other party or other Person whose consent is required pursuant to this
Indenture; and any waiver of the terms hereof or of any Certificate shall be
effective only in the specific instance and for the specific purpose
given.
Section
15.10 Successors
and
Assigns. All covenants and agreements contained herein shall
be binding upon, and inure to the benefit of, each of the parties hereto and
the
successors and assigns of each, all as herein provided, provided that Borrower
may not assign or transfer its rights and obligations under this Indenture
without Indenture Trustee’s prior written consent. Any request,
notice, direction, consent, waiver or other instrument or action by any
Certificate Holder shall bind the successors and assigns of such Certificate
Holder.
Section
15.11 Headings. The
headings of the various Articles and Sections herein and in the table of
contents hereto are for the convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
Section
15.12 Governing
Law; Counterpart
Form. THIS INDENTURE SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE WITHOUT REGARD TO ANY
PRINCIPLES OF CONFLICT OF LAWS THAT MIGHT APPLY THE LAWS OF ANY OTHER
JURISDICTION. THIS INDENTURE IS BEING DELIVERED IN THE STATE OF NEW
YORK. Each of the
Borrower and Indenture Trustee hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Indenture or any other Operative Document, or for recognition or
enforcement of any judgment, and each of any such action or proceeding may
be
heard and determined in such New York State or, to the extent permitted by
law,
in such federal court. Each of the Borrower and Indenture Trustee
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or
in any other manner provided by law. Nothing in this Indenture shall
affect any right that any party hereto may otherwise have to bring any action
or
proceeding relating to this Indenture or the other Operative Documents against
any other party hereto, or such party’s properties, in the courts of any
jurisdiction. This Indenture may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
Section
15.13 WAIVER
OF JURY
TRIAL. EACH OF THE BORROWER AND THE INDENTURE TRUSTEE HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO
THIS INDENTURE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
*
*
*
IN
WITNESS WHEREOF, the
parties hereto have caused this Indenture to be duly executed by their
respective officers thereunto duly authorized, as of the day and year first
above written, and acknowledge that this Indenture has been made and delivered
in the City of New York, and this Indenture having become effective only upon
such execution and delivery.
|
PINNACLE
AIRLINES,
INC.,
as
Borrower
By:
Its:
|
|
|
XXXXX
FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION,
as
Indenture Trustee
By:
Its:
|
EXHIBIT A
TO
TRUST
INDENTURE
TRUST
INDENTURE SUPPLEMENT
TRUST
INDENTURE SUPPLEMENT
(_________) No. _____ dated ___________, ____ (this “Indenture Supplement”) of
PINNACLE AIRLINES, INC. (herein called the “Borrower”).
W
I T N E S S E T
H:
WHEREAS,
the Trust Indenture
and Security Agreement (___________) dated as of January __, 2008 (herein
called the “Trust
Indenture”) between the Borrower and Xxxxx Fargo Bank Northwest, 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 (such term and other
defined terms in the Trust Indenture being herein used with the same meanings)
and any Replacement Airframe or Replacement Engine included in the Trust
Indenture Estate, and shall specifically mortgage such Aircraft, Replacement
Airframe or Replacement Engine, as the case may be, to the Indenture
Trustee.
WHEREAS8
, the Trust Indenture relates to
the Airframe and Engines described below and a counterpart of the Trust
Indenture is attached hereto and made a part hereof and this Trust Indenture
Supplement, together with such counterpart of the Trust Indenture, is being
filed for recordation on the date hereof with the Federal Aviation
Administration as one document.
WHEREAS9
, the Trust Indenture and Indenture
Supplement (_______) dated _______________, 2008 and Trust Indenture Supplement
and filed therewith) have been duly recorded pursuant to Subtitle VII of
Title 49 of the United States Code on __________, 200_, as one document and
have been assigned Conveyance No. _________;
NOW,
THEREFORE, This Trust
Indenture Supplement witnesseth, that, to secure (i) the prompt payment of
the
principal of and Break Amount (if any) and interest on, and all other amounts
due with respect to, all Certificates from time to time outstanding under the
Trust Indenture and the performance and observance by the Borrower of all the
agreements, covenants and provisions for the benefit of the Certificate Holders
in the Trust Indenture and in the Loan Agreement and the Certificates contained,
and the prompt payment of any and all amounts from time to time owing under
the
Trust Indenture and the Loan Agreement and the other Operative Documents for
the
security and benefit of the Certificate Holders and the Indenture Trustee and
(ii) the prompt payment of the Other Secured Obligations and the performance
and
observance by the Borrower of all the agreements, covenants and provisions
of
the Other Operative Documents for the security and benefit of the Other Secured
Parties (clauses (i) and (ii) are referred to collectively herein as the “Secured Obligations”), and for
the uses and purposes and subject to the terms and provisions of the Trust
Indenture, and in consideration of the premises and of the covenants contained
in the Trust Indenture, and of the acceptance of the Certificates by the
Certificate Holders, and of the sum of $[***] paid to the Borrower by the
Indenture Trustee at or before the delivery hereof, the receipt whereof is
hereby acknowledged, the Borrower 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 and its successors and assigns, in the trust created by the
Trust Indenture, a first priority security interest in and first mortgage lien
upon, all right, title and interest of the Borrower in, to and under the
following described property:
AIRFRAME
One
airframe identified as follows:
|
Manufacturer
|
Model
|
FAA
Registration
Number
|
Manufacturer’s
Serial
Number
|
|
Bombardier
|
together
with all Parts, owned by the Borrower and installed in or appurtenant to said
Aircraft, to the extent provided in the Trust Indenture.
AIRCRAFT
ENGINES
(2)
aircraft engines, each such engine
being
a
_______ aircraft engine with at least _____ lb of thrust
or
its
equivalent, identified as follows:
|
Manufacturer
|
Model
|
Manufacturer’s
Serial
Number
|
together
with all Parts owned by the Borrower and installed in or appurtenant to said
aircraft engines to the extent provided in the Trust Indenture.
TO
HAVE AND TO HOLD all and
singular the aforesaid property unto the Indenture Trustee, its successors
and
assigns, for the benefit and security of the Certificate Holders for the uses
and purposes and subject to the terms and provisions set forth in the Trust
Indenture.
AND,
FURTHER, the Borrower
hereby acknowledges that the Airframe and/or Engines referred to in this
Indenture Supplement are subject to the Lien of the Trust Indenture.
This
Trust Indenture Supplement shall be construed as supplemental to the Trust
Indenture and shall form a part thereof, and the Indenture is hereby
incorporated by reference herein and is hereby ratified, approved and
confirmed.
This
Trust Indenture Supplement is being delivered in the State of New York.
* * *
IN
WITNESS WHEREOF, the
Borrower has caused this Trust Indenture Supplement to be duly executed by
one
of its officers thereunto authorized, this ____ day of ________, ____.
|
PINNACLE
AIRLINES, INC.
By:
Its:
|
SCHEDULE
1
Schedule of
Principal
Payments
|
Interest
Payment Date
|
Principal
Amount
to
be Paid
|
ANNEX
A
TO
TRUST
INDENTURE
FOREIGN
REGISTRATION
The
Borrower may register the Aircraft in any country with which the United States
and Canada maintains normal diplomatic relations with the prior written consent
of the Indenture Trustee (such consent not to be unreasonably
withheld). Without limiting the foregoing, prior to any such change
in the country of registry of the Aircraft, the Indenture Trustee shall have
received the following:
(a)
an opinion of counsel (subject to customary exceptions), in form and substance
reasonably satisfactory to the Majority in Interest of Certificate Holders,
to
the effect that:
(1)
after giving effect to such change in registration, the Borrower’s ownership
interest in the Aircraft shall be recognized under the laws of such
jurisdiction;
(2)
after giving effect to such change in registration, the obligations of the
Borrower, and the rights and remedies of the Indenture Trustee under this Trust
Indenture shall remain valid, binding and enforceable under the laws of the
jurisdiction to which the laws of the jurisdiction of registry would refer
as
the applicable governing law; provided that opinions of counsel addressing
this
provision may be subject, with respect to the enforceability of remedies, to
customary exceptions relating to insolvency or bankruptcy, general principles
of
equity, or other similar matters which do not hinder the Indenture Trustee’s
ability to enforce the remedies under this Trust Indenture in any manner greater
than would have been the case had the Aircraft been registered in the United
States;
(3)
after giving effect to such change in registration, the Lien of this Indenture
will continue as a valid and duly perfected first priority (subject to Permitted
Liens) security interest and all filing, registrating, recording or other action
necessary to protect the same will be accomplished (or, if such opinion cannot
be given at the time of such proposed change in registration because such change
in registration is not yet effective, (1) the opinion shall detail what filing,
recording or other action is necessary, (2) the Indenture Trustee shall have
received a certificate from Borrower 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 promptly
after the effective date of such change in registration) and (3) if such new
country of registry is a Contracting State to the Cape Town Convention and
Article 25 of the Cape Town Convention is applicable to such Contracting State,
an irrevocable de-registration and export request authorization as contemplated
by Article 25 of the Cape Town Convention (“IDERA”) shall have been properly
issued by Lessee and submitted for recordation to the applicable registry
authority as contemplated in Article 25 of the Cape Town Convention;
(4)
it is not necessary, solely as a consequence of such change in registration
and
without giving effect to any other activity of any Certificate Holder or the
Indenture Trustee, for such Certificate Holder or the Indenture Trustee to
qualify to do business in such jurisdiction, unless qualification only results
in an obligation to pay fees or taxes and the Borrower provides adequate funds
or, in the case of future payments, makes adequate provision for that purpose;
and
(5)
(unless the Borrower shall have agreed to provide insurance covering the risk
of
requisition of title of the Aircraft by the government of such jurisdiction
so
long as the Aircraft is registered under the laws of such jurisdiction) the
laws
of such jurisdiction require fair compensation by the government of such
jurisdiction payable in currency freely convertible into Dollars for the loss
of
title of the Aircraft in the event of the requisition by such government of
such
title;
(b)
a report of Insurance Brokers demonstrating that, after giving effect to such
change in registration, the insurance requirements of Article VI have been
satisfied;
(c)
(unless the Borrower shall have agreed to provide insurance reasonably
satisfactory to the Indenture Trustee covering the risk of the government of
such jurisdiction preventing the export of the Aircraft out of such jurisdiction
so long as the Aircraft is registered under the laws of such jurisdiction)
if
requested by the Indenture Trustee (and such request is reasonable in light
of
the circumstances) and if and to the extent obtainable with reasonable effort
and if it is otherwise customary to obtain the same in such jurisdiction, export
permits necessary to take the Aircraft into or out of such jurisdiction;
(d)
evidence that any value added tax, customs duty, tariff or similar governmental
charge relating to the change in jurisdiction or registration of the Aircraft
shall have been paid or adequately provided for by the Borrower; and
(e)
evidence that such new country of registry imposes (or the Lessee has adopted
and follows) aircraft maintenance standards at least as stringent and not
materially different from those of the FAA or the aeronautical authority of
Canada, Switzerland, France, Germany, the Netherlands, Japan or the United
Kingdom (or any successor to such authority).
ANNEX
B
TO
TRUST
INDENTURE
INSURANCE
A.
Liability
Insurance
1.
The Borrower shall, without expense to Certificate Holders and Indenture
Trustee, maintain or cause to be maintained in effect at all times with insurers
of nationally or internationally recognized responsibility (“Approved Insurers”)
comprehensive airline liability insurance (including, without limitation,
aircraft third party, passenger legal liability, property damage, general third
party legal liability and product liability coverage but excluding
manufacturer’s product liability coverage) with respect to the Aircraft in an
amount not less than the greater of (i) the amount which the Borrower may carry
from time to time on other similar aircraft in its fleet (whether owned or
leased) and (ii) $[***] per occurrence. Such insurance shall be of
the type usually carried by the Borrower with respect to similar aircraft and
engines, and covering risks of the kind customarily insured against by the
Borrower. In addition, subject to the rights of the Borrower under
Section F, the Borrower shall carry, or cause to be carried, with Approved
Insurers war risk and allied perils liability insurance in accordance with
London form AVN52C or substantially similar form (or substantially similar
insurance or indemnity provided by the U.S. Government, it being agreed that
the
form of FAA war risk insurance policy in effect on October 1, 2007, is
acceptable) with respect to the Aircraft in an amount not less than the greater
of (i) the amount of such insurance which the Borrower may carry from time
to
time on other similar aircraft in its fleet (whether owned or leased) and
(ii) $[***].
X.
Xxxx
Insurance
The
Borrower shall, without expense to Certificate Holders or Indenture Trustee,
maintain or cause to be maintained in effect at all times with Approved Insurers
all risk, ground and flight hull insurance, which may, except as provided below,
exclude war risks and allied perils, covering the Aircraft for an amount at
all
times (even when the Aircraft is grounded or in storage) not less than [***]%
of
the aggregate outstanding principal amount of the Loan Certificates (the “Agreed
Value”). Such insurance shall be on an agreed value basis and
shall not provide insurers with a right to replace the Airframe or any Engine
with another airframe or engine. Such hull insurance or other
insurance of the Borrower (or a Lessee) shall include coverage for Engines
and
Parts temporarily removed from the Airframe, pending replacement by installation
of the same or similar Engines or Parts on the Airframe, including coverage
for
fire and transit. Such insurance shall be of the type usually carried by the
Borrower with respect to similar aircraft and engines, and covering risks of
the
kind customarily insured against by the Borrower. In addition, the
Borrower shall carry or cause to be carried with Approved Insurers war risk
and
allied perils hull insurance in accordance with London form LSW555B or
substantially similar form (or substantially similar insurance or indemnity
provided by the U.S. Government, it being agreed that the form of FAA war risk
insurance policy in effect as of October 1, 2007, is acceptable) covering
the Aircraft for an amount not less than the Agreed Value.
Any
policies of insurance carried in accordance with this Section B covering the
Aircraft and any policies taken out in substitution or replacement for any
such
policies (i) shall name Indenture Trustee as exclusive loss payee for any
proceeds to be paid under such policies up to an amount equal to the Agreed
Value and (ii) shall provide that (A) in the event of a loss involving proceeds
in excess of the Threshold Amount, the proceeds in respect of such loss shall
be
payable to Indenture Trustee (so long as the Lien of this Trust Indenture shall
not have been discharged), except in the case of a loss with respect to an
Engine installed on an airframe other than the Airframe, in which case the
Borrower (or any Lessee) shall endeavor to arrange for any payment of insurance
proceeds in respect of such loss to be held for the account of Indenture Trustee
(so long as the Lien of this Trust Indenture shall not have been discharged)
whether such payment is made to the Borrower (or any Lessee) or any third party,
it being understood and agreed that in the case of any payment to the Indenture
Trustee otherwise than in respect of an Event of Loss, Indenture Trustee shall,
upon receipt of a certificate of a qualified engineer (who may be an employee
of
the Borrower) certifying that the damage giving rise to such payment shall
have
been repaired or that such payment shall then be required to pay for repairs
then being made, pay the amount of such payment to the Borrower or its order,
and (B) the entire amount of any loss involving proceeds of the Threshold Amount
or less or the amount of any proceeds of any loss in excess of the Agreed Value
shall be paid to the Borrower or its designee, provided that if a Special
Default or any Event of Default shall have occurred and be continuing, such
payment referred to in clause (B) shall be made as provided in clause (i)
above. In the case of a loss with respect to an engine (other than an
Engine) installed on the Airframe, Indenture Trustee shall hold any payment
to
it of any insurance proceeds in respect of such loss for the account of the
Borrower or any other third party that is entitled to receive such
proceeds.
C.
General
Provisions
The
Borrower shall cause all policies of insurance carried in accordance with
Section A and B, to name the Additional Insureds as additional insureds, as
their respective interests may appear. Such polices shall provide with respect
to such Additional Insureds that (i) none of their respective interest in such
policies shall be invalidated by any act or omission or breach of warranty
or
condition contained in such policies by the Borrower or, in the case of any
particular Additional Insured, any other Additional Insured; (ii) no
cancellation or lapse of coverage for nonpayment of premium or otherwise, and
no
substantial change of coverage which adversely affects the interests of any
such
Additional Insured, shall be effective as to such Additional Insured until
30
days (or such lesser period as may be applicable in the case of any war risk,
hijacking and allied perils insurance coverage) after receipt by such Additional
Insured of written notice from the insurers of such cancellation, lapse or
change; (iii) the Additional Insureds shall have no liability for premiums,
commissions, calls, assessments or advances with respect to such policies;
(iv)
such policies will be primary without any right of contribution from any other
insurance carried by such Additional Insureds; (v) the insurers waive any rights
of set-off, counterclaim, deduction or subrogation against such Additional
Insureds; (vi) shall apply worldwide and have no territorial restrictions or
limitations (except in the case of war risk, hijacking or related perils
insurance, which shall apply to the fullest extent available in the
international insurance market); and (vii) shall contain a 50/50 Clause per
Lloyd’s Aviation Underwriter’s Association Standard Policy Form AVS 103. Each
liability policy shall provide that all the provisions thereof, except the
limits of liability, shall operate in the same manner as if there were a
separate policy covering each insured and provide that the exercise by the
insurer of rights of subrogation derived from rights retained by the Borrower
will not delay payment of any claim that would otherwise be payable but for
such
rights of subrogation.
D.
Reports
and Certificates; Other Information
Borrower
will furnish to Certificate Holders and Indenture Trustee (A) on or prior to
the
Closing Date, insurance certificates describing in reasonable detail the
insurance maintained by Borrower as required pursuant to this Annex B, (B)
prior
to the cancellation, lapse or expiration of the insurance policies required
pursuant to this Annex B, evidence of renewal of such insurance policies, and
(C) on or prior to the Closing Date and on or before the renewal dates of the
insurance policies carried by Borrower pursuant to this Annex B, a report signed
by a firm of aircraft insurance brokers, not affiliated with Borrower, regularly
retained by the Borrower, stating the opinion of such firm that all premiums
in
connection with the insurance then due have been paid and the insurance then
carried and maintained on the Aircraft complies with the terms hereof and,
in
the case of renewal insurance, that such renewal insurance will on and after
the
effective date thereof so comply with the terms hereof. Borrower will
instruct such firm to give prompt written advice to Certificate Holders and
Indenture Trustee of any default in the payment of any premium and of any other
act or omission on the part of Borrower of which it has knowledge and which
would in such firm’s opinion invalidate or render unenforceable, in whole or in
any material part, any insurance on the Aircraft. Borrower will also instruct
such firm to advise Certificate Holders and Indenture Trustee in writing at
least 30 days prior to the termination or cancellation of, or material adverse
change in, such insurance carried and maintained on the Aircraft pursuant to
this Annex B (or such lesser period as may be applicable in the case of war
risk, hijacking and allied perils coverage).
E.
Right
to
Pay Premiums
None
of
the Additional Insureds shall have any obligation to pay any premium,
commission, assessment or call due on any such insurance (including
reinsurance). Notwithstanding the foregoing, in the event of cancellation of
any
insurance due to the nonpayment of premiums, each Certificate Holder and
Indenture Trustee shall have the option, in its sole discretion, to pay any
cash
premium in respect of the Aircraft that is due in respect of the coverage
pursuant to this Trust Indenture and to maintain such coverage, as such
Certificate Holder or Indenture Trustee may require, until the scheduled expiry
date of such insurance and, in such event, Borrower shall, upon demand,
reimburse such Certificate Holder and Indenture Trustee for amounts so paid
by
them.
F.
Self-Insurance
Other
than with respect to a deductible per occurrence applicable on a fleet-wide
basis that is not in excess of the lesser of (x) the prevailing standard market
deductible for similar aircraft as the Aircraft and (y) $[***], Borrower shall
not be entitled to self insure the risks required to be insured against pursuant
to Article VI and this Annex B.
SCHEDULE
1 AND ANNEXES A AND B TO
THE
TRUST INDENTURE (______)
HAVE
BEEN INTENTIONALLY OMITTED FROM THE
TRUST
INDENTURE (______) ON FILE WITH THE FAA
TRUST
INDENTURE SUPPLEMENT
TRUST
INDENTURE SUPPLEMENT
(_________) No. 1 dated ___________, 2008 (this “Indenture Supplement”) of
PINNACLE AIRLINES, INC. (herein called the “Borrower”).
W
I T N E S S E T
H:
WHEREAS,
the Trust Indenture
and Security Agreement (__________) dated as of _______________, 2008 (herein
called the “Trust
Indenture”) between the Borrower and Xxxxx Fargo Bank Northwest, 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 (such term and other
defined terms in the Trust Indenture being herein used with the same meanings)
and any Replacement Airframe or Replacement Engine included in the Trust
Indenture Estate, and shall specifically mortgage such Aircraft, Replacement
Airframe or Replacement Engine, as the case may be, to the Indenture
Trustee.
WHEREAS,
the Trust Indenture
relates to the Airframe and Engines described below and a counterpart of the
Trust Indenture is attached hereto and made a part hereof and this Trust
Indenture Supplement, together with such counterpart of the Trust Indenture,
is
being filed for recordation on the date hereof with the Federal Aviation
Administration as one document.
NOW,
THEREFORE, This Trust
Indenture Supplement witnesseth, that, to secure (i) the prompt payment of
the
principal of and Break Amount (if any) and interest on, and all other amounts
due with respect to, all Certificates from time to time outstanding under the
Trust Indenture and the performance and observance by the Borrower of all the
agreements, covenants and provisions for the benefit of the Certificate Holders
in the Trust Indenture and in the Loan Agreement and the Certificates contained,
and the prompt payment of any and all amounts from time to time owing under
the
Trust Indenture and the Loan Agreement and the other Operative Documents for
the
security and benefit of the Certificate Holders and the Indenture Trustee and
(ii) the prompt payment of the Other Secured Obligations and the performance
and
observance by the Borrower of all the agreements, covenants and provisions
of
the Other Operative Documents for the security and benefit of the Other Secured
Parties (clauses (i) and (ii) are referred to collectively herein as the “Secured Obligations”), and for
the uses and purposes and subject to the terms and provisions of the Trust
Indenture, and in consideration of the premises and of the covenants contained
in the Trust Indenture, and of the acceptance of the Certificates by the
Certificate Holders, and of the sum of $[***] paid to the Borrower by the
Indenture Trustee at or before the delivery hereof, the receipt whereof is
hereby acknowledged, the Borrower 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 and its successors and assigns, in the trust created by the
Trust Indenture, a first priority security interest in and first mortgage lien
upon, all right, title and interest of the Borrower in, to and under the
following described property:
AIRFRAME
One
airframe identified as follows:
|
Manufacturer
|
Model
|
FAA
Registration
Number
|
Manufacturer’s
Serial
Number
|
|
Bombardier
|
together
with all Parts, owned by the Borrower and installed in or appurtenant to said
Aircraft, to the extent provided in the Trust Indenture.
AIRCRAFT
ENGINES
(2)
aircraft engines, each such engine
being
a
________ engine with at least ________ of thrust
or
its
equivalent, identified as follows:
|
Manufacturer
|
Model
|
Manufacturer’s
Serial
Number
|
together
with all Parts owned by the Borrower and installed in or appurtenant to said
aircraft engines to the extent provided in the Trust Indenture.
TO
HAVE AND TO HOLD all and
singular the aforesaid property unto the Indenture Trustee, its successors
and
assigns, for the benefit and security of the Certificate Holders for the uses
and purposes and subject to the terms and provisions set forth in the Trust
Indenture.
AND,
FURTHER, the Borrower
hereby acknowledges that the Airframe and/or Engines referred to in this
Indenture Supplement are subject to the Lien of the Trust Indenture.
This
Trust Indenture Supplement shall be construed as supplemental to the Trust
Indenture and shall form a part thereof, and the Indenture is hereby
incorporated by reference herein and is hereby ratified, approved and
confirmed.
This
Trust Indenture Supplement is being delivered in the State of New York.
* * *
IN
WITNESS WHEREOF, the
Borrower has caused this Trust Indenture Supplement to be duly executed by
one
of its officers thereunto authorized, this ___ day of _________, 2008
|
PINNACLE
AIRLINES, INC.
By:
Its:
|
PINNACLE
AIRLINES, INC.
THIS
CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED,
AND
MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED
OF EXCEPT WHILE SUCH A REGISTRATION IS IN
EFFECT
OR
PURSUANT TO AN EXEMPTION FROM
REGISTRATION
UNDER SAID ACT
THIS
CERTIFICATE IS SUBJECT TO CERTAIN ADDITIONAL
RESTRICTIONS
ON TRANSFER SET FORTH IN
THE
INDENTURE REFERRED TO BELOW.
CERTIFICATE
DUE ____________, 2023
ISSUED
IN
CONNECTION WITH ONE BOMBARDIER MODEL ________ AIRCRAFT WITH MANUFACTURER’S
SERIAL NUMBER ________AND INITIALLY BEARING UNITED STATES FEDERAL AVIATION
ADMINISTRATION REGISTRATION NO. ______ AND TWO _______ MODEL ________
ENGINES
Xx. X-0 Xxx
Xxxx, Xxx Xxxx
$__________________ __________,
2008
PINNACLE
AIRLINES, INC. (the
“Borrower”) hereby
promises to pay to EXPORT
DEVELOPMENT CANADA, or registered transferees, the principal sum of
_________________________________________ and __/100 Dollars
($_________________), in consecutive installments, equal to the amount, and
payable on the dates, set forth in Annex A hereto, together with interest
on the unpaid principal amount hereof from time to time outstanding from and
including the date hereof until such principal amount is paid in
full. Interest shall accrue with respect to each Interest Period at a
rate per annum equal to ______% and shall be payable in arrears on each Interest
Payment Date and on the date this Certificate is paid in full. This
Certificate shall bear interest at the applicable Past Due Rate on any principal
hereof, and, to the extent permitted by applicable law, interest and other
amounts due hereunder, not paid when due (whether at stated maturity, by
acceleration or otherwise), for any period during which the same shall be
overdue, payable on demand by the Holder hereof given through the Indenture
Trustee.
Interest
shall be calculated on the basis of a year of 360 days consisting of 12 thirty
day months provided that for
any
period during which interest is calculated on the basis of the Past Due Rate,
it
shall be calculated as the basis specified in the definition of “Past Due Rate”
in Section 1.01 of the Indenture. If any sum payable hereunder
falls due on a day which is not a Business Day, then such sum shall be payable
on the next succeeding Business Day.
All
payments of principal, Break Amount, if any, and interest and other amounts
to
be made to the Holder hereof or under the Trust Indenture and Security Agreement
(_______) dated as of ____________, 2008 (as amended or supplemented from time
to time, herein called the “Indenture”, the terms defined
therein and not otherwise defined herein being used herein with the same
meanings) between the Borrower and Xxxxx Fargo Bank Northwest, National
Association, as Indenture Trustee thereunder, (i) shall be made in
accordance with the terms of the Loan Agreement and the Trust Indenture and
(ii) are guaranteed by Pinnacle Airlines Corp. pursuant to the terms of the
Guaranty (_______) dated as of _______________, 2008 from Guarantor.
Principal
and interest and other amounts due hereon shall be payable in Dollars in
immediately available funds prior to 10:00 a.m., New York, New York time,
on the due date thereof, to the Indenture Trustee at the Corporate Trust Office
and the Indenture Trustee shall, subject to the terms and conditions of the
Indenture, remit all such amounts so received by it to the Holder hereof in
accordance with the terms of Indenture at such account or accounts at such
financial institution or institutions as the Holder hereof shall have designated
to the Indenture Trustee in writing, in immediately available funds, such
payment to be made, in the case of any such designated account in New York,
New
York, prior to noon, New York time, on the due date thereof. In the
event the Indenture Trustee shall fail to make any such payment as provided
in
the immediately foregoing sentence after its receipt of funds at the place
and
prior to the time specified above, the Indenture Trustee agrees to compensate
the Holder hereof for loss of use of funds in a commercially reasonable
manner. All such payments by the Borrower and the Indenture Trustee
shall be made free and clear of and without reduction for or on account of
all
wire or other like charges.
Each
Holder hereof, by its acceptance of this Certificate, agrees that, except as
otherwise expressly provided in the Indenture, each payment received by it
in
respect hereof shall be applied, first, to the
payment
of any amount (other than the principal of or interest on this Certificate)
due
in respect of this Certificate, second, to the
payment of interest hereon (as well as any interest on overdue principal and,
to
the extent permitted by law, interest and other amounts payable hereunder)
due
hereunder, third, to the
payment
of the principal of this Certificate then due and fourth, the balance,
if any, remaining thereafter, to the payment of the principal of this
Certificate remaining unpaid, in the manner set forth in the last sentence
of
Section 2.06 of the Indenture. Without limiting the foregoing,
the Holder hereof, by its acceptance of this Certificate, agrees that if it
receives any payment or distribution in respect of this Certificate that it
is
not entitled to receive under Section 2.02 or Section 9.07 of the
Indenture, it shall hold any amount so received in trust for the Indenture
Trustee and forthwith turn over such amount to the Indenture Trustee in the
form
received to be applied as provided in Section 9.07 of the Indenture.
This
Certificate is one of the Certificates referred to in the Indenture which have
been or are to be issued by the Borrower pursuant to the terms of the
Indenture. The Indenture Estate is held by the Indenture Trustee as
security, in part, for the Certificates. Reference is hereby made to
the Indenture and the Loan Agreement referred to therein for a statement of
the
rights and obligations of the Holder hereof, and the nature and extent of the
security for this Certificate and of the rights and obligations of the other
Certificate Holders, and the nature and extent of the security for the other
Certificates, as well as for a statement of the terms and conditions of the
trusts created by the Indenture, to all of which terms and conditions in the
Indenture and such Loan Agreement each Holder hereof agrees by its acceptance
of
this Certificate.
There
shall be maintained a Certificate Register for the purpose of registering
transfers and exchanges of Certificates at the Corporate Trust Office of the
Indenture Trustee or at the office of any successor indenture trustee in the
manner provided in Section 2.08 of the Indenture. As provided in
the Indenture and subject to certain limitations set forth therein and in the
Loan Agreement, this Certificate or any interest herein may, subject to the
next
following paragraph, be assigned or transferred, and the Certificates are
exchangeable for a like aggregate original principal amount of Certificates
of
any authorized denomination, as requested by the Certificate Holder surrendering
the same.
Prior
to
the due presentment for registration of transfer of this Certificate, the
Borrower and the Indenture Trustee shall deem and treat the person in whose
name
this Certificate is registered on the Certificate Register as the absolute
owner
of this Certificate and the Certificate Holder for the purpose of receiving
payment of all amounts payable with respect to this Certificate and for all
other purposes whether or not this Certificate is overdue, and neither the
Borrower nor the Indenture Trustee shall be affected by notice to the
contrary.
This
Certificate is subject to prepayment as permitted by Sections 2.11 and 2.12
of the Indenture and to purchase without the consent of the Holder hereof as
provided in Section 2.15(e) of the Indenture and to acceleration by the
Indenture Trustee as provided in Section 9.01 of the Indenture, and the
Holder hereof, by its acceptance of this Certificate, agrees to be bound by
said
provisions.
This
Certificate shall not be secured by or be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose, unless authenticated by
the
Indenture Trustee as evidenced by the manual signature of one of its authorized
signatories on the certificate below.
This
Certificate shall be governed by and construed in accordance with the law of
the
State of New York.
IN
WITNESS WHEREOF, the
Borrower has caused this Certificate to be executed in its corporate name by
its
officer thereunto duly authorized, as of the date hereof.
|
PINNACLE
AIRLINES, INC.
By:
Its:
|
INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Certificates referred to in the within-mentioned Indenture.
|
XXXXX
FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, as Indenture Trustee
By:
Its:
|
Annex
A to Certificate
SCHEDULE OF
PRINCIPAL PAYMENTS
|
Interest
Payment Date
|
Principal
Amount
to
be Paid
|
* * *